Supreme Court Upholds Termination of Probationary Employee: ARIES vs. Devendra Joshi (2018)

Introduction

Date of the Judgment: March 19, 2018
Citation: 2018 INSC 217
Judges: S.A. Bobde, J. and L. Nageswara Rao, J.

Can an employer terminate a probationary employee’s service by framing it as a simple termination, even if a preliminary inquiry for misconduct was conducted? The Supreme Court of India recently addressed this question in a case involving the Aryabhatta Research Institute of Observational Sciences (ARIES) and one of its employees, Devendra Joshi. The core issue was whether the termination of Joshi’s service was punitive, given that a preliminary inquiry into alleged misconduct had been initiated but not pursued, and the termination order was framed as a termination simpliciter. The judgment was delivered by a two-judge bench comprising Justices S.A. Bobde and L. Nageswara Rao, with Justice L. Nageswara Rao authoring the opinion.

Case Background

Devendra Joshi was appointed as Engineer-B (Civil) at the Aryabhatta Research Institute of Observational Sciences (ARIES) on November 1, 2007, following an advertisement on August 10, 2007. He joined on January 1, 2008, and was placed on probation for two years. On May 22, 2008, ARIES informed that the probation period for Group ‘A’ officers was reduced to one year. On October 15, 2008, Joshi was notified that his probation period was reduced to one year due to an amendment in the bye-laws.

During his probation, an internal Office Note dated July 24, 2008, directed Joshi to submit a report regarding irregularities in road infrastructure improvements. An Office Memorandum dated August 18, 2008, communicated shortcomings in his duties and directed him to complete tasks diligently. He was also asked to explain why he initiated water tank work without prior approval.

On December 23, 2008, an Office Memorandum was issued calling for an explanation regarding alleged misconduct, specifically the removal of a pen-drive and copying its files to his personal computer without permission. Subsequently, on December 31, 2008, ARIES terminated Joshi’s services, stating it was beyond his one-year probation period. Joshi’s representation for reinstatement was rejected on April 2, 2009. He then filed a Writ Petition before the High Court of Uttarakhand at Nainital challenging his termination.

Joshi also raised concerns about the appointment of another employee, Respondent No.4, to a higher post (Engineer-C) despite being selected for a lower post (Engineer-B). Joshi claimed that Respondent No.4 was biased against him due to his representations against the appointment, and that the termination was a result of this bias.

Timeline:

Course of Proceedings

The High Court of Uttarakhand at Nainital set aside the termination order of December 31, 2008, and extended Joshi’s probationary period by one year. The High Court found that the termination was a result of Joshi’s objection to the appointment of Respondent No.4 to a higher post and that the memorandum dated December 23, 2008, was issued at the behest of Respondent No.4. The High Court also directed ARIES to consider Joshi’s representation of October 8, 2008, either by giving him the post of Engineer-B (Civil) or by reverting Respondent No.4 to the post of Engineer –C (Civil).

ARIES appealed to the Supreme Court, arguing that the High Court erred in setting aside the termination order, as it was due to unsatisfactory work and not mala fide intentions. ARIES contended that the termination was a simple termination and not punitive. Joshi also filed a separate appeal challenging the High Court’s rejection of his prayer for confirmation as Engineer –B (Civil).

Legal Framework

The case revolves around the legal principles governing the termination of probationary employees. Generally, an employer can terminate a probationary employee’s services if their performance is found to be unsatisfactory. Such terminations are typically considered ‘termination simpliciter’ and do not require a detailed inquiry or the opportunity to be heard, unless the termination is punitive or stigmatic. However, if the termination is based on misconduct or is a disguised punishment, it may be considered punitive and require a detailed inquiry.

Arguments

Arguments by ARIES (Appellants):

• The termination of Joshi’s services was due to unsatisfactory work performance and not due to any mala fide intention.
• The High Court erred in setting aside the termination order based on the ground that it was mala fide.
• Letters were written to Joshi regarding his unsatisfactory performance even before the appointment of Respondent No.4.
• Though there was a preliminary inquiry into the alleged misconduct, the Appellant decided not to proceed further.
• The termination was a simple termination at the end of the probation period.
• The appointment of Respondent No.4 to the post of Engineer-B (Civil) was justified.
• The appointment of Respondent No.4 was not challenged by Joshi in the Writ Petition.

Arguments by Devendra Joshi (Respondents):

• The termination order was not sustainable as it was based on misconduct, as mentioned in the Memorandum dated December 23, 2008.
• The termination order should have been preceded by a detailed inquiry after providing sufficient opportunity to Joshi.
• The real reason for the termination was to punish him for objecting to the appointment of Respondent No.4 to Engineer-B (Civil) post.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section but addressed the following key issues:

1. Whether the termination order dated December 31, 2008, was a simple termination or punitive in nature.
2. Whether the High Court was correct in setting aside the termination order based on mala fide.
3. Whether the High Court should have adjudicated on the validity of the appointment of Respondent No.4.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

How each authority was viewed by the Court?

• The Supreme Court relied on Radhey Shyam Gupta v. U.P. State Agro Industries Corpn. Ltd. [(1999) 2 SCC 21]* to differentiate between a simple termination and a punitive one. The court emphasized that a termination based on unsatisfactory work is a motive, not a foundation, for a simple termination.
• The court also followed the precedent in Ratnesh Kumar Choudhary v. Indira Gandhi Institute of Medical Science, Patna, Bihar [(2015) 15 SCC 151]* which reiterated the principles laid down in Radhey Shyam Gupta.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The Court emphasized that the termination order dated December 31, 2008, was a simple order of termination, not containing any allegations of misconduct.
• The Court noted that there was sufficient material on record, including prior communications, indicating that Joshi was informed about his unsatisfactory performance during his probation period.
• The Court highlighted that the preliminary inquiry was not the foundation of the termination order but merely a motive.
• The Court found no basis for the High Court’s conclusion that the termination was to conceal the manner in which Respondent No.4 was appointed.

Logical Reasoning:

The Court considered the argument that the termination was a punishment for objecting to Respondent No.4’s appointment, but rejected it. The Court also considered the argument that the preliminary inquiry made the termination punitive but held that since the inquiry was not pursued, it was merely a motive and not the foundation for the termination.

“A plain reading of the Order dated 31st December, 2008 would show that it is an innocuous order terminating the services of Respondent No.1 at the end of the probation period. As no allegations of misconduct are made in the Order, there is no stigma.”

“The fact remains that there was a preliminary inquiry conducted by the Management in which there was a prima facie finding recorded against the Respondent No.1 of his involvement in an act of misconduct.”

“However, the service of Respondent No.1 was terminated at the end of the period of probation which cannot be said punitive. Therefore, the Order dated 31st December, 2008 is an order of termination simpliciter.”

The Court’s decision was unanimous, with both judges concurring on the final outcome.

Key Takeaways

• A termination order of a probationary employee is considered a simple termination if it does not contain any allegations of misconduct and is based on unsatisfactory performance.
• A preliminary inquiry for misconduct, if not pursued, does not automatically make a termination order punitive.
• The High Court should not adjudicate on issues not raised in the Writ Petition.
• Employers can terminate probationary employees based on unsatisfactory performance without a detailed inquiry, provided the termination is not punitive or stigmatic.

Directions

The Supreme Court set aside the judgment of the High Court and allowed the appeal of ARIES. The appeal filed by Devendra Joshi was dismissed.

Specific Amendments Analysis

There is no specific amendment discussed in the judgment.

Development of Law

The ratio decidendi of the case is that a termination order of a probationary employee is considered a simple termination if it does not contain any allegations of misconduct and is based on unsatisfactory performance. The court reiterated the principle that a preliminary inquiry for misconduct, if not pursued, does not automatically make a termination order punitive. This case reinforces the existing legal position on the termination of probationary employees.

Conclusion

The Supreme Court upheld the termination of Devendra Joshi, an Engineer at ARIES, ruling that it was a simple termination based on unsatisfactory performance, not a punitive measure. The Court emphasized that a preliminary inquiry not pursued does not make a termination punitive and that the High Court should not have adjudicated on issues not raised in the Writ Petition. This judgment reinforces the employer’s right to terminate probationary employees for unsatisfactory performance without a detailed inquiry, as long as the termination is not stigmatic or punitive.