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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Sri Sanjeev Sindhwani.
  • Sri V. Krishnamurthi and Sri A.E Sinha.
Judges
  • Sri S.C Jain, J.
Acts
  • Rule 2(14) of the Rules
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Sri Sanjeev Sindhwani.
  • Sri V. Krishnamurthi and Sri A.E Sinha.
Judges
  • Sri S.C Jain, J.
Acts
  • Rule 2(14) of the Rules
See more information ...
Smart Summary

Judgment Summary — S.C. Jain, J.

Factual and Procedural Background

The petitioner, Mrs. Jyotsna Raina, was appointed as "Senior Sales Assistant" by an office order dated 23.7.1987 issued on behalf of the Managing Director of Tamilnadu Handicrafts Development Corporation Ltd., Madras. The appointment letter contained terms including Clause 4 (probation for six months with management's right to extend up to a maximum of one year) and Clause 5 (service governed by the Corporation's service rules). The petitioner joined service with effect from 4.5.1987 (forenoon) at the Poompuhar Sales Showroom in New Delhi.

By an office order dated 15.4.1988, the probation period was extended by another six months, which the opinion states expired on 3.5.1988. No further order extending probation was passed, but the petitioner continued to work until her services were terminated by an office order dated 24.7.1990 issued by the Sales Manager, effective 31.7.1990, on the ground of "want of vacancy." The petitioner challenged that termination by filing the writ petition that is the subject of this opinion.

Legal Issues Presented

  1. Whether the petitioner stood confirmed in service after expiry of the maximum period of probation prescribed in the appointment terms (such that no formal order of confirmation was necessary).
  2. Whether the termination of the petitioner's services by the respondent on the ground of "want of vacancy" was lawful, in particular whether Rule 2(14) of the Tamilnadu Handicrafts Development Corporation Service Rules (1979) — requiring three months' notice or payment in lieu — was complied with.
  3. Whether the Sales Manager had the authority to issue the termination order when the Managing Director was the appointing authority, including whether any delegation of termination power was proved.
  4. Whether the termination was mala fide, arbitrary, violative of principles of natural justice and the petitioner’s constitutional protections (Articles 14, 16 and 20 of the Constitution of India as alleged).

Arguments of the Parties

Petitioner's Arguments

  • After successful completion of the maximum period of probation (one and a half years), the petitioner stood confirmed in the post even without a formal order of confirmation; reliance placed on State of Punjab v. Dharam Singh (1968) for the proposition that formal confirmation is not necessary on expiry of maximum probation.
  • Once confirmed, the respondent had no power to summarily terminate the petitioner on the ground of "want of vacancy"; such termination amounted to removal from service and required a proper enquiry and observance of natural justice.
  • The termination order dated 24.7.1990 was without jurisdiction because the appointing authority was the Managing Director whereas the order was issued by the Sales Manager.
  • Termination violated Rule 2(14) of the service rules (three months' notice or salary in lieu) and violated Articles 14, 16 and 20 of the Constitution; the action was mala fide, arbitrary and without jurisdiction.

Respondent's Arguments

  • The management asserted a power to keep an employee on probation for a maximum period of three years (contention later rejected by the Court as being against record).
  • It was acknowledged that Rule 2(14) requires three months' salary at termination, and the Corporation stated its readiness to pay the same; omission to mention payment in the termination order was described as a mistake/irregularity that could be cured by tendering payment later.
  • The Managing Director had delegated certain powers to pass termination orders against certain cadres of employees, and by virtue of that delegation the Sales Manager was competent to issue the termination order dated 24.7.1990.
  • The respondent relied on K. A. Barot v. State of Gujarat (1990) for the proposition that probation does not necessarily transform into confirmation unless there is a specific order of confirmation (though the Court found this reliance inapplicable on the facts of the present case).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of Punjab v. Dharam Singh, 1968 (II) SLR 247 Formal order of confirmation is not necessary on expiry of the maximum period of probation prescribed under the rules. The Court applied this principle to hold that the petitioner's service automatically stood confirmed with effect from 4.11.1988, upon expiry of the maximum probationary period prescribed in the appointment terms.
K A. Barot v. State of Gujarat, 1990 (Suppl.) SCC 287 Probation does not transform into confirmation unless there is a specific order of confirmation (as applied in that case on its facts). The Court considered the decision but held that its facts were different and that K. A. Barot did not assist the respondent in the present case; the Court distinguished that precedent on the special facts of the cited case.

Court's Reasoning and Analysis

The Court proceeded in two main stages:

  1. Probation and confirmation:

    The Court examined the appointment terms (Clause 4) which provided an initial six months' probation with management's right to extend up to a further year, fixing the maximum probation at one and a half years. Although no specific order of confirmation was ever issued, the Court relied on the Supreme Court's ruling in State of Punjab v. Dharam Singh that a formal order of confirmation is not necessary where the maximum probationary period prescribed under the rules has expired. Applying that principle to the facts (the opinion identifies the maximum probationary period as having expired on 3.11.1988), the Court concluded that the petitioner's service automatically stood confirmed with effect from 4.11.1988.

  2. Lawfulness of termination:

    The Court analyzed Rule 2(14) of the Tamilnadu Handicrafts Development Corporation Service Rules (1979), which provides that services may be terminated for reasons other than misconduct by the appointing authority on giving three months' notice or payment of corresponding salary in lieu. The Court noted that the respondent did not dispute the applicability of these rules but also did not show compliance with Rule 2(14) at the time of termination — the termination order did not state that three months' salary would be paid, and there was no contemporaneous notice or payment tendered.

    The Court further found that the respondent failed to demonstrate the non-existence of a vacancy or to explain the selection of the petitioner for termination despite her not being the junior-most Sales Assistant. The purported ground of "want of vacancy" was shown to be unsubstantiated — the Court observed that the alleged vacancy situation (linked to an employee transfer) was not adequately handled in a manner that would lawfully necessitate termination. The Court concluded that the ground of "want of vacancy" appeared to have been created to terminate the petitioner, indicating malafides on the part of the respondent.

    Additionally, the Court addressed authority to terminate. It observed that the appointing authority was the Managing Director and that there was nothing on record to show a delegation of power to the Sales Manager to terminate the services of the petitioner. Because the termination was issued by the Sales Manager and no delegation was proved, the termination was also invalid on that ground.

Weighing these factors together — automatic confirmation by expiry of maximum probation, non-compliance with Rule 2(14), absence of proof of genuine "want of vacancy", and lack of proven delegation of terminating authority — the Court concluded that the termination was mala fide, arbitrary and without jurisdiction.

Holding and Implications

Final Disposition: The writ petition is allowed; the termination letter dated 24.7.1990 stands quashed; the respondents are directed to treat the petitioner in service and to give her all consequential benefits.

Implications:

  • Direct effect on the parties: The petitioner is to be reinstated in service and accorded all consequential benefits arising from quashing of the termination order.
  • On broader law: The Court applied established Supreme Court authority (State of Punjab v. Dharam Singh) to hold that confirmation can arise automatically on expiry of the maximum probationary period prescribed; the Court distinguished the respondent's reliance on K. A. Barot as factually inapposite. The opinion does not purport to create new precedent beyond the application of existing authorities to the facts of this case.
Show full summary ...

    Smt. Jyotsna Raina v. Tamil Nadu Handicrafts Development Corporation, Ltd., And Another

    S.C Jain, J.:— Mrs. Jyotsna Raina, hereinafter referred to as the petitioner, was appointed as “Senior Sales Assistant” vide office order dated 23.7.1987 issued on behalf of the Managing Director of Tamilnadu Handicrafts Development Corporation Ltd., Madras. Clause 4 of the terms and conditions, inter alia, stated that the petitioner will be on probation for a period of six months from the date of joining, but the management will have the right to extend this period of probation upto a maximum period of one year. Clause 5 further states that the service of the petitioner shall be governed by the service rules of the Corporation. The petitioner joined w.e.f 4.5.1987 (forenoon) at Poompuhar Sales Show room at New Delhi. Vide office order dated 15.4.1988 the probation period was extended by another period of six months which expired on 3.5.1988 No order was passed thereafter extending the period of probation. However, she continued to work in that capacity till 31.7.1990 when her services were terminated vide office order dated 24.7.90 issued by the Sales Manager of the respondent Corporation for want of vacancy.

    2. This order of termination has been challenged by the petitioner on various grounds by filing this writ petition.

    3. The counsel for the petitioner submitted that after successful completion of the maximum period of probation i.e one and a half year on 4.11.1988, as prescribed in the appointment letter, the petitioner stood confirmed to the post of Senior Sales Assistant even though no formal order to this effect was passed. He relied upon the decision of the Supreme Court in State Of Punjab v. Dharam Singh 1968 (II) SLR 247 in support of his contention that a formal order of confirmation is not necessary on the expiry of probation. After such confirmation the respondent had no power to terminate the services of the petitioner summarily on the ground of “want of vacancy”. Such an action on the part of the respondent amounted to “removal from service” which cannot be done without proper enquiry and without complying with the rules of natural justice.

    4. The next submission made by the learned counsel for the petitioner is that the impugned office order dated 24.7.90 terminating the services of the petitioner w.e.f 31.7.90 is wholly without jurisdiction and nullity inasmuch as the appointing authority of the petitioner is the Managing Director whereas the termination order has been issued by the Sales Manager. Learned counsel for the petitioner further submitted that besides the terms and conditions of the appointment the service of the petitioner is governed by the service rules of Tamilnadu Handicrafts Development Corporation Ltd. 1979 (hereinafter referred to as the rules). He drew my attention to Rule 2(14) of the Rules dealing with the termination of the service of an employee which reads as under:—

    “The services of any employee of the Corporation can be terminated for reasons other than those of misconduct by the appointing authority on giving three months notice or payment of corresponding salary in lieu thereof.”

    5. According to the learned counsel for the petitioner while terminating service of the petitioner the respondent has violated this rule. On 24.7.90, she attended the office in normal course and performed her duty but to her shock and surprise she was handed over letter dated 24.7.90 terminating her services w.e.f 31.7.90 on the alleged ground of “want of vacancy”. This action of the respondent is malafide, arbitrary and without jurisdiction. It is also in violation of Articles 14, 16 and 20 of the Constitution of India and is against the pritciples of natural justice.

    6. Connter affidavits have been filed by the Regional Manager and Sales Manager of the respondent Corporation. It has been pleaded that the management has the power to keep a person under probation for a maximum period of three years. It is admitted that the Corporation is bound to give three months salary at the time of terminating the service of an employee which the Corporation is always ready to pay the same as per Rule 2(14) of the Rules. Unfortunately, when the order of termination was served on 24.7.50, she was asked to hand over the charge to another employee of the showroom. She had not handed over the charge till 31.7.90 and thereafter she did not report for duty. In the order of termination by mistake it was not mentioned that three months salary would be paid to the petitioner. It is alleged that the Managing Director delegated certain powers regarding passing termination order against certain cadre of employees. By virtue of this delegation the Sales Manager was competent to pass termination order dated 24.7.90 terminating the services of the petitioner. It is denied that there is any malafide intention in passing the termination order against the petitioner.

    7. Learned counsel for the respondent submitted that the probation does not transform itself into confirmation unless there is specific order. In this case, admittedly no confirmation order has been passed confirming the petitioner on the said post. According to the learned counsel, terminating the services of the petitioner by giving her notice cannot be said to be illegal or unjustified though it has not been specifically mentioned in the said order that she would be paid three months salary as per Rule 2(14) of the Rules. But this is only an irregularity and not an illegality and it can be cured by tendering three months salary to the petitioner at a later point of time. He relies upon a decision of the Supreme Court in K A. Barot v. State of Gujrat 1990 (Suppl.) Supreme Court Cases 287.

    8. Admittedly, the petitioner was appointed as Senior Sales Assistant vide order dated 23.4.87 passed by the Managing Director of the Tamilnadu Handicrafts Development Corporation Ltd., Madras. On the terms and conditions annexed with said letter. As per clause 4 of the terms and conditions of the appointment, the petitioner was to be on probation for six months from the date of joining and the probation period, if necessary, could be extended upto a maximum period of one year. It means that the maximum period of probation of the petitioner could not be more than one and half years. No doubt, no specific order of her confirmation was ever passed but it is to be seen whether in the absence of specific order of confirmation she was to be treated as confirmed employee or still on probation.

    9. In this regard, the Hon'ble Judges of the Supreme Court in the State of Punjab v. Dharm Singh (supra) have specifically ruled that “formal order of confirmation is not necessary on expiry of maximum period of probation prescribed under the rules.” In the present case, clause 4 of the terms and conditions of appointment, inter alia, stated that the petitioner will be on probation for a period of six months from the date of joining and the management has the right to extent the period of probation upto a maximum period of one year. The maximum period of one and a half year is prescribed in this case. The maximum period of probation of one and-a-half year expired on 3.11.1988 and as such the service of the petitioner automatically stood confirmed w.e.f 4.11.1988 The decision cited by the counsel for the respondent in K.A Barot (Supra) does not help the respondent in the present circumstances of the casein that case the fact were quite different. Keeping in view the special facts and circumstances of the cited case, the Hon'ble Judges held that the probation does dot transform itself into confirmation unless there is a specific order. The facts of the present case are similar to those of the case State Of Punjab v. Dharam Singh (supra), wherein it was specifically laid down that no formal order of confirmation was necessary, when the maximum period of probation prescribed under rules had already expired.

    10. The plea of the learned counsel for the respondent that in this case the maximum period of probation was three years and it had not expired at the time of termination of her services is against record and as such not tenable.

    11. The next point which needs determination in this case is as to whether the respondent Corporation is justified in terminating the services of the petitioner who stood confirmed on the post of Senior Sales Assistant by sending her a simple termination letter by the Sales Manager for want of vacancy. The respondent has not disputed the applicability of the service Rules of the Tamilnadu Handicrafts Development Corporation, 1979 to the petitioner. It has also not been denied that as per rule 2(14) of the service Rules dealing with the termination of the employee, the Corporation has to give three months notice or payment for corresponding salary in lieu thereof if the services of an employee is sought to be terminated for reasons other than misconduct. It is not the case of the respondent that the services of the petitioner were terminated on account of misconduct but they say that her services were being terminated for want of vacancy. The compliance of rule 2(14) of the service rules has not been made. The respondent has not been able to show as to how there was no vacancy and how her services were terminated when she was not the junior most Sales Assistant. As per the case of the respondent itself, three months notice or corresponding salary in lieu thereof has not been given to the petitioner at the time of termination of her services. The necessity of terminating the services of the petitioner, as per the respondent, arose because one sales assistant Dipti Dutta was transferred from Calcutta unit to Delhi unit. When Dipti Dutta was transferred to Delhi unit, there should be corresponding transfer of another employee to Calcutta unit from any other unit. All this has not been done. In view of this fact the alleged ground of want of vacancy did not exist rather it was created to terminate the services of the petitioner which clearly establishes the malafides of the respondent. Non-observance of rule 2(14) of the service Rules is also fatal in the present case. There is no dispute about the legal proportion that it is only the appointing authority, who is competent to dismiss the services of an employee. In this case, admittedly the Managing Director of respondent No. 1 is the appointing authority but the services of the petitioner has been terminated by the Sales Manager who is below the rank of the Managing Director-the appointing authority. There is nothing on record to show and prove that the Managing Director had delegated his power to the Sales Manager regarding termination of the services of the petitioner who was working as Senior Sales Assistant. On this ground also the petitioner succeeds in challenging the impugned termination order dated 24.7.90

    12. Under these circumstances, this writ petition is allowed. Rule is made absolute. Termination letter dated 24.7.90 stands quashed. The respondents are directed to treat the petitioner in service and give her all consequential benefits. Ordered accordingly.

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    Comments

    Smt. Jyotsna Raina v. Tamil Nadu Handicrafts Development Corporation, Ltd., And Another
    (Aug 21, 1991)