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Case Number

Original Jrdn. Case No. 436 of 1970

Advocates

R.K.Patra
R.C.Pradhan
P.K.Das
G.Rath
C.V.Murthy

Judges

Hon'ble Mr. Justice Bijay Kishore Ray
Hon'ble Mr. Justice Gati Krushna Misra

Acts

overruled.8. Section 73 of the Municipal Act
Section 75(1) of the Orissa Municipal Act
S. 73. Rule 427 of the Municipal Rules

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Smart Summary

Judicial Opinion Summary — R.N. Misra, J.

Factual and Procedural Background

The petitioner claims to have passed the final examination in Civil Engineering in 1956 and thereafter held various technical posts: he served as an Overseer under the Collector of Puri (May 1956 to May 1959), for six months under the Board of Revenue, and was appointed as Overseer (Civil) of Jharsuguda Municipality by order dated 1-4-1961. The appointment was expressly temporary and subject to fitness, antecedents and character verification.

In April 1961 the Municipal Executive Officer sought sanction for a permanent post and, on 16-9-1967, the Director of Urban Local Bodies sanctioned creation of a permanent overseer post under Section 75(1) of the Orissa Municipal Act from the date the post was actually filled. An inspection report for 1964–65 by the Superintending Engineer (Inspector of Local Works) stated that the petitioner was "practically functioning for all technical affairs" and that he was qualified and experienced.

In April 1969 the Inspector recorded an objection saying the petitioner’s certificate was "not equivalent to the Diploma Course" and recommended termination of the "unqualified Overseer." The State Government's Urban Development Department then wrote on 22-8-1969 requesting that, in view of the Inspector's clarification, necessary action be taken.

The petitioner sought to substantiate his qualification in early 1970 and submitted explanation and references to others in service with similar qualifications. Nonetheless, the Municipal Council issued an order dated 27-4-1970 terminating the petitioner’s services on the ground that he was not qualified as pointed out by the Superintending Engineer/P.W.D. The petitioner challenged that termination by writ petition under Article 226.

The Municipal Council filed a return; Opposite Party No. 2 (the official who had found the petitioner unqualified) did not appear to support that conclusion. The Council contended inter alia that the appointment was temporary and terminable by notice, that the petitioner’s diploma was not recognised by the State Government or Chief Engineer, that qualified personnel were available, and that a statutory appeal was available but not pursued by the petitioner.

Legal Issues Presented

Whether Opposite Party No. 2 is estopped from disputing that the petitioner was qualified for the post of Overseer, given earlier admissions and the inspection report.
Whether the writ petition is maintainable despite the availability of a statutory appeal or other statutory remedies.
Whether the termination of the petitioner’s service was lawful where the appointment was temporary and the Council gave the required notice.

Arguments of the Parties

Petitioner's Arguments (as presented)

The petitioner produced particulars of his qualification at the time of appointment in 1961 and relied on the conditional appointment which did not make verification of educational qualification a pre-condition to effectiveness.
The petitioner was earlier found to possess the requisite qualification by Opposite Party No. 2 in the 1964–65 inspection report and his work was satisfactory for years; no objection was raised for eight years.
Four other persons with similar qualifications were serving in corresponding or higher posts in State service, and this fact was not refuted.
The petitioner had relied on the representation of qualification and changed his position over years (including age-related employment prospects), invoking estoppel against belated challenge.
A statutory appeal route was not effectively available to him given the Government’s letter and the direction under which termination followed; therefore he invoked writ jurisdiction.

Opposite Parties' Arguments (as presented)

The Municipal Council maintained the appointment was temporary and terminable by a month's notice and that such notice had been given.
It was asserted that the petitioner’s diploma had not been recognised by the State Government or the Chief Engineer and that qualified overseers/engineers were available.
Opposite Party No. 2's stance (in the Inspector's report and subsequent communication) was that the petitioner’s certificate was not equivalent to the diploma required and accordingly his service should be terminated.
It was further argued that there can be no estoppel against a statutory rule prescribing qualifications — if the prescribed rule was not met, the appointment could not stand.
The return also raised the availability of a statutory appeal which the petitioner had not pursued.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
(1969) 2 SCC 1 : AIR 1970 SC 426	That estoppel is only a rule of evidence and does not create any substantive right or confer a cause of action in ordinary circumstances.	The court cited this to explain the general limits of estoppel while analysing whether estoppel could prevent Opposite Party No. 2 from disputing qualification.
AIR 1954 Mad 402 (403)	That estoppel is capable of being viewed as a substantive rule of law insofar as it helps to create or defeat a right which would not exist but for that doctrine.	Used to support the proposition that, in appropriate circumstances, estoppel may have substantive effect and thereby bar the opposite party's challenge.
Anglo Afgan Agencies' case, AIR 1968 SC 718	The Supreme Court applied the rule of estoppel to support a claim for mandamus in appropriate cases.	Cited as an instance where estoppel was applied by the Supreme Court to grant relief despite other legal constraints; used analogically to justify relief on estoppel grounds.
Century Spinning Mills, (1970) 1 SCC 582 : AIR 1971 SC 1021	The law can raise an equity against a representing authority to compel performance of obligations arising from a representation; estoppel can thus support relief.	Invoked to show that courts have compelled performance where authorities made representations, supporting application of estoppel in the present factual matrix.
Turner Morrison and Co. v. Hungerford Investment (1972) 1 SCWR 887 : (1972) 1 SCC 857 : AIR 1972 SC 1311	That the equitable rule of estoppel has gained new dimensions in recent years.	Used to indicate the evolving scope of equitable estoppel and to justify its application in novel factual situations like the present one.
Lever Finance Ltd. v. West Minster (City) LBC (1970) 3 WLR 732 (CA)	An instance of the extended doctrine of estoppel in Commonwealth jurisprudence.	Referred to as an example of the extended doctrine, supporting the Court's acceptance of broader applications of estoppel.
AIR 1960 SC 100	The rule that an admission by an adversary, if not satisfactorily explained, is strong evidence ("the best piece of evidence").	The court relied on this principle to treat the Inspector's earlier admission in the inspection report as highly persuasive evidence which Opposite Party No. 2 failed to explain away.

Court's Reasoning and Analysis

The court proceeded in discernible analytical steps:

Preliminary objection—availability of alternate statutory remedy: The court acknowledged that availability of statutory remedies does not automatically bar Article 226 relief. Given the State Government's letter to the Executive Officer and the direction under which termination followed, the court accepted the petitioner's contention that invoking writ jurisdiction was appropriate and overruled the preliminary objection.
Statutory framework and prescribed qualification: The court noted Section 73 of the Municipal Act vests power in the Municipal Council to determine establishment subject to State Government sanction, and Section 387(2)(XXIII) allows the State Government to make rules prescribing qualifications. Rule 427 (Municipal Rules) prescribes qualifications for an Overseer (upper subordinate diploma, or lower subordinate diploma or equivalent recognised by the Chief Engineer).
Factual matrix bearing on qualification: The court observed that the petitioner had produced his qualification particulars at appointment in 1961; the appointment order did not make verification of educational qualification a condition precedent to the appointment's effectiveness; Opposite Party No. 2 had earlier (in the 1964–65 inspection report) stated that the petitioner was qualified and competent and had been performing technical duties; no objection was raised for eight years.
Doctrine of estoppel and admissions: The court reviewed authorities on estoppel and its modern application. Recognising that estoppel is generally a rule of evidence (and not a substantive right), but that in certain cases it can operate to create or defeat rights, the court examined whether estoppel barred the opposite parties from challenging the petitioner's qualification. The court placed weight on two factual features: (a) prior admission/acceptance by Opposite Party No. 2 in the inspection report that the petitioner was duly qualified, and (b) the petitioner's changed position (long service and reliance). Because Opposite Party No. 2 did not appear to explain away the admission, the court treated the admission as powerful evidence and held that estoppel and the admission combined to operate as a bar against the opposite parties' subsequent denial.
Statutory command vs. estoppel: The court acknowledged the counter-argument that there can be no estoppel against a statute prescribing qualifications, and that an appointment not meeting the rule cannot ordinarily stand. Nevertheless, on the facts the court found the opposite parties were precluded from disputing the petitioner's qualification because of (i) the prior acceptance by Opposite Party No. 2, (ii) the lapse of time without objection, and (iii) the petitioner's reliance and changed position.
Nature of the termination: Although termination of a temporary servant by notice is permissible, the court observed the stated reason for termination here — lack of qualification — carried a stigma and was not an ordinary exercise of the right to terminate a temporary appointment.
Maintainability as against a municipal council and application of Service Code: The court found no bar to maintainability on the ground that Opposite Party No. 1 is a municipal council; the service is statutory and the Service Code applied.
Conclusion of analysis: Balancing the statutory rules, the factual admissions, the doctrine of estoppel as applied in comparable authorities, and the absence of any satisfactory explanation from the authority who later disavowed the qualification, the court concluded that the termination could not stand.

Holding and Implications

Holding: The court QUASHED the impugned order of termination, allowed the writ application, and directed that the petitioner be restored to service and be deemed to have been always in service notwithstanding the impugned order. The court directed that the parties bear their own costs.

Direct consequences and implications:

Immediate effect: The petitioner's termination dated 27-4-1970 is quashed; the petitioner is to be reinstated and treated as never having been removed from service.
Costs: Each party shall bear its own costs.
Scope of precedent: The court did not state that it was laying down any new general legal rule overturning the statutory prescription of qualifications. Instead, it applied established principles (estoppel and evidentiary weight of admissions) to the specific facts before it. Therefore, no broad new precedent overriding statutory qualification requirements was proclaimed; the decision rests on the particular factual matrix, prior admissions by the authority and the absence of any explanation from that authority.

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M.K Raghavan v. The Municipal Council, Jharsuguda And Another Opposite Parties.

R.N Misra, J.:— The petitioner claims to have passed the final examination in Civil Engineering from the Institute of Engineering Technology at Kumbanad in the State of Tamil Nadu in 1956. Between May 1956 and May, 1959, he served as Overseer under the Collector of Puri and thereafter for six months he served under the Board of Revenue. By order dated 1-4-1961 the Jharsuguda Municipal Council (Opposite partv No. 1) appointed him as an Overseer. His order of appointment ran thus:—;

“Shri M.K Raghavan, at present resident of Jharsuguda is appointed as Overseer (Civil) of Jharsuguda Municipality in the scale of pav of Rs. 110-5-150-EB-8-190 EB-10/2-250/- with usual dearness allowance of Rs. 7.50 n.p

The appointment is purely temporary and terminable at any time without any notice.

The appointment is subject to production of fitness certificate from Asst. Surgeon, Government Hospital, Jharsuguda: verification of antecedents and character.”

2. In April 1961, the Executive Officer of the Municipal Council wrote to the Deputy Commissoner of Sambalpur pleading for sanction of permanent post of Overseer and mentioned about the petitioner's appointment. On 16th September, 1967, the Director of Urban Local Bodies communicated sanction under Section 75(1) of the Orissa Municipal Act to the creation of a permanent post of overseer from the date the post had actually been filled up. In the mean time, the Superintending Engineer, Northern Circle of the Public Works Department who happens to be the Inspector of Local Works so far as Jharsuguda Municipality is concerned, in his inspection report made for the year 1964–1965 dealing with the petitioner stated:

“There is no Municipal engineer in this Municipality. Sri M.K Raghavan (petitioner), Municipal Overseer is practically functioning for all technical affairs of the Municipality. He is in charge of execution of all works under the Municipality. He took over charge of the Municipality from 1-4-1961. The Overseer is a qualified one under rules, and gained sufficient experience under the Municipality by executing various types of works for the last four years.”

3. In April, 1969, the Inspector of Local Works and Superintending Engineer wrote to the Executive Officer of opposite party No. 1:—

“The objection raised by the Audit Officer is genuine. The certificate is not equivalent to the Diploma Course of three years' theory and year's practical in Civil Engineering.

Hence the service of unqualified Overseer Sri M.K Raghavan may be terminated with due notice.”

4. The State Government in Urban Development wrote to the said Executive Officer on 22-8-1969 saving:

“In inviting a reference to the letter No. 5997 dated 8-4-1969 from the Inspector of Local Works and Superintending Engineer Northern Circle on the aforesaid subject (clarification regarding qualification of the Overseer of the Jharsuguda Mumcipality) I am directed to request that in view of the clarification given therein, necessary action may please be taken immediately.”

5. The petitioner contended that he had the requisite qualification and attempted to support his stand by producing the certificate obtained by him in 1956. In January, 1970 the Chairman of the Council called upon him to substantiate his stand by proof. The petitioner furnished a detailed explanation and indicated in his letter of 20-2-1970 that four other persons with the qualification of the petitioner were serving under the State Government in corresponding or higher posts. Thus came the impugned order dated 27-4-1970 saving:

“The services of Sri M.K Raghavan, Overseer are terminated from the date of receipt of this order as he is not qualified as pointed out by the Superintending Engineer P.W.D (N.C), Sambalpur and Inspector of Local works vide his letter No. 2-3 WA-7-69-5997 dt. 1969,”

6. The petitioner challenges the aforesaid order of termination as illegal and not sustainable. The Municipal Council alone has made a return to the rule nisi. The opposite party No. 2, who is said to have found the petitioner to be not qualified, though on an earlier occasion, he had held him to be properly qualified and under whose decision the petitioner's service was ultimately terminated, has not made his appearance in the proceeding to support his conclusion. The Council has pleaded that the petitioner had a temporary appointment and his services could be terminated with a month's notice and as that has been done, he has no grievance to make. The diploma of the petitioner has not been recognised by the State Government of Orissa or the Chief Engineer. Qualified Overseers and even engineers are available in this State. Lastly it is pleaded that the petitioner had a right of appeal under the Act and the writ petition should not be entertained as the petitioner has not exhausted that statutory remedy open to him.

7. It is well settled that availability of an alternate statutory remedy does not bar the jurisdiction under Article 226 though sound exercise of discretion often stands in the way of invoking the extraordinary jurisdiction. In this case the order was under the direction of the Chairman. An appeal would lie to government. In view of the Government letter referred to above sent to the Executive Officer, we accept Mr. Murty's contention that the petitioner rightly thought that no relief could he had from Government. The preliminary objection, therefore must stand overruled.

8. Section 73 of the Municipal Act vests power in the Municipal Council to determine its establishment but subject to the previous sanction of the State Government. Section 387(2)(XXIII) authorises the State Government to make rules prescribing the qualification of candidates for employment under S. 73. Rule 427 of the Municipal Rules in item 3 prescribes:

“3. Overseer — (a) Upper subordinate diploma of a College or School of Engineering; or

(b) Lower subordinate diploma of a College or School of Engineering or an equivalent qualification recognised by the Chief Engineer.

9. Mr. Murty for the petitioner contends that the petitioner had produced particulars of his qualification in 1961, when he was given the appointment. The order of appointment was conditional upon certain other formalities being completed but did not refer to verification of educational qualification as a pre-condition to the appointment being effective. The petitioner was found to have the requisite qualification by the opposite party No. 2 as stated in the annual report of inspection for the year 1964–1965 and his service was found satisfactory. Until eight years had passed objection on the ground of absence of requisite Qualification was not raised. The allegation of the petitioner that four others with similar Qualification are in Government service is not refuted. It is true that we have no material on record to show whether for such posts there is any prescription of Qualification, but we think, we shall do well to assume that Government have found the diploma of the petitioner not to be worthless in their case: otherwise public appointment in posts of technical nature could not have been given to them.

10. It is further contended that at the time of appointment in 1961 the petitioner was 25 years old and, as such, if the Municipal Council did not appoint him, he could have looked for alternate employment. After nine years when he was 34 years old he would not find it possible to get into alternate employment. The Municipal Council as also the opposite Party No. 2 it is contended, are estopped from raisins the dispute over the petitioner's Qualification at this belated stage.

11. Mr. Rath for the opposite party No. 1 answers Mr. Murty's contentions by saving that there can be no estoppel against the statute. Since the rule prescribes the Qualification, and the petitioner does not possess it there can be no appointment and any appointment erroneously given or made in derogation of the statutory rule cannot stand. Mr. Rath agrees that the Municipal Council has no particular grievance against the petitioner, but in view of the direction of the opposite party No. 2 as reiterated by Government, the termination has followed.

12. It is well settled that estoppel is only a rule of evidence which under certain circumstances can be invoked by a party to an action. It does not create any substantive right or confer any cause of action on the other ((1969) 2 SCC 1 : AIR 1970 SC 426), but it is capable of being viewed as a substantive rule of law insofar as it helps to create or defeat a right which would not exist or be taken away but for that doctrine (AIR 1954 Mad 402 (403).) In Anglo Afgan Agencies' case, AIR 1968 SC 718, their Lordships applied the rule for supporting the claim for a mandamus. In Century Spinning Mills, case, (1970) 1 SCC 582 : AIR 1971 SC 1021 their Lordships held that law is not powerless to raise in appropriate cases an eauity against the representing authority to compel performance of the obligation arising out of the representation. In Turner Morrison and Co. v. Hungerford Investment (1972) 1 SCWR 887 : ((1972) 1 SCC 857 : AIR 1972 SC 1311) it has been indicated that the equitable rule of estoppel has gained new dimensions in recent years. In Lever Finance Ltd. v. West Minster (City) LBC, (1970) 3 WLR 732 (CA) an instance of extended doctrine of the rule is available.

13. We have indicated at length the facts of the present case and the sequence of events. In that background is the opposite party No. 2 estopped from disputing the fact that the petitioner, was qualified for the Post?

14. The opposite party No. 2 whose finding that the petitioner is unqualified is in dispute and has brought about the impugned termination does not enter contest. That authority had admitted the petitioner to have the requisite qualification on an earlier occasion. We have not been told as to how that statement was made then. It is not the case of the opposite parties that the petitioner had mis-represented about his qualification at the time of securing his appointment. As already stated the appointment was not conditional upon verification of educational Qualification. It must, therefore, be assumed that both at the time of appointment as also at the time of inspection the respective opposite parties were satisfied that the petitioner was qualified for the post to which he was appointed. To allow the opp. parties to hold to the contrary would be prejudicial to the petitioner. We must say that the petitioner has changed his position to such an extent that he cannot now be subjected to the impugned situation as he cannot relieve himself of the consequences of the representation expressed in the action of the opp. parties on those two occasions.

15. In the two instances (AIR 1968 SC 718 and (1970) 1 SCC 582 : AIR 1971 SC 1021) their Lordships of the Supreme Court while applying the rule of estoppel overlooked the mandatory requirement of law and notwithstanding the fact that in the ordinary circumstances (that is but for application of the doctrine of estoppel no relief was available) no claim was sustainable, gave relief on basis of estoppel. In the present case the appointment of the petitioner is disputed on the ground that the diploma held by him is not of the type the rule requires. We must hold that the opposite parties are precluded from disputing that fact. Besides the petitioner is not a person picked up from the street who does not answer at all the specification. He himself served Government for more than three years before his appointment under the Municipality, Again his service was commended by the opposite party No. 2. Persons of his like are in disputably now in employment of Government.

16. There is another feature in support of his case. The admission of the opposite party No. 2 in the inspection report that the petitioner is duly qualified has not been properly explained away. It is settled law that an admission of the adversary if not satisfactorily explained is the best piece of evidence and goes a I long way in establishing the claim. (AIR 1960 SC 100). The opposite party No. 2 has not cared to appear in the proceeding to explain away his admission. Estoppel and admission thus operate as bar against the present stand of the opposite parties.

17. Mr. Rath reiterated the stand taken in the return that the petitioner was a temporary servant and the termination is in terms of the contract.

18. We agree that there could be termination of the service of a temporary servant by notice, but in the instant case the termination is on the stated ground of want of adequate Qualification. It is certainly a stigma and cannot be held to be an order of termination simpliciter.

19. Objection has not been rightly raised to the maintainability of the petition on the ground that the opposite party No. 1 is a municipal council. The service is statutory and the Service Code has also been applied.

20. We therefore, quash the order of termination of service allow the writ application and direct that the petitioner shall be restored to service and be deemed to have been always in service notwithstanding the impugned order. We direct parties to bear their own costs.

21. B.K Ray, J.:— I agree.

22. Petition allowed.

M.K Raghavan v. The Municipal Council, Jharsuguda And Another Opposite Parties.

Judicial Opinion Summary — R.N. Misra, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's Arguments (as presented)

Opposite Parties' Arguments (as presented)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

M.K Raghavan v. The Municipal Council, Jharsuguda And Another Opposite Parties.

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