Full Judgment Text
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CASE NO.:
Appeal (civil) 3125 of 2008
PETITIONER:
Punjab National Bank by Chairman & Anr
RESPONDENT:
Astamija Dash
DATE OF JUDGMENT: 30/04/2008
BENCH:
S.B. SINHA & V.S. SIRPURKAR
JUDGMENT:
J U D G M E N T
REPORTABLE
CIVIL APPEAL NO. 3125 OF 2008
(Arising out of SLP (C) No. 18997 of 2005)
WITH
CIVIL APPEAL NO. 3126 OF 2008
(Arising out of SLP (C) No. 23155 of 2005)
Astamija Dash .\005. Appellant
Versus
Punjab National Bank and another \005.. Respondents
S.B. SINHA, J.
1. Leave granted in both the matters.
2. These two appeals arise out of a judgment and order dated 20th May,
2005 rendered by the Division Bench of the Orissa High Court at Cuttack in
WP No. 2333 of 1991.
3. Writ Petitioner (Respondent in appeal arising out of SLP ) No. 18997
of 2005 and Appellant in the connected appeal) was appointed as a
Management Trainee in the Punjab National Bank (Bank). She was duly
selected by the Banking Service Recruitment Board, Delhi. An offer of
appointment was made to her favour on or about 28th July, 1986 inter alia on
the following terms and conditions :-
"2. TRAINING/PROBATION/CONFIRMATION
"You will be on training/probation for a period of 2 years
from the date of your joining the Bank and you will be
considered for confirmation in the service, subject to
your satisfactory report on your training, passing Bank’s
confirmation test and receipt of satisfactory report from
the Police authorities about your character and
antecedents. You may also be required to pass a test in a
language other than your mother tongue before
confirmation.
3. During the period of probation your services can
be terminated by giving one month’s notice or payment
of one month’s emoluments in lieu thereof. The Bank
may, however, in its discretion extend your probation by
a further period not exceeding one year. If you desire to
leave the services of the Bank at any time during the
period of probation, including the extended period
thereof, if any, you shall give a month’s notice or in lieu
thereof, you shall pay a month’s emoluments to the
bank."
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4. She joined the services of the Bank immediately thereafter.
Pursuant to the condition that she must pass the confirmation test, she
appeared in the said examination on 29th May, 1988. She did not pass the
said examination. She was, however, again asked to appear in the
examination on 1st October, 1989. By a letter dated 5th September, 1989 she
expressed her inability to do so, stating :-
" I invite a kind reference to your letter dated 18th
August, 1989 wherein I was advised to appear in the
confirmation test scheduled to be held on 1 October,
1989 in Central Staff College, Delhi. In this context, I
would like to inform you that I am passing through the
period of pregnancy and am advised by the doctor not to
undertake long journey during the period of pregnancy
till delivery as a result of which I will not be able to
appear the test.
I, therefore, request you to kindly consider my case
sympathetically and permit me to appear the test on the
next schedule date, in future. I enclose a medical
certificate for your information and favourable
consideration."
5. She had two mis-carriages. She was asked again to appear in the
examination on 19th August, 1990. She appeared in the said test, but could
not succeed. In the meanwhile the probation period expired on 28th July,
1988. It was extended by another year i.e. till 28th July, 1989.
6. Indisputably, she had otherwise completed her period of probation.
She also fulfilled the other conditions of service. Her services, however,
were terminated by an order dated 9th November, 1990 stating :-
"You were appointed as a Management Trainee on
25.8.1986. One of the terms of your appointment
stipulates that :
"3. CONFIRMATION
You will be considered for confirmation in the
Bank service after two years on :
a) Satisfactory report of your training.
b) Passing Bank’s confirmation Test.
c) You may also be required to pass a test in language
other than your mother tongue before confirmation.
In the event of your not satisfactorily completing
the training referred to in sub para 3(a) or failure to
qualify the Bank’s confirmation test within the
training/probation period of two years or to pass the test
in a language other than your mother tongue, your
probation may be extended by a further period not
exceeding one year.
If during the period of probation, including the
period of extension, if any, the competent authority is of
the opinion that you are not fit for confirmation to be
retained in the bank service, your services shall be liable
to be terminated by one month’s notice or payment of
one month’s emoluments in lieu thereof.
You had appeared in the confirmation test held on
29.5.1988 but you did not qualify the same. In the
confirmation test held on 1.10.1989, you have been
advised to appear for the test but you had remained
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absent. Although the Bank would have been justified in
terminating your services in accordance with your terms
of appointment, a lenient view was taken and you were
given a last and final opportunity for qualifying the
confirmation test in August, 1990. You appeared in the
Bank’s confirmation test held on 19.8.1990 but did not
qualify the test."
7. She preferred an appeal thereagainst before the appellate authority
asking for another chance to clear the confirmation test stating thatsimilarly
situated employees including one Indubala had been given another chance to
appear at the examination. However, the said appeal was dismissed by an
order dated 28th November, 1990.
8. She filed a writ petition before the High Court, inter alia, contending:-
i) In terms of the Punjab National Bank (Officers) Service
Regulations, 1979 insistence of passing the confirmation
teat was illegal.
ii) As the extended period of probation expired on 28th July,
1989 she should be deemed to have been confirmed in
service.
iii) She had been subjected to discriminatory treatment viz-a-
vis. Indubala who was granted an opportunity to appear
in the confirmation test for the 4th time on the ground of
illness of her mother.
9. The High Court rejected the first two contentions raised by the writ
petitioner herein but accepted the third. The writ petition was allowed on
the said premise.
10. Both the parties, being aggrieved, are before us.
11. Mr. Dhruv Mehta, learned counsel appearing on behalf of the Bank
would submit:-
i) Although Regulations do not provide for a confirmation test,
the writ petitioner having accepted the conditions of
appointment, she cannot be permitted to approbate or
reprobate.
ii) Her services having not been expressly confirmed, the doctrine
of implied confirmation is not applicable in view of the
decision of the Division Bench of the Allahabad High Court in
General Manager, Punjab National Bank and others vs. Khar
Bhan Ram : (1995) II LLJ 93 All.
iii) Reliance placed by the High Court on the case of Indubala was
misplaced as an affidavit explaining the situation had not been
taken into consideration and in any event no legal right can be
claimed on the basis of an illegality committed by the employer
as Article 14 of the Constitution of India speaks of a positive
right.
12. Mr. S.S. Upadhyay, learned Senior Counsel, appearing on behalf of
the writ petitioner, on the other hand, would submit :-
i) The order of termination being not based on
unsatisfactorily completion of the in-house training or the
non-passing of a language test, which only have been
provided for in the Regulations, the impugned order of
termination could not have been passed on the premise
that the writ petitioner did not pass the confirmation test.
ii) Having regard to Regulations 15 and 16 of the
Regulations, her services having been terminated on 9th
November, 1990 i.e., after the extended period of the
period of probation upto 28th July, 1989 expired, she
would be deemed to have been confirmed in service.
iii) In any event she had clearly been discriminated against
inasmuch as an employee who was similarly situated had
been given a fourth opportunity to clear the said
confirmation test, whereas the writ petitioner was not.
13. The Bank is a scheduled Bank within the meaning of the provisions of
the Banking Companies (Acquisition and Transfer of Undertakings) Act,
1970. It has various statutory powers. It has inter alia power to frame
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Regulations. In exercise of its powers conferred upon it by Section 19 read
with sub-section (2) of Section 12 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970, the Board of Directors of the
Punjab National Bank, in consultation with the Reserve Bank of India and
with the previous sanction of the Central Government made Regulations
known as the Punjab National Bank (Officers’) Service Regulations, 1979
(for short Regulations). Applicability of the said Regulations to the case of
the writ petitioner is not in dispute.
14. Regulations 15, 16 and 36, which are relevant for our purposes may
be noticed.
In terms of sub-regulation (1) of Regulation 15, the period of
probation is two years. Sub-regulation (1) of Regulation 16 provides for
confirmation of service, if in the opinion of the competent authority, the
officer has satisfactorily completed the training in any institution to which
he might have been deputed for training and in the in-service training in the
bank. The proviso appended thereto provides for passing a test in a
language other than the mother tongue of the office. Sub-regulation (2) of
Regulation 16 provides for extension of the period of probation only in the
event the officer does not satisfactorily complete either or both the trainings
referred to in sub-regulation (1) or fails to pass the test referred to therein.
Extension of the period of probation, however, could not exceed a further
period of one year. Sub-regulation (3) of Regulation 16 provides that
service of an employee can be terminated in the case of a direct appointee,
by one month’s notice or payment of one month’s emoluments in lieu
thereof only when during the period of probation, including the period of
extension, if any, the competent authority is of the opinion that the officer is
not fit for promotion.
Regulation 36 provides for maternity regulation in terms whereof
leave upto a period of six months can be granted.
16. Indisputably, the Regulations do not provide for passing of any
confirmation test. Such a confirmation test had been prescribed only in the
letter of appointment. Ordinarily, although when conflict occurs between an
executive order and a statutory Regulation, the latter will prevail; we will
proceed on the premise that such a condition could be imposed by the
competent authority.
17. We, for the time being, would also assume that having regard to the
doctrine of approbation and reprobation as also the doctrine of election, the
writ petitioner could not question the validity or otherwise of the said
executive action.
18. While saying so, however, we are not unmindful of the observations
made by this Court in Municipal Corporation, Raipur vs. Ashok Kumar
Misra : (1991) 3 SCC 325.
"6. Exercise of the power to extend the probation is
hedged with the existence of the rule in that regard
followed by positive act of either confirmation of the
probation or discharge from service or reversion to the
substantive post within a reasonable time after the expiry
of the period of probation. If the rules do not empower
the appointing authority to extend the probation beyond
the prescribed period, or where the rules are absent about
confirmation or passing of the prescribed test for
confirmation of probation then inaction for a very long
time may lead to an indication of the satisfactory
completion of probation."
19. The period of probation is governed by a statutory provision. The
appointing authority is bound thereby. The initial period of probation is two
years, subject only to non compliance of the conditions laid down under sub-
regulation (1) of Regulation 16, namely failure to complete satisfactorily
either or both the trainings referred to therein or passing of a language test,
the period of probation can be extended. The statute mandates that it can be
extended for a period not exceeding one year. The total period of probation,
therefore, can be three years and not more. No doubt for confirming the
services of an officer of the bank, the competent authority must satisfactorily
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form an opinion that the officer had completed the trainings in any
institution to which the officer had been deputed as also the in-service
training in the bank. It is not the case of the appellant-bank that the proviso
appended thereto is applicable in the case of the writ petitioner.
20. Extension of the period of probation limited to one year, however, is
circumscribed by the conditions specified in sub-regulation (2). What is
apparent, has been made explicit by sub-regulation (3) as the competent
authority has to form an opinion that the officer is not fit for confirmation
only within the period of probation including the period of extension and not
beyond the same.
21. The High Court, as noticed hereinbefore, has relied upon the decision
of the Division Bench of the Allahabad High Court in the case of appellant-
bank itself.
Chief Justice S.S. Sodhi, speaking for the Division Bench,
distinguished the cases of State of Punjab vs. Dharam Singh :1968 (3)
SCR 1 and Om Pakash Maurya vs. U.P. Co-operative Sugar Federation,
Lucknow : 1986 Suppl. SCC 95 to hold :-
"It may be mentioned here that both Dharam Sigh and
Om Prakash’s cases (supra) were later distinguished by
the Supreme Court in Municipal Corporation, Raipur v.
Ashok Kumar Misra (1991-II-LLJ-343), where the facts
were somewhat similar as here in that the relevant service
rules, besides requiring successful completion of
probation for confirmation in service, also laid down, as
an essential pre-condition, the passing of the
departmental test. It was held that mere expiry of the
period of probation did not automatically have the effect
of deemed confirmation. Both the earlier judgments of
the Supreme Court in Dharam Singh and Om Prakash
cases (supra) were noticed and distinguished. Seen in this
light, there can be no escape from the conclusion that in
the circumstances here, mere expiry of the period of
probation, without the respondent having qualified in the
confirmation test, did not entitle him to confirmation in
service.
22. The decisions of this Court in Dharam Singh (supra) and Om Prakash
Maurya (supra), on the one hand, and Municipal Corporation, Raipur vs.
Ashok Kumar Misra : (1991) 3 SCC 325, on the other, as would appear from
the discussions made hereinafter had set the legal principles differently.
23. In Dharam Singh, a Constitution Bench of this Court categorically
held that :-
"Where on the completion of the specified period of
probation the employee is allowed to continue in the post
without an order of confirmation., the only possible view
to take in the absence of anything to the contrary in the
original order of appointment or promotion or the service
rules, is that the initial period of probation has been
extended by necessary implication."
What is, therefore, evident is that the matter must be governed by the
statutory rules.
24. The Rule in question which was applicable in Dharam Singh (supra)
was sub-rule (3) of Rule 6 of the Punjab Educational Service (Provincialised
Cadre) Class III Rules, 1961 which was in the following terms :-
"6(3) On the completion of the period of probation the
authority competent to make appointment may confirm
the member in his appointment or if his work or conduct
during the period of probation has been in his opinion
unsatisfactory he may dispense with his services or may
extend his period of probation by such period as he may
deem fit or revert him to his former post if he was
promoted from some lower post.
Provided that the total period of probation including
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extensions, if any, shall not exceed three years."
In view of the said Rule it was held :-
"This Court has consistently held that when a first
appointment or promotion is made on probation for a
specific period and the employee is allowed to continue
in the post after the expiry of the period without any
specific order of confirmation, he should be deemed to
continue in his post as a probationer only, in the absence
of any indication to the contrary in the original order of
appointment or promotion or the service rules. In such a
case, an express order of confirmation is necessary to
give the employee a substantive right to the post, and
from the mere fact that he is allowed to continue in the
post after the expiry of the specified period of probation
it is not possible to hold that he should be deemed to
have been confirmed."
It was further held :-
"In the present case, r. 6(3) forbids extension of the
period of probation beyond three years. Where, as in the
present case, the service rules fix a certain period of time
beyond which the probationary period cannot be
extended, and an employee appointed or promoted to a
post on probation is allowed to continue in that post after
completion of the maximum period of probation without
an express order of confirmation, he cannot be deemed to
continue in that post as a probationer by implication. The
reason is that such an implication is negatived by the
service rule forbidding extension of the probationary
period beyond the maximum period fixed by it. In such a
case, it is permissible to draw the inference that the
employee allowed to continue in the post on completion
of the maximum period of probation has been confirmed
in the post by implication."
25. The said principle was reiterated by a seven Judge Bench of this Court
in Samsher Singh vs. State of Punjab vs. State of Punjab : (1974) 2 SCC
831 stating :
"71. Any confirmation by implication is negatived in the
present case because before the completion of three years
the High Court found prima facie that the work as well as
the conduct of the appellant was unsatisfactory and a
notice was given to the appellant on October 4, 1968 to
show cause as to why his services should not be
terminated. Furthermore, Rule 9 shows that the
employment of a probationer can be proposed to be
terminated whether during or at the end of the period of
probation. This indicates that where the notice is given at
the end of the probation the period of probation gets
extended till the inquiry proceedings commenced by the
notice under Rule 9 come to an end. In this background the
explanation to Rule 7(1) shows that the period of probation
shall be deemed to have been extended impliedly if a
Subordinate Judge is not confirmed on the expiry of this
period of probation. This implied extension where a
Subordinate Judge is not confirmed on the expiry of the
period of probation is not found in Dharam Singh case .
This explanation in the present case does not mean that the
implied extension of the probationary period is only
between two and three years. The explanation on the
contrary means that the provision regarding the maximum
period of probation for three years is directory and not
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mandatory unlike in Dharam Singh case and that a
probationer is not in fact confirmed till an order of
confirmation is made."
(Emphasis supplied)
26. In Om Parkash Maurya vs. U.P. Coop. Sugar Factories Federation :
(1986) Suppl. SCC 95 following Dharam Singh, this Court held :-
"4. In the instant case the order of appointment
promoting the appellant to the post of Commercial
Officer merely indicated that his probationary period
could be extended and he could be reverted to the post of
Office Superintendent without any notice. Stipulation for
extension of probationary period in the appointment
order must be considered in accordance with the proviso
to Regulation 17(1) which means that the probationary
period could be extended for a period of one year more.
Indisputably on the expiry of the appellant’s initial
probationary period of one year, the appointing authority
extended the same for another period of one year which
also expired on September 4, 1982. During the period of
probation appellant’s services were neither terminated
nor was he reverted to his substantive post instead he was
allowed to continue on the post of Commercial Officer.
On the expiry of the maximum probationary period of
two years, the appellant could not be deemed to continue
on probation, instead he stood confirmed in the post by
implication. The appellant acquired the status of a
confirmed employee on the post of Commercial Officer
and the appointing authority could not legally revert him
to the lower post of Superintendent."
(Emphasis supplied)
27. The said principle, we may notice, was again reiterated in Chief G.M.,
State Bank of India vs. Bijoy Kumar Mishra : (1997) 7 SCC 550 wherein
this Court had the occasion to consider a pari materia rule, stating :-
"10. There can thus be no doubt that the deemed
confirmation which is inferred from the employer’s
conduct is permissible only when it follows from the
positive act of the employer permitting the employee to
continue to work on the post even after completion of the
maximum period of probation permitted under the
Service Rules since no other inference is possible in such
a situation from the employer’s conduct of continuing to
take work from the employee after that period."
28. We may, having noticed the legal principles enunciated by this Court,
consider the decision of this Court in Ashok Kumar Misra (supra). The
relevant Rule which was involved therein was Rule 8 of Madhya Pradesh
Government Servants’ General Conditions of Service Rules, 1961 which
was in the following terms :-
"8. Probation .\027 (1) A person appointed to a service or
post by direct recruitment shall ordinarily be placed on
probation for such period as may be prescribed.
(2) The appointing authority may, for sufficient reasons,
extend the period of probation by a further period not
exceeding one year.
Note .\027 A probationer whose period of probation is not
extended under this sub-rule, but who has neither been
confirmed nor discharged from service at the end of the
period of probation shall be deemed to have been
continued in service, subject to the condition of his
service being terminable on the expiry of a notice of one
calendar month given in writing by either side.
(3) A probationer shall undergo such training and pass
such departmental examinations during the period of his
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probation as may be prescribed.
(4) and (5) are not relevant, hence omitted.
(6) On the successful completion of probation and the
passing of the prescribed departmental examinations, the
probationer shall be confirmed in the services or post to
which he has been appointed."
29. The note appended to sub-rule (2) of Rule 8 as also sub-rule (6)
thereof made all the difference. In terms of note appended to sub-rule (2) a
legal fiction was created in terms whereof upon completion of the extended
period of probation the employee would have been continued in service,
subject to the condition that the same would be terminable on the expiry of a
notice of one calendar month and furthermore an express order confirming
the service would be necessary.
In the aforementioned situation Dharam Singh (supra) and Om
Prakash Maurya (supra) were distinguished opining :-
"6. Exercise of the power to extend the probation is
hedged with the existence of the rule in that regard
followed by positive act of either confirmation of the
probation or discharge from service or reversion to the
substantive post within a reasonable time after the expiry
of the period of probation. If the rules do not empower
the appointing authority to extend the probation beyond
the prescribed period, or where the rules are absent about
confirmation or passing of the prescribed test for
confirmation of probation then inaction for a very long
time may lead to an indication of the satisfactory
completion of probation. But in this case Rule 8
expressly postulates otherwise. The period of probation is
subject to extension by order in writing for another
period of one year. Passing the prescribed examinations
and successful completion of probation and to make an
order of confirmation are condition precedent. Mere
expiry of the initial period of probation does not
automatically have the effect of deemed confirmation and
the status of a deemed confirmation of the probation. An
express order in that regard only confers the status of an
approved probationer. We are of the view that note to
sub-rule (2) read with sub-rule (6) of Rule 8 manifests
the legislative intent that confirmation of the probation of
the respondent would be made only on successful
completion of the probation and the passing of the
prescribed examinations. It is not the respondent’s case
that he passed all the examinations. He shall be deemed
to be continued on probation. Before confirmation the
appointing authority is empowered to terminate the
service of the probationer by issuing one calendar
month’s notice in writing and on expiry thereof the
service stands terminated without any further notice.
Within three months from the date of expiry of original
two years period of probation and within one year’s
period, the order of termination was made. In this view
the question of conducting an inquiry under the
Classification, Control and Appeal (Rules) after giving
an opportunity and that too for specific charges does not
arise."
30. The order of termination in that case was, therefore passed within the
extended period of probation in service. Ashok Kumar Misra (supra),
therefore, in our opinion did not speak in a different tone and is in
conformity with the legal principles laid down in Dharam Singh (supra) and
others.
31. The High Court, therefore, in our opinion was not correct in relying
upon the decision of the Division Bench of the Allahabad High Court in the
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case of the appellant bank. It, with utmost respect, did not lay down the
correct law and is, therefore, liable to be over-ruled.
32. So far as the question of discrimination meted out to the writ
petitioner is concerned, we may notice that the High Court had come down
heavily on the bank and, in our opinion, rightly so.
33. In the affidavit affirmed by one Rabi Shankar Sabat (Manager
Personnel) of the Bank the Indubala case was sought to be distinguished
stating:-
"5. That as regards the case of petitioner vis-‘-vis case
of one Ms. Indubala is concerned it is submitted that both
the cases stand absolutely on different footing. Ms.
Indubala is not a batchmate of petitioner. Ms. Indubala
joined the bank as Management Trainee on 12.11.1984
and she was called for confirmation test of Management
Trainee held by the bank on 13.7.1986. She did not
appear in the said test. She was given another chance for
confirmation test held on 26.4.1987 who appeared in the
said test but failed. Ms. Indubala was again called for
confirmation test held on 29.5.1988, as per the decision
of the Executive Committee of the bank, however, she
could not take the confirmation test this time due to her
illness and accordingly her services were terminated by
the Bank on 29.5.1988. On appeal by Ms. Indubala the
matter was put up before the Executive Committee of the
bank and the Executive Committee in its meeting held on
16.8.89 decided that in view of the fact that Ms. Indubala
could not avail of the last i.e. 3rd chance due to her
illness, she may be afforded another opportunity to
appear in the confirmation test and this is how Ms.
Indubala was given one more chance. Copy of decision
of the Committee dated 16.8.89 is filed herewith as
Annexure-F. On the other hand the petitioner joined the
Bank as Management Trainee on 25.8.1986 and she
failed to appear in the confirmation test held in April,
1988 and October, 1989. She was also given the 3rd
chance the last chance where she did appear and failed to
qualify. It may be noted here that Ms. Indubala was
given the 3rd chance but she could not appear in the 3rd
and last chance due to her illness. So both the cases
stand on a different footing as such petitioner cannot
claim any benefit on the basis of Ms. Indubala’s case.
Besides, that was a solitary case and as the Principle that
one wrong cannot justify another wrong the petitioner
cannot claim any advantage relying on the same."
34. At once we may notice that the said statement contained a factual
error which has been very fairly conceded by Mr. Mehta as the ground for
giving another opportunity to Indubala to appear at the confirmation test for
the 4th time was not on the ground of her own illness but on her mother’s
illness.
35. Was the fact situation in Indubala’s case is different from that of the
writ petitioner? The answer must be found in the judgment of the High
Court, wherein it was held that the writ petitioner’s case stands on a much
better footing. As she could not appear in the third chance on account of the
illness of her mother which did not depict the correct state of affairs whereas
the writ petitioner underwent a mis-carriage of her conception in the month
of April, 1988, she had to remain alone at the place of posting and could not
prepare for the examination. At the time when she was called upon to
appear in the examination for the second time, she was in the advance stage
of pregnancy and she was medically advised not to move, as she had
miscarriages at two previous occasions. That is the reason why she could
not appear in the test. When she was called upon to appear for the third
examination, she having undergone caesarian delivery, she was advised rest
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by the doctor. At the time of her examination, her son was only six month’s
old and was not keeping good health.
36. Submission of the Bank is that the competent authority had
formulated a policy of not permitting anybody to appear the in the test more
than thrice. Strong reliance in this behalf is placed on the decision of the
Executive Committee of the Bank dated 19th June, 1990 deciding that
maximum number of 3 chances should be given to the Management Trainee
for qualifying in the confirmation test failing which services of the
probationer be terminated.
37. Regulation does not speak of any confirmation test. The offer of
appointment does not speak about the number of chances to be given for
passing the confirmation test. A decision was taken in this behalf when the
writ petitioner had already appeared on one occasion. The decision even
otherwise was to give atleast three opportunities to a candidate must be real
and effective one. Such a contention must be considered having regard to
the doctrine of reasonableness and fairness, which the Bank is required to
comply with keeping in view its status of a State within the meaning of
Article 12 of the Constitution of India. As a ’State’ the Bank was bound to
follow the equity clause contained in Articles 14 and 16 of the Constitution
of India. Its action even in relation to its own employees is expected to be
not only fair but also non-arbitrary.
38. In E.P. Royappa vs. State of Tamil Nadu and another : (1974) 4
SCC3, a Constitutional Bench of this court as regards the argument that the
petitioner was appointed to a post that was inferior to the status and office of
the Chief Secretary , thus offending Articles 14 and 16 of the Constitution,
opined :-
"Article 16 embodies the fundamental guarantee that
there shall be equality of opportunity for all citizens in
matters relating to employment or appointment to any
office under the State. Though enacted as a distinct and
independent fundamental right because of its great
importance as a principle ensuring equality of
opportunity in public employment which is so vital to the
building up of the new classless egalitarian society
envisaged in the Constitution, Article 16 is only an
instance of the application of the concept of equality
enshrined in Article 14. In other words, Article 14 is the
genus while Article 16 is a species, Article 16 gives
effect to the doctrine or equality in all matters relating to
public employment. The basic principle which, therefore,
informs both Articles 14 and 16 is equality and inhibition
against discrimination. Now, what is the content and
reach of this great equalising principle? It is a founding
faith, to use the words of Bose, J., "a way of life", and it
must not be subjected to a narrow pedantic or
lexicographic approach. We cannot countenance any
attempt to truncate its all-embracing scope and meaning,
for to do so would be to violate its activist magnitude.
Equality is a dynamic concept with many aspects and
dimensions and it cannot be "cribbed, cabined and
confined" within traditional and doctrinaire limits. From
a positivistic point of view, equality is antithetic to
arbitrariness. In fact equality and arbitrariness are sworn
enemies; one belongs to the rule of law in a republic
while the other, to the whim and caprice of an absolute
monarch. Where an act is arbitrary it is implicit in it that
it is unequal both according to political logic and
Constitutional law and is therefore violative of Article
14, and if it affects any matter relating to public
employment, it is also violative of Article 16. Articles 14
and 16 strike at arbitrariness in State action and ensure
fairness and equality of treatment. They require that State
action must be based on equivalent relevant principles
applicable alike to all similarly situate and it must not be
guided by any extraneous or irrelevant considerations
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because that would be denial of equality. Where the
operative reason for State action, as distinguished from
motive inducing from the antechamber of the mind, is not
legitimate and relevant but is extraneous and outside the
area of permissible considerations, it would amount to
mala fide exercise of power and that is hit by Articles 14
and 16. Mala fide exercise of power and arbitrariness are
different lethal radiations emanating from the same vice :
in fact the latter comprehends the former. Both are
inhibited by Articles 14 and 16."
It was further held:
"It is also necessary to point out that the ambit and reach
of Articles 14 and 16 are not limited to cases where the
public servant affected has a right to a post. Even if a
public servant is in an officiating position, he can
complain of violation of Articles 14 and 16 if he has
been arbitrarily or unfairly treated or subjected to mala
fide exercise of power by the State machine."
39. In the Constitution Bench decision of this court in Mithu vs. State of
Punjab : 1983) 2 SCC 277, the issue to be decided was the vires of Section
303 of the Indian penal Code vis-‘-vis Article 21 of the Constitution. It was
held that the same was unconstitutional as it violated the guarantee of
equality clause contained in Article 14 and 21 since a person who is
sentenced to life imprisonment incurs the mandatory penalty of death under
Section 303 if he commits a murder while he is under the sentence of life
imprisonment defied logic.
40. In T.R. Kothandaraman and Ors. vs. Tamil Nadu Water Supply &
Drainage BD and Ors. : (1994) 6 SCC 282, the issue before this court was
as regards what Article 16 has to say when the right to be considered for
promotion is either barred or restricted on the basis of educational
qualifications. Thus, the validity of Rule 2(b), which prescribed the ratio of
3:2 for direct recruits and promotees, the former being degree-holders and
later diploma-holders was challenged as being violative of the guarantee of
equality embodied in Article 16 Citing with approval Justice Krishna Iyer in
State of Jammu & Kashmir v. Trilokinath Khosa : ( 1974 ) 1 SCC 19, it was
thus stated:
"Krishna Iyer, J., stated that the social meaning of
Articles 14 and 16 is neither dull uniformity nor
specious ’telentism’. Further, the soul of Article 16 is the
promotion of the common man’s capabilities, opening up
full opportunities to develop without succumbing to the
sophistic argument of the elite that talent is the privilege
of the few and they must rule. But then, personnel policy
does require an eye on efficiency; and so, though ’chill
penury" should not ’repress their noble rage’, technical
proficiency cannot be sacrificed at the altar of wooden
equality. All these call for a striking of balance between
the long hunger for equal chance of the lowlier and the
disturbing concern of the community for higher standards
of performance. Even so, mini-classifications based on
micro-distinctions are false to our egalitarian faith; and
over-doing of classification would be undoing of
equality. The Court has to function always as a sentinel
on the qui vive."
Thus, dismissing the writ petition, it was held that a harmony would
thus be struck, by maintaining reasonableness in the ratio, between the call
of social justice and the need for higher education, without in any way
jeopardising the principal object of classification, by the impugned rule.
41. In T. Sham Bhat vs. Union of India (UOI) and Anr. 1994 Supp (3)
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SCC 340, the vires of Regulation 2 of the Indian Administrative Service
(Appointment by Selection) Second Amendment Regulations. 1989 - the
IAS Second Amendment Regulations was challenged before this court.
It inter-alia referred to the following judgments:
"16. Venkatashwara Theatre vs. State of Andhra Pradesh
and Ors. : (1993) 3 SCC 677, is a decision of this Court
which points out, as to how discrimination can arise, if
persons who are unequals are treated as equals, thus:
"Just as a difference in the treatment of persons similarly
situate leads to discrimination, so also discrimination can
arise if persons who are unequals, i.e...differently placed,
are treated similarly.... A law providing for equal
treatment of unequal objects, transactions or persons
would be condemned as discriminatory if there is
absence of rational relation to the object intended to be
achieved by the law."
Food Corporation of India vs. Kamdhenu Cattle Feed
Industries : (1993) 1 SCC 71, is a decision of this Court
where it is pointed out that requirement of non-
arbitrariness in a State action, if ought to conform to
Article 14 of the Constitution, due weight must be given
to reasonable or legitimate expectations of the persons
likely to be affected by such action, thus:
"To satisfy this requirement of non arbitrariness in a
State action, it is, therefore, necessary to consider and
give due weight to the reasonable or legitimate
expectations of the persons likely to be affected by the
decision or else that unfairness in the exercise of the
power may amount to an abuse or excess of power apart
from affecting the bona fides of the decision in a given
case. The decision so made would be exposed to
challenge on the ground of arbitrariness."
Thus, holding the classification between the increase in number of
years of continuous service of non-State Civil Service Class-I officers to
make them eligible for selection to the Indian Administrative service which
deprived them of the right to be considered for selection under the IAS
Selection Regulations which held the field for over 33 years, as unjust,
arbitrary, unreasonable and that which arbitrarily affected the legitimate and
normal expectations of non-State Civil Service Class-I officers and was
inhibited by Article 14 of the Constitution, the regulation was struck down
as unconstitutional.
42. Delhi Transport Corporation vs. D.T.C. Mazdoor Congress and
others : 1991 Supp (1) SCC 600, dealt with the question of constitutional
validity of the right of the employer to terminate the services of permanent
employees without holding any inquiry in certain circumstances by
reasonable notice or pay in lieu of notice. After referring to a plethora of
decisions of this court on the application of Article 14 and 16 in cases of
public employment, it was opined:
"Thus it could be hold that Article 14 read with 16(1)
accords right to an equality or an equal treatment
consistent with the principles of natural justice. Any law
made or action taken by the employer, corporate statutory
or instrumentality under Article 12 must act fairly, justly
and reasonably. Right to fair treatment is an essential
inbuilt of natural justice. Exercise of unbridled and
uncanalised discretionary power impinges upon the right
of the citizen; vesting of discretion is no wrong provided
it is exercised purposively judiciously and without
prejudice. Wider the discretion, the greater the chances of
abuse. Absolute discretion is destructive of freedom than
of man’s other inventions. Absolute discretion marks the
beginning of the end of the liberty. The conferment of
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absolute power to dismiss a permanent employee is
antithesis to justness or fair treatment. The exercise of
discretionary power wide of mark would bread arbitrary,
unreasonable or unfair actions and would not be
consistent with reason and justice. The provisions of a
statute, regulations or rules that empower an employer or
the management to dismiss, remove or reduce in rank of
an employee, must be consistent with just, reasonable
and fair procedure. It would, further, be held that right to
public employment which includes right to continued
public employment till the employee is superannuated as
per rules or compulsorily retired or duly terminated in
accordance with the procedure established by law is an
integral part of right to livelihood which in turn is an
integral facet of right to life assured by Article 21 of the
Constitution. Any procedure prescribed to deprive such a
right to livelihood or continued employment must be just,
fair and reasonable procedure. In other words an
employee in a public employment also must not be
arbitrarily unjustly and unreasonably be deprived of
his/her livelihood which is ensured in continued
employment till it is terminated in accordance with just,
fair and reasonable procedure. Otherwise any law or rule
in violation thereof is void."
43. We have noticed hereinbefore the plight of the writ petitioner as to
why she could not prepare well or appear at the second test. In such a
situation an employee in certain establishments would be governed by the
Maternity Benefit Act, 1961. All shops and establishments were brought
within the purview of the said Act by Act No. 61 of 1988 w.e.f. 10th January,
1989. In terms of the provisions of the said Act, a woman is prohibited from
working in an establishment during the period of six weeks from
immediately following the day of her delivery, miscarriage or medical
termination of pregnancy. She, if a request is made by her in this behalf,
even would not be asked to work for the period specified in sub-section (4)
of Section 4. Apart from the right to payment of maternity benefits, she
would be entitled to the benefits of Sections 6 and 9 thereof. Section 9 reads
as under :-
"9. Leave for miscarriage, etc. \026 In case of miscarriage
or medical termination of pregnancy, a woman shall, on
production of such proof as may be prescribed, be
entitled to leave with wages at the rate of maternity
benefit, for a period of six weeks immediately following
the day of her miscarriage, or, as the case may be, her
medical termination of pregnancy."
44. Mr. Mehta has, however, drawn our attention to Regulation 36 of the
Regulations to contend that maternity leave was admissible upto a period of
6 months only, on and from the 1st day of April, 2000. A statutory
Regulation, as is well known, is subject to the provisions of a Parliamentary
Act. Regulations framed by the Board of Directors of the Bank fail to
provide for grant of maternity leave and other benefits to which a woman
employee would be entitled to in terms of the Maternity Benefit Act, 1961.
A subordinate legislation, as is well known, must be made in conformity
with the Parliamentary Act.
45. In Bombay Dyeing and Mfg. Co. Ltd. vs. Bombay Environmental
Action Group and Ors. : (2006) 3 SCC 434, this court opined:
"By reason of any legislation whether enacted by the
legislature or by way of subordinate legislation, the State
gives effect to its legislative policy. Such legislation,
however, must not be ultra vires the Constitution. A
subordinate legislation apart from being intra vires the
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Constitution, should not also be ultra vires the parent Act
under which it has been made. A subordinate legislation,
it is trite, must be reasonable and in consonance with the
legislative policy as also give effect to the purport and
object of the Act and in good faith."
46. Similarly, in Vasu Dev Singh and Ors. vs. Union of India and Ors. :
2006 (11) SCALE 108, wherein the Validity of Section 3 of the East Punjab
Urban Rent Restriction Act, 1949 was challenged, this court after referring
to a large number of decisions on subordinate legislation, held:
"A statute can be amended, partially repealed or wholly
repealed by the legislature only. The philosophy
underlying a statute or the legislative policy, with the
passage of time, may be altered but therefore only the
legislature has the requisite power and not the executive.
The delegated legislation must be exercised, it is trite,
within the parameters of essential legislative policy. The
question must be considered from another angle.
Delegation of essential legislative function is
impermissible. It is essential for the legislature to declare
its legislative policy which can be gathered from the
express words used in the statute or by necessary
implication, having regard to the attending
circumstances. It is impermissible for the legislature to
abdicate its essential legislative functions. The legislature
cannot delegate its power to repeal the law or modify its
essential features."
[See also Employees State Insurance Corporation vs. H.M.T. Ltd. and
another : 2008 (1) SCALE 341.]
47. We, however, are not oblivious of the fact that the contention as
regards the applicability of the Maternity Benefit Act, 1961 had not been
raised before the High Court. We will assume for the sake of arguments that
the said Act is not applicable. However, we intend to emphasize that the
attitude on the part of the State in exercise of its power of discretion should
otherwise be commensurate with the doctrine of reasonableness. A State,
even for applying the constitutional scheme of equqlity would not enforce its
decision only upon taking into consideration the cases of the different parties
before it. A woman who had undergone miscarriages, in our opinion, was
entitled to a different treatment. Article 14 indisputably is a positive
concept. Applicability of the doctrine of equality as a positive concept,
therefore, should have been the premise that as a woman having regard to
the state of affairs in which the writ petitioner was placed, she was entitled
to obtain a different treatment from the employer. Article 14 does not apply
in a vacuum. Whereas persons absolutely similarly situated, should be
treated equally, equal treatment to the persons dis-similarly situated would
also attract the wrath of Article 14. It is from that point of view that the writ
petitioner’s case ought to have been considered vis-a-vis Indubala. If the
appellate authority was entitled to exercise its power of relaxation, which in
the absence of any statutory interdict (presumably it was entitled to), it
should have considered the case of the petitioner vis-‘-vis Indubala, whose
case, was rightly been found by the High Court stood at a much weaker
foundation. Thus, Article 14 must be held to have been violated; the power
of relaxation having been conceded to the appellate authority.
48. This aspect of the matter has been considered by this Court in Nehru
Yuva Kendra Sangathan vs. Mehbub Alam Laskar : 2008 (1) SCALE 590.
"A ’State’ within the meaning of Article 12 of the
Constitution of India should have placed full facts before
the High Court. Only in its anxiety to show that the case
of Ajay Kumar Gupta was different from that of the
respondent, it came out with the truth that the respondent
was guilty of a serious misconduct."
49. We are not unmindful that as a positive concept, Article 14 would not
apply in illegality.
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50. In Nagar Mahapalika, Kanpur vs. Smt. Vibha Shukla and Ors.: 2007
(8) SCALE 361, the court on the issue of regularization of services opined:
"Equality is a positive concept. Therefore, it cannot be
invoked where any illegality has been committed or
where no legal right is established."
51. Similar opinion was expressed in State of Orissa and Ors. vs. Prasana
Kumar Sahoo : 2007 (6) SCALE 236 at paragraphs 23 and 24 and in Vice
Chancellor, M.D. University, Rohtak vs. Jahan Singh : 2007 (4) SCALE
226 at paragraph 28.
52. The Executive Committee of the Bank had fixed the number of
chances to be given to an employee in the confirmation test. If it is enforced
against the writ petitioner having regard to her physical position, to appear in
the second examination, the provisions thereof, keeping in mind the
principle underlying the statutory provisions of Maternity Benefit Act, may
not be held to be applicable. She was, thus, entitled to another opportunity
to appear at the examination. The Executive Committee or for that matter
the appellate authority cannot exercise the power of relaxation in a
discriminatory manner. It was expected to act judiciously, assuming that the
employer had a discretion in this behalf. Discretion cannot be equated with
whims and caprices.
53. We, for the reasons abovementioned, are not in a position to accept
the submission of Mr. Mehta that it was for the employer to decide as to how
many chances have to be given to each employee and the Bank cannot be
deprived of such discretionary jurisdiction.
54. For the views we have taken we need not deal with the question as to
whether the insistence of confirmation test is not in accordance with the
Regulations.
56. For the reasons abovementioned appeal filed by the Bank is dismissed
and that of the writ petitioner is allowed. The writ petitioner shall be
reinstated in service forthwith. She, however, may be paid only 50 % of the
back wages. This order we are passing keeping in view that her services had
been terminated on 9th November, 1990. The writ petitioner is also entitled
to costs. Counsel’s fee assessed at Rs.50,000/-.