Judgment-

RANGANATH MISRA

( 1 ) THIS is an appeal by special leave. The appellant was employed on the production side of the Uttar Pradesh State Handloom Corporation, a public sector undertaking, (hereinafter referred to as corporation for short) on temporary basis. Having been appointed on 30-10-1976 as Bunker Sewa he obtained two promotions while still working in temporary status and by 1983 was working as Deputy Production Manager. The appellants letter of appointment, as far as material, stated :-

"with effect from the date of taking over charge Shri Rabindra Kumar Mishra. . . is hereby appointed as Bunker Sewa. . . on the following terms and conditions :-

(1) That his appointment is temporary and his services are liable for termination with one months notice or one months pay in lieu of notice from either side. . . . . . . . ".

ON 22-11-1982 the appellant was placed under suspension and that order read as follows :-

"as a result of preliminary enquiries made by the Central Manager on 13-11-1982 of the Production Centre, Kunda and other Centres under the same, it has come to notice that Shri R. K. Misra, former Dy. Production Manager, Kunda, is responsible for misconduct, dereliction of duty, mismanagement and showing fictitious production of terrycot cloth. He is, therefore, placed under suspension with immediate effect. . . . . . . . . . ". (Underlings are ours ).

( 2 ) ON 1-2-1983 the order of suspension was revoked and on 10-2-1983 the impugned order terminating his services being to the following effect was passed. :-

"the undersigned hereby gives notice to Shri R. K. Misra, Deputy Production Manager, Production Centre, Kunda, Pratapgarh, Salon Rai Bareilly that his services are no more required and his service will be deemed to be terminated from receipt of this notice by him. It is directed that he will be entitled to receive one months salary in lieu of notice period on the same rate on which he was receiving salary before termination of his service. "

( 3 ) THE appellant challenged the order of termination of his service before the Allahabad High Court but the High Court declined to interfere by holding that the termination was not punitive and the question of breach of principles of natural justice did not arise.

( 4 ) IT is not disputed that the employer Corporation is state within the meaning of Art. 12; yet it has not been contended - and rightly - that the protection of Art. 311 (2) of the Constitution is available to the employees of the Corporation. The appellant has, however, claimed that he is entitled to the protection of Arts. 14 and 16 of the Constitution; though his order of termination is innocuous the setting in which it has been made clearly makes it an order of dismissal and the High Court has gone wrong in holding that the order of termination was not punitive; as service was determined by the order of termination attaching stigma the appellant was entitled to a hearing commensurate with rules of natural justice and in the absence of that opportunity of being heard the order is liable to be quashed.

( 5 ) IT cannot be disputed that temporary service can be terminated by notice. The order of appointment in the appellants case made it abundantly clear that with a months notice or payment of salary in lieu of notice such termination could be effected by either side. Rule 63 of the Corporation Rules made in exercise of Art. 127 of the Articles of Association of the Uttar Pradesh State Handloom Corporation Limited recognised such a power. That Rule provides :-

"1. The appointing authority may, at any time during the pendency of the temporary tenure, terminate the services of a temporary employee by giving him one months notice or emoluments for such lesser period by which the notice falls short of one month.

2. The temporary employee, on his part, shall have the option of quitting service by giving one months notice to the appointing authority or paying to the Corporation an amount equal to his one months pay