•' )

AJIT SINGH & OTHERS ETC.

STATE OF PUNJAB & ANOTHER

March 10, 1983

[D.A. DESAI AND V. BALAKRISHNA ERADI, JJ.)

Civil service-Service rule prescribed probation of two years-Order of appointment stated probation as one year-Government, if competent to prescribe

shorter period of probation.

Probation-Meaning of-Object in prescribing.

Interpretation-Mandatory or directory-TestJ for determining.

The Punjab Town Improvement Act, 1922 envisages the setting up of Trusts and the Trusts so set up were to be bodies corporate with perpetual sue .. cession and a common seaJ. The duti(:S and functions entrusted to the Trusts Jncluded, among others, preparation of schemes for improvement and expansion of towns in the State. For the purpose of manning the senior posts under the Trusts, the Act conferred power on the State Government to constitute certain services. One of the services constituted by the Government was the Punjab

Service of Trust Executive Officers. Exercising power under the Act the State Government framed the Punjab Trust Services (Recruitment and Conditions of Service) RuJes, 1978, The Rules envisaged the setting up of a Selection Committee called tho Punjab Trust Services Selection Committee for selecting Officers. After folL>wing the procedure prescribed under the Rules, the Selection Committee recommended the appointment of the eleven petitioners herein to the posts of Trust Executive Officers, Class 1, II and III. The State Government accepted the recommendations of the Selection Committee and in May, 1979 appointed the petitioners to the respective posts. Condition (c) of the terms and conditions annexed to the order of appointment issued to each of the appointees stated :

"AU the appointees shall remain on probation for a period of one year under rule 10(1) of the Rules. The regular appointments shall be subject to the satisM factory completion of the period of probation by such appointee after the expiry of one year from the date of his joining." On the completion of one year of ser .. vice an increment was released in favour of each of the appointees.

In August, 1980 tho State Government dissolved 21 Trusts. Purporting to act under rule 9 of tho 1978 Rules, the Governor dispensed with immediate effect the services of each of the II petitioners after paying a moqth"s salary in lieu of a

111onth's notice, -

SUPRBMB COURT REMRTS (1983J 2 S.C.ll.

In their petitionS:filed under Anicle 32 of the Constitution impugning the order of the State Government dispensing with their services, the p.etitioners alleged that after they bad satisfactorily completed the period of probation of one year it was not oPen to the State Government to dispense with their services; the power to dissolve the Trusts was used by the Government to get rid or the petitioners; that sometime after dispensing with their services the Trusts bad been reconstituted but even so they had not been recalled to their posts and that the action of the Government in the case was thoroughly arbitrary, actuated by extra neous considerations. ·

In reply it was stated that under rule 9 (2) the State Government had power to dispense with the services of a probationer if his work and conduct during the period of probation were not satisfactory; payment of a month's pay in lieu of notice was made by way of abundant caution and that it could not confer any right on the petitioners; the period of probation of one year, mentioned in clause (c) of the anncxure to the order of appointment was a typographicaJcum clerical error, which in terms of rule 9 (2) should have been two years in respect of direct recruits and lastly their se:rvices had been dispensed with because with . the dissolution of the Trusts the Executive Officers had become surplus and their continuance in)ervice would be an avoidable burden on the exchequer.

It was contended on behalf of the State Government that the expression 'shall' in rule 9 (1) on its own force would apply so that the direct recruits would automatically be on probation for a period or two years and no power or discretion is conferred on anyone to reduce this period.

Allowing petition,

HELD : It is not necessary to prescribe a period of probation and the State Government as the appointing authority would have discretion in the matter subject to rules by which the appointment is governed. [529 C]

Under the archaic law of hire and fire the concept of probation in service jurisprudence was practically absent; but with the advent of the concept of security in public service it came to acquire a certain connotation. In order that an incompetent or inefficient servant is not foisted upon the master the concept of probation was devised. A new recruit is put on test for a period before he is absorbed in the service or has acquired a right to the post. In so far as the master is concerned the period of probation.gave a sort of locus pententlae to him to observe the work, ability, efficiency, sincerity and competence of the servant and if the servant is not found suitable fo-r the post the master reserved the right to .l dispense with bis service during or at the end of the period of probation.

The period of probation, therefore, furnisbed a valuable opportunity to the master to closely observe the work of a probationer. The termination of service of a probationer during or at the end of the probation 'did not ordinarily and by itself constitute a punishment for, the servant had no right to continue to hold such a post. The period of probation may vary from post to post or from master to master. It is not obligatory on the part of the master to prescribe a'. period of probation; it is open to him to employ. a person without putting him on proba-'

tion. In short the power to keep a servant on probation and the period. during which his performance is to be observed remained the prerogative of the master.

[526 A-HJ

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AJIT SINGH v. PUNJAB 519

Purshottam IA/ Dhingra v. Union of India, [1958] SCR 828, followed.

) There is no general rule which may help in determining whether a provi- . aion is mandatory or directory. It is the duty of the court to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed. The use of the expression 'shall' is not decisive and the question whether a provision is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. [527 G-HJ

Cul/imore v. Lyme Rogis Corporation, [1962] 1 Q.B. 718; State of U.P. & Ors. v. Babu Ram Upadhaya, [1961] 2 SCR 679 at 710; State of U.P. v. Manbodhan Lal Srivastava, [19S8] 2 SCR 533 and Motrtreal Street Railway Company v. Nor- -..... mandin, L.R. [1917] A.C. 170, referred to.

\ ....

Rule 9 (2) is directory and confers a discretion on the State Government to prescribe a period of probation shorter than the maximum set out in it. The period of two years prescribed in this rule is the maximum period which means that the rule placed an embargo on the appointing authority's right to prescribe a period of probation longer thaq tWo years. But the rule does not admit of a construction that a period shorter than two years could not be prescribed. The rule enables the appointing authority to determine the suitability of the person appointed and the State Government may, having regard to the biodata and other information it has about the officers, feel that a period shorter than two years would suffice to make up its mind whether to retain him in service or to dispense with his service. Power in this respect is vested in the State Government which is the highest authority and that power has to be exercised on the recommendation of a statutory body. This power is not taken away by the use of the expression 'shall' in the rule. [527 C-F]

In the instant case two of the pct1t1oners who were appointed to class I post possessed high educational qualifications. had considerable experience in the education department of the State and left the permanent service under the State to take up the present jobs. Persons of such long experience and high qualifications would be disinclined to be put OD probation again for a period Of two years .

It is thcrerore reasonab!C to infer that, having regard to the high attainments of the candidates, the State Government had prescribed a period or probation of one year. A few other petitioners, who were appointed to class II and Ill posts were practising advocates. In all the cases, on the completion or the period of probation of one year tbey were given an increment which is released only if the work and conduct of the person arc found to be satisfactory. It is implicit in this that they had satisfactorily discharged .their duties during the period of probation. Jn the face of this position to hold that the wording of the appointment order stating that each of the appointees would be on probation for one year was a typographi cal-cum-clerical error. would be doing violence to commonsense.

[525 B-E, 529 C.F)

That the dissolution of the Trusts was a device to get rid of the petitionen is evident from later events. By the very order by which the Trusts were dissolved certain officers were appointed to carry on the functions of the Trusts. There. fore the Tru!ts. independent of the Board of Trustees, bad a corporate personality, with a perpetual succession and their functions had to be carried out. The

520 SUPREMll COURT REPORTS 119831 2 s.c .••

effect of the 'dissolution was me rely to dissolve the Board of Trustees. The corpo rate personality of the Trust recnained inviolate. If the Trusts were functioning,, if their schemes were being i mpleIJaented, ir all other staff was retained there is no substance in the contention that the services of the petitioners alone were no longer required because' of the dissolution of Trusts. Even if the charge of mala fide is not true there are certain aspects which unerringly point in the direction that the action was arbitrary and i.s violative of Articles 14 and 16 of the Consti tution. [535 A-El

There is equally no force in the contention that after the dissolution of the Trusts their continued retention in service was imposing an unnecessary burden on the State exchequer. After removing the petitioners 11 other officers were asked to take over their duties. This apart, the State exchequer was not responsi .. ble for the salary and prequisiles of the Trust Executive Officers; their salaries, allowances and prequisites were charged on the fund of the Trusts as envisaged by section 17 (4) of the Act. [534 A]

The argument that the performance of the petitioners was not satisfactory is equally untenable. On the expiry of the period of probation they were allowed an increment and wcte continued in service. It would be unjust to say that their work was unsatisfactory till they earned their increments but that their work and conduct were found to be unsatisfactory within less than six weeks tbereafcer, meriting dispensing with their services. [530 8-0]

ORIGINAL JURISDICTION : Writ Petition (Ci vii) Nos. 5274-81, 5463, 5348 & 5606 of 1980.

(Under article 32 of the Constitution of lnuia)

M.K. Ramamurt.W .• J Ramamurthy, Miss R. Vaigui for the Petitioners.

Hardyal Hard)' and D.D. Sharma for the Respondents.

The Judgment of the Court was delivered by

DESAI, J. These writ petitions under Article 32 of the Constitution questioned the validity of the orders dispensing with servi.ce of each of the petitioner with immediate effect made by the Director Local Government, Punjab dated September 25, 1980 as being violative of Arts. 14 and 16 of the Constitution.

The Punjab Town lmpmvement Act, 1922 ('Act' for short) was enacted to make provision for the improvement and expansion of H towns in Punjab. The act envisages the creation and constitution of Trusts and the Trust so created will have a corporate personality with perpetual succession and a common seal. The duties and functions

,..

. AJIT SINOH v. PUNJAB (Desa.I, J.) 521

of the Trust inter a/la include preparing of schemes under the Act for various purposes. Section 17 conferred power on the State Government to constitute certain services in the manner therein prescribed. One such service contemplated by the section was Punjab Service of Trust-Executive Officers. Sub-section (2) of section 17 conferred power on the State Government to make rules for regula ting the recruitment and the conditions of service of members of the Trust Services constituted by the State Government. Armed with this power, the State Government constituted Punjab Service of Trust Executive Officers. In exercise of the power conferred by sec. 73 read with sec. 17 (2) of the Act, the State Government framed rules styled as Punjab Trust Services (Recruitment and Conditions of Service) Rules, 1978 ('Rules' for short). Rule 5 (2) (i) inter alia provided that fifty precent of the vacancies in the cadre of Executive Officers shall be filled by direct recruitment and for this purpose rule 5(4) envisaged the setting up of a Selection Committee called Punjab Trust Services Selection Committee.

In the year 1978, Directorate of Local Government, Punjab issued advertisement No. 1078 inviting applications for the posts in Class I, II and III of Trust Executive Officers. Pursuant to this advertisement, large number of person's applied for various posts.

The Punjab Trust Services Selection Committee interviewed various candidates and ultimately .recommended eleven persons for the post of Trust Executive Officers. Ajit Singh and Rajinder Singh were recommended for Class I post; S. Sarup Singh and R.L. Bhagat were recommended for Class II Post of Trust Executive Officers and the

~- remaining 7 petitioners in this group'ofpetitions were recommended for Class III Post of Trust Executive Officers. These recommendations were accepted and appointment orders were issued by Punjab Government on May 28, 1979 and it is not in dispute that all the appointees joined the respective posts. Each one of the appointees was issued an order of appointment to which terms and conditions of appointment were annexed. One such condition worth-noticing reads as under :

' '

"(c) All the appointees shall remain on probation/or a period of one year under rule 10 (I) of the Rules. The regular appintments shall be subject to the satisfactory completion of the probation period by such appointee after th~ expiry of one year from th.~ ate of his joininf'

542 'UPREMB COl:JRT REPORTS

(1983) 2 s.c.~.

After each appointee completed one year of service, an incre ment was released in his favour: Suddenly in exercise of the power conferred by Rule 9 of the '1978 Rules', Director of Local Government, Punjab dispensed with the service of each of the 11 Trust Executive Officers, who were appointed on May 28, 1979.

These orders are impugned in these petitions.

As the language of the order was the subject matter of some discussion, the one in respect of petitioner No. 3 R.L. Bhagat may be extracted. It reads as µnder :

"P•rn}ab Government

Local Government Department

ORDER

In exercise of the powers conferred under Rule 9 of the Punjab Trust Services (Recruitment and Conditions of Service) Rules, 1978 and all other powers enabling him in.this behalf the Governor of Punjab is pleased to dispense with immediate effect the services of Shri Rattan Lal Bhagat who • was appointed to the Punjab Trust Service of Executive Officer Class. II vide office order No. DLG (TSC)-79/126 dated 28th May, 1979. He will be paid one month's salary in lieu of the month's notice.

Sd/- R.D. Joshi,

Director, Local Government, Punjab. ._.

Endst. No. DLG (TSC) 80/8648/51 Dated Chandigarh the 25th Sept. 1980".

Validity of this order styled as order dispensing with the service of each of the petitioner is questioned in this group 'of petitions on the ground that the action is thoroughly arbitrary actuated by extraneous considerations and violative of equality of opportunity in the matter of employment. It is also challenged on the additional ground that aftenhe completion of the period of prnbation it was not open to the State Government to terminate the service of the petitioners, in theJmanner in which it is done. One more ground of attack was that the action was malafide in that the petitioners were appointed when a political party of other hl!e an4 colol!r WllS in power and on a

l I I

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AJIT SINGH v, PUNJAB (Desai, J.)

change of Government, the petitioners were victimised. Iilsupport of the last contention it was urged that the power to dissolve trust con ferred by section I 03 was used to get rid of the petitioners which can be demonstrably established by the fact:that after dispensing with the service of petitioners, the trusts have been reconstituted without calling hack petitioners to their posts.

A return was filed on behalf of the respondents-the State of Punjab and Director-cum Joint Secretary, Local Government Depart ment, Punjab by Prithipal Singh Sodhi. Apart from the usual preliminary objection . that the petition involves disputed and tangled questions of facts which cannot be resolved under a petition under Article 32 of the Constitution, it was contended tbat the Government had dissolved all the 21 Improvement Trusts in the State of Punjab by its order dated August II, 1980 and since the Trusts were dissol ved, services of Executive Officers were no longer required because their continuance would inflict an unnecessary burden on the State Exchequer and therefore, the State Government decided to dispense with the services of those Executive Officers appointed by direct rec ruitment who had not completed the probationary period of 2 years under Rule 9 (I) of '1978 Rules'. It was contended that all the petitioners were appointed through direct recruitment as Executive Officers in the Punjab Trust Services on May 28, 1979 and according to the respondents the period of probation was two years which would expire on May 27, 1981. It was said that the State Govero ment in exercise of the power conferred by Rule 9 (2) could dispense with a service of a probationer, if the work and conduct of a person to a service during the period of liis probation is in the opinion of the appointing authority not satisfactory. Armed with this power, it was contended that the services of the petitioners were terminated which would mean that the work and .conduct of each of the petitio

ner who was appointed by direct recruitment was not satisfactory.

Explaining why one month pay in lieu of notice was paid, it was contended that payment was ex majorie cautela and it can confer no right on the petitioners. Referring to clause (c) in the annexure to the appointment order of the petitioners which prescribed a probation period of one year, it was submitted that that was a typographicalcumclerical error because Rule 9 (2) which prescribes peric d of probation in terms specifies the probation period of two years . in respect of direct recruits.

It was lastly contended that as the Trusts were dissolved, the services of the petitioner§ '-~ {j~~'!U, tiv~ 9fficen tia.~ gon.iq

SUPREME COURT REPORTS (1983] 2 s.c.R.

surplus and therefore, had to 1be dispensed with as a compelling

necessity.

Pleadings have been set out in some detail to highlight a very narrow controversy which requires to be resolved in this case. There is no dispute that petitioners were appointed to Class I, II and III post of Trust Executive Service after they were recommended by the statutory body called Punjab Trust Service Selection Committee. That each petitioner in response to the appointment order dated May 28, 1979 joined the service is again undisputed. Terms and conditions were set out as an annexure to the appointment order of each of the petitioners and clause (c) in the annexure clearly specifies the probation period to be of one year as prescribed under Rule 10 (!) of '1978 Rules.' Now if each of the petitioners was appointed as a probationer and the period of probation which he wu informed by the annexure to the appointment order was of one year, indisputably on May 27, 1980 each one completed the period of probation. However, the contention of the respondents is that tlie recital in clause (c) of the annexure to the appointment order specifying the probation period of one year in respect of each petitioner is a typographicalcum-clerical error in view of the provision contained in Rule 9 (I) of '1978 Rules'. Rule 9 (I) and 9 (2) provide as under:

"9-Probation :- (I) A person appointed to a service shall remain on probation for a period of two years, if appointed by direct recruitment, and one year, if appointed otherwise.

(2) if the work or conduct of a person appointed to a service during the period or his probation is, in the opinion of the appointing authority, not satisfactory, it may;

(a) if appointed by direct recruitment, dispense with his services."

It would thus appear at a glance that the real question in controversy was what was the period of probation in respect of each of the appointee. It is not in dispute nor is it controverted by the respondents that the appointment order issued by the Punjab Government did recite that the person mentioned in the order is appointed to Punjab Trust Services of Executive Officers Class I or Class II or III as the case may be subject to the conditions annexed to the order etc. Therefore, the appointme11t was subject to the conditions

anne)td to the ordr and as pointed out earlier condition (c) annexed

> ,

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AllT SINGH V, PUNJAB U>e8qi, J,)

to the order prescribes a. period of probation of one year, Nowhere in the affidavit in opposition, the respondents state as to whether rule 10 (1) also confers power to prescribe a period of probation.

Refeence is to Rule 9 (1) which prescribed a period of probation of two years for those appointed by direct recruitment. Now examining. the matter from the point of view of petitioners, all the petitioners were appointed by direct recruitment. But at this stage one may point out that petitioner No. I Ajit Singh, who was selected for c1, ss I post of Trust Executive Officer, bad 26 ye'ars of service to his credit in the Education Department of Punjab Government and he had to resign that post in order to take the post of Trust Executive Officer' Class I. Similarly, Rajinder Singh-petitioner No. 2, who was appointed to Class I post was Class II Gazetted Officer in Punjab Government service with 26 years of service to his credit till Septem ber 22, 1978. He had also worked from September 22, 1978 to the date of joining the post of Class I Trust Executive Officer as Executive Officer Class II in the same Local Government Department. Thus both Ajit Singh and Rajinder Singh who were appointed to Class I post had rendered service for a long time, Both were highly educated. Both had to leave permanent service to take up the post of Trust Executive Officer. R.L. Bhagat, Pavittar Singh Gill, Gulam Sabir Ali Khan and Harjinder Singh, who were directly recruited to Class II and III posts of Executive Officers were practising advocates. If the Service Selection Board had the bio-data of each of these persons before it, one can say with certain amount of confidence that the Service Selection Committee as well as the Punjab Government having taken into consideration such high educational attainments and past experience may prescribe a shorter period of probation. Mr. Hardy, learned counsel for the respondents, however, seriously contended that rule 9(1) does not permit anyone to prescribe shorter period of probation than the prescribed period of two years. He relied on the use of the expression 'shall' in Rule.9 (!)as mandatory and submitted that even if the appointment order did not carzy any specification about the prescribed period of probation, the rule on its own force will applyand a direct recruit appointed to Trust Executive Service and governed by the '1978 Rules' will automatically be on probation for a period of two years. It was also pointed out that the rules do not confer any power or discretion on 2any authority to reduce t))is period. We find it difficult to subscribe to this view;

This requires examination of the genesis why period of probation is prescribed. And how the period of probation has been understood in service jurisprudence.

st11>tt2t.IB rouat RBl>Oats (1983] 2 s.c.I\.

A When the master servant relation was govern ed by the archaic

law of hire and fire, the concept 'of probation in service jurisprudence was practically absent.

With the advent of security in public service when termination or removal became more and more difficult and order of termination or removal from service became.a subject matter of judicial review, the concept of probation came to acquire a certain connc>tation. If a servant could not be removed by way of punishment from service unless be is given an opportunity to meet the alle gations if any against him which necessitates his removal from ser vice, rules of natural justice postulate an enquiry into the allegations and proof thereof. This developing master servant relationship put the master on guard. In order that an incompetent or inefficient servant is not foisted upon him because the charge of incompetence or inefficiency is easy to make but difficult to prove, concept of prohibition was devised. To guard against error of human judgment in . selecting suitable personnel for service, the new recruit was put on test for a period before he is absorbed in service or gets a right to the post. Period of probation gave a sort of locus pententiae to the employer to observe the work, ability, efficiency, sincerity and competence of the servant and if be is fonnd not suitable for the post, the master reserved a right to dispense with bis service without anything more during or at the end of the prescribed period which is styled as period of probation. Viewed from this aspect, the courts held that termination of service of a probationer during or at the end of a period of probation will not ordinarily and by itself be a punishment because the servant so appointed has no right to continue to hold s4cb a post any more than a servant employed on probation by a private employer is entitled fo. (See Purshotam Lal Dhingra v.

Union of lndia.(1) The period of probation therefore furnishes a valuable opportunity to the master to closely observe the work of the probationer and by the time the period of probation expires to make up bis mind whether to retain the servant by absorbing him in regular service or dispense with his service.

Period of prol)ation may vary from post to post or master to master. And it is not obli gatory on the master to prescribe a period of probation. It is always open to the employer 'to employ a person without putting him on 'Probation.· Power to put the employee on probation for watching his performance and the period during which the performance is to be observed is the prerogative of the employer.

(!) [1958] S, C.R. 828.

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AJIT SiNOH v. PUNiAil (besai, J.) 521

ltule 9 (2) provides that a person appointed to a service shall temain on probation for a period of two years if appointed by direct recruitment etc. Emphasis was placed on the use of the expression 'shall' and it was urged that it is mandatory. It was also urged that the rule leaves no discretion in the. appointing authority to prescribe a period of probation shorter than two years. And even if someone has attempted to do the same that being clearly illegal, the person concerned having been fastened with the knowledge of the statutory rule cannot contend that his period of probation is less than two years, and the court will have to proceed on the basis that period of probation shall be two years. This submission raises a vital question whether the use of the expression 'shall' in rule 9 (2) indicates that the rule was to be mandatory in its application and no one will have a discretion to prescribe a period shorter than two years. On a plain grammatical construction of the rule it appears clear that the prescribed period of two years was the maximum period and that placed an embargo on the appointing authority denying it a right to prescribe a period of probation longer than two years. But the rule • does not admit of a construction that a period shorter than two years cannot be prescribed. The purpose underlying the rule was to give an opportunity to the appointing authority, in this case the State Government, to determine the suitability of the person appointed and the State Government having the bio-data of officers before it may feel that a period shorter than 2 years would suffice it to make up its mind whether to retain the employee concerned or to dispense with his service. Rule 9 (2) is thus an enabling provision which permits the Government to prescribe a period of probation and the period can be anywhere upto two years and not in excess of 2 years. Such

enabling provision is generally held to be directory and not mandatory. The rule is cast in affirmative language and there is no pro hi bi tion placed in public interest. In order to determine whether a provision is mandatory or directory, there is no general rule which may help. It is the duty of Court to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be cons.trued. (See Cullimore v. Lyme Regis Corporation. (1) The use of the expressioo 'shall' is not considered decisive and the ques tion whether a provision is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent it clothed. This Court in State of U.P. & Ors. v. Babu Ram

(I) (1962] 1 Q.B. 718,

sUPRllMB d6tl&t Rl'!POJi.ts [i983j s.e.t.

Upadhaya,(') after referring to Crawford "On the Construction of Statutes", Craies on "Statute Law", Maxwell on "The Interpretation of Statutes", State of UP. v. Manbodhan Lal Srivastava(') and Montreal Street Railway Company v. Nirmandin,(3) briefly formulated the relevant rules for interpretation a8 under :

"When a statute uses the word 'shall', primafacie, it is mandatory but the Court may ascertain the real intention of the Legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature, the Court may consider inter alia, the nature and the design of the statute and the consequences which would follow from construing it the one way or the other, the impact of other provisions whereby t!:ie necessity of complying with the provisions in question is avoided, the circumstance, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, the sedous or trivial consequences that flow therefrom and, above all, whether the object of the Legislation will be defeated or furthered."

This rule of interpretation was re-affirmed recently in Municipal Corporation of Greater Bombay v. B. E. S. T, Workers Union(').

In order to as, certain whether rule 9(2)1is mandatory or directory, the setting in which it is placed, the purpose underlying the provision, the object sought to be achieved would help in determining whether it is mandatory or directory. As we have pointed out above that rule 9(2) was an enabling provision conferiog power on the State Government to put a person appointed by direct recruitment on a probation of maximum period of two years and no consequence of failure to comply with the same is provided in the relevant rules, the provision appears to be direc: tory. Obviously, the appointing authority having regard to all the circumstances may not be inclined to prescribe any period of probation or may prescribe a shorter period of probation. This power is not taken away by the use of the expression 'shall' in rule

(I) (1961) 2 S.C.R. 679 at 710. ai [1958J 2 s.c.a. 533.

(3) LR (1917) AC 170.

(4) (197313 s.c.a. 288.

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A11T SINGH v. PUNJAB (Desai, 1.)

9(2). And let it be remembered that the power of appointment A is vested in the highest executive namely the State Government and the power is to be exercised on the recommndation of a statutory body. Viewed from all these angles, it appears clear to us that rule 9(2) is directory and confers a discretion on the State Government to prescribe a period of probation shorter than the maximum set out in rule 9(2).

Having clearly ascertained the purpose and intendment under lying the concept of probationary period in service jurisprudence, one can confiently say, that it is not absolutely necessary to prescribe a period of probation in each case and the State Government as an appointing authority will have discretion in this matter subject to rules by which appointment is governed, otherwise the rule would be counter-productive. Highly qualified and experienced persons coming into service at a later stage in life like petitoners Ajit Singh and Rajinder Singh, who after rendering service for a long period of 26 years came to be appointed as direct recruits, would be disinclined to be on a probation for a period of two years. And the appointing authority, in this case the State Govern ment, not any lower officer, noting their worth and value may either wholly dispense with . the period of probation or reduce it considerably. If such be the purpose and intendmcnt underlying the concept of probationary period, it is reasonable to infer that in respect of such experienced and highly qualified persons, the appointing authority the State Government must have prescribed the period of probation of one year.

And that is why uniformly in each appointment order, the appointee concerned was told that his period of probation would be one year only. To bold with the ' respondents that this is a typographical-cum-clerical error is such over simplification as would be doing violence to common sense.

We arc therefore, of the opinion that in case of each of the appointee, the period of ptobation prescribed was one year only.

This conclusion is buttressed by another circumstance appearing in the record. When each of the petitioners completed his one year of service, which marked the expiration of the period of pro bation, an increment was released in his favour. Subject to the specific rule to the contrary, ordinarily no increment is earned . during the period of probation. But at any rate, if an increment can

be earned after the expiry of the period of probation, it would depend upon the satisfaction of the appointing authority that the

530 SUPIU!ilB COURT REPORTS [1983J 2 s.C.i.I..

work and conduct of the probationer was satisfactory.

Further rule 4. 7 of the Punjab Civil Service Rules Vol. 1 provides that an increment shall ordinarily be drawn as a matter of course, unless it is withheld. An increment may be withheld from a Government employee by a competent authority if his conduct has not been good or his work has not been satisfactory. Now almost all the petitioners completed their. one yeat service by fone, 1980. An increment was released in favour of each of them. It is implicit in release of incre meat that the petitioners bad satisfactorily discharged their duty during the probation period, and at any rate the work and conduct was not shon to be unsatisfactory, which permitted an increment to be earned. Asst1ming, as contended for on behalf of the respon dents that period of probation was two years, the fact that on the expiry of one year of service an increment was released, would imply that during the period of one year the work and conduct has not been unsatisfactory. If it was otherwise the release of increment could have been interdicted on the ground that neither the work nor the conduct was satisfactory. The fact that the increment was released would atleast permit an inference that there was satisfactory comple tion of the probation period and that during the probationary period, the work and conduct of each of the petitioner was satisfactory.

If upto the end of June, 1980, the work and conduct of each of the petitioner was satisfactory and if the service of each of them was simultaneously on the same day Septem her 28, 1980 disi)ensed with on the ground mentioned in rule 9 (2) (a) in that in the opinion of the appointing authority, the work and conduct of each of the peti tioner was not satisfactory, then between June 1980 and September 1980 something was simultaneously done by each of the petitioners to permit the appointing authority-the State to reach an affirmative conclusion that the work and conduct, became wholly unsatisfactory and the degree of dissatisfaction with the service was so high that the service of all the 11 petitioners recruited on the same day was required to be dispensed with on identical ground. This is too for

tuitous to carry conviction.

Mr. M.K. Ramamurthi, in this connection, contended that there is no satisfactory explanation as to what suddenly occurred in respect of all the 11 petitioners recruited on the same day to render thefr otherwise satisfactory service as unsatisfactory and that too during the short period after release of increment ? Mr. Ramamurthi urged that between recruitment and termination of service, the politi

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AllT SINGH v. PUNJAB (/)esai, J.)

 cal hue of the party in power changed. Maybe, there may be some substance in the contention, but for paucity of evidence we are not inclined to examine this contention. We would rather confine ourselves to the positive averment in the return filed on behalf of the respondents for dispensing with the service of all the petitioners. In Para 9 of the return, following reasons are assigned for dispensing with the services of the petitioners :

"The services of the petitioners have been dispensed with and not terminated because :-

(i) They had not completed their period of probation on the date of order; C "

(ii) .Their services were no longer required as the Improvement Trusts in the State of Punjab bad been dissolved;

(iii) Their continuance in service was only causing unnecessary burden to the State Exchequer;

(iv) They being probationers had no right to the posts.

(v) Their performance, in the opinion of the appointing authority, was not upto the mark."

We will meticulously examine the validity of each one of these reasons seriatim.

The first submission is that each of the petitioners had not completed the period of probation on the date of impugned order.

This proceeds on the assumption that the period of probation was two years. For the reasons bereinabove stated, this submission is contrary to the record. If the period of probation was one year as held by us, indisputably each one of the petitioners had completed his period of probation on the date of the impugned order. Therefore this reason is untenable and will have to be ignored.

The second reason assigned for the impugned action was that the services of lhe petitioners were no longer required as the. Improvement Trusts in the State of Punjab had been dissolved. By an order dated August 11, 1980, Government of Punjab in exercise of the power conferred by sec. 103 (I) of the Act dissolved with immediate effect the trusts therein set out. , Jn all 21 Trusts were dissolved.

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532 SUPlBllE couaT llll1'0ltT$ (19&3! 2 s.c.R ..

Each Trust had an Executive Officer. If 21 Trusts were dissolved, 21 Executive Officers bc;_came surplus and their services W?uld no longer be necessary as contendcid on behalf of the respondents. Only 11 direct recruits of 1979 recruitment were adversely affected by the dissolution of the Trusts in that their services were dispensed with. We were not informed as to how Trusts Executive Officers of other 10 Trusts were dealt with, but as petitioners have not made any grievance in that behalf, we would overlook that aspect. Petitioners on the contrary contend that dissolution of the Trusts was a device to get rid of the petitioners. It would be stretching credibility too far to hold on the material placed before us that the State Government l"ent to the extreme length of dissolving Trusts to get rid of 11 petitioners, though in the circumstances of the case it is equally difficult to disabuse our mind that such may be tlie unde_rlyingmotive. We are however determined not to be influenced by the alleged possible motivation. The question is if the Trusts were dissolved, what happened to the assets, liabilities and the ongoing and continuing functions of the Trusts. If the assets, liabilities and ongoing functions were taken over by some other bodies, but with their own staff carried on the activities, there would have been some semblence of justification in the action of the respondent in treating the petitio- \ ners as surplus and dispensing with the services on that account. On the contrary, it becomes evident from the record and it was not disputed that except the 11 Executive Officerspetitioners herein, all other staff of all the Trusts were retained and they carried out the functions of the Trust under the supervision of an officer appointed by !the Municipal Committee or in some cases by the State Government. It thus unquestionably appears that what was dissolved was the Board of Trustees and not the Trusts. Only the nomenclature changed. The work continued. And this is evident from the fact that as late as August 19, 1980, Batala Improvement Trust issued a notice inviting objections from the public in respect of its development scheme. Similarly on October 11, 1980 Amritsar Improvement Trust invited applications for allotment of plots to the local displaced persq, ns. available in certain schemes framed by it. We can multiply such illustration.

But we consider it unnecessary to do so. And it is impossible to believe that on mere dissolution of the Board of Trustees, all its functions were wound up.

As many as 1500 officers and other members of the staff continued to work for the so-called dissolved Trusts. The only persons whose services were dispensed with as no more necessary were the

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AJlT SINGH v. PUNJAB (Desai, !.) 533

11 petitioners i. e. the direct recruits of 1979. In this back ground, it becomes difficult to escape the conclusion though we are trying our level best to do so that dissolution of the aTrusts was a device to get rid of the petitioners. But on that point we say no more. Mr.•Hardy pointed out that by the Ordinance .No. 6 of 1980 styled as Punjab Town Improvement (Amendment) Ordinance, 1980, sub-sec. (2) was introduced to sec. 103 which took care of the situation arising out of the dissolution of the Trusts. It provided that all properties, funds and dues vested in or realisable by the Trust and Chairman respectively shall vests in and be realisable by the State Government till they stand transferred to the Municipal Committee under subsec. 3. Sub-clause (c) ofsubsection (2) enabled the Government to appoint a Class I Officer of the State Government for the purpose of completing the execution of any scheme which the Trust may be implementing. And 1!u_bsec. (3) provided for the consequsnces after all the functions Eof the dissolved Trusts were discharged. We fail to see how this section can throw any light on the point under discussion? On the contrary, by the very order dissolving the Trusts, certain officers were appointed in respect of each trust to carry on the functions of the Trusts. Therefore, the Trust independent of the Board of Trustees had a corporate person ality. It had a perpetual succession and its functions had to be carried oul They effect of the dissolution of the Trusts was merely dissolving the Board of Trustees. The corporate personality of the Trust remained, inviolate. But the Punjab Government took advantage of the dissolution order dissolving in effect the Board of Trustees and dispensed with the services of 11 petitioners. If the Trusts are functioning, if its schemes are being implemented, if all other staff is retained, we find it difficult to accept the submission of Mr. ljardy that the services of the petitioners were no longer required because of the dissolution of the Trusts, and therefore the same have been dispensed with.

The third reason assigned is that their continuance in service was only imposing an unnecessary burden on the State Exchequer. In fact this is actually begging the issue. After removing the peti tloners, 11 other officers were asked to take over the duties of the petitioners. In the order dissolving the Trusts, it is mentioned that in exercise of the power conferred by clause (2) (c) of sec. 103

of the Act. the Governor of Punjab is further pleased to direct that the officers indicated in column 2 shall perform the functions of the Trust and the Chairman under the Act. Trust Executive Officer Wl!S the hihest exe\:utive off!cer and qis funvtion js to \le discharged

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SUPREME COURT REPORTS [1983] Z s.c.11.

by the newly appointed officer. It is therefore, difficult to accept the submission that the continued retention in service of the petitioner after the dissolution of the Trusts was imposing an unneces• sary burden on the State Exchequer.

This submission does nor. commend to us for the additional reason that the State Exchequer was not responsible for the salary and perquisites of the Trust EJCecutive Officers, in view of the provi sion contained in sub.sec. (4) of sec 17 of the Act which provides that salary, allowances, gratuity, annuity, pension and other payments required to be made to the members of the Trust Service in accordance with the conditions of. their service shall be charged from the funds of the Trust in the prescribed manner.

The fourth and fifth grounds for dispensing with the sel'Vices of the petitioners were that the petitioners being probationers bad no right to the posts, and their performance in the opinion of the appointing authority was not satisfactory are wholly untenable because the period of probation had expired and they were continued in service after allowing each one of them to earn an increment. It is a permissible inference that till allowing each petitioner to earn his increment, his service and work were deemed to be satisfactoty and nothing is pointed out to us as to what occurred in respect of 11 petitioners simultaneously within hardly a period of less than six weeks since the release of increment to stigmatise each one of them that his work and conduct was not satisfactory. Therefore, the conclusion is inescapable tba.t none of the reasons assigned for dispen. sing with the services of the 11 petitioners is tenable.

Now if the reasons for dispensing with the services of petitio ners are untenable, the question is whether the action of dispensing with services of the petitioners is arbitrary. Mr. Hardy, learned counsel for the respondents contended that even if the Court is satisfied that the reasons set out in the return for dispensing with the services of the petitioners are untenable and irrelevant, nonetheless the Trusts having been dissolved the conclusion cannot be escaped that services of the petitioners as Trust Executive Officer were no more necessary and therefore, this Court cannot interfere with the order dispensing with the services of the petitioners. We remain unconvinced. Though there was formal dissolution of Trusts, in effect and substance the Board of Trustees was dissolved. Corporate perso nality of Trusts remained 11nalfte<1. St11ff rlllaiqed. fu11c!io11s wr~

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Am SINGH v. PUNJAB (Deaal; .J.) 535

being carried out. By the time the writ petitions came up for hearing Mr. Ramamulthi pointed out that the Trusts have been re constituted and that was not seriously disputed by Mr. Hardy. Fur ther, it is crystal clear that what was dissolved was the Board of Trustees and not the Trusts because functions of the Trusts were being discharged by other officers. The entire staff of the Trusts except the 11 petitioners was retained. Schemes formulated by the Trusts were being implemented. In other words, the corporate per sonality remained almost inviolate. Even if we decline to examin.e the charge of malafides, there are certain aspects herein discussed which cannot be overlooked and which compulsively and unerringly point in the direction that theaction was arbitrary. To recapitulate these circumstances, it is crystal clear that the Board of Trustees was dissolved, the Trusts without the name of Trust continued, their functions continued, the staff excluding the II Trust Executive Officers was retained, and in place of the officers whose services were dispen sed with, some other. officers were asked to take over their functions and duties, and within a short time, the Trusts were formally consti tuted. The only effect sought to be achieved by the bizarre exercise of first acquiring power to disolve the trusts and then c; rdering their dissolution was to dispense with service of only 11 Trusts Executive Officers of 19?9 recruitment. And having achieved the desired result the Trusts have been reconstituted albeit without showing the fair ness of recalling the discharged 11 Trust Executive Officers. There fore, without imputing any motive, the conclusion is inescapable that the action was thoroughly arbitrary and violative of the guarantee of equality of opportunity enshrined in Art. 16 read with Art. 14 of the Constitution and such thoroughly arbitrary action cannot be sustain ed, and deserves to be quashed.

The last contention of Mr. Hardy was that in any event even if the Court comes to the conclusion that the petitioners had completed the period of probation, yet they would be temporary government servants and their services were dispensed with after giving them salary for one month in tieu of notice and as the Trusts no more exists, they atleast cannot be reinstated.

We find no substance in this contention. We would have been required to examine this con tention in some depth, but we are spared the exercise in view of the decision of this Court in The Manager, Government Branch Press and

Anr. v. D.B. Belliappa, wherein it was observed as under :

"Conversely, if the services of a temporary government

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SUPREME COURT REPORTS [1983) 2 s.c.R.

his unsuitability, unsatisfactory conduct or the like which would put him in a class apart from bis juniors in the same service, a question of unfair discrimination may arise, notwithstanding the fact that in terminating his service, the appointing authority was purporting to act in accordance with the terms of the employment. Where a charge of unfair discrimination is levelled with specificity, or inproper motives are imputed to the authority making the impugned order of termination of the service, it is the duty of the authority to dispel that charge by disclosing to the Court the reason or motive which impelled it I<) take the impugned action."

We have reached the conclusion that the action was thoroughly arbitrary and if it is arbitrary, it smacks of discrimination an~ a discriminatory treatment in the matter of public employment cannot be overlooked.

Accordingly, these petitions must succeed. The order dated September 25, 1980 dispensing with the service of each of the petitioner is quashed and set aside and it is declared that all the peti- .tioners continue to be in service and they should be forthwith reinstated. By an interim order made by this Court, respondents were directed to pay !half the salary to the prtitioners from the date of dispensing with their services till further orders. Now that it is declared that the petitioners continue to be in service, each of the petitioners shall be paid bis full salary with effect from the date of bis judgment, but, for the period between the date'.of dispensing with the service and till today, each of the petitioners should be paid only half the salary. The respondents shall pay the costs to the petitioners and bear their own.

P.B.R.

Petitions allowed.