Termination of a contractual employee for incompetence is stigmatic, requiring adherence to principles of natural justice.

The petitioner, a retired bank official, was appointed as In-charge Manager (Audit) at the Bihar State Food and Civil Supplies Corporation (BSFC) on a one-year contractual basis starting July 2021

Soon after joining, the petitioner requested a transfer to his home district, Darbhanga

On September 11, 2021, the respondent authority issued a termination order effective October 9, 2021, citing a report from the General Manager (Finance) that the petitioner was "not found competent" for audit work

The petitioner challenged this as an arbitrary, stigmatic termination issued without a show-cause notice or adherence to natural justice

1. Whether the termination order dated 11.09.2021 was stigmatic in nature, thereby requiring adherence to the principles of natural justice

2. Whether the petitioner is entitled to reinstatement or consequential benefits given that the original contract period has expired

The court applied the principles of Natural Justice regarding "stigmatic" termination orders, which hold that even a contractual or temporary appointment cannot be terminated using language that casts a slur on the employee's competence or character without a fair hearing

Specific Service Conditions/Appointment Letter (Memo No. 5250), specifically Clauses (v) and (x), which mandated a one-month advance notice or honorarium in lieu of notice for termination

The court determined that the language used in the termination order—specifically referencing a report that the petitioner was "not found competent for the work"—constituted a "stigmatic" remark

While the respondents argued the termination followed the one-month notice clause in the contract, the court held that because the order explicitly labeled the petitioner as incompetent, it could not be sustained as a simple termination simpliciter without following due process

the court noted that the petitioner’s original one-year contract would have ended by July 2022 and he had not performed duties since late 2021. Consequently, while the order was legally unsustainable, physical reinstatement was no longer practical

Due to the efflux of time and the contractual nature of the post, the court declined to order reinstatement. Instead, the court held the petitioner entitled to one month’s salary/remuneration as a final settlement, to be paid by the Managing Director, BSFC, within three months. The application was disposed of accordingly