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1996 Supreme(Ori) 258
IN THE HIGH COURT OF ORISSA
S.N. Phukan, C.R. Pal, A. Pasayat, JJ.
AMIYA CHARAN JENA - APPELLANT
Versus
MANAGING DIRECTOR, ORISSA HANDLOOM DEVELOPMENT CORPORATION LTD. - RESPONDENT
Decided On : 09-10-1996
M.K. Malik, P. Nayak and R. Mohanty in OJC Nos. 3638 and 3668/92 and N.C. Panigrahi and S.C. Dash in OJC No. 1152/95, for the Appellant; Bijan Ray in OJC Nos. 3638 and 3668/92 and 1152/95; B.K. Bal in OJC Nos. 3638 and 3668/92; B. Mohanty in OJC Nos. 3668/92, 1152/95 and B.B. Chouchary, A.K. Mohanty, S.K. Dwibedy and R.K. Biswal in OJC No. 1152/95, for the Respondent
There cannot be deemed confirmation of an employee under the Orissa State Handloom Development Corporation Limited Employees Service Rules, 1986, and an order of confirmation in writing by the Managing Director is necessary. Rule 20 of the Rules, which allows the Corporation to terminate the services of an employee after the expiry of the probation period without assigning any reason, is not arbitrary or violative of Articles 14 and 16(1) of the Constitution of India, as it applies only to probationers and not to confirmed/permanent employees of the Corporation.
Headnote:
ORISSA STATE HANDLOOM DEVELOPMENT CORPORATION LIMITED EMPLOYEES SERVICE RULES, 1986 - RULES 16, 17, 18, 19 AND 20 - INTERPRETATION - DEEMED CONFIRMATION - TERMINATION OF SERVICES - HENRY VIII CLAUSE - CONSTITUTIONALITY.
Fact of the Case:
The Orissa State Handloom Development Corporation Limited Employees Service Rules, 1986 (the Rules) were challenged, particularly Rule 20, which allowed the Corporation to terminate the services of an employee after the expiry of the probation period without assigning any reason. The petitioners argued that Rule 20 was arbitrary and violative of Articles 14 and 16(1) of the Constitution of India.
Finding of the Court:
The Court held that Rule 20 of the Rules was not arbitrary or violative of Articles 14 and 16(1) of the Constitution of India. The Court found that Rule 20 applied only to probationers and not to confirmed/permanent employees of the Corporation. The Court also held that the Corporation could not terminate the services of a probationer by way of punishment after the maximum period of probation without proper inquiry and an opportunity to be heard.
Issues: 1. Whether there can be deemed confirmation of an employee after the maximum period of probation is over or whether a written order of confirmation by the Managing Director is necessary? 2. If there is no deemed confirmation and an order of confirmation in writing by the Managing Director is necessary, whether the services of an employee, after he has completed the maximum period of probation, can be terminated by the Corporation by invoking Rule 20, or whether Rule 20 has to be struck down being characterised as Henry VIII clause?
Ratio Decidendi: 1. The Court held that there cannot be deemed confirmation under the Rules and an order of confirmation in writing by the Managing Director is necessary. 2. The Court held that Rule 20 of the Rules can be invoked by the Corporation for termination of services of a probationer after the expiry of the period of probation, but it cannot be used to terminate the services of a confirmed/permanent employee of the Corporation.
Final Decision: The Court answered the reference as follows: (i) There cannot be deemed confirmation and there has to be an order of confirmation in writing by the Managing Director after the expiry of the maximum period of probation. (ii) Rule 20 of the Rules cannot be said to be bad in law as it applies only to a probationer and not to a confirmed/permanent employee of the Corporation. (iii) The Managing Director has to apply his mind under Rule 18 within a reasonable time as to whether an employee should be confirmed or not. (iv) By resorting to Rule 20 of the Rules, the services of a probationer cannot be terminated by way of punishment after the maximum period of probation, and the Court can lift the veil to ascertain whether the order was an order of termination simpliciter for unsatisfactory performance of the probationer or it was a way of punishment.
JUDGMENT :
S.N. Phukan, C.J. - Bench of this Court while hearing OJCs 3638 and 3668 of 1992 entertained doubt regarding correctness of the judgment dated. 5-11-1993 rendered in OJC No. 3883/92 (Hrushikesh Mohanty v. Managing Director, Orissa State Handloom Development Corporation Ltd. and others) and referred the matter to a larger Bench. Subsequently, OJC No. 1152/95 was also heard along with the aforesaid cases. The order of reference in OJCs 3638 and 3668 of 1992, which is dated 2-5-1995, reads as follows :
"Rule 20 of the Orissa State Handloom Development Corporation Limited Employees Service Rules, 1986, has been struck-down by a Bench of this Court in OJC No. 3883 of 1992 (Hrushikesh Mohanty v. Managing Director Orissa State Handloom Development Corporation Ltd. and Ors.) on the assumption that a probationer on expiry of 2 years must be deemed to have been confirmed in the post. While corning to the aforesaid conclusion. Rule 18 of the Rules has not been brought to the notice of the Court which unequivocally states that on satisfactory completion of probation, an employee shall be confirmed and no employee shall be deemed to be confirmed unless confirmation is done in writing by the Managing Director. A combined reading of Rules 16, 17 and 18 indicates that a person can remain as a probationer for a maximum period of two years and thereafter his status will he that of a temporary servant until an order of confirmation is passed in terms of Rule 18 and the services of such a temporary employee could be terminated in terms of Rule 20. Since a Bench of this Court without noticing Rule 18 has held that a person must be deemed to have been confirmed after expiry of two years of probation act on that basis has struck down Rule 20 and the same point is involved in the present two cases, we think it appropriate to refer both the cases to a larger Bench ...."
2. Before proceeding to consider the reference, we may refer to the provisions of the Orissa State Handloom Development Corpora- ' lion Limited Employees Service Rules, 1986 (for short, "the Rules"). Rules 1.6, 17, 18, 19 and 20, which are relevant for the present purpose, are quoted below :
"16. All employees to be on probation-All persons appointed in the Corporation Service either by direct recruitment or promotion shall be on probation.
17. Period of probation-The period of probation in case of employees shall be one year. The Managing Director may extend the period of probation of an employee by one year only if his work is not found satisfactory during the period of probation.
18. Discharge/Reversion during probation-During the probationary period an employee if he is directly recruited may be discharged from service without assigning any reason by giving 15 days notice or on payment of an amount equal to his 15 days pay in lieu of notice. During the probationary period an employee may resign by giving 15 days notice or pay in lieu thereof.
On satisfactory completion of the probation an employee shall be confirmed. No employee shall be deemed to be confirmed unless confirmation is done in writing by the Managing Director. The Managing Director shall be the final authority to decide about the satisfactory completion of the probation or otherwise.
During the period of probation an employee appointed by promotion may be reverted to his former post.
19. Termination of service by the employee-An employee at any time after the expiry of the period of probation may resign from the service of the Corporation on giving a notice in writing of his intention to do so. The period of notice required shall be three calendar months in case of an Officer in Class-I and Class-II service and one calendar month in case of any other employee of the Corporation, except in cases where special contract is executed.
In the case of breach of provision of this Rule the employees shall pay to the Corporation a sum equal to his pay for the period of notice required or for the period of the notice falls shor
