Equivalent Citations

2006 LLJ 1 188 . 2005 ILR KER 3 186 . 2005 KERLT 3 748 . 2005 SCC ONLINE KER 233 .
2006 LLN 1 655 . 2005 KLT 3 748 . 2005 LLR 967 .

National Small Industries Corporation, Ltd. v. Narayanan

Kerala High Court (May 24, 2005)

CASE NO.

Writ Appeals No. 3358 of 2000 and 1009 of 2001

ADVOCATES

For Appellants.— Sri K.P Dandapani and Smt. Sumathi Dandapani.

Sri P. Sankarankutty Nair and Sri T.V Ajayakumar.
JUDGES

Sri J.B Koshy

Sri K.T Sankaran, JJ.

JUDGMENT

For Appellants.— Sri K.P Dandapani and Smt. Sumathi Dandapani.

For Respondents.— Sri P. Sankarankutty Nair and Sri T.V Ajayakumar.

The Judgment of the Court was delivered by

Koshy, J.: — When order of terminating the probationary service was received by the
petitioner, petitioner approached this Court challenging the same, Petitioner was appointed
by Exhibit P1 appointment order. Condition No. 1 in Exhibit P1 appointment order reads
as follows:
“1. You will be on probation for period of two years from the date of your joining the post.
The probation period may be extended, at the discretion of the appointing authority.
During the probation period the appointment will be liable to termination on one month's
notice and thereafter on three months notice on either side or pay with allowances in lieu
thereof. Continuance in service after the probation period is subject to satisfactory
performance.”
According to the petitioner, even though the order issued is an order simpliciter, it is
actually a punitive order issued without conducting an enquiry and without complying with
the rules and, therefore, it is liable to be set aside. The learned Single Judge allowed the

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above plea and directed to reinstate the petitioner with continuity of service and with one-
eighth of back-wages. Petitioner filed Writ Appeal No. 1009 of 2001 demanding full back-
wages. The employer filed Writ Appeal No. 3358 of 2000 challenging the above judgment
in so far as it interferes in the termination order. Exhibit P10 termination order reads as
follows:
“In pursuance of the proviso to Cl. (1) of offer of appointment letter No. SIC/ Pers.
1/11(33)790, dated 9 November 1990, Sri M. Narayanan, Deputy Manager was placed on
probation for a period of two years with effect from 21 January 1991. The services of Sri
Narayanan, whose probation was extended for a period of six months with effect from 21
January 1993, for unsatisfactory performance vide office order No. NSIC/ M/ Estt.
2(505)/92/1048, dated 21 January 1993, and was further extended for another period of six
months with effect from 21 July 1993 for poor performance vide office order NO. NSIC/
M/Estt. 2(505)/92/1518, dated 30 July 1993, is hereby terminated forthwith.
Sri Narayanan shall be entitled to a sum equivalent to one month basic pay and IDA
towards notice period as per Cl.(1) of the offer letter, dated 9 November 1990, mentioned
above, at the same rates at which he was drawing them immediately before the termination
of his service.”
2. The contention that his probation period was not extended till the time of termination is
not correct. In any case, he has no case that his services were confirmed. There is no
provision in the Standing Orders for automatic termination of service. In any event, it was
specifically stated in the appointment order that his continuance of service after
probationary period is subject to satisfactory service. It is settled law that in the absence of
a provision in the service rule or a term in the appointment order to the contrary, a
probationer will continue to be a probationer unless he is confirmed. In State of
Maharashtra v. Veerappa R. Saboji , [1980 (1) L.L.N 17], it was held that automatic
confirmation cannot be claimed in the absence of specific rule and work has to be
satisfactory which is a prerequisite or precondition for confirmation and, therefore, even if
the probationer is allowed to continue beyond the period of probation there is no deemed
confirmation. The above view was followed recently also in Registrar, High Court of
Gujarat v. C.G Sharma, [2005 (1) L.L.N 1] Position will be different if there is a rule for
automatic confirmation after a certain period.
3. It is true that even though the termination order is innocuously worded, the Court can
lift the veil and look at the real foundation of the order to find out whether it is an order
simpliciter for unsatisfactory service or it is a motivated order and punitive. The
averments in the counter- affidavit show that on the basis, of some allegations, an
investigation was conducted through the vigilance and, therefore, it is argued on behalf of
the employee that the termination order is by way of punishment for misconduct. In
Parshottam Lal Dhingra v. Union of India, [A.I.R 1958 S.C 36], Constitution Bench of
the Apex Court held that inefficiency, misconduct or even many other inducing factors
may be there which influences the authority to terminate the services of an employee and
it might have been the motive for terminating the services. But, the motive by itself does

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not make an order punitive unless the order was founded on those factors or other
disqualifications. In this case, on the basis of Exhibit P1 order, petitioner was appointed
and posted at Jaipur. He was later transferred to Thrissur. According to the respondent,
there were many allegations against him from the customers at Jaipur which is a very busy
centre and, therefore, he was transferred to Thrissur. But, despite transfer, there was no
improvement in his performance. His period of probation was extended. Inspite of the
extension of the period of probation twice, there was no improvement in his performance
and, finally, Exhibit P10 order was issued. It is now well settled law that services of a
probationer can be terminated during or at the end of the period of probation on account of
general unsuitability for the post in question and normally the performance of the
probationer has to be assessed by the superior officers.
4. In Chandra Prakash Shahi v. State of Uttar Pradesh, [2000 (3) L.L.N 21], it was held
that the entire case law on termination is based on the peculiar facts of each individual
case and the concept of motive and foundation, etc., are to be looked into considering the
facts of each case. The learned counsel for the petitioner relied mainly on the decision of
the Constitution Bench of the Supreme Court in Shamsher Singh and Ishwar v. State of
Punjab , [1975 (1) L.L.N 4]. In that case, after the findings of the Vigilance Director
without notice to the petitioner, a show-cause notice was issued asking to show cause. The
show- cause notice was actually replied. But, then, the services were terminated. On the
facts of those cases, the Supreme Court held that the order was actually punitive in nature.
But, the Court observed that the period of probation is intended to assess the work of the
probationer whether it is satisfactory and whether the appointee is suitable for the post; the
competent authority may come to the conclusion that the probationer is unsuitable for the
job and hence must be discharged on account of inadequacy for the job or for any
temperamental or other similar grounds not involving moral turpitude. No punishment is
involved in such a situation. In Dipti Prakash Banerjee v. Satyendra Nath Bose National
Centre for Basic Sciences , Calcutta, [ 1999 (2) L.L.N 44 ], after reviewing the entire
available case law on the issue, the Apex Court held that “termination of a probationer's
services, if motivated by certain allegations tantamounting to misconduct but not forming
foundation of a simple order of termination cannot be termed punitive and hence would be
valid.” The Supreme Court in Mathew P. Thomas v. Kerala State Civil , Supply
Corporation, Ltd., [2003 (2) L.L.N 353], held that repeated dereliction of duty will
tantamount to unsatisfactory performance. Even though serious allegations of misconduct
and of unsatisfactory service were contained in the show- cause notice, order of
termination was solely based on unsatisfactory performance in terms of the conditions in
the appointment order and it was held that the order of termination is an order simpliciter
and judicial review is not possible. In High Court of Judicature at Patna v. Pandey Madan
Mohan Prasad Sinha, [1999 (2) L.L.N 669], it was held that consideration of complaints
regarding integrity and character and morality of the petitioner and his alleged indulgence
in drinking and gambling, in taking decision to terminate his service does not show that the
decision is punitive. The Supreme Court in State of Uttar Pradesh v. Kaushal Kishore
Shukla, [1991 (1) L.L.N 343], held that when order of termination is based on assessment
of suitability on considerations of adverse entry, despite pendency of various allegations of

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misconduct, the order is not punitive, A similar view was taken by the Supreme Court in
Kunwar Arun Kumar v. Uttar Pradesh Hill Electronics Corporation, Ltd., [1997 (1) L.L.N
570]. Merely because there was a vigilance investigation against the employee in view of
certain complaints, order of termination will not become punitive. Apex Court in
Pavanendra Narayan Verma v. Sanjay Gandhi Post Graduate Institute of Medical
Sciences, [2002 (1) L.L.N 45], further held:
“It cannot be held that the enquiry held prior to the order of termination turned the
otherwise innocuous order into one of punishment. An employer is entitled to satisfy itself
as to the competence of a probationer to be confirmed in service and for this purpose
satisfy itself fairly as to the truth of any allegation that may have been made about the
employee . A charge sheet merely details the allegations so that the employee may deal
with them effectively. The enquiry report in this case found nothing more against the
appellant than an inability to meet the requirements for the post. None of the three factors
catalogued above for holding that the termination was in substance punitive exists in the
present case.
An affidavit cannot be relied on to improve or supplement an order. Equally, an order
which is otherwise valid cannot be invalidated by reason of any statement in any affidavit
seeking to justify the order.”
In Krishnadevaraya Education Trust v. L.A Balakrishna, [2001 (1) L.L.N 856], it was held
by the Apex Court that, in Paras. 5 and 6, at page 858:
“5. There can be no manner of doubt that the employer is entitled to engage the services of
a person on probation. During the period of probation, the suitability of the recruit/
appointee has to be seen. If his services are not satisfactory which means that he is not
suitable for the job, then the employer has a right to terminate the services as a reason
thereof If the termination during probationary period is without any reason, perhaps, such
an order would be sought to be challenged on the ground of being arbitrary. Therefore,
naturally services of an employee on probation would be terminated, when he is found not
to be suitable for the job for which he was engaged, without assigning any reason. If the
order on the face of it states that his services are being terminated because his performance
is not satisfactory, the employer runs the risk of the allegation being made that the order
itself casts a stigma. We do not say that such a contention will succeed. Normally,
therefore, it is preferred that the order itself does not mention the reason why the services
are being terminated.
6. If such an order is challenged, the employer will have to indicate the grounds on which
the services of a probationer were terminated. Mere fact that in response to the challenge
the employer states that the services were not satisfactory would not ipso facto mean that
the services of the probationer were being terminated by way of punishment. The
probationer is on test and if the services are found not to be satisfactory, the employer has,
in terms of the letter of appointment, the right to terminate the services.”
5. In Unit Trust Of India v. T. Bijaya Kumar Patra, [1992 (2) L.L.N 1015], it was held by

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the Supreme Court, (in Para. 4, at page 1017), that before terminating the services of a
probationer for unsatisfactory performance, no notice of hearing need be issued. The
above, decision was rendered by a three-member Bench. As far as the facts of this case are
concerned, the confidential report shows that the assessment was very bad and the adverse
entry in the confidential report was communicated to the petitioner. Exhibit P5 is one of
such communications which reads as follows:
“The following remarks made in his confidential report for the year 1991– 92 are
communicated to Sri M. Narayanan, Deputy Manager for information and such
representation as he may wish to make against it but not later than three months from the
date of issue of this Memorandum—
AssessmentInadequateCost consciousnessAware of effecting economy but makes no
special efforts.Innovative thinkingSeldom putforth ideas; barely understands problems;
solutions evolved are usually irrelevant.Decision- makingSlow at taking
decisions.Interpersonal relationsSometime unco- operative; occasionally creates friction
with colleagues, subordinates and seniors.LeadershipMarginally able to influence the team;
minimally effective in developing and training subordinates.DisciplineNeeds to improve
his sense of discipline; needs to be punctual and regular in attendance.Group
effectivenessMarginally able to maintain group morale; occasionally fails to utilize
manpower resources optimally.IntegrityQuestionable.Understanding of the organisational
and corporate objectiveInadequate.Overall evaluationUnsatisfactory - Performance barely
adequate.

Under the column of Achievement/ Failure vide Para. IV of the report, Reporting/
Reviewing Officers have observed as under:
“Certain cases of malpractices were reported and confirmed after he was relieved from
B.O”
“Needs removal from any commercial assignment.”
There is no evidence of mala fide on the part of the employer. They could have terminated
the service at that time itself. He was transferred from Jaipur to Thrissur. Thereafter also,
there was no improvement. As pointed out by the counsel for the respondent, self appraisal
forms were also not written by the petitioner. It is also pointed out that several complaints
were received against him. All these factors establish that hrs service was not satisfactory.
His representations were also disposed of as can be seen from Exhibit R2(c) to (e). On
going through the confidential reports, we cannot find fault with the opinion of the
employer that despite the extended period of probation, petitioner was not able to show
any improvement and his work during the probation period was not satisfactory. Exhibit
P10 termination order is not punitive in nature, but, only an order simpliciter in
accordance with the appointment order. The allegations levelled by the petitioner that
when petitioner was in Jaipur all officers above him were acting against the interest of the

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company, that he made complaints and that when he was transferred again the officers at
Thrissur were also acting against the interest of the company, etc., are mere self serving
statements and these wild allegations are not substantiated. In any event, his probationary
service was not satisfactory and Exhibit P10 termination order was issued in accordance
with condition No. 1 of Exhibit P1 order. In the above circumstances, the learned Single
Judge should not have interfered with the termination order. In the result, the judgment of
the learned Single Judge is set aside and W.A No. 1009 of 2001 filed by the petitioner is
dismissed and W.A No. 3358 of 2000 is allowed.

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