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Issues Involved:
1. Nature of the appointment of the respondent: whether it was regular or contractual. 2. Validity of the termination of the respondent's appointment if it was contractual. Detailed Analysis: Re: Question No.1 - Nature of the Appointment The core issue was to determine whether the respondent's appointment was regular or contractual. The initial advertisement did not specify the nature of the appointment. However, the offer letter dated 8th January 1997, clearly indicated that the appointment was on a contractual basis for three years, renewable based on performance, and terminable with three months' notice or salary in lieu thereof. The formal appointment order dated 6th February 1997, reiterated these terms. The respondent's request for amending Clause (2) of the appointment letter to align with GRIDCO Officers Service Regulations was accepted, but it did not alter the contractual nature of the appointment. The amendments only clarified that the tenure could be extended until superannuation, subject to periodic renewals and performance reviews, without implying a regular appointment. The GRIDCO Officers Service Regulations, particularly Para 13(3), mandated that appointments to grades above E-9, including the respondent's position, be on a contractual basis. This regulatory framework reinforced the contractual nature of the appointment. The Division Bench's view that the appointment was regular was thus incorrect, as the contractual terms were clear, unambiguous, and consistent with the applicable regulations. Re: Question No.2 - Validity of the Termination The second issue addressed the judicial reviewability and the validity of the termination of the respondent's contractual appointment. The scope of judicial review in contractual matters involving the State is limited to examining whether the action was arbitrary, irrational, unreasonable, or mala fide. The respondent's termination was in accordance with the contractual terms, which allowed termination with three months' notice or salary in lieu thereof. The respondent's performance and the corporation's need for his role were within the discretion of the appellant-Corporation. There was no evidence of mala fides or unfair treatment. The termination was thus a legitimate exercise of the contractual terms. Judicial precedents, such as Shrilekha Vidyarthi v. State of U.P. and others, establish that State actions in contractual matters are subject to Article 14, ensuring non-arbitrariness. However, the courts do not substitute their judgment for that of the administrative authority unless the decision is perverse or irrational. The respondent's case did not meet the criteria for judicial interference, as the termination was neither arbitrary nor irrational. In conclusion, the Supreme Court found that the respondent's appointment was indeed contractual, and the termination was valid and in accordance with the terms of the contract. The appeal was allowed, and the judgment of the Division Bench of the High Court of Orissa was set aside. The respondent was allowed to retain any salary and allowances paid pursuant to the impugned judgment, with no recovery directed. Each party was to bear its own costs.
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