Nitin Garg vs Delhi State Industrial Development Corporation Limited

Mukundakam Sharma, C.J.—This appeal is directed against the order dated 7th July, 2006 passed by the learned Single Judge whereby the

writ petition filed by the appellant was dismissed.

The respondent-Corporation appointed the appellant herein as Junior Engineer on a consolidated salary of Rs. 8,400/- per month on contract

basis on 4th October, 2000. In the appointment letter it was specifically stated inter alias as follows:

The post is purely on contract basis for a period of one year only. The appointment can be terminated at any time (on either side) by giving one

month''s notice or by paying one moth''s salary without assigning any reason or failure to complete the initial period of three months to the

satisfaction of the Competent Authority.

Although the aforesaid contract period of one year for which the appellant was appointed has expired, yet the appellant continued in the same

post till his services were terminated under order dated 25th May, 2005. The said order is reproduced as under:

Shri Nitin Garg was appointed to the post of Junior Engineer (Civil/Electrical) on a consolidated salary of Rs. 8,400/- per month purely on contract

basis vide Office Memorandum No. DSIDC/II-8/Estt./2000 dated 04-10-2000.

A joint surprise check was conducted by the CBI at DSIDC, Sector-3, Bawana on 16-09-2003. It was alleged that Sh. Nitin Garg, while posted

and functioning as Junior Engineer (Civil) DSIDC, Bawana handed over the official documents in his possession to an unauthorised person. By his

such acts, Sh. Nitin Garg not only failed to maintain devotion and integrity to duty but also failed to preserve/maintain the prestige of the

corporation.

In view of above irregularities committed by Sh. Nitin Garg and detected by CBI, the contract of engaging Sh.Nitin Garg as Junior Engineer

(Civil/Electrical) on a consolidated salary of Rs. 8,400/- per month vide Office Memorandum No. DSIDC/II-8/Estt/2000 dated 04-10-2000 is

Therefore terminated with immediate effect and a bank draft No. 085894 of Bank of India dated 25-05-2005 for an amount of Rs. 8,400/- is

enclosed in lieu of one month''s notice in view of para-1 of his contract appointment.

Legality of the aforesaid order was challenged before the learned Single Judge on the ground that the same is stigmatic and, Therefore, vocative

of the principles of natural justice. Notice was issued on the writ petition and respondent-Corporation filed a counter affidavit contending inter alias

that the appellant was engaged on contract basis and, Therefore, he has no right to hold the post. It was also stated that the service of the appellant

was terminated by an innocuous order of termination that casts no stigma on him inasmuch as his termination order does not indict appellant for any

misconduct. It was also stated that the inquiry conducted against the appellant was preliminary in nature so as to ascertain the suitability of the

appellant for continuance in service. it is also pointed out that prior to the termination, an inquiry was held against the appellant and other

employees with regard to the allegation registered by the CBI pursuant to a joint surprise check conducted at the office of the respondent which

was in the nature of preliminary inquiry. On completion of the preliminary inquiry, CBI recommended a regular departmental inquiry for major

penalty against two employees including the appellant. Later on however the Central Vigilance Commission gave an opinion in the matter that since

the appellant was engaged on contract basis Therefore his services could be terminated by giving one month''s notice. It appears that the

respondent followed the aforesaid advice given by the CVC, consequent upon which the aforesaid order was passed.

The learned Single Judge who heard the writ petition considered the provisions of the Rule as also service contract of the appellant and after

making reference to the same it was held that the appellant continued to work with the respondent on implied contract which came to an end when

his services were terminated. Since contract period expired with efflux of time, the appellant cannot demand that he should be re-engaged in

service. So far as the use of stigmatic language in the order is concerned, it was held by the learned Single Judge that the same is extraneous matter

and whether it was stigmatic or not had got no bearing on the facts of the case, as the service rules are not applicable to the appellant, he being a

contract employee. The aforesaid findings recorded by the learned Single Judge are under challenge in this appeal on which we have heard the

learned Counsel appearing for the parties.

Our attention has been drawn to the various records including the service rules and the letter of appointment of the appellant. The letter dated

4th October, 2000 whereby the appellant was engaged on contract basis clearly stipulates that the period of contract is one year. It was also

mentioned that he would receive a consolidated salary and that he shall not have any right or claim for regular appointment to that post. It was also

mentioned in the said letter that other conditions of contractual service will be governed by the relevant Rules and orders from time to time.

Our attention was drawn to the Staff Service Rules called Delhi State Industrial Development Corporation Limited (Staff Service) Rules, 1978.

Rule 1(iii) of the said Rules stipulates that the same shall apply to all employees of the Corporation including those on contract or on deputation, in

respect of all matters not regulated by the contract or by the terms of deputation, as the case may be. Rule 2(h) defines an ""employee"" to mean a

person who is in the whole time regular service of the Corporation, but does not include a person employed by the Corporation on daily wage, ad-

hoc and consolidated pay, including persons employed under Apprenticeship Training Scheme and Subsidised Scheme. Rule 3(1) provides that

duration of employment of all persons employed by the Corporation on contract or short terms basis shall be governed by the stipulations made in

this behalf in the appointment letter of each individual employee. ""Employee on contract"" has also been defined in Rile 3(v) to mean that an

employee who has been engaged on contract by the Corporation for a limited period or fixed period or an employee deputed by some other

organisation for training or service of the Corporation and who is likely to be reverted to that organisation. It is, Therefore, clearly established from

the aforesaid stipulations in the letter of appointment on contract basis that the service conditions of the appellant were governed by the conditions

of appointment as stipulated in the aforesaid order of appointment. Rule 26 of the Rules deals with termination of service of an employee. Relevant

portion of the said Rule is as under:

termination of service:

(1) Notwithstanding anything contained in any of the rules of these regulations, the management may terminate the services of any employee other

than the Managing Director at any time by giving him notice in writing for a period not less than that prescribed in Rule 25, if the management in its

considered opinion is satisfied that it is expedient to terminate the service of such employee on account of:

(i) xxxxxxx

(ii) Loss of confidence

(iii) xxxxxxx

(ii) The corporation may at any time and without assigning any reasons, terminate the services of any employee who has not completed his

probation.

(iii) the power to terminate the service shall be exercised by the Appointing Authority as defined in Rule 10(i)

It is established that if the management is of the opinion that it is expedient to terminate the services of any employee on account of loss of

confidence in the said employee, power is vested in the Corporation to terminate his services at any time by giving him notice in writing for a period

not less than that prescribed in Rule 25. Power is also vested in the Corporation to terminate the services of any employee who has not completed

his probation, without assigning any reason and at any time. The appellant was only a contract employee and his services stood terminated

automatically on expiry of the contract by efflux of time. He was allowed to continue even after expiry of the period of contract and later on his

services were terminated under the impugned order. The contract period having expired, the appellant had no right to hold the said post

particularly in view of the fact that his initial appointment was not in accordance with law and provisions of the service Rules i.e. through the regular

process of advertisement, interview and selection. He was also found to be involved in a proceeding registered by the CBI. He has no right to hold

the post and on expiry of contract period he cannot be directed to be taken back into the service also.

There are certain remarks made in the order of termination dated 25th May, 2005 which are stigmatic as they refer to the conduct of the

appellant during the service period. A stigmatic order terminating services of an Officer who is on probation or otherwise cannot be passed without

holding an enquiry and following the service rules. To this extent we allow the present appeal and direct the respondent to expunge and delete the

statements in the order dated 25th May, 2005 that the appellant had handed over official documents to an unauthorized person, failed to maintain

devotion, integrity to duty, failed to preserve/maintain prestige of the Corporation. The observations that the appellant had committed irregularities

detected by CBI are also directed to be withdrawn.

The appellant was appointed as Junior Engineer on 4th October, 2000 without following the regular selection procedure. Junior Engineer

(Civil/Electrical) is a Group C post and as per instructions of the Government of Delhi, applicable to the respondent this post is to be filled up by

sending the requisition to Delhi Sub-ordinate Services Selection Board. The said Board after following the proper procedure and after inviting

applications from general public can fill up the said post. The said post cannot be filled up directly by the respondent. The initial appointment of the

appellant was, Therefore, illegal and contrary to the recruitment rules of the respondent. This is the reason why he was given contractual

appointment and the period for the contract has also expired long back. In these circumstances, we do not think it will be appropriate and just to

direct the respondent to reinstate the appellant. Any such direction will be contrary to the judgment of Supreme Court in case of National

Fertilizers Ltd. and Others Vs. Somvir Singh, wherein it was held as under:

The respondents herein were appointed only on applications made by them. Admittedly, no advertisement was issued in a newspaper nor was

the employment exchange notified as regards existence of vacancies. It is now trite law that State within the meaning of Article 12 of the

Constitution is bound to comply with the constitutional requirements as adumbrated in Articles 14 and 16 thereof. When the Recruitment Rules are

made, the employer would be bound to comply with the same. Any appointment in violation of such Rules would render them as nullities. It is also

well settled that no recruitment should be permitted to be made through back door.

With the above observations, we partly allow this appeal but hold that the appellant is not entitled to reinstatement by the respondent. Contract

service of the appellant having expired with the aforesaid termination, there shall be no liability and direction to pay wages to the appellant.

In terms of the aforesaid order, the appeal stands disposed of.