1. Heard Mr. J Roy, learned counsel for the appellant /petition and the learned Government Advocate for the respondents.
2. The appellant-petitioner was appointed as Plant Manager of Rundung Cement Factory by order dated 28.9.1991 after undertaking selection process by the duly constituted selection committee. The terms of the appointment state that he was appointed on consolidated salary of Rs. 6,500 per month ; that he shall be on probation for a period of two years ; that the shall be a full time employee of the Company and shall not take up any other assignment of any nature without prior permission from the Company. The appellant-petitioner same time in the year 1993 sustained injury and thereafter he was under treatment. By order dated 19.10.1995 (Annexure A/30) the petitioner's services have been terminated in pursuance of the resolution No. 5 of 27th Meeting of the Board of Directors of Manipur Cements Limited held on 15.9.1995 in exercise of power conferred on the Managing Director under Rule 2 of Termination of Service in Chapter II of Manipur Cements Limited (Staff) Rules, 1994 (for short 'the Rules 1994') with effect from 9.1.1995. Aggrieved by the aforesaid order of termination, the petitioner approached this High Court by filing a writ petition. The writ petition was dismissed by the learned Single Judge mainly on the ground that the petitioner did not join his duty and continued to remain on leave despite he has been asked and directed to join his duly and thus the Management has rightly terminated the services of the petitioner. It is further stated that since the petitioner was absented himself from duly without authority with effect from 9.1.1995 his services have been rightly terminated from 9.1.1995 by order dated 19.10.1995 and such an order of termination from back date cannot be called as an order of termination passed with retrospective effect. Aggrieved by the aforesaid judgment and order dated 12.9.2000 passed by the learned Single Judge in Civil Rule No. 251 of 1996, the present appeal is filed before us.
3. Learned counsel for the appellant has contended that in a case of permanent employee, his service cannot be terminated by resorting to the method as adopted by the Respondent No. 2. The requirement of law is that he should be given an opportunity to explain the allegations made against him and after holding a proper enquiry, if he is found guilty of the charges, his services can be terminated. On the other hand, the counsel for the respondents has taken shelter under Rules 1 and 2 in the heading of termination of services of the Rules 1994, whereunder it has been provided that the Company may terminate the services, of a permanent employee by giving three months' notice of on payment of substantive pay for three months in lieu of notice in case of the Manager. The power of the termination of service of an employee shall be exercised by the Managing Director with the prior approval of the Board. Thus according to the learned counsel for the respondents, the petitioner's service could have been terminated by giving him three months notice or on payment of notice in lieu thereof. The petitioner's service having been terminated by the Managing Director with the prior approval of the Board, the order of termination is in accordance with law.
4. Under the Rules 1994 an employee, who is directly recruited shall be on probation at least for one year from the date of commencement of his service. The period of probation of an employee directly recruited can be extended at the discretion of the appointing authority with the approval of the Board of Directors provided that in no case the period may be exceeded three years. Under the Rules, 1994 the maximum period on which an employee can be kept on probation is three years. On successful completion of three years period of probation under the Rules an employee becomes a permanent employee automatically. The maximum probationary period being a period of three years and admittedly, the petitioner-appellant being appointed on 28.9.1991, he becomes a permanent employee by operation of the Rules on completion of 3 years of probationary service. The date on which the petitioner's service was terminated he was a permanent employee of the company and his service could not have been terminated without affording him an opportunity to explain the misconduct alleged against him, remaining absent from duty without leave.
5. In the case of Delhi Transport Corporation v. DTC Mazodoor Congress and Others, reported in 1991 Supp (1) SCC 600, a similar matter came for consideration before the Apex Court and in the said case it has been held that provision for termination of service of permanent employees of public/semi Government undertakings or statutory corporations only on one month's notice or pay in lieu of notice without any enquiry is unconstitutional as also violative of audi alteram partem rule of natural justice and Section 23 of the Contract Act. As per the Apex Court, such a rule cannot be given effect to in case of termination of service of a permanent employee.
6. In Central Inland Water Transport Corporation Limited and Another v. Brojo Nath Gangully and Another (1986) 3 SCC 156, the Apex Court has held that the term in contract of employment as also service rules of the company providing for termination of service of permanent employees without assigning reasons on three month's notice or pay in lieu thereof on either side is held to be unconscionable, arbitrary and opposed to public policy and in void under Section 23 of the Contract Act and also violative of Article 14 of the Constitution.
7. Calling the decision in the matter of O.P. Bhandari v. Indian Tourism Development Corporation Ltd. and Ors., (1986) 4 SCC 337, the Apex Court has pronounced that the termination of service of an employee by giving notice or pay in lieu thereof of notice cannot coexist with Articles 14 and 16(1) of the Constitution of India such Rule has the effect of setting at knot the guarantee enshrined in Articles 14 and 16 of the Constitution.
8. In the matter of D.K. Yadav v. JMA Industries Ltd. (1993) 3 SCC 59 while considering the provisions of Standing Orders, whereunder termination of the employee is provided without holding any domestic enquiry or affording any opportunity to the workman, the Apex Court held that such provision is violative of principles of natural justice and Articles 14 and 21 of the Constitution of India. That apart there is non-compliance of the provisions of Rules. In case of the appellant. The Rules holds the filed and under the Rules the service of a permanent employee can be terminated by three month's notice or payment of three months substantive pay in lieu of notice. Termination order issued in the case of the petitioner-appellant does not indicate either he was given three month's notice or the pay in lieu of notice period at the time of termination of his service. The requirement of Rule is that the order has to be issued by the Managing Director with the prior approval of the Board. It further requires that at the time of termination of the service of a permanent employee he shall either be paid 3 months' salary or the termination of service shall be after three month's notice. Nothing to that effect has been done by the Respondents in the instant case. Therefore, on this count also, according to us, the order of termination is illegal.
9. In view of the aforesaid reasons, the appeal is allowed and the impugned judgment and order dated 12.9.2000 passed by the learned Single Judge in Civil Rule No. 251/96 is set aside. The appellant shall be reinstated in service with full back wages.
10. However, it shall be open for the respondent company to take up the proceeding in accordance with the law against the appellant/ petitioner for the alleged misconduct and the order of this Court will not stand in the way of departmental proceeding or enquiry that may be commenced by the Respondent Company against the appellant.
11. There shall be no order as to costs.