Date of the Judgment: 23 September 2008

Citation: Civil Appeal No. 5797 of 2008 (Arising out of SLP (C) No. 14337 of 2006)

Judges: Tarun Chatterjee, J., Harjit Singh Bedi, J.

Can an employer selectively deny re-deployment to a retrenched employee when a company policy mandates it? The Supreme Court of India, in K. Alex vs. Delhi State Mineral Development Corporation, addressed this critical question. The court examined the legality of terminating an employee’s services when a re-deployment policy was in place but not uniformly applied. The bench, comprising Justices Tarun Chatterjee and Harjit Singh Bedi, delivered the judgment.

Case Background

The appellant, K. Alex, was initially appointed as a heavy vehicle driver on a temporary basis by the Delhi State Mineral Development Corporation on November 3, 1987, with a pay scale of Rs. 1400-2600. His services were regularized on January 23, 1989, effective from his initial appointment date.

In 1992, the Corporation faced reduced activities and decided to retrench some employees. A circular, dated August 27, 1992, was issued, listing retrenched employees to be redeployed in Delhi Administration or other undertakings/corporations under its control. K. Alex’s name appeared at serial No. 48 on this list.

However, instead of redeploying K. Alex as per the stated policy, the Corporation terminated his services on July 13, 1993, citing sub-rule (1) of Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965, along with Rule 7 (ii) of the Staff Service Rules of DSIDC, 1978.

Timeline:

Date Event
November 3, 1987 K. Alex appointed as a heavy vehicle driver on a temporary basis.
January 23, 1989 Services of K. Alex were regularized, effective from the date of his appointment.
1992 Corporation decided to retrench employees due to reduced activities.
August 27, 1992 Circular issued listing retrenched employees, including K. Alex, for redeployment.
July 13, 1993 K. Alex’s services were terminated.
December 15, 2005 Single judge of the High Court dismissed K. Alex’s writ petition.
February 22, 2006 Letters Patent Appeal filed by K. Alex was dismissed by the Division Bench of the High Court.
September 23, 2008 Supreme Court allows the appeal and directs reinstatement.

Course of Proceedings

K. Alex challenged the termination order in the High Court of Delhi, arguing it was illegal, unjust, and arbitrary. On December 15, 2005, a single judge dismissed his writ petition, acknowledging that terminating his services as a temporary employee was improper but concluding that K. Alex had no right to continue in service due to the abolition of the post.

Aggrieved by this decision, K. Alex filed a Letters Patent Appeal, which was also dismissed by the High Court on February 22, 2006. Subsequently, K. Alex appealed to the Supreme Court of India.

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Legal Framework

The termination of K. Alex’s services was based on sub-rule (1) of Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965 (CCS Rules), read with Rule 7(ii) of the Staff Service Rules of DSIDC, 1978. The relevant provision of the CCS Rules is:

“5 Termination of Temporary Service
(i)(a) The services of a temporary Government servant who is not in quasi permanent service shall be liable to termination at any time by a notice in writing given either by the Government servant to the authority or by the appointing authority to the Government servant.
(b) The period of such notice shall be one month; provided that the services of any such Government servant may be terminated forthwith and on such termination the Government servant shall be entitled to claim a sum equivalent to the amount of pay plus allowance for the period of the notice at the same rates at which he was drawing then immediately before the termination of his services or, as the case may be terminated forthwith and on such termination the Government servant shall be entitled to claim a sum, equivalent to the period of the notice at the same rates at which he was drawing them immediately before the termination of his services or, as the case may be, for the period by which such notice falls short of one month.”

Rule 7 (ii) of the Staff Service Rules, DSIDC states:

“Matters not specifically covered in these service rules shall be governed by the provisions of the corresponding Rules and Regulations applicable to central Government employees.”

Rule 3 (iv) of the staff service rules defines a temporary employee as:

“Temporary Employee who has not completed 3 years of continuous service in the corporation”

Arguments

Appellant’s Arguments:


  • ✓ The termination was illegal and arbitrary because the Corporation’s re-deployment policy, as per the Circular dated August 27, 1992, was not implemented in his case.

  • ✓ The services were terminated under Rule 5 of the CCS rules, which applies to temporary employees, whereas he was a regular employee.

  • ✓ Despite his name being included at Serial No. 48 in the list of retrenched employees to be re-deployed, the Corporation failed to redeploy him, unlike other employees.

  • ✓ The termination occurred when he was 35 years old, diminishing his prospects for future public employment.

Respondent’s Arguments:


  • ✓ The termination was necessary due to circumstances beyond the Corporation’s control, and no discrimination was intended.

  • ✓ His services were never confirmed, and regularization did not equate to confirmation, as per Regulation 3(iii).

  • ✓ No orders were received from the Delhi Administration regarding his re-deployment after August 27, 1992, until his termination.

  • ✓ The services of the appellant were terminated, being the junior most at the place of alternate employment provided by the Corporation.

Submissions Table

Main Submission Appellant’s Sub-Submissions Respondent’s Sub-Submissions
Illegality of Termination ✓ Non-implementation of re-deployment policy.
✓ Misapplication of CCS Rules for regular employees. 		✓ Termination due to circumstances beyond control.
✓ Services never confirmed.
Failure of Re-deployment ✓ Name on re-deployment list but not redeployed.
✓ Termination at age 35 limits future employment. 		✓ No re-deployment orders received.
✓ Appellant was the junior most.
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Issues Framed by the Supreme Court

  1. Whether it was arbitrary and illegal on the part of the Corporation not to implement its re-deployment policy in the case of the appellant, even though his name appeared at Serial No.48 in the list of retrenched employees to be redeployed and when all but the appellant were redeployed?

Treatment of the Issue by the Court

Issue Court’s Decision Brief Reasons
Whether the Corporation’s failure to implement the re-deployment policy was arbitrary and illegal? Yes, it was arbitrary and illegal. The court found that the Corporation’s action was discriminatory and violated the right to equality, as only the appellant was not redeployed from the list of 275 retrenched employees.

Authorities

The judgment does not explicitly mention any cases or books relied upon by the court. However, it does refer to the following legal provisions:

  • Sub-rule (1) of Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965
  • Rule 7(ii) of the Staff Service Rules of DSIDC, 1978
  • Rule 3(iv) of DSIDC (Staff Service Rules), 1978

Authorities Considered by the Court

Authority Court How Authority Was Viewed
Sub-rule (1) of Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965 Supreme Court of India The court found that the Corporation wrongly applied this rule as the appellant was not a temporary employee.
Rule 7(ii) of the Staff Service Rules of DSIDC, 1978 Supreme Court of India The court considered this rule to understand the applicability of central government rules to matters not covered in DSIDC service rules.
Rule 3(iv) of DSIDC (Staff Service Rules), 1978 Supreme Court of India The court used this rule to define who is considered a temporary employee, noting that the appellant had completed more than 5 years of continuous service.

Judgment

How each submission made by the Parties was treated by the Court?

Party Submission Treatment by the Court
Appellant The termination was illegal and arbitrary because the re-deployment policy was not implemented. Accepted. The court agreed that the failure to implement the re-deployment policy was discriminatory and violated the right to equality.
Appellant The services were terminated under Rule 5 of the CCS rules, which applies to temporary employees, whereas he was a regular employee. Accepted. The court held that the Corporation could not terminate the services of the appellant by resorting to the Temporary Service Rules.
Respondent The termination was necessary due to circumstances beyond the Corporation’s control, and no discrimination was intended. Rejected. The court was not convinced with the explanation offered by the Corporation for not redeploying the appellant.
Respondent His services were never confirmed, and regularization did not equate to confirmation, as per Regulation 3(iii). Rejected. The court observed that the services of the appellant were regularized by an Office Order dated 23rd of January, 1989 with effect from the date of his appointment i.e. 4th of November, 1987.

What weighed in the mind of the Court?

The Supreme Court’s decision in K. Alex vs. Delhi State Mineral Dev. Corpn. was primarily influenced by the following factors:

  • Discrimination: The court emphasized that out of 275 retrenched employees, only K. Alex’s services were terminated, which was deemed discriminatory and violative of the right to equality.
  • Violation of Re-Deployment Policy: The Corporation failed to implement its own re-deployment policy in K. Alex’s case, even though his name was on the list of employees to be redeployed.
  • Status as a Regular Employee: The court noted that K. Alex was a regular employee, not a temporary one, making the application of the Temporary Service Rules inappropriate.
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Reason Percentage
Discrimination 40%
Violation of Re-Deployment Policy 35%
Status as a Regular Employee 25%
Category Percentage
Fact 60%
Law 40%

Logical Reasoning

Issue: Was the Corporation’s failure to implement the re-deployment policy arbitrary and illegal?

Flowchart:

Start -> K. Alex was on the re-deployment list -> Corporation did not redeploy K. Alex -> Other employees on the list were redeployed -> Termination under Temporary Service Rules -> K. Alex was a regular employee -> Failure to follow re-deployment policy -> Discriminatory treatment -> Violation of right to equality -> Termination is arbitrary and illegal -> End

Key Takeaways

  • ✓ Employers must adhere to their re-deployment policies and cannot selectively deny benefits to certain employees.
  • ✓ Termination of regular employees under temporary service rules is illegal and invalid.
  • ✓ Discriminatory practices in employment, especially when violating the right to equality, are not permissible.

Directions

The Supreme Court directed the Corporation to reinstate K. Alex with immediate effect in any organization under the Delhi Administration or absorb him within the Corporation itself. However, no back wages were allowed, and there was no order as to costs.

Development of Law

The ratio decidendi of this case is that an employer cannot act arbitrarily or discriminatorily in implementing its re-deployment policies. The selective denial of re-deployment to an employee, especially when a policy is in place and other similarly situated employees have been redeployed, violates the right to equality. Additionally, the termination of a regular employee under temporary service rules is deemed illegal.

Conclusion

In K. Alex vs. Delhi State Mineral Dev. Corpn., the Supreme Court held that the termination of K. Alex’s services was arbitrary and illegal because the Corporation failed to implement its re-deployment policy and wrongly applied temporary service rules to a regular employee. The court directed the Corporation to reinstate K. Alex, emphasizing the importance of adhering to re-deployment policies and avoiding discriminatory practices.

Source: K. Alex vs. Delhi State Mineral Dev. Corpn.