Supreme Court overturns High Court order on continuity of service for contract employees dismissed after inquiry: Depot Manager vs. S. Krishna (2018)

Date of the Judgment: December 7, 2018

Citation: (2018) INSC 1074

Judges: Dr. Dhananjaya Y. Chandrachud, J., M.R. Shah, J.

Can a contract employee, terminated after a full departmental inquiry, be granted continuity of service upon re-engagement? The Supreme Court of India addressed this crucial question in a recent service law case. The Court examined whether a High Court could grant continuity of service to a contract employee who was dismissed for misconduct after a departmental inquiry, especially when a previous judgment regarding similar employees was being relied upon. The bench comprised Justices Dr. Dhananjaya Y. Chandrachud and M.R. Shah, with the judgment authored by Justice M.R. Shah.

Case Background

The respondent, Sri S. Krishna, was initially appointed as a contract driver with the appellant corporation. Following a departmental inquiry, his services were terminated. His departmental appeal and review petition were also rejected. Subsequently, an industrial dispute raised by him was dismissed by the Labour Court. Krishna then approached the High Court of Judicature at Andhra Pradesh at Hyderabad under Article 226 of the Constitution of India.

The High Court’s single judge allowed the writ petition, directing the corporation to re-engage Krishna with continuity of service, except for the period of absence, but without monetary benefits. This decision was based on a previous judgment of the same court in a similar case. The Division Bench of the High Court affirmed the single judge’s order.

Timeline:

Course of Proceedings

The respondent’s industrial dispute was initially dismissed by the Presiding Officer, Labour Court I, Hyderabad. Subsequently, the respondent filed a writ petition before the High Court of Judicature at Andhra Pradesh at Hyderabad. The learned Single Judge allowed the petition, relying on a previous judgment in Writ Petition No. 2786 of 2012, and directed the corporation to re-engage the respondent with continuity of service. The Division Bench affirmed this order.

Legal Framework

The High Court’s jurisdiction was invoked under Article 226 of the Constitution of India, which empowers High Courts to issue writs for the enforcement of fundamental rights and for other purposes. The case also touches upon principles of service law concerning termination of employment and continuity of service.

Arguments

Appellant’s Arguments (The Depot Manager & Ors.):

• The learned Senior Counsel for the appellants argued that the Division Bench of the High Court erred in affirming the order of the Single Judge without considering the facts of the individual case.
• It was submitted that the Single Judge had mechanically disposed of the writ petition by relying on the order passed in Writ Petition No. 2786 of 2012, which was not applicable to the present case.
• The appellant contended that the respondent was dismissed from service after a full departmental inquiry, where the charges of misconduct were proven.
• The appellant argued that granting continuity of service to the respondent, who was found guilty of misconduct, would place him on the same footing as other contractual employees with unblemished records.
• The appellant submitted that since the termination and fresh engagement of the respondent were not in question, granting continuity of service was misconceived.

Respondent’s Arguments (Sri S. Krishna):

• The respondent’s arguments are not explicitly detailed in the provided text. However, it can be inferred that the respondent relied on the High Court’s judgment, which granted him continuity of service based on the precedent set in Writ Petition No. 2786 of 2012.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in the provided text. However, the core issue before the court was:

1. Whether the High Court was justified in granting continuity of service to a contract employee who was dismissed after a departmental inquiry, based on a previous judgment that did not consider the specific facts of each case.

Treatment of the Issue by the Court

Authorities

The Supreme Court primarily focused on the factual distinction between the present case and the earlier judgment in Writ Petition No. 2786 of 2012. The Court noted that the earlier judgment dealt with cases where termination orders were issued without inquiry or in violation of the principles of natural justice. In contrast, the respondent in the present case was dismissed after a full departmental inquiry where the charges of misconduct were proven.

Judgment

How each authority was viewed by the Court?

The Supreme Court distinguished the case from the earlier order of the learned Single Judge dated 29.02.2012 in Writ Petition No. 2786 of 2012. The Court noted that the earlier order was passed in a batch of cases where termination orders were issued without holding an inquiry or after holding an inquiry in violation of the principles of natural justice. In the present case, the employee was dismissed after a full departmental inquiry where the charges were proven. Therefore, the Court held that the earlier order was not applicable to the present case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the factual distinction between the present case and the precedent relied upon by the High Court. The Court emphasized that the respondent was dismissed after a full departmental inquiry where the charges of misconduct were proven. This was in contrast to the cases considered in Writ Petition No. 2786 of 2012, where terminations were either without inquiry or in violation of the principles of natural justice. The Court also highlighted that continuity of service cannot be granted unless the termination order is set aside. The Court’s reasoning was rooted in ensuring that employees who have been found guilty of misconduct are not placed on the same footing as those with unblemished records.

Logical Reasoning:

The Supreme Court considered the High Court’s decision to grant continuity of service based on a previous judgment. However, the Supreme Court found that the facts of the present case were different as the respondent was dismissed after a full departmental inquiry where the charges of misconduct were proven. The Court noted that continuity of service cannot be granted unless the termination order is set aside. Therefore, the Supreme Court set aside the High Court’s order.

The court stated, “Even otherwise such a direction cannot be issued by the learned Single Judge without the termination being set aside. The ground of continuity was not sustainable for the simple reason that unless the order of termination is set aside. As a matter of first principle, continuity cannot be granted.”

The Court further observed, “Granting continuity of service to a person such as the respondent, who was found to have committed misconduct, would place him on the same footing as other contractual employees who have a record without blemish.”

The Court also stated, “We find a considerable degree of merit in the submission of learned senior counsel appearing on behalf of the Corporation that in deciding the entire batch of cases by a common order, the learned Single Judge as well as the Division Bench unfortunately lost sight of the facts of each individual case.”

Key Takeaways

• High Courts must consider the specific facts of each case and not rely solely on precedents without proper application.
• Continuity of service cannot be granted to an employee who has been dismissed after a full departmental inquiry unless the termination order is set aside.
• Employees found guilty of misconduct cannot be placed on the same footing as employees with unblemished records.

Directions

The Supreme Court set aside the impugned judgment and order dated 24.07.2013 in Writ Appeal No. 1344 of 2013, as well as the judgment and order passed by the learned Single Judge in Writ Petition No. 5632 of 2012.

Development of Law

The ratio decidendi of this case is that continuity of service cannot be granted to an employee who has been dismissed after a full departmental inquiry unless the termination order is set aside. This judgment clarifies that High Courts must not apply precedents mechanically without considering the specific facts of each case. This decision reinforces the principle that employees found guilty of misconduct should not be treated the same as those with clean records, especially when it comes to regularization of service.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court’s order. The Court emphasized that the High Court erred in granting continuity of service to a contract employee who was dismissed after a full departmental inquiry, based on a previous judgment that did not consider the specific facts of each case. This judgment reinforces the importance of considering individual facts in service law matters and clarifies that continuity of service cannot be granted unless the termination order is set aside.