ORDER
Dr. M.K.Sharma, J.
1. Challenge in this writ petition is to the validity of clause 18 of the offer of appointment of the petitioner dated 4.4.1990 and also to regulation 44 of The Fruit and Vegetable Project Officers (Conduct, Discipline and Appeal) Regulations, 1991. The petitioner has also sought for quashing of the order passed by the respondent No.1 terminating his services under clause 18 of the offer of appointment and as a consequential relief the petitioner seeks for reinstatement in service with full back wages.
2. The petitioner was initially appointed as an Executive by the respondent No.1 purely on temporary basis for a period of 3 months at consolidated salary of Rs.2,000/- per month. On 3.1.1990 the petitioner was given a fresh appointment as Executive at a consolidated salary of Rs.2,000/- per month which appointment was also purely on temporary basis for a fixed period of 3 months. On 4.4.1990, the respondent offered the petitioner an appointment as Executive in level IV of the Organisation with a basic pay of Rs.1,175/- in the sub-scale of Rs.1175-1630 falling under the scale of Rs.1175-2920. The petitioner was put on probation for a period of 6 months. On successful completion of the probation period the petitioner was confirmed in the said post as Executive Procurement on 10.11.1990. The services of the petitioner were however, terminated by letter dated 31.3.1993 stating that in terms of clause 18 of the offer of appointment dated 4.4.1990 the services of the petitioner were no longer required by respondent No.1 and the same stood terminated with immediate effect. Alongwith such termination letter a cheque for Rs.4,850.50 was also enclosed being one months’ salary in lieu of one months notice period. Aggrieved by the aforesaid order of termination the petitioner has approached this court through the present writ petition.
3. For better appreciation of the facts, clause 18 of the offer of appointment dated 4.4.1990 is extracted below:-
“Clause 18:
You shall have to give one months’ notice in writing or to make payment of amount equivalent to one months’ salary in lieu thereof if you desire to leave the service of the Project after your confirmation, and the management shall also likewise terminate your services by giving one months’ notice or one months’ salary in lieu thereof.”
4. In exercise of the powers conferred by Section 48 of the National Dairy Development Board Act, 1987 the Board of Directors of the National Dairy Development Board made regulations called ‘The Fruit & Vegetable Project Officers (Conduct, Discipline and Appeal) Regulations, 1991, (hereinafter referred as the Regulations) which came into force w.e.f. 1.4.1988. Admittedly, the aforesaid regulations also govern the service conditions of the petitioner. Regulation 44 of the said Regulations provides for termination of services in the following terms:-
“44. TERMINATION OF SERVICES:
The services of an officer may be terminated after giving him one month’s notice or on payment of salary (basis pay + D.A.) in lieu of the notice period, provided that in case where the officer is found guilty of misconduct his services may be terminated by dismissal or discharge in accordance with the procedure laid down under these regulations.”
5. Since during the course of hearing the counsel for the parties also referred to some other provisions of the said Regulations, I deem it appropriate to extract some of such provisions:-
“37. PENALTIES:
The following penalties may be imposed on an officer as hereinafter provided, for misconduct committed by him or for any other good and sufficient reasons namely-
(A) Minor Penalties –
(a) Censures;
(b) Fines;
(c) Withholding of increments with or without cumulative effect;
(d) Withholding of promotion;
(e) Recovery from the pay or from any other amount due to an officer of the whole or part of any pecuniary loss caused to the Project by his breach of any order or due to negligence or otherwise.
(B) Major Penalties –
(a) Reduction to lower service or post, or to a lower pay scale, or to a lower stage in a pay scale;
(b) Compulsory retirement;
(c) Removal from service;
(d) Dismissal.
….. ….. ….. ………. ….. ….. …..
39. DISCIPLINARY PROCEDURE:
(1) Where it is proposed to impose any of the minor penalties specified in regulation 35, the officer concerned shall be informed in writing of the allegations and the charge of misconduct or misbehaviour against him and where his past service is also relief upon a copy of his past service record as well, and he shall be given an opportunity to submit his written statement of defense within the specified period not exceeding fifteen days and the defense statement, if any, submitted by the officer, shall be taken into consideration by the Disciplinary Authority before passing orders.
(2) ….. ….. …..
….. ….. …..
(3) No order imposing any of the major penalties specified in regulation 37 shall be made except after an enquiry is held in accordance with this regulation.
….. ….. ….. …..
….. ….. ….. …..
43. SPECIAL PROCEDURE IN CERTAIN CASES:
Notwithstanding anything contained in this Chapter, the Disciplinary Authority may straight away impose any of the penalties specified in regulation 37 in any of the following circumstances:
(i) on the strength of facts or conclusions arrived at after a judicial trial or where the officer has been convicted on a criminal charge; or
(ii) Where the Disciplinary Authority is satisfied for reasons to be recorded in writing that it is not reasonably practicable to hold an enquiry in the manner provided in these regulations; or
(iii) Where the officer admits to the misconduct concerned, or
(iv) Where in the interest of the security of the Project or the State or due to the Project Authorities having lost all confidence in the officer, it is not expedient to continue the officer in the service.
6. On a comparative analysis of Regulation 44 with that of clause 18 of the terms of appointment, it is apparent that clause 18 was incorporated in the terms of appointment in the light of regulation 44. They are almost peri materia. The petitioner in the present petition has challenged the legality and validity of said clause 18 and regulation 44 on the ground that it is arbitrary, discriminatory and unconscionable.
7. The respondent has contested the writ petition by filing a detailed counter affidavit contending inter alia that the services of the petitioner were terminated by respondent No.1 owing to a complete lack of confidence arising out of serious allegations and accusations of lack of integrity against the petitioner in the responsible and sensitive job of Executive (Procurement). It is also stated that the job of the petitioner involved purchase of various items of fruits and vegetables worth lacs of Rupees every month which called for petitioner’s discretion and judgment judiciously and honestly but he failed to inspire any confidence. After careful consideration of the matter and keeping in view the facts and circumstances of the case the authority was satisfied that it was not reasonably practicable to hold an enquiry against the petitioner and hence terminated the petitioner’s services. In support of the contention reference was made to the provisions of Regulation 43 of the Service Regulations which empowers the respondent No.1 to terminate the services of an employee without holding an enquiry. Reference was also made to clause 18 of the terms of appointment.
8. I have heard the learned counsel appearing for the petitioner as also the counsel appearing for the respondent at length. The letter of appointment appointing the petitioner in service dated 4.4.1990 is on record. The letter terminating the services of the petitioner has also been placed on record by the petitioner which is Annexure ‘D’ to the writ petition. The said letter dated 31.3.1993 specifically stated that in terms of clause 18 of the said offer of appointment the services of the petitioner are not required by the Project and accordingly, the same are terminated with immediate effect. Apparently, therefore, the respondent No.1 chose to invoke the powers vested in it under clause 18 of the offer of appointment read with regulation 44 of the Regulations. It is thus, apparent that the respondent now is seeking to improve upon and/or add to the order of termination of services in the counter affidavit by adding therein that the power has also been exercised by respondent No.1 under clause 43 of the regulations which is similar to that of Article 311(2) of the Constitution of India. The aforesaid provision of clause 43(ii) which appears to be peri materia with Article 311(2) of the Constitution of India requires the
disciplinary authority to record its reasons for its satisfaction as to why it is not reasonably practicable to hold an enquiry in the manner provided in the regulations. The regulation has laid down detailed procedure as to how a departmental enquiry is to be conducted and regulation 39(iii) of the Regulations states that no order imposing any of the major penalties specified in regulation 37 shall be made except after an enquiry is held in accordance with these Regulations. Removal from service and dismissal are included in major penalties.
9. A mere reading of the order of termination of services of the petitioner discloses that the said termination has been effected in terms of clause 18 of the offer of appointment which is peri materia with that of clause 44 of the Regulations and therefore, the respondent No.1 could not have fallen back on the provisions of regulation 43(ii) of the regulations as has been sought to be done in the counter affidavit by stating that the action has also been taken under clause 43(ii). The respondent has the option to take action against the petitioner on either of the three modes prescribed under the Regulations i.e. his services can be terminated through the provisions of Regulation 44 or the disciplinary authority may impose any of the penalties specified in Regulation 37 by resorting to clause 43(ii) provided the conditions set out therein are satisfied or may proceed against the petitioner in accordance with the provisions of Regulation 37 after initiation of the departmental proceedings. In the present case the respondent has chosen to invoke the provisions of regulation 44 of the Regulations and therefore, the respondent is not entitled to fall back upon the provisions of regulation 43(ii). The respondent cannot add to and/or make improvement to the impugned order in the counter affidavit filed by it, nor it can seek to override the order in the counter affidavit by pleading a case different from the impugned order. Besides the respondent has failed to place the reasons on record showing the satisfaction of the disciplinary authority that it is not practicable to hold any enquiry in the manner provided for in these Regulations. Accordingly, the respondent has to stand on the basis of the letter by which the services of the petitioner were terminated. No doubt regulation 44 as also clause 18 of the offer of appointment empower the competent authority to terminate the services of a confirmed employee by giving him one months’ notice or one months’ salary in lieu thereof. Since however, the validity of the aforesaid provision has been challenged in this writ petition, it would be necessary to consider and deal with the aforesaid challenge. The Supreme Court dealing with the constitutionality of similar provisions enabling the Governmental authorities to terminate service of an employee has held that the constitutional pledge of equality and the constitutional guarantee against arbitrary action contained in Article 14 frown upon conferment on the State or its instrumentalities such arbitrary power. In this regard reference may be made to the decision of the Supreme Court in West Bengal State Electricity Board Vs. D.B.Ghosh; , Central Inland Water Transport Corporation Ltd. and another Vs. Brojo Nath Ganguly & another; AIR 1986 SC 1575, O.P.Bhandari Vs. Indian Tourism Development Corporation Ltd.; , M.K.Aggarwal Vs. Gurgaon Gramin Bank and others; AIR 1987 SC 286 and Delhi Transport Corporation Vs. DTC Mazdoor
Congress and others; reported in 1991(Suppl.) 1 S 600.
10. In Central Inland Water Transport Ltd. (supra) it was held by the Supreme Court that the provisions of Rule 9(1) which is almost peri materia with the present regulation 44 is not only arbitrary but also discriminatory for it enables the Corporation to discriminate between employee and employee, for it can pick up one employee and apply to him clause (i) of Rule 9, it can again pick up another employee and apply to him clause (ii) of Rule 9. It can pick up yet another employee and apply to him sub-clause (iv) of clause (b) of Rule 36 read with Rule 38 and to yet another employee it can apply Rule 37. It was held that all this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary enquiry into the alleged misconduct against the employee. The Supreme Court in that case also held that the Corporation can afford to dispense with the services of an officer and it would find hundreds of others to take his place but an officer cannot afford to lose his job because if he does so, there are not hundreds of jobs waiting for him. A clause such as clause (i) of Rule 9 is against right and reason and is wholly unconscionable. It is also stated that it has been entered into between the parties between whom there is gross inequality of bargaining and it is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies and consequently it is against public good. Finally the Supreme Court in that case held that Rule 9(i) is both arbitrary and unreasonable and it also wholly ignores and sets aside the audi alteram partem rule and is therefore, violative of Article 14 of the Constitution of India.
11. In the case of M.K.Aggarwal (supra) the Supreme Court held that regulation 10(2)(a) empowering the bank to terminate the services of an officer after giving him 3 months notice or pay in lieu thereof is an arbitrary and unguided power and is unconstitutional.
12. Similarly, in the case of Delhi Transport Corporation (supra) regulation 9(b) which is almost peri materia with that of the regulation 44 confers power on the authority to terminate the services of a permanent and confirmed employee by issuing the notice terminating the service or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the impugned order. Construing the aforesaid provision it was held by the Supreme Court that such power is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14
of the Constitution. It was also held that regulation 9(b) is also void under Section 23 of the Contract Act as being opposed to public policy.
13. The provisions of Regulation 44 are worded almost in the similar language and therefore, in the light of the aforesaid decisions of the Supreme Court the said provision has to be held to be arbitrary, discriminatory and unconscionable and violative of principles of natural justice and accordingly unconstitutional. In view of the aforesaid conclusions the order of termination passed against the petitioner dated 31.3.1993 which has for its foundation a provision which is unconstitutional is also required to be and is hereby quashed, holding the same to be illegal, void
and non est.
14. Having held thus, the issue that immediately crops up is – to what relief the petitioner shall be entitled to i.e. whether he should be reinstated in service with full back wages or he should be reinstated in service with 1/2 back wages or he should be paid only an amount by way of compensation in place of reinstatement. In Central Inland Water Ltd. case (supra) the Supreme Court after quashing the order of termination directed for reinstatement of the writ petitioner and also to pay him all arrears of salary and allowances payable to him whereas in M.K.Aggarwal’s case (supra) the Supreme Court on a consideration of the entire matter directed for reinstatement of the writ petitioner but restricted the back wages to 50% of what would otherwise be payable. At the same time the Supreme Court gave liberty to the bank to hold such disciplinary enquiry as it might deem fit in regard to the acts of misconduct alleged against the petitioner. On the other hand in O.P.Bhandari’s case (supra) after setting aside and quashing a similar provision as unconstitutional did not grant the relief of reinstatement in services and instead ordered for payment of compensation taking into consideration certain factors which would protect the interests of both the writ petitioner as also the respondent therein.
15. It is true that once an order of termination is set aside a workman and white collar employee other than those belonging to managerial or similar high level cadre is concerned employee is generally to be reinstated in service. While doing so taking into consideration the entire facts and circumstances of the case the court could direct for payment of only 50% of the arrears of salary and allowances to the petitioner. In the present case the counsel for the petitioner on instructions from the petitioner who was also personally present in court stated that the petitioner would be agreeable to receive even 50% of the arrears of salary and allowances in case the court directs for reinstatement of the petitioner in service. I am also informed by the counsel for the parties that 50% of the arrears salary would amount to approximately Rs.2,50,000/- for at the time of termination of the services the petitioner was drawing a salary of about Rs.5,800/-. However, when I take note of the averments made in the counter affidavit that the services of the petitioner were terminated due to complete lack of confidence arising out of serious allegations and accusation of lack of integrity of the petitioner in the responsible job of procurement, it implores me to consider the relief to be given to the petitioner more minutely and deeply.
16. In O.P.Bhandari’s case (supra), the Supreme Court in paragraphs 6 & 7 has held thus:-
“Time is now ripe to turn to the next question as to whether it is obligatory to direct reinstatement when the concerned regulation is found to be void. In the sphere of employer-employee relations in public Sector Undertakings, to which Article 12 of the Constitution of India is attracted, it cannot be posted that reinstatement must invariably follow as a consequence of holding that an order of termination of service of an employee is void. No doubt in regard to `blue-collar’ workman and `white collar’ employees other than those belonging to the managerial or similar high level cadre, reinstatement would be a rule, and compensation in lieu thereof a rare exception. In so far as the high level managerial cadre is concerned, the matter deserves to be viewed from an altogether different perspective a larger perspective which must take into account the demands of National interest and the resultant compulsion to ensure the success of the public sector in its competitive co-existence with the private sector. The public sector can never fulfill its life-aim or successfully vie with private sector if it is not managed by capable and efficient personnel with unimpeachable integrity and the requisite vision, who enjoy the fullest confidence of the `policy makers’ of such undertakings. Then and then only can public sector undertaking achieve the goals of (1) maximum production for the benefit of the community, (2) social justice for workers, consumers and the people, and (3) reasonable return on the public funds invested in the undertaking.
It is public interest that such undertakings of their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in a bonafide manner unable to function harmoniously as a team working arm-in-arm with success in the aforesaid three-dimensional sense as their common goal. These factors have to be taken into account by the Court at the time of passing the consequential order, for the Court has full discretion in the matter of granting relief, and the Court can sculpture the relief to suit the needs of the matter at hand. The Court, if satisfied that ends of justice so demand, can certainly direct that the employer shall have the option not to reinstate provided the employer pays reasonable compensation as indicated by the Court.”
17. The petitioner was working with the respondent as an Executive (Procurement). The job of the petitioner admittedly, involved purchase of various items of fruits and vegetables worth lacs of Rupees every month. The respondent has taken up the stand that there are allegations of misappropriation against the petitioner and that it is a case of lack of integrity on the part of the petitioner. In my considered opinion, absolute and unquestionable integrity is crucial to the job that the petitioner was performing. The respondent has also referred to the omplaints/reports
received against the petitioner from various sources which were enquired into by the respondent No.1 entrusting the matter of investigation to an independent outside investigating agency. It is also stated that the said investigating agency submitted a report on 15.1.1993 which is placed on record and annexed as Annexure R1/3. The said report does not speak well of the petitioner. In a job of Executive (Procurement) which the petitioner was performing at the time of termination of his services and to which post he is to be reinstated, if so ordered by this court, calls for absolute and unquestionable integrity. Trust and confidence of the management on the person holding the said post is one of the vital and important factors. The report submitted by the investigating agency prima facie points out certain misdeeds and does not speak well of the petitioner. It thus cannot be said that the apprehension of the respondent is misplaced or ill-founded. In the present case, even if an order is passed for reinstatement of the petitioner, liberty will have to be given to the respondent to initiate a department enquiry against the petitioner for the misconduct alleged against him in the counter affidavit, and therefore, the matter would not end with the reinstatement of the petitioner in service. Taking all these factors into consideration, I do not consider it to be a fit case where the petitioner should be ordered to be reinstatement in service and instead I feel that payment of adequate compensation to the petitioner in lieu of his services would advance the cause and interest of justice. The petitioner, at the time of his termination of his services was drawing a salary of Rs.5,800/- per month and therefore, if it is ordered that he should be paid a compensation of Rs.4 lacs instead of reinstatement in service he would be able to invest the said amount in a fixed deposit whereby he would be able to earn interest of about Rs.48,000/- per annum going by the present rate of interest, which would mean that he would be getting Rs.4,000/- per month, which would be the amount he would be receiving every month apart from being able to take up any other job or venture into some other business of his own.
18. Accordingly, taking note of the peculiar facts and circumstances of the case as delineated above, and taking note of the ratio of the decision in O.P.Bhandari’s case (supra), in my considered opinion the compensation of Rs.4 lac would be a reasonable amount to award in favour of the petitioner in lieu of reinstatement, which I hereby do, with costs of Rs.5,000/- payable by the respondent to the petitioner.