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2023 Supreme(Gau) 1550

THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
SUMAN SHYAM, J.
Ali Ahmed Barbhuiya, S/o. Late Azmot Ali Barbhuiya – Petitioner 
Versus
The State of Assam, Represented By The Principal Secretary To The Govt. of Assam And Ors. – Respondents
WP(C) No.2977 of 2023
Decided On : 01-06-2023

Advocates Appeared:
For the Petitioner: Mr M.J. Quadir
For the Respondent: SC, P. And R.D.

A termination order for a contractual employee that is stigmatic (based on misconduct) requires adherence to the principles of natural justice, specifically the opportunity to be heard, as it carries the trappings of dismissal and affects future employment prospects.

Headnote:(A) Principles of Natural Justice - Termination of contractual employment - Stigmatic order - Opportunity of being heard - An order of termination based on findings of an enquiry alleging misconduct is stigmatic and cannot be issued without providing the employee an opportunity to be heard, regardless of whether the employment is contractual or temporary (Paras 8, 9).

(B) Contractual Employment - Nature of termination - While the terms of a contract generally govern service conditions, a termination order that has the trappings of dismissal or removal due to misconduct affects the employee's future employment prospects and therefore necessitates adherence to the principles of natural justice (Para 9).

Facts of the case:
Several individuals engaged on a contractual basis as engineers, computer assistants, and assistants were terminated from their services. The termination was based on a preliminary enquiry report alleging irregularities and misappropriation of funds. Although salary in lieu of notice was provided, the termination orders were issued without serving show-cause notices or providing the employees an opportunity to be heard.

Findings of Court:
The court found that the termination orders were issued based on findings of misconduct conducted without the knowledge of the petitioners. Since the orders were founded on allegations of misconduct, they were stigmatic on the face of the record. The failure to provide an opportunity to be heard constituted a clear violation of the principles of natural justice.

Issues: Whether the termination of a contractual employee based on findings of misconduct is sustainable if issued without providing the employee an opportunity to be heard.

Ratio Decidendi: Termination orders that are stigmatic and carry the trappings of dismissal or removal from service cannot be issued without following the principles of natural justice. Such actions cause serious prejudice to the employee and negatively impact their future employment prospects, making the orders unsustainable in law regardless of the contractual nature of the engagement.

Result: Writ petitions allowed; orders of termination set aside; respondents directed to reinstate petitioners with liberty to proceed against them in accordance with law by serving proper notice.

Legal Category Hierarchy

  • administrative law
    • principles of natural justice
      • right to be heard (Para 8, 9)
    • contractual employment
      • termination of service
        • stigmatic termination (Para 8, 9, 10)
        • reinstatement (Para 10, 11)

Table of Contents

1. Termination of contractual employees based on misconduct allegations — Opportunity of hearing not given — Violation of natural justice. (Para 2 , 4 )

2. Termination founded on misconduct requires hearing — Respondent contends no show-cause needed due to contractual nature. (Para 5 , 6 )

3. Termination orders set aside — Reinstatement directed — Respondents allowed to proceed after notice and following natural justice. (Para 10 , 13 , 14 )

4. Does a termination order based on allegations of misconduct without giving an opportunity of hearing violate principles of natural justice?

Yes, such an order is stigmatic and violates natural justice, even for contractual employees, as it affects future employment prospects. (Para 8 , 9 )

5. What is the legal effect of a termination order that has the trappings of dismissal or removal?

Such an order cannot be issued without hearing, even for a temporary or contractual employee, because it carries stigma and impacts future employment. (Para 9 )

6. What remedy is available when a contractual employee's services are terminated stigmatically without hearing?

The termination order is set aside, reinstatement ordered, and the employer may proceed after serving proper charges and following natural justice. (Para 10 , 11 )

ORDER :

SUMAN SHYAM, J.

Heard Mr. K.N. Choudhury, learned senior counsel assisted by Mr. R. M. Deka, learned counsel as well as Mr. T. A. Choudhury and Mr. M.J. Quadir, learned counsel appearing for the writ petitioners in this batch of writ petitions. Also heard Mr. S. Dutta, learned Standing Counsel, Panchayat and Rural Development Department, Assam, appearing for the respondents.

2. The petitioners in this batch of writ petitions were engaged under the Panchayat and Rural Development Department, Assam, on contractual basis as Accredited Engineers/Computer Assistant/Gram Rozgar Sahayak. However, their services were terminated by the orders under challenge in the respective writ petition by giving them one month salary in lieu of notice on the ground that the preliminary enquiry conducted against the petitioners had disclosed irregularities committed by them in course of their service. The orders of termination have been challenged primarily on the ground that those have been issued in violation of the Principles of Natural Justice.

3.For the purpose of disposal of these writ petitions, the facts involved in WP(C) 1785/2022 are discussed herein below :-

4. The petitioner in WP(C) 1785/2022 was appointed as a Computer Assistant vide appointment order dated 02/11/2018. The engagement of the petitioner was purely on contractual basis and pursuant to a selection process conducted by the department. However, his services were terminated by the impugned order dated 30/10/2021. The order of termination mentions that an enquiry in connection with alleged misappropriate of fund under the MGNREGA and PMAY-G in the Borkhetri Development Block under Nalbari district was conducted, whereafter, a report was submitted. Taking note of the findings in the enquiry report, the department of Panchayat and Rural development Department, Government of Assam had issued instruction to terminate the contractual service of the petitioner. Consequently, the impugned order of termination was issued.

5. Mr. Choudhury submits that the order of termination from service is stigmatic and is founded on an allegation of misconduct. Therefore, the services of the petitioner could not have been terminated without giving him an opportunity of being heard in the matter.

6. Mr. S. Dutta, learned Standing Counsel, Panchayat and Rural Development Department, Assam, has fairly submitted that the order of termination is based on allegations of misconduct emanating from the findings in the enquiry report but since the petitioner was on contractual service, hence, he was not served with any show-cause notice before terminating his services. Mr. Dutta has further submitted that no order of reinstatement of service be issued by this Court. Alternatively, even if such an order is issued, Mr. Dutta submits that the department be granted liberty to proceed in the matter after serving notice upon the petitioner and in the meantime, the petitioner be allowed to be placed under suspension.

7. Mr. Choudhury, learned senior counsel for the petitioner submits that as long as the authorities proceed in accordance with law and by following the Principles of Natural Justice, he would not have any objection in the matter. Similar is the submission of counsel for the petitioners in the other writ petitions.

8. It is no doubt correct that in case of a contractual engagement, the terms and conditions of the contract would govern by the service conditions of the employee. In the present case, the contract agreement signed by the petitioner does have a clause permitting termination of the contract at any point of time if the services rendered by the contractual staff was not found to be satisfactory. However, what is to be noted herein that bare perusal of the impugned order of termination demonstrates on the face of the record that the same was issued on the basis of findings of the enquiry proceeding conducted behind the back of the petitioner wherein, it had been projected that the petitioner was

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