S.S. Narayana vs Government of Andhra Pradesh and Others

The petitioner in this case seeks a writ of certiorari calling for the records relating to the impugned order G.O. Rt. No. 346, Industries & Commerce (S.11) Department, Government of Andhra Pradesh, dated March 8, 1989 terminating the services of the petitioner with immediate effect and posting the 4th respondent in the place of the petitioner and quash the same as being mala fide, illegal and without jurisdiction.

The petitioner is a Diploma Holder in L.M.E., B.O.E. and F.S.T.A. He was originally appointed as Apprentice in the Mechanical Section of the Nizamabad Co-operative Sugar Factories Ltd. Nizamabad, on April 13, 1963. He was temporarily appointed as Mechanical Supervisor in Mechanical Department of the said factory on August 24, 1965. He was appointed as a Shift Engineer on October 20, 1965 in Chodavaram Co-operative Sugar Factory, Govada, Visakhapatnam District, where he worked upto September 10, 1974. He joined as a Shift Engineer in West Godavari Co-op. Sugars, Bhimadole on 17th September, 1974 and worked as such till October 27, 1975. He was appointed as a Senior Engineer in Sarada Sugar & Industries Ltd., Paliakalan, Kheri District, Uttar Pradesh where he worked for a period of five months. Later on he joined as Project Engineer in Haryana Co-operative Sugar Mills, Rohtak, in April, 1976 and became Chief Engineer in-charge on May 4, 1977. Subsequently he was appointed as Chief Engineer in Palair Co-op Sugar Factory, Rajeswaram, Khammam Dt. on 23rd September, 1977 and worked there for about six years. In the year 1983, a common cadre was created for the senior officers like Chief Engineer, Chief Chemist, Chief Agricultural Officer etc., of the Co-operative Sugar Factories in Andhra Pradesh. Consequent upon the creation of the common cadre the petitioner was transferred to Anakapalli Co-operative Sugar Ltd., Anakapalli, in July, 1983, as Chief Engineer and he worked there as such upto January 15, 1986. By proceedings G.O. Ms. No. 2 dated January 2, 1986 of the Commissioner for Sugar and Cane Development and Ex-officio Secretary to the Government, Industries, Commerce and Power (Sugar II) Department, the petitioner was appointed on selection as Managing Director of the Co-operative Sugar Factories and posted to West Godavari Co-operative Sugars Ltd., Bhimadole, where he joined duty on January 16, 1986. The petitioner says that he earned a word of praise from his superiors for his meritorious services rendered in the field of development of Sugar Industries not only in Andhra Pradesh, but in the States of Uttar Pradesh and Haryana. He has been given testimonials of appreciation by the then Managing Director of West Godavari Co-operative Sugar Ltd., Bhimadole and also the Chief Engineer of the State Co-operative Societies. He has also earned a word of praise from the Chief Engineer of Sarada Sugar & Industries Ltd. Kheri, Uttar Pradesh.

The State policy was to post technocrats as Managing Directors in Co-operative Sugar Factories, as a result of which the petitioner was posted as the Managing Director to the West Godavari Co-operative Sugar Factory, Bhimadole. He was instrumental in taking several steps to improve the cane area, besides introducing a Pilot Scheme on Maharashtra pattern with abundant financial benefits to the ryots in the border villages of the private factories in the same District. The initiatives taken by the petitioner were deeply appreciated by the farmers of the area and met the appreciation of the concerned officers. It seems that Bhimadole Sugar Factory was continuously incurring loss amounting to Rs. 5.5 crores, but after the petitioner took charge as the Managing Director a fillip was given to the industry and the sugar factory reached a target of 6.5 lakhs of tonnes of sugar cane with a recovery of 9.84% of sugar, which is said to be one of the highest turnover among all the 18 Co-operative Sugar Factories in the State of Andhra Pradesh.

The case of the petitioner is that in view of his exemplary achievements he ran into trouble with the politicians of the day, particularly Sri Kommareddy Suryanarayana, Ex-M.P. who was the founder President of the Sugar Factory. The petitioner further alleges that the action taken against him has a tinge of political rivalry between the political parties who were wrestling for power in that area. At the Annual General Body meeting held on November 16, 1986 for constitution of a Purchase and Sales Committee a resolution was moved by Sri. K. Suryanarayana, Ex-M.P. On further deliberation and in view of the existing rules, it was felt that constitution of such a Committee would be in contravention of the circular instructions given by the Government in G.O.Ms. No. 68 dated February 4, 1977 wherein they have accepted the suggestions of the Government of India for the constitution of the same committee with the representative of the Management, cane growers and the employees including workmen. It was the responsibility of such committees to fix the price below which the factory should not sell the sugar. Later on in Circular No, 2526/77-81 dated March 26, 1977 some norms were laid for constitution of the committee in line with the orders contained in the G.O. referred to above. In the light of the above provisions, the petitioner brought to the notice of the said Sri. K. Suryanarayana, that the Committee proposed by him cannot be constituted, upon which he felt insulted and was nursing a grouse against the petitioner. The petitioner further alleges that Sri. K. Suryanarayana tried his level best to remove the petitioner from the post of the Managing Director of the Sugar Factory and levelled several false and frivolous allegations against him. The West Godavari District Collector conducted a preliminary enquiry into the allegations. He instituted an enquiry against the petitioner and appointed the Joint Collector to conduct a preliminary enquiry into the allegations levelled against the petitioner. The Enquiry Officer conducted the preliminary enquiry and submitted his report. The petitioner is of the view that the preliminary enquiry report was not to the liking of Sri K. Suryanarayana, who prevailed upon the Hon''ble Chief Minister of Andhra Pradesh to appoint Sri M. Mahender Reddy, I.P.S., former Director-General of Police and the then Vice-chairman and Managing Director of the Nizam Sugar Factory as Enquiry Officer to conduct another preliminary enquiry. Sri. M. Mahender Reddy conducted a preliminary enquiry into the matter and submitted this report. The Enquiry Officer appreciated the good work done by the petitioner as Managing Director of Sugar Factories and also mentioned in his report that the farmers have a great deal of appreciation for the efforts put in by the petitioner in the filed of sugar industry. The Government of Andhra Pradesh, issued G.O.Rt. No. 1132 Industries & Commerce (Sugar-II) Department dated October 21, 1987 and appointed Sri Binoy Kumar, I.A.S., the Joint Collector, West Godavari, Eluru as an Enquiry Officer to conduct enquiry into the allegations against the petitioner with a direction to frame charges. The Enquiry Officer framed 13 charges to which he submitted his explanation. It seems no oral enquiry was conducted into the charges and the Enquiry Officer submitted his report to Sri Swaminatham, Ex-Officio Secretary, holding that charges 5, 6, 7, 11 and 13 were not proved and the rest of the charges were said to have been proved. The matter was then referred to the then Minister for Sugar and Wakf Board who expressed his disagreement with the note of the Ex-officio Secretary and endorsed a word of appreciation in favour of the petitioner for the meritorious work done by him. The petitioner was then transferred to Nandyal Co-operative Sugar Factory, Nandyal, by G.O.Rt. No. 665 dated June 26, 1987. Thereafter he was served with three months notice of termination. In the meanwhile an advertisement was published in ''Eenadu'' daily news paper dated July 15, 1988, by the Director of Sugar, Hyderabad, calling for application for appointment as managing Director in Co-operative Sugar Factories in Andhra Pradesh on a contract basis for a period of three years, which is likely to be extended, on a monthly salary of Rs. 4000/- with residential quarters and other perquisites. The petitioner applied for the said post and was duly selected by the duly constituted Recruitment Board. The petitioner was appointed by an order G.O.Rt. No. 1164 of the Industries and Commerce (Sugar II) Department, Government of A.P., dated November 11, 1988, as the Managing Director of Nandyal Co-operative Sugar Factory, with effect from the date next to the expiry of the notice period, exempting him from possession of the Degree qualification. The appointment order shows that the appointment of the petitioner was made subject to the outcome of the disciplinary cases pending against him and in the event of the charges being held proved, the appointment was liable to be terminated without notice. The terms and conditions are enumerated in the Annexure filed to the order which consists of Items 1 to 17 to which a reference will be made later in this Judgment.

The petitioner received the proceedings G.O.Rt. 346 dated March 8, 1989 of the Industries and Commerce (S. 11) Department, Government of Andhra Pradesh, informing him that his services were no longer required by the Government and hence they are terminated with payment of three months'' pay with immediate effect subject to recovery of any amount due from him and transferring Sri. S. Ramagangi Reddy, Managing Director, Nagarjuna Co-operative Sugar Factory,. Gurazala and postings him to Nandyal, where the petitioner was working. The petitioner applied for casual leave well in advance on February 28, 1989 for the period from March 7, 1989 to March 11, 1989 which was refused. Later on the petitioner was informed that the 4th respondent had also assumed charge on March 10, 1989. The petitioner handed over charge to the 4th respondent on March 11, 1989 without prejudice to his right to challenge the validity of the impugned order.

The petitioner challenges the order of termination in G.O.Rt. No. 346 dated March 8, 1989 on several jurisdiction. It is further alleged that the order of termination in reality is the order of dismissal from service. The seemingly innocuous order of termination was issued to cover up inability of the authorities to substantiate the charges and therefore, it does not come within the category of termination simpliciter. It is supposed to be a colourable exercise of power opposed to all principles of natural justice. A press statement given by the 5th respondent, K. Suryanarayana, published in the ''Eenadu'' daily newspaper dated March 10, 1989 mentions that the petitioner was removed from service by the Hon''ble Chief Minister of Andhra Pradesh on the basis of the allegations made by him (5th respondent) against the petitioner. The petitioner relies to a very large extent on the word of appreciation endorsed on the file by the Minister for Sugar and Wakfs in his favour and stresses the point that his termination is the result of political maneuvering on the part of K. Suryanarayana, the 5th respondent, by bringing pressure on the Hon''ble Chief Minister of Andhra Pradesh. The petitioner further assails the mode of enquiry conducted as being in flagrant violation of the principles of natural justice and in complete disregard of the rules applicable to such cases. It is on record that four other Managing Directors were also appointed with a condition that their appointment were subject to the outcome of the disciplinary cases pending against them, but they are still continuing in service and in that view of the matter, the petitioner alleges discrimination against him under Article 14 and 16 of the Constitution.

The main question to be considered in this writ petition is, whether the order of termination of service of the petitioner in G.O.Rt. No. 346 dated March 8, 1989 is sustainable in the eye of law as being an order of termination simpliciter without casting any stigma on the petitioner.

The learned Additional Advocate-General Mr. N. Subbareddy, raised a preliminary objection during the course of his arguments that the writ petition is not maintainable as it has been filed against Co-operative Society, registered under A.P. Co-operative Societies Act, 1964 (for short "the Act"). It is further contended by the learned Additional Advocate-General, that the society is not the authority within the meaning of Art. 12 of the Constitution of India and as such a no writ lies against it. The West Godavari Co-operative Sugars Ltd., Bhimadole, to which the petitioner was posted as its Managing Director was registered under the Act and that bye-law 24(d) of the said Society which empowered the Government to appoint its Managing director framed in pursuance of the provisions of the Act, cannot be held to be law or to have the force of law and it governs the internal management, business of administration of the Society, just like the Articles of Association or the rules for internal management of a Corporation binding between the shareholders and the Directors and other authorities of the company. The learned Additional Advocate-General, relied upon a decision of the Supreme Court reported in Co-operative Central Bank Ltd. and Others Vs. Additional Industrial Tribunal and Others, and V. Narsingarao v. The Prudential Co-operative Urban Bank Ltd. AIR 1989 1 ALT 300 for this purpose.

In the Co-operative Central Bank Ltd. case (supra) it was observed that the bye-laws of a Co-operative Society framed in pursuance of the provisions of the Act cannot be held to be law or to have the force of law. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society, but they do not have the force of a statute. It is further observed by the Supreme Court that the bye-laws that can be framed by a Society under the Act are similar in nature to the Articles of Association of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law.

In Narasingarao''s case (supra) it is observed that so far a authorities which fall within the definition of ''State'' in Article 12 of the Constitution are concerned, it is admitted on all hands that they are amenable to writ jurisdiction of this Court. Statutory Corporations, clothed with the power to make Regulations having the force of law and to enforce them to the detriment of citizens, would be "authorities" on their own. Other Corporations, societies, and institutions not so empowered also become "authorities" as agencies or instrumentalities of State, if they satisfy the tests enunciated in that regard. Applying the said test it was held by the Division Bench that the respondent-Bank in that case is not statutory Corporation as it is only a Co-operative Society registered under the A.P. Co-operative Societies Act, 1964. The Division Bench also observed that the Act and the rules merely regularise the incorporation, membership, elections to the Committee and other general measures to ensure that the Societies function properly and within their bounds. In that view of the matter, the Bench ultimately held that the respondent-Bank under the Co-operative Societies Act was not a State within the Act and was not a State within the meaning of Article 12 of the Constitution. The principles laid down in these decisions are distinguishable in the light of facts of each case and will have to be viewed in the context of the authoritative pronouncement of the Supreme Court in Ajay Hasia and Others Vs. Khalid Mujib Sehravardi and Others, . In that case, the Supreme Court laid down certain tests for determination as to when a Corporation is said to be an instrumentality or agency of a Government. It is true that those propositions were not supposed to be conclusive or clinching. But they are to be treated as indicative indicia which have to be used to determine the true character of a particular Corporation or a Society which can come within the meaning of the authority under Article 12 of the Constitution. The Supreme Court relied upon its earlier decision in R. D. Shetty v. The International Airport Authority of India (1979 II 1 LLJ 217) and observed that one thing is clear that if the entire share capital of the Corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumenality or agency of Government. Similarly laying down the second test, the Supreme Court observed that the financial assistance of the State will have to be taken into consideration as it would afford some indication of the Corporations being impregnated with Governmental character. The extent of State control over such bodies and the nature of the functions discharged by such Corporations or bodies, as the case may be, are also relevant factors to be taken into consideration. Similarly it is observed that if a department of Government is transferred to a Corporation, it would be a strong fact supportive of this inference that the Corporation is an instrumentality or agency of Government. A significant observation has been made stating that the Corporation may be statutory Corporation created by a statute or it may be a Government company or company under the Companies Act, 1956 or it may be Society registered under the Societies Registration Act, 1860 or any other similar statute, whatever be its genetical origin it would be authority within the meaning of Art. 12 if it is an instrumentality or agency of the Government and that would have to be decided on proper assessment of the facts in the light of the relevant factors. The Supreme Court further observed that the concept of instrumentality or agency of the Government is not limited to a Corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12. In Cement Corporation of India Ltd. v. S. T. Veeran 1987 (2) L. I. C. 1173 it is observed that by reason of the authoritative pronouncement of the Supreme Court in Ajay Hasia''s case (supra) it has come to be firmly established that an activity carried on with the direct and regular financial support of the State with the control of the State extending over the activity will be counted as a State action for purposes of subjecting such activity to Part III of the Constitution, notwithstanding the fact that the body which carries on that activity is not a part of the Government department or is, in fact a separate legal person according to the ordinary notions of law. In a recent decision of the Supreme Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, the Supreme Court observed as follows (p. 330) :

"Here again we may point out that mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, professor De Smith states : "To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, customs or even contract". (Judicial Review of Administrative Act, 4th Edn. P. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found.'' Technicalities should not come in the way of granting that relief under Article 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition.

Their Lordships further observed -

"The term ''authority'' used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art. 32. Article 226 confers power on the High Court to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words "any person or authority" used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty must be judged in the light of positive obligation owned by person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied".

From a reading of the above said decisions what emerges is that the question whether a particular Corporation or a society qualifies as an authority within the meaning of Article 12 of the Constitution will have to be determined taking into consideration the various aspects like financial and administrative control of the said organisation, nature of duties performed, the Articles of Association or the bye-laws, as the case may be, governing the internal management of such an organisation. In other words the tests laid down by the Supreme Court in the various cases cited above can be the guiding factor to come to a conclusion as to whether a particular society is an authority within the meaning of Article 12, amenable to the writ jurisdiction of this Court or not.

In so far as the West Godavari Co-operative Sugars Ltd., Bhimadole is concerned, it is clear that by virtue of its financial positions, the staffing pattern and the nature of duties discharged by it, it comes within the meaning of the authority under Article 12 of the Constitution.

It would be pertinent to note that u/s 116-A of the Andhra Pradesh Co-operative Societies Act, it is provided as follows :-

"Section 116-A :- Constitution of Common Cadre of Employees for certain Societies :

(1) Notwithstanding anything in this Act, the Registrar shall have power to constitute a common cadre for the following posts namely :-

XX XX XX

(d) Sugar Factories :-

(i) Chief Engineer; (ii) Chief Chemist; (iii) Chief Agricultural Officer; (vi) Chief Accounts Officer; (v) Administrative Officer; (vi) Labour Welfare Officer.

(2) The classification and methods of recruitment, conditions of service, pay and allowance and discipline and conduct of the officers specified in sub-section (1) shall be such as may be provided by regulations to be framed by the Registrar."

Under Section 116-C of the Act it is provided as follows :

"Section 116-C :- Staffing pattern of societies :-

(1) A Society shall have power to fix the staffing pattern, qualification, pay scales and other allowances for its employees with the prior approval of the Registrar of Co-operative Societies.

(2) No appointment or removal of a Chief Executive by whatever name called by any society, or class of societies as may be prescribed, which are in receipt of financial aid from the Government, shall be made without the prior approval of the Registrar of Co-operative Societies."

It is also clear that the activities of West Godavari Co-operative Sugars Ltd., Bhimadole, are being carried on with the regular financial support of the State with the control of the State extended over that activity. Therefore, any action taken by the Society can be construed as a State action for the purpose of subjecting such activity to the power of judicial review under Article 226 of the Constitution.

In view of the above, I have no hesitation in rejecting the preliminary objection raised by the learned Additional Advocate-General and I am constrained to hold that the writ petition filed against the particular West Godavari Co-operative Sugars Ltd., Bhimadole, is maintainable in the eye of law.

The next point arising for consideration in this case is, whether the termination of services of the petitioner by payment of three months salary in lieu of notice on the grounds that his services are no longer required is valid.

In order to examine this point, it would be necessary to see the sequence in which the developments have taken place culminating in the order of termination passed against the petitioner. The case of the petitioner in this regard is that Sri K. Suryanarayana tried his best to remove him from the post of Managing Director and levelled certain frivolous and baseless allegations against him. The Collector, West Godavari who was then the Chairman of the Sugar Factory, appointed the Joint Collector of West Godavari to conduct a preliminary enquiry into the allegations levelled against the petitioner. The Enquiry Officer submitted a preliminary enquiry report. However, not satisfied with the preliminary enquiry report, Sri. K. Suryanarayana persisted further in the matter and got Sri M. Mahender Reddy I.P.S. former Director-General Police, and the then Vice-Chairman and Managing Director of the Nizam Sugar Factory, appointed as Enquiry Officer to conduct another preliminary enquiry, without any reference to the remarks made by the Minister for Sugar or the concerned Director of Sugar and Cane Commissioner and Ex-Officio Secretary. Sri. M. Mahender Reddy conducted a preliminary enquiry and submitted his report. The Enquiry Officer had said a word of appreciation about the laudable work put in by the petitioner and also with satisfaction his efforts to improve the conditions of the farmers by initiating new schemes for their benefit. It is significant to note that during the course of the enquiry neither K. Suryanarayana, Ex.M.P., R-5 herein, nor any of the officers connected with the unit nor local elders nor any public representatives attributed any corrupt motives to the petitioner. Thereafter, Sri Binoy Kumar, I.A.S. Joint Collector. West Godavari District was appointed by G.O.Rt. No. 1132 dated October 21, 1987 as the Enquiry Officer to conduct an enquiry into the allegations levelled against the petitioner with directions to frame charges against him and submit a report to the Government. In all, thirteen charges were levelled against the petitioner out of which charges 5, 6, 11 and 13 were held to be not proved, and the other charges were stated to have been proved by the Enquiry Officer. In the meanwhile the petitioner was transferred to Nandyal Co-operative Sugar Factory, Nandyal as its Managing Director by G.O.Rt. No. 665 dated June 26, 1987. Thereafter he was served with three months'' notice of termination of his services. In the meanwhile the petitioner applied for appointment as managing Director in Co-operative Sugar Factories on contract basis in response to an advertisement published in the Eenadu Daily newspaper dated July 15, 1988. He was appointed as the managing Director of Nandyal Co-operative Sugar Factory with effect from the date next to the expiry of the notice period, exempting him from possession of Degree qualifications. His appointment has been made subject to the outcome of the disciplinary case or cases pending against him and in the event of the charges being proved his services are liable to be terminated without notice. It would not be out of place to reproduce here the terms and conditions on which the petitioner has been appointed :

(i) It is on contract basis, initially for a period of three years.

(ii) He must resign his present post before taking up the appointment as Managing Director.

(iii) It is subject to the outcome of disciplinary case/cases pending against him. If the charges in the disciplinary cases are proved, his appointment will be terminated without notice.

(iv) Pay : He will be paid a consolidated salary of Rs. 4000/- per month.

(v) Retirement : The appointment will terminate on his attaining the age of 58 years.

(vi) Perks : use of car of Co-operative Sugar Factory for private purposes upto 500 Kms. per month paying Rs. 150/- towards propulsion charges.

(vii) Service of two attenders (not to surrender for claiming attender allowance in cash) one for office and one for use at the residence.

(viii) Leave per annum : Causal leave : 15 5 days, Optional Holidays : 5 days, Earned leave : 30 days. He will not be permitted to avail himself of any leave during the crushing season.

(ix) Residential quarters in the factory area (free of electricity and water) on payment of 10% of salary.

(x) Agreement Bond : He shall execute an agreement in the form enclosed.

(xi) Transfer : He is liable for transfer to any Co-operative Sugar Factory in the State.

(xii) Drawal of Salary : He shall draw his salary from the Co-operative Sugar Factory to which he stands transferred from the date of his relief from the previous factory.

(xiii) Joining time : He will be eligible for 10 days joining time including journey and holidays on transfer.

(xiv) Termination of Service : Government shall have the right to terminate his services by issue of three months'' notice or three months'' salary in lieu thereof; he can relinquish himself by giving three months'' advance notice or paying three months'' salary in lieu of three months'' advance notice.

(xv) T.A. & D.A. : He is eligible or T.A. an D.A. at the following rates :

"T.A. : First Class Railway fare or actual bus fare D.A. : Delhi, Bombay and Calcutta Rs. 75/- Hyderabad, Madras, Bangalore, Poona and Kanpur Rs. 40/- Other capital cities and Visakhapatnam Rs. 25/- Other places Rs. 20/- Mileage Ps/km : Rs. 0.60 ps. per km. if journey is performed by factory car.

(xvi) Provident Fund : He will contribute to the P.F/G.P.F. according to the G.P.F. Rules.

(xvii) The Government reserves the right to alter/modify, replace any of the existing provisions of the rules governing the appointment".

It is in this background the proceedings G.O.Rt. No. 346 dated March 8, 1989 of the Industries and Commerce (S.11) Department of the Government of Andhra Pradesh, were issued informing him that his services were no longer required by the Government and hence they were terminated with payment of three months'' pay with immediate effect, subject to recovery of any amounts due from him. The petitioner had handed over the charge to the 4th respondent on March 1, 1989 without prejudice to his right to challenge the impugned order.

In the decision in Parshotam Lal Dhingra Vs. Union of India (UOI), it was held that an appointment to temporary post for a certain specified period also gives the servant so appointed a right to hold the post for the entire period of his tenure and his tenure cannot be put and end to during that period unless he is, by way of punishment, dismissed or removed from the service.

It was further observed by the Supreme Court in the same case that the use of the expression "terminate" or "discharge" is not conclusive. In spite of the use of such innocuous expression, the court, has to apply to two tests viz., (1) whether the servant had a right to the post or rank; and (2) whether he has been visited with evil consequences of the kind which casts stigma on his character. If the case satisfied either of the two tests then it must be held that the termination of his services may be taken as dismissal or removal from service and his reversion to the substantive rank must be treated as a reduction in rank. Therefore, the requirement of Article 311 of the Constitution which gives protection to a Government servant will have to be complied with in all such cases.

In Champaklal Chimanlal Shah Vs. The Union of India (UOI), , it was observed by the Supreme Court that the mere innocuous use of the expression like "terminate" or "discharge" is not enough to satisfy the Court that no disciplinary action has been taken against the delinquent Officer and the Court will have to see as to whether in pith and substance an order passed in that regard in an order of punishment or not.

In State of Punjab and Another Vs. Shri Sukh Raj Bahadur, , the Supreme Court formulated five propositions; one of the propositions formulated by the Supreme Court is if there is a full-scale departmental enquiry envisaged by Article 311 i.e., an Enquiry Officer is appointed, a charge-sheet submitted, explanation called for and considered, and any order of termination of service made thereafter, will attract the operation of the said Article. This proposition of law has been approved in the case of Samsher Singh Vs. State of Punjab and Another, by a Division Bench of seven Judges, wherein it was opined by the Supreme Court that the fact of holding an enquiry is not always conclusive. What is decisive is whether the order is really by way of punishment. It was further observed that if the facts and circumstances of the case indicate that the substance of the order is that the termination is by way of punishment then a probationer is entitled to the protection of Article 311 of the Constitution of India.

The following words of the Supreme Court in Samsher Singh''s case (supra) are of much significance for the purpose of the instant case. It is observed at para 67 at page 480 :

"Where a department enquiry is contemplated and if an enquiry is not in fact proceeded with, Article 311 will not be attracted unless it can be shown that the order though unexceptionable in form is made following a report based on misconduct."

In Jagdish Mitter Vs. The Union of India (UOI), , it has been held that -

"If a formal departmental enquiry has been held in which findings have been recorded against the temporary servant and, a as a result of the said findings, his services are terminated, the fact that the order by which his services are terminated, ostensibly purports to be a mere order of discharge, would not disguise the fact that in substance and in law the discharge in question amounts to the dismissal of temporary servant. That is why the form of the order is inconclusive; it is the substance of the matter which determines the character of the termination of services."

The same principle has been affirmed in Anoop Jaiswal Vs. Government of India and Another, holing inter alia that it is now well settled that where the form of the order is merely a camouflage it would be necessary to go behind the form and ascertain the true character of the order. If the Court holds that the order though in the form is merely a determination of employment is in reality a cloak for an order of punishment, the court would not be debarred, merely because of the form of the order, in giving effect to the rights conferred by law upon the employee."

The decision reported in K. C. Joshi v. Union of India (1985 I LLJ 416), is an authority for the proposition that if an employee has been appointed on a regular basis, his service cannot be terminated by one month''s notice. If it is by way of punishment, it will be violative of the principles of natural justice in that no opportunity was given to the appellant to clear himself of the alleged misconduct which never found its expression on the paper but which remained in the minds of those passing the order of termination of service.

For further clarification of the above proposition of law, it can be seen in the decision reported in The State of Bihar and Others Vs. Shiva Bhikshuk Mishra, , wherein it is held that there is no rigid principle that one has only to look to the order and if it does not contain any imputation of misconduct or words attaching stigma to the character or reputation of a Government Officer it must be held to have been made in the ordinary course of administrative routine and the court is debarred from looking at all the attendant circumstance whether the order has been made by way of punishment.

In a situation like this it is incumbent on the court to lift the veil and to see the real circumstances as well as the basis and foundation of the order complained of.

In A.L. Kalra Vs. Project and Equipment Corporation of India Ltd., , the scope of Article 14 in such cases has been discussed in the following terms (p. 192) :

"It thus appears well settled that Art. 14 strikes at arbitrariness in executive/administrative action because any action that is arbitrary must necessarily involved the negation of equality. One need not confine the denial of equality to a comparative evaluation between two persons to arrive at a conclusion of discriminatory treatment. An action per se arbitrary itself denies equality of protection of law".

A detailed analysis of the principles laid down by the Supreme Court in the various cases has been made in this case with the object of applying the principles laid down therein to the facts of the case in hand. As per condition (iii) of the order of appointment, it is clear that the appointment of the petitioner is made subject to the outcome of the disciplinary cases pending against him. On the basis of the allegations made by Sri. K. Suryanarayana, Ex.M.P. against the petitioner, a preliminary enquiry was conducted by the Joint Collector, West Godavari, who was the then Chairman of the West Godavari Co-operative Sugars Ltd., Bhimadole. He submitted his preliminary enquiry report for consideration of the authorities. Subsequently another preliminary enquiry was got conducted by Sri. M. Mahender Reddy, I.P.S. former Director-General of Police and then Vice-Chairman of Nizam Sugar Factory, without any reference to the observations made by the Minister for Sugar or the concerned Director of Sugar and Cane Commissioner in favour of the petitioner. Sri. M. Mahender Reddy also conducted an enquiry and submitted his report. By G.O.Rt. 1132, dated October 21, 1987 the Government finally appointed Sri. Binoy Kumar, I.A.S. the then Joint Collector, West Godavari, as Enquiry Officer to conduct a detail enquiry into the allegations leveled against the petitioner and the petitioner and the Government also directed the Enquiry Officer to frame charges against the writ petitioner. The Enquiry Officer framed thirteen charges and issued a charge-sheet to the writ petitioner, who submitted his explanation to the charge-sheet. It is a matter of record that no oral enquiry was conducted in this case m or any personal hearing was given to the petitioner. The contention on behalf of the Government is that the enquiry was conducted and the enquiry report was submitted holding that charges 1, 2, 3, 4, 8 and 9 were proved, recommending necessary action against the writ petitioner. However, it is not clear from a reading of the counter-affidavit what kind of punishment was sponsored by the Enquiry Officer. Under these circumstances, the allegation of the petitioner in this connection seems to be well founded and that the enquiry was held behind his back without allowing him in inspect the documents and he was not given any opportunity to explain his conduct. The petitioner was not aware of the basis on which the Enquiry Officer has given his findings and the petitioner was not supplied with the copy of the report and the Enquiry report is kept as a confidential document. These allegations of the petitioner are no denied in the counter-affidavit. Furthermore a minute examination of the counter-affidavit reveals the fact that in para 7 of the counter-affidavit it is stated that the Enquiry Officer gave an opportunity to the petitioner, obtained his explanation and submitted the enquiry report along with the findings. It seems the enquiry report along with the findings of the Joint Collector, West Godavari was sent to the Government by the Commissioner of Sugar with his recommendation to terminate the services of the petitioner. In para 16 of the counter-affidavit it is stated thus :-

"The Managing Directors of Co-operative Sugar Factories were appointed on contract basis with a view to ensure that in respect of such of the Managing Directors whose work is not satisfactory they are removed from service by issue of three months'' notice or payment of three months'' pay in lieu thereof. The financial take of the government in the Co-operative Sugar Factories is very high. In order to safeguard the interests of the Government, Financial Institutions and also the share-holders, Government have to act in removing such of the Managing Directors whose work is found to be not satisfactory."

In the same sequence of events, the following passage in para 17 at page 14 of the counter assumes more importance :

"Since the termination is due to the disciplinary action, the services of the petitioner could be terminated even without notice."

The question therefore arising for consideration is whether the terminations orders has been passed on the basis of the report submitted by the Enquiry Officer and recommendation of the Commissioner of Sugar, to dismiss the writ petitioner. If the enquiry report and the recommendation of the Commissioner of Sugar form the basis for passing of the order, the order clearly falls under the proposition laid down in Sukhraj Bahadur''s case (supra) to the effect that if there is a full scale departmental enquiry envisaged by Article 311 and an Enquiry Officer is appointed, a charge-sheet submitted, explanation called for and considered and an order of termination of service made thereafter, will attract the operation of the said Article. Therefore, the seemingly innocuous expression of the order of termination cannot be considered to be an order simpliciter by virtue of which the petitioner can be denied his invaluable right to defend himself in accordance with the well established principles of justice and fair play. In such an event, the order in question is rendered arbitrary and capricious and it offends the provisions of Article 14 of the Constitution. Admittedly, there are four more Managing Directors of Sugar Factories who were appointed on the same terms and conditions along with the writ petitioner, against whom disciplinary proceedings were initiated and they are still continuing in service. No plausible reason is given as to why the services of the petitioner alone were terminated there by infringing the provisions of Art. 14 of the Constitution.

Sri N. Subbareddy, learned Additional Advocate-general has taken the stand and observed with the submission that the impugned order is not based on the enquiry report and it is only an order of simple discharge. However, it is easy to see that the order though camouflaged in terms of an order simpliciter is in effect an order passed upon the disciplinary action initiated against the petitioner.

Considering the facts and circumstances as stated above, this writ petition is allowed and the impugned order G.O.Rt. No. 346 of the Industries and Commerce (S.11) Department Government of A.P. Hyderabad, dated March 8, 1989 terminating the services of the petitioner and transferring and posting the 4the respondent in his placed is hereby quashed. It would be, however, open for the authorities to proceed against the petitioner by initiating or pursing the disciplinary action already taken against the petitioner in accordance with the Rule of natural justice thereby affording an adequate opportunity to the petitioner to explain his case to the authorities. In the circumstances of the matter, there will be no order as to costs.