IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL NO.466 OF 1996 in SPECIAL CIVIL APPLICATION No.11047 of 1994 with CIVIL APPLICATION No.4448 of 1996 Date of Decision: 6/04/2004 -------------------------------------------------------------- YAMINI J. DAVE VERSUS THE DIRECTOR, I.U.C.A.A. & ANOTHER (for full cause title, see next sheet) -------------------------------------------------------------- Coram: The Hon'ble Mr.Justice Bhawani Singh, Chief Justice The Hon'ble Mr.Justice H.K.Rathod, Judge Whether approved for reporting? For the Appellant Mrs.Sangeeta Pahwa, Adv. For the Respondents Mr.M.R.Bhatt, Adv. -------------------------------------------------------------- PER: H. K. RATHOD, JUDGE (C.A.V. Judgment):- #. In this Letters Patent Appeal, the appellant has challenged the judgment passed by Single Judge (Coram: M.S.Shah, J.) in Special Civil Application No.11047 of 1994 dated January 10, 1996, whereby, the petition filed by the appellant has been dismissed. #. The facts giving rise to the present Letters Patent Appeal may be narrated thus. The appellant was appointed clerk-cum-typist by the respondents vide appointment --------------------------------------------------------- Whether reporters of Local Papers may be allowed to see the Judgment? letter dated September 9, 1991, pursuant to advertisement dated May 11, 1991, in INFLIBNET programme with IUCAA, an autonomous registered society established by the University Grants Commission with head quarter at Ahmedabad. The candidates appointed to the posts advertised were to remain on probation for a period of one year from the date of appointment and subject to service conditions and conduct rules approved by the governing body of the INFLIBNET/ IUCAA. The appellant joined the post of clerk-cum-typist on September 11, 1991 with pay scale of Rs.950-1500. By Office Order dated September 15, 1992, the appellant was informed that her probationary period stood closed from 10.9.1992 (AM). The appellant proceeded on 90 days' maternity leave from May 3, 1994 to July 31, 1994, sought through application dated May 2, 1994. She reminded respondents vide letter dated May 28, 1994, to sanction her the leave. The respondents sanctioned the leave vide order dated June 2, 1994. During the intervening period, the appellant submitted medical bills to the tune of Rs.8,000/= which were sanctioned after reminders to that effect. Again, the appellant sought extension of maternity leave from August 1, 1994 to September 4, 1994 as per Rules applicable to Central Government employees. By Memorandum dated September 9, 1994, her services have been terminated. The appellant challenged her termination through Special Civil Application No.11047 of 1994. However, same has been dismissed by the impugned judgment. During the pendency of Appeal, amendment is sought and some documents are placed on file. #. The appellant alleges that the respondents could not terminate her services, she having become permanent. Case of respondents is that the appellant was in project employment. Her tenure was extended from time to time like other employees. Ultimately, extension was not granted, therefore, by impugned order, she ceased to be in service. The Single Judge agreed with these submissions and held that the appellant was a project employee, her stay in service extended from time to time, therefore, she was not entitled to continuance in service nor entitled to confirmation/ regularization. #. Through this Appeal, order of Single Judge has been challenged. While deciding the Special Civil Application, the Single Judge did not decide the question as to maintainability of the petition on the ground that he dismissed the petition on merits. Therefore, we permitted the respondents to advance submissions on this question during the course of hearing and substantiate the preliminary objection raised by them in their reply-affidavit to the Special Civil Application. Therefore, before adverting to deciding the Appeal on merits, it is desirable to deal with the preliminary objection. The respondents simply state in the reply that petition is not maintainable since the respondents are not State/ other authority within the meaning of Article 12 of the Constitution of India. Except making this statement, no material has been placed in justification thereof. Further, no decision has been cited in support of the claim. However, from perusal of the material available on record, it is crystal clear that IUCAA is an autonomous body and INFLIBNET is also an autonomous body by this time according to the counsel for respondents. This project is funded by University Grants Commission. Hundred percent funds are released by Union of India and University Grants Commission. It is therefore an autonomous body with financial and pervasive control of the State, majority of the Directors of the Board being State nominees, State electees and it performs public nature of functions. The question whether a body is State/ authority within the meaning of Article 12 of the Constitution of India has been examined by Apex Court and High Courts in a large number of decisions by this time. However, suffice it is to make mention of Pradeepkumar Biswas v. Indian Institute of Chemical Biology and others (2002(5) SCC 111). In paragraph 17, it is observed that: "17. For identifying such an agency or instrumentality it propounded four indicia : [1] "A finding of the State financial support plus an unusual degree of control over the management and policies might lead one to characterize an operation as State action." [SCC p.454, para 96] [2] "Another factor which might be considered is whether the operation is an important public function." [SCC p.454, para 97] [3] "The combination of State aid and the furnishing of an important public service may result in a conclusion that the operation should be classified as a State agency. If a given function is of such public importance and so closely related to governmental functions as to be classified as a governmental agency, then even the presence or absence of State financial aid might be irrelevant in making a finding of State action. If the function does not fall within such a description, then mere addition. If the function does not fall within such a description, then mere addition of State money would not influence the conclusion." [SCC p.454, para-97] [4] "The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the Government for carrying on a business for the benefit of the public. In other words, the question is, for whose benefit was the corporation carrying on the business ?" [SCC p.458, para 111] Having examined the matter carefully, we have no difficulty in holding that the respondents are State/ authority within the meaning of Article 12 of the Constitution of India, contention to the contrary is therefore rejected. #. Having decided the preliminary objection, we turn to deal with the case on merits. It is undisputed between the parties that initially the appellant was offered appointment by order dated 9th September, 1991 containing terms and conditions prescribed therein, issued by the Administrative Officer, INFLIBNET programme. The appellant was appointed in INFLIBNET programme of Inter University Center for astronomy and astro physics, an autonomous institution of the University Grants Commission. The pay scale of the appellant was at par with the Central Government employees and also having similar status. Initially, the appointment was made for a period of two years from the date of joining on the post, which was likely to continue indefinitely, subject to passing of the typing test. Thus, the initial appointment was on probation for a period of one year from the date of appointment which may be extended or curtailed at the discretion of the competent authority. It is also on record that the post on which the appellant came to be appointed was transferable anywhere in India or even abroad at any sub center or stations of INFLIBNET programme / IUCAA. The scheme of IUCAA for the provident fund is applicable to the appellant. The said appointment was subject to bye-laws and service conditions of IUCAA including the amendments thereto issued from time to time applicable to the administrative / supporting staff until the INFLIBNET becomes autonomous. After INFLIBNET becomes an autonomous, appointment was to be governed by the bye-laws and service conditions of INFLIBNET. The appellant accepted the offer of appointment on the aforesaid terms and conditions and Appellant submitted joining report in the service of the respondent on 11th September, 1991. In the advertisement, it was provided that initially, the candidate appointed will be on probation for one year from the date of appointment. The order of appointment is dated 18th September, 1991 and terms and conditions are governed as per the offer of appointment dated 9th September, 1991. The appellant passed the skill test conducted by the respondent on 27th August, 1992. The leave of the appellant for a period from 5th September, 1994 to 30th September, 1994 was refused by the respondents. The appellant completed two years' service on 10th September, 1993. Prior to that, by order dated 15th September, 1992, the appellant was informed by the respondents that her probationary period stands closed with effect from 10th September, 1992. She continued in service upto 10th September, 1993 and completed total period of two years as per the appointment letter dated 9th September, 1991. In the office note dated 17.8.93, cases of G.S.Negi, Mrs.Sahana M. Munshi, Yamini J.Dave (appellant) and A.P.Asthani were discussed by the respondents with regard to extension of project appointment. Therein, question was raised that there was no mention in the advertisement that appointment will be on year to year basis and even UGC had not instructed for the same at the time while sanctioning some initial posts. Secondly, there are orders regarding permanent absorption of an employee with above type of appointment, which are contrary to the spirit of the permanent absorption. Ultimately, the following decision has been taken which is reflected from page.90 of the petition : "Persons who have joined on immediate absorption basis, the condition of initial two years appointment will not be applicable to them and they should be made permanent. These employees are like other permanent employees of IUCCA and posted for IUCAA's INFLIBNET project at Ahmedabad. In the event of any problem with INFLIBNET project these employees should be prepared to come to IUCAA at Pune for service. In other cases the appointment may be extended on year to year basis." #. This decision is approved by the Director on 17th August, 1993 and as a result thereof, the appointment of the appellant, was converted into year to year basis. Accordingly, by office order dated 10th September, 1993, the appointment of appellant, in continuation of the earlier order dated 18th September, 1991, has been treated as project appointment, expiring on 10th September, 1993, and the same has been extended for a further period of one year from 11th September, 1993 to 10th September, 1994. The other terms and conditions governing her appointment were to remain the same. It is relevant to note that the Committee of four persons convened for examining two cases including the appellant for extension, has observed qua appellant that [a] she has attended the office only for 29 days during 1994, [b] she has been casual and careless and in spite of oral reprimand there has not been any improvement during the period of present extension. This aspect is also reflected in her C.R. for the year 1994. The observations of the committee are dated 19th August, 1994. However, before that, by order dated 6th August, 1994, it has been informed to the Evaluation Committee for the performance of appellant whose period has expired on 10th September, 1994. Thereafter, by Memorandum dated 9th September, 1994, in continuation of the earlier office order dated 10th September, 1993, it was decided by the competent authority not to give any further extension beyond the 10th September, 1994 and therefore, the appellant was informed that she will cease to be in the service of IUCAA / INFLIBNET programme with effect from 10th September, 1994. This fact can be gathered from the record of the respective parties. Bye-law of IUCAA, Rule 5[iii] which applies to the administrative and supporting staff, includes persons employed by the IUCAA for running and maintaining its infrastructure but does not include the persons hired on contractual basis for whom separate bye-laws-8 operates. Rule 2 relates to appointment and duration of service of the employees of the IUCAA. The relevant sub clause 2.1 is reproduced as under : "2.1 Period of Service : Members of staff of IUCAA, excepting those appointed on a temporary basis and those appointed explicitly on a contractual basis, shall be appointed with a one year probation period. At the end of this period, probation may be extended but for not more than one year. At the end of the probation period, on the basis of an evaluation of the individual's performance during probation, the appropriate appointing authority may offer the staff member continuing appointment in IUCCA till the age of superannuation, namely 60 years in the case of Category [I] and 58 years in the case of Category [II] or [III]. If a staff member having a continuing appointment at IUCAA is made Director, then at the end of service as Director, then at the end of service as Director, he shall have the option to revert to the prior appointment, unless he has reached the age of superannuation. If any staff member during his service period happens to become the Director and reverts to his original post he shall not have any claim of age of superannuation upto 65 years. Age of superannuation of such an employee will be in accordance with the rules as are applicable to other normal employees." This Rule-2.1 applies to staff members of IUCAA as defined in bye-law No.5 as referred to above. The period of probation is fixed for two years, and after one year, it can be extended for a further period of one year. If probationary period is closed or satisfactorily completed then, according to this Rule, the appointing authority may offer his staff member, continued appointment in IUCAA till age of superannuation viz. upto 60 years in case of category [I] and 58 years in case of category II and III. #. In the light of material referred to above, it is clear that according to the advertisement, appointment of appellant was on probation for one year and appointment was made initially for a period of two years with clarification that post was likely to continue indefinitely. Service Rules of IUCAA are applicable to the appellant. One year probationary period stood closed with effect from 10th September, 1992 and therefore, issuance/ extension of the appointment on year to year basis, which is admittedly not provided in the advertisement, appears to be contrary to the letter of appointment dated 9th September, 1991. Therefore, the decision taken on 17th August, 1993 in Office Note extending the appointment of appellant on year to year basis is contrary to the principles of natural justice because initial appointment was for a period of two years. So after two years, the respondents were not authorised to convert her appointment on contractual basis. In advertisement, no such condition was incorporated, or made known to the appellant. Even UGC had not instructed so while sanctioning the post, but even then, decision has been taken to continue the appellant on year to year basis. That decision is illegal and arbitrary and it is hit by Article 14 of the Constitution of India. It is nowhere discussed that what would be a legal effect of closing of period of probation. Closing the period of probation without any adverse remarks and allowing the appellant to continue in service thereafter, in the opinion of the Court, means that the appellant is a confirmed employee of the respondents. The observations of the Committee dated 19th August, 1994 which is at page.59 clearly made allegation against the appellant and misconduct has been alleged being casual and careless and no improvement and confidential report of 1994 is also credited as "Not Good". Relying on these observations, the committee has recommended that it will not be in the interest of INFLIBNET to give extension to Ms.Y.J.Dave. This recommendation has been accepted and accordingly services of the appellant have been terminated on 9th September, 1994. Therefore, considering the total facts, termination is not a simpliciter but it is attached with stigma. The foundation is recommendation of the Committee dated 19th August, 1994, wherein misconduct has been alleged against the appellant. However, without giving any opportunity and without holding any departmental inquiry, termination order has been passed by the respondents. The appellant was not initially appointed on project but she was appointed on regular or immediate absorption basis. Subsequently, without giving any opportunity to the appellant, to appoint her on contract basis, by taking arbitrary decision, is bad and is contrary to the terms and conditions of the appointment letter dated 9th September, 1991 and also against the principles of natural justice. This was not termination during probation period but it was after completion of probationary period. The positive decision has been taken by the respondent for closing probationary period on 15th September, 1992 with effect from 10th September, 1992. In the pay slip which is produced at page.118 after grant of increments in favour of the appellant, in column No.2, which is titled "whether it is substantive appointment or officiating", the contents of the column shows that it is "substantive" which suggests that the appellant was appointed on substantive basis and not on contractual basis. #. We have gone through the judgment impugned in the this appeal. The conclusions of the learned Single Judge are that the appellant was not employed on the administrative set up of the IUCAA but was appointed on contractual basis for INFLIBNET programme and relevant bye-law-8 would apply and not Bye-law-5[III] and the appellant never acquiring any permanency right. No order of appointing the appellant as permanent employee was issued by the respondents and no such Rule has been pointed out and therefore, the appellant was considered as the temporary employee appointed for a specific period. This goes against the terms and conditions incorporated in the letter of appointment dated 9th September, 1991. In letter of appointment, appellant was appointed for a period of two years which was likely to continue for indefinite period. That aspect has been ignored by the learned Single Judge. The relevant question, namely after a period of one year the probation period stood closed, meaning thereby, positive action/decision was taken by the respondents of closing period of probation, whether the appellant became a permanent employee of the respondents as the post on which the appellant was appointed was a permanent post sanctioned by the U.G.C., seems to have not been examined by the learned Single Judge. Bye-law No.2.1 makes it very clear that after completion of the probationary period of one year, if period is not extended, then the respondents must have to offer such staff member, continuing appointment in IUCAA till age of superannuation. Therefore, distinction which has been made by the learned Single Judge that the appellant was not appointed by IUCAA is totally irrelevant in light of the facts that IUCAA bye-laws are fully applicable to the appellant. Therefore, the appellant is entitled to claim legal right based upon the bye-laws of the IUCAA. Therefore, the finding of the learned Single Judge that the appellant was a temporary employee appointed for a specific period, seems to be contrary to the letter of appointment and contrary to the record and bye-laws. The learned Single Judge has also while answering the contentions Nos.II & III, come to the conclusion that the respondent is justified not to extend the period of appellant on the basis of Committee report where misconduct has been alleged and therefore, the respondent is justified in their action. It also reflects that the aspect of absenteeism and the administration having suffered because of that also weighed with the learned Single Judge. Further finding is that a person who is not given the benefit of extension of employment on the ground of intermittent absence and for his/ her unsuitability or inefficiency, cannot claim protection under Articles 14 an 16 of the Constitution merely because other employees are continued in service. This finding is also contrary to the record. It seems that the learned Single Judge has ignored the fact that further period of extension was not granted because of some allegation made against the appellant about absence and her unsuitability and inefficiency. Even temporary employees are also entitled to minimum requirement, i.e. an opportunity of hearing before passing any adverse order. The learned Single Judge has also not appreciated that such action or decision not to extend the period of service, is contrary to the principles of natural justice which was based upon the committee's report where allegations are made against the appellant. The learned Single Judge has also come to the conclusion that temporary Government servant has no right to post and the competent authority can terminate his services by an innocuous order of termination without causing any stigma on him and such orders can be passed even without holding departmental inquiry. The learned Single Judge has considered the decision of the Apex Court in case of STATE OF UTTAR PRADESH AND ANOTHER V. KAUSHAL KISHORE SHUKLA [ (1991) 1 SCC 691 ] and other decisions referred in the impugned judgement. According to the learned Single Judge, appellant having no legal right to be heard before not extending the period of service, the appellant is not suitable to the post and where service of the appellant has not been extended, there is nothing wrong in it when she has remained absent. Notice as per bye-law 2.5.1 to terminate service of the appellant is also not necessary because her services came to an end by afflux of time. In respect of the contention of malafide raised by the appellant, in absence of the details, same is also rejected by the learned Single Judge. The last contention about considering the case of the appellant on humanitarian ground is also rejected by the learned Single Judge. After our thoughtful consideration, we find that the learned Single Judge has erred in rejecting the petition and coming to such conclusion which is found contrary to the record, bye-laws and principles of natural justice. It seems that the matter was not properly taken into consideration by the learned Single Judge, more particularly, in light of the background that what would be the legal effect of the positive decision taken by the respondent to close probationary period after completion of the one year service. In that order, dissatisfactory work or unsuitability is not mentioned. Even inefficiency is also not mentioned and the appellant continued in service for further period of one year. The moment probationary period is not extended further or no order of termination is passed against an employee or where probationary period is closed after completion of one year, it means that there is positive decision taken by the authority to the effect that probationary period has been cleared with satisfactory work by the employee. Even it is also not the case of the respondent that during probation period of one year, the appellant remained inefficient and was not found suitable and was inefficient. Whatever observations that were made by the committee related to subsequent period of probation, that is to say, when the appellant became a permanent employee of the respondent. #. The learned advocates for the respective parties have cited before us decisions of the Hon'ble Apex Court in support of their rival contentions. We have gone through the decisions relied upon by the learned advocates and in our opinion, there is no dispute with the ratio laid down in the decisions of the Apex Court cited before us and we are in full agreement with the same. But same are not applicable to the facts of the present case. ##. Learned advocate Mr.M.R.Bhatt, relying on the decisions referred above in written submissions, contended that non extension of project appointment does not tantamount to stigma. He relied upon certain decisions. It is his submission that appointment to appellant