The termination of service of a permanent employee without holding an enquiry is invalid, and a service condition that permits termination of service by giving one month's notice or pay for one month in lieu thereof is violative of Section 23 of the Contract Act, 1872, being opposed to public policy.

JUDGMENT :

B.L. Hansaria, C.J. - The petitioner was appointed on April 30, 1986 as an Assistant Engineer (Civil) by the Managing Director, Utkal Weavers' Co-operative Spinning Mills Ltd. Khurda, and was put on probation for six months. As his performance was not found satisfactory, some further time was given to watch his performance and as he did not improve according to the employer, his services came to be terminated by an order dated December 19, 1988 as at Annexure-3. The legality of this order has been assailed in this petition.

2. It may be stated at the threshold that before Annexure-3 was issued, it is an admitted position that no disciplinary proceeding was drawn and it is because of this that Annexure-3 speaks about the same having been issued in accordance with Clause 7 of letter No. 10680(3) dated April 30, 1986, a copy of which is at Annexure-2. Which says, inter alia, that the service can be terminated by giving one month's notice or one month's pay in lieu of notice, and so, in Annexure-3 one month pay has been offered.

3. This case was once heard on April 6, 1993 and on knowing that the maximum period of probation provided by Rule 12 of the Staff Service Rules, 1980, which is 24 months, had expired by the time the termination order was issued, a need was felt to examine the question as to whether it can be stated that the petitioner had stood automatically confirmed on the expiry of 24 months from the date of appointment, because of which the order in the present case could not have been issued without holding any enquiry.

4. Shri Patnaik, the learned counsel appearing for the petitioner, has brought to our notice three decisions of the apex Court in which the view taken is that if an incumbent is appointed on probation and the maximum period of probation expires during which period the employer neither discharges nor confirms such employee, then in the absence of any statutory indication, it can be held that there was implied confirmation. This is the view expressed by a two-Judge Bench in M.K. Agarwal v. Gurgaon Gramin Bank, in paragraph 4 of which reference has been made to earlier decisions of the apex Court, the same being State of Punjab Vs. Dharam Singh and Om Parkash Maurya Vs. U.P. Cooperative Sugar Factories Federation, Lucknow and Others,

5. Of the aforesaid decisions, Dharam Singh is by a Constitution Bench and in that case a probationer was officiating in a permanent post and was allowed to continue in that post even after expiry of three years beyond which probationary period could not have been extended by the Service Rules in question. It was, therefore, held that the incumbent must be deemed to have been confirmed in that post despite no express order of confirmation having been passed. This decision was followed in Om Prakash's case wherein also the appellant had continued in the post after completion of the maximum period of probation provided under the concerned Service Regulations because of which it was stated that he stood confirmed and his reversion to lower post by treating him to be on probation was held to be bad.

6. As against the aforesaid three decisions relied upon by Shri Patnaik, Shri Das appearing for the employer brings to our notice a judgment of a three-Judge Bench in Dhanjibhai Ramjibhai Vs. State of Gujarat, in which while assailing the order of termination one of the contentions advanced was that the appellant must be deemed to have been confirmed on the expiry of the period of probation. This contention mentioned in paragraph 4 of the judgment has been dealt with in paragraph 6 and the contention was not accepted by stating that though the order of appointment had recited that the petitioner would be on probation for a period of two years which was in conformity with the concerned Recruitment Rule which prescribes such period of probation, automatic confirmation could not be read, because of the rules themselves had further stated that the period of probation may be extended