Life Insurance Corporation of India and Others vs Haripad Rohidas

This appeal, at the instance of the Life Insurance Corporation of India, is directed against the judgment and order of the learned Single Judge dated 27th March, 2003, allowing the writ application filed by respondent No. 1 herein, being C.W.J.C. No. 2086 of 1996 (R), quashing the order dated 21st March, 1995, by which the petitioner''s services had been terminated and holding that the writ petitioner would be entitled to all consequential benefits.

The writ petitioner had been appointed as a Probationary Development Officer with effect from 23rd January, 1992, for a period of nine months. In terms of the appointment letter dated 18th January, 1992, the period of probation could be extended by a period of twelve months but so as not to exceed a total period of twenty four months.

As will appear from the materials on record, after the initial period of probation of nine months, the period of probation was extended by a period of twelve months which was to end on 22nd October, 1994. Admittedly, after the expiry of the said period, neither was any letter of termination nor confirmation issued to the writ petitioner and the writ petitioner was allowed to continue to work upto the month of May, 1995 at Chirkunda Branch Office. As will also appear from the materials on record, the writ petitioner was allowed to draw his salary upto the month of May, 1995, when all of a sudden, he was served with a letter dated 21st," March, 1995, informing him that his services stood terminated with effect from 25th October, 1994, since on an appraisal of his performance, it had been found that he had failed to achieve the target given to him.

The writ petitioner challenged the said letter of termination of his service in the writ petition mainly on the ground that since he had completed the period of probation and had been allowed to continue beyond the said period, it must be deemed that he stood confirmed after the expiry of the said period. It was also contended that although the letter of termination was issued some time thereafter, the petitioner was allowed to continue to work and draw his salary right upto the month of May, 1995.

One of the other points urged was that the termination of the petitioner''s services without any show cause issued to him or any disciplinary proceeding was bad and contrary to the Service Rules and in violation of the principles of natural justice.

The writ petitioner relied heavily on the decision of the Hon''ble Supreme Court in the case of Dayaram Dayal Vs. State of M.P. and another [OVERRULED], , in support of the contentions raised by him in the writ application.

The writ application was opposed on behalf of the appellant-Life Insurance Corporation of India on the ground that the proposition as explained in the case of Daya Ram Dayal, (supra) was, in fact, over-ruled by the Hon''ble Supreme Court in the case of High Court of Madhya Pradesh thru. Registrar and Others Vs. Satya Narayan Jhavar, and that in view of the later decision of the Hon''ble Supreme Court, the termination of the services must be held to have been done correctly. The learned Single Judge, however, was of the view that the observations made by the Hon''ble Supreme Court in the later case of Satya Narayan Jhavar (supra) were based on facts which were completely different from those of the instant case in that the officer''s services having been found unsatisfactory for confirmation during the period of probation, the action taken was in conformity with the Rules relating to probation. It is on such finding that the learned Single Judge allowed the writ application and quashed the impugned order of termination of the petitioner''s service.

Appearing in support of the* appeal, Mr. Rajiv Ranjan Prasad took us through the appointment letter issued to the writ petitioner wherein it had been specifically mentioned that the petitioner would be required to achieve certain targets and confirmation of his service would be subject thereto. Mr. Prasad pointed out that as will appear from the letter terminating the petitioner''s services, such a step had been taken by the Life Insurance Corporation of India only because the petitioner had failed to meet such targets and no stigma was involved in termination of the petitioner''s services.

The main contention of Mr. Prasad, however, was that the views expressed by the Hon''ble Supreme Court in the case of Daya Ram Dayal (supra), on which the learned Single Judge had relied, had been specifically over-ruled in the later decision of the Hon''ble Supreme Court in Satya Narayan Jhavar''s case (supra). As will appear from the decision of the Hon''ble Supreme Court in the said case, the question regarding expiry of the maximum period of probation had been duly considered and it had been found that the expiry of the maximum period of probation had not resulted in automatic confirmation of the petitioner''s service, but that other conditions for confirmation were required to be considered before an order of confirmation could be passed. Mr. Prasad pointed out that in the instant case, the facts were similar in that one of the preconditions for confirmation of service was to achieve certain targets mentioned in the appointment letter, which the writ petitioner had failed to achieve. It would be worthwhile to quote the relevant portion of the judgment of the Hon''ble Supreme Court in Satya Narayan Jhavar''s case (supra) which reads as follow :

"It is too well settled that an order of confirmation is a positive act on the part of the employer which the employer is required to pass in accordance with the Rules governing the question of confirmation subject to a finding that the probationer is in fact fit for confirmation. This being the position under sub-rule (1) of Rule 24, it is difficult for us to accept the proposition, broadly laid down in the case of Dayaram Dayal (supra) and to hold that since a maximum period of probation has been provided thereunder, at the end of that period, the probationer must be held to be deemed to be confirmed on the basis of the judgment of this Court in the case of Dharam Singh (supra)."

Mr. Prasad pointed out that from the above, it is quite evident that merely because the petitioner had completed the maximum period of probation, it could not be said that the petitioner''s service had become permanent. Mr. Prasad, however, did concede that the order of termination could not have been passed with retrospective effect.

Having considered the submissions made on behalf of the respective parties, we are unable to uphold the views expressed by the learned Single Judge and we are inclined to agree with Mr. Prasad that having regard to the later decision of the Hon''ble Supreme Court in the case of Satya Narayan Jhavar (supra), the mere fact that the writ petitioner had completed the maximum period of probation, could not have automatically confirmed him in service. As explained by the Hon''ble Supreme Court, such confirmation would have to be a positive act on the part of the employer. We also agree with Mr. Prasad''s submission that the question of stigma does not arise in the instant case because what had merely been indicated in the termination letter was that the writ petitioner had failed to achieve certain targets as indicated in the appointment letter.

Having regard to the above, we allow the appeal and set aside the judgment of the learned Single Judge. But we also make it clear that the services of the petitioner will be deemed to have been terminated from the date on which the termination letter was issued and the appellant-Life Insurance Corporation of India will not be entitled to claim refund/reimbursement of the salary paid to the writ petitioner during the extended period of service. There will be no order as to costs.