1998 (3) TMI 691 - SC - Indian Laws

Summary

Issues Involved:

1. Whether the appellant was a probationer or a confirmed employee at the time of termination.
2. Whether the termination of the appellant's services was valid under the Service Rules.
3. Whether the principles of natural justice were followed in the termination process.
4. The appropriate relief or compensation for the appellant.

Issue-wise Detailed Analysis:

1. Probationer or Confirmed Employee:

The appellant was appointed as Divisional Manager on 10.01.1978, with a probation period of one year. The Service Rules required the appointing authority to issue a certificate of satisfactory completion of probation, but no such certificate was issued. The High Court held that the appellant remained a probationer until his termination on 31.03.1985. However, the affidavit filed by the respondents indicated that the appellant was considered a regular employee from 10.01.1979. The Supreme Court found that the appellant was considered to have satisfactorily completed his probation and was treated as a confirmed employee since 10.01.1979.

2. Validity of Termination:

The termination order dated 31.03.1985 provided three months' pay in lieu of notice, indicating that the appellant was treated as a confirmed employee. Under the Service Rules, a confirmed employee could be discharged on three months' notice or salary in lieu thereof. The Managing Director's report, which was placed before the Board of Directors, detailed the appellant's inefficiencies and the losses incurred by the Corporation. The Board decided to terminate the appellant's services based on this report. The Supreme Court found that there was no breach of the Rule relating to discharge, as the report provided cogent reasons for the appellant's termination.

3. Principles of Natural Justice:

The Service Rules required that a confirmed employee be given an opportunity to explain himself before a decision on discharge is made. The Supreme Court held that the word "may" in the Rule should be construed as "shall" to comply with the principles of natural justice. The appellant was not given an opportunity to explain himself before the termination decision was made, which constituted a serious violation of natural justice. Therefore, the termination order was vitiated and could not be sustained.

4. Relief or Compensation:

Given that the appellant would retire in June 1998 and considering the Corporation's poor financial condition, the Supreme Court deemed monetary compensation appropriate. The appellant had not worked for the Corporation since his termination and had not joined the Corporation even after obtaining a stay order. The Supreme Court directed the respondents to pay the appellant Rs. 2 lakhs as compensation within three months, considering the totality of circumstances.

Conclusion:

The appeal was allowed with costs, and the termination order was set aside. The respondents were directed to pay Rs. 2 lakhs to the appellant as compensation.