A.Senthil Kumar v. The General Manager Mw2
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON: 14.7.2015 AND PRONOUNCED ON: 06.8.2015
CORAM
THE HONOURABLE MR.JUSTICE V.RAMASUBRAMANIAN AND THE HONOURABLE MR.JUSTICE T.MATHIVANAN W.A.No.1901 of 2012 A.Senthil Kumar ... Appellant/Petitioner Vs.
1.The General Manager,(MW 2), State Bank of India, Local Head Office, 16, College Lane, Chennai - 600 006.
2.The Chief Manager, State Bank of India, Pudukottai Branch, Pudukkotai Taluk & District, Tamil Nadu.
3.The Branch Manager, State Bank of India, Mylapore Branch, Chennai - 600 004.
... Respondents/Respondents For Appellant :
Mr.N.G.R.Prasad, Advocate For M/s. Row & Reddy & K.Srinivasa Murthy For Respondents :
M/s. P.D.Audikesavalu APPEAL under Clause 15 of the Letters Patent against the order of this Court in W.P.No. 22698 of 2009 dated 8.6.2011.
W.P.No. 22698 of 2009 : Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorarified Mandamus, to call for the records pretaining to the issue of the discharge certificate and the communication of termination dated 10.8.2009 duly issued in proceedings bearing No.PBBU 9-10/219 by the General Manager (NW2) Appointing Authority, State Bank of India, Local Head Office, 16, College Lane, Chennai-6, the 1st respondent herein and quash the same and direct the respondents to reinstate the petitioner as Customer Relationship Executive either on a regualr basis or at least by renewing the contract on par with the other contractual candidates.
JUDGMENT
V.RAMASUBRAMANIAN,J Aggrieved by the dismissal of his writ petition challenging the non renewal of his contract of appointment, the employee has come up with the above writ appeal.
2. By an order dated 8.8.2007, the appellant herein was appointed as a Customer Relationship Executive (Personal Banking), on contract basis for a period of two years. The entire batch of persons appointed as such, pursuant to an advertisement issued on 27.2.2007, were directed to report for training on 20.8.2007. Since the contract was for a period of two years, it was to expire on 19.8.2009.
3. Similarly, another person by name D.Raja was appointed as an Officer-Marketing and Recovery (Rural), by an order dated 10.3.2008, on contract basis for a period of two years. The contract was to commence from 31.3.2008 and to end on 30.3.2010.
4. The orders of appointment of the appellant herein as well as the other person namely D.Raja contained identical terms and conditions. Therefore, upon the expiry of the period of two years, the appellant herein was discharged with effect from 20.08.2009, by an advance intimation dated 10.08.2009. Similarly, the other person D.Raja was discharged by order dated 30.03.2010, upon the expiry of the period of his contract.
5. Challenging the non-renewal of their contracts and contending that such non-renewal of the contracts amounted to termination without reasons and without an opportunity of hearing, the appellant filed the first writ petition in W.P. No.22698 of 2009. The other
person namely D.Raja exhausted appellate remedies and thereafter filed W.P.No.11880 of 2011.
6. The writ petition filed by the appellant herein, in W.P.No.22698 of 2009 came up for hearing before one learned Judge and after hearing both parties, the learned Judge dismissed the writ petition by an order dated 8.6.2011. Aggrieved by the said order, the appellant herein filed the above appeal, but with a delay of about 98 days.
7. When the said appeal was pending even at the stage of condonation of delay, the writ petition filed by D.Raja in W.P.No.11880 of 2011 came to be dismissed by Vinod K. Sharma, J., by an order dated 27.7.2012. Therefore, D.Raja filed an appeal, but within the period of limitation.
8. In the meantime, the delay in filing the appeal by the present appellant got condoned. Therefore, by coincidence, the appeal filed by the appellant herein got numbered as W.A.No.1901 of 2012 and the appeal filed by D.Raja got numbered as W.A.No.1902 of 2012. But, it appears that W.A.No.1902 of 2012 came up for admission earlier and a Division Bench of this Court admitted the appeal. Thereafter, the present writ appeal W.A.No.1901 of 2012 came up for admission before the Division Bench on 11.9.2012. Therefore, the Division Bench not only admitted the present appeal, but also passed a judicial order directing this appeal to be posted along with W.A.No.1902 of 2012 filed by D.Raja.
9. But it appears that both the appeals came up for final disposal before a Bench presided over by the learned Judge, out of whose order this present appeal arises. Therefore, both the appeals appear to have been delinked and the other Writ Appeal W.A.No.1902 of 2012 was allowed by an order dated 21.8.2014 by the Bench presided over by the same learned Judge whose order is now under appeal before us. We are bringing this fact on record, only due to the fact that heavy reliance is placed by the learned counsel for the appellant herein on the judgment of that Division bench in W.A.No.1902 of 2012. It is the primary contention of the learned counsel for the appellant herein that in respect of an identical contract of appointment, the same learned Judge, whose order is on appeal before us, has taken the contra view while presiding over a Division Bench in W.A.No.1902 of 2012.
10. Before looking in to the decision in W.A.No.1902 of 2012, it may be necessary to bring on record, the brief facts leading to this appeal as follows:-
(i) As we have stated earlier, the appellant was appointed by the 1st respondent as a Customer Relationship Executive (Personal Banking) on contract basis. Paras 3,4 and 5 of the Appointment Order given to the appellant dated 8.8.2007 reads as follows: "3. Your appointment in the Bank will be contractual in nature, initially for 2 years from 20.08.2007 to 19.08.2009 (both days inclusive). Your services are liable to be transferred to any branch / office of the Bank depending upon the needs and exigencies of service and may not be restricted to any office / place / Circle."
"4. The compensation package offered to you will be all inclusive Rs.3.00 lacs (Rupees three lacs only) p.a on CTC (Bank) basis, which includes Pay (including variable pay), House Rent, Conveyance, Leave Fare Concession, Medical and Interest Subsidy on Loan subject to maximum limits prescribed by the Bank. (30%) of such proportion of the total emoluments as may be decided by the Competent Authority. The actual amount of variable pay will be sanctioned depending upon the performance of the officer."
"5. Your services in the Bank will be governed by the 'State Bank of India Service Rules for Customer Relationship Executives (Personal Banking) - 2007' and amendments thereof and the instructions / guidelines to be issued / other rules and regulations framed by the Bank from time to time."
(ii) Since such appointments are also governed by the SBI Service Rules for Customer Relationship Executives (Personal Banking) 2007, it is necessary to extract certain rules which may have a bearing on this case. Rule 4 relates to Nature of Appointment and it reads as follows:- "4.1 The appointment of Customer Relationship Executives (Personal Banking), will be purely contractual in nature for a specified period. Initially it will be for a period of two years. Thereafter, the period for which these officers are to be appointed / continued in the service of the Bank shall be decided by the DMD & CDO. The contract may be renewed on completion of contractual period depending on the performance and suitability of the officer at the Bank's discretion and needs of the Bank. Non-renewal of the contract of service with the Bank before expiry of the previous period of contractual service shall automatically terminate the
service of these officers on the last date of the previous period of contractual service.
These officers shall also have the option to renew or not to renew the contract of service at the time of expiry of the current term of the contract.
4.2 Officers appointed under this category shall have no claim for permanent absorption in the Bank's regular cadre."
(iii) The appellant reported for training along with the entire batch, who were selected pursuant to a notification issued on 27.2.2007. He was given on the job training and subsequently by an order dated 18.10.2007 he was posted to work at their Mylapore Branch at Chennai. The appellant was thereafter transferred to work in their Pudukottai Branch with effect from 3.10.2008 coming under the control of the 2nd respondent. On the ground that the appellant did not achieve the target, he was not paid his variable pay. In this connection, the 2nd respondent by his communication dated 28.7.2009 informed the 1st respondent as follows:
"With reference to your letter No. Mis.dated 20.06.2009, we have to advise that since the CRE(PB) Shri. A.Senthil Kumar has not achieved the target fixed to him in all the four quarters i.e. June 2008, September 2008, December 2008 and March 2009, he is not eligible for payment of variable pay. He has taken the walk-in-customers' deposits / advances, cross selling etc. as his achievements, which is not acceptable. Therefore, he has not been paid variable pay at Pudukkottai Branch."
(iv) When the term of the contract was about to expire, the respondent Bank put up an office note based upon the correspondence received from the Corporate Centre and prepared a list of Customer Relations Executives (PB) belonging to the batch of 2007-2008 whose contract can be continued on the basis of performance review and persons whose contracts are to be terminated. The note placed before the Bench (copy served on the appellant's counsel) reads as follows: "We place below the correspondences received from Corporate Centre (Flag A and Flag B) on renewal of contract of CREs(PB) and the notes approved by CMC (Flag G). The performance of CREsPB for the 4 quarters, i.e June 2008, Sept 2008, Dec 2008 and March 2009 is also placed below as Flag C. As per the directives of Corporate Centre, the CREsPB who have not achieved a minimum of 60% of target given to them are not eligible for renewal of contract. An analysis of the data received from the controllers shows that
almost 25% of the CREsPB do not satisfy the stipulation of Corporation Centre and are not eligible for continuation of the contract. Thus, out of 61 Nos of CREsPB of 2007-2008 batch working at present, we will be losing 16(flag D) from our Circle.
However, New Business Department, Corporate centre, has vide its letter no. NB/CRE/2009-10/363 dated 21.07.2009 and NB/CRE/2009-10/521 dated 29.07.2009 (Flag E & D) removed the negative weightage of 5% for non-achievement of 100% performance in the areas of internet Banking and Dmat / eZtrade accounts as well as the minimum performance levels under certain parameters has also been excluded from the final weightage while assessing the achievement of 60% target. These new instructions have helped us to reduce the no. of ineligible CREsPB and hence the final resultant figure would be 8 instead of 16." (v) Thereafter, by an advance intimation dated 10.8.2009, the appellant was informed that his contract will automatically expire on 19.8.2009 by efflux of time and that it would not be renewed.
The operative portion of the said order given by the 2nd respondent reads as follows:- "Your appointment was contractual in nature for a period of 2 years from 20.08.2007 to 19.08.2009. The term period of your contract will end on 19.08.2009. Since the term / period of your contract will come to an end on 19.08.2009 at the close of business hours, you will stand discharged from the bank with effect from 20.08.2009. You are not required to attend the office from the said date i.e.20.08.2009. This communication is the Discharge Certificate / Letter from the Bank as regards your service on contractual basis."
(vi) Though by a letter dated 18.8.2009 the appellant sought a renewal of the contract, it was not accepted by the respondents. Therefore, he filed W.P.No. 22698 of 2009 challenging the order of discharge dated 10.8.2009 as one of termination and sought for reinstatement. It was contended by the appellant that though his services were contractual, a person can be appointed either on regular basis or his contract can be renewed on successful completion of the contractual period. It was also claimed that during his service in Mylapore and Pudukottai branches, he had excelled in all fields and acquired a working knowledge. He also stated that in spite of his meritorious service, he was denied extension of contract whereas similar persons are continuing service.
(vii) In the said writ petition, the respondents filed a counter affidavit. In paragraphs 10,11 and 13 of the counter, it was averred as follows:
"10. I deny the various allegations contained in paragraph 4 that substantial quantum of new business to the tune 4.09 crores against budgeted level of 5 crores was achieved by the petitioner between 01.06.2008 to 30.06.2009 and it amounts to 81%. The Petitioner has included in his performance, the walk in business and cross - business and the same cannot be reckoned for the purpose of ascertaining target. The Petitioner achieved only 25.47% and hence performance was not as per contract. Along with the Petitioner, contracts of another 7 officers who has not performed and achieved the target were not renewed."
"11.the contractual appointment itself was for a period of 2 years as stated above the contractual appointment itself was for a period of 2 years and thereafter the Petitioner was subjected to State Bank of India Service Rules for Customer Relationship Executives (Personal Banking) hereinafter referred to as "the Rules". It is specifically mentioned in Rule 4(1) that (1) the appointment is purely contractual
(2) initially it will be for 2 years. (3) the contract may be renewed on completion of contractual period depending upon performance and suitability of the officer and the need of the bank (4) non-renewal before the expiry of the contractual period shall automatically terminate the service on the last date
(5) the officers (petitioner) shall also have the option to renew or not to renew and under Rule 4(2), The officers appointed under this category shall have no claim for permanent absorption in the bank's regular cadre."
"13. The petitioner's performance is the lowest with 25.47%. I deny the allegations made in the ground (III) and (IV) that the petitioner was sidelined and others who were similarly placed were renewed. Out of the total 59 contractees only 8 were not renewed and the contract could not be continued on account of their performance and not reaching 60% target."
(viii) The appellant filed an additional affidavit in the W.P. and contended that the Central Board of the Bank, in their meeting
held on 14.7.2010, approved a policy for permanent absorption of officers involved in marketing and recovery (Rural), Technical Officers (Farm sector), Micro Finance marketing officers, Customer Relationship Executives (PB & ME) in JMGS-1 as Specialist Officers and that it was applicable to him. He further stated that by a circular dated 20.7.2010, the persons who were in the service of the bank as on 14.7.2010 were eligible for absorption subject to having achieved a minimum target of 60% and that the circular was made applicable even to those who resigned from the service of the bank and rejoined a higher cadre.
(ix) In response to the points raised in the additional affidavit, the respondent Bank stated in their additional counter as follows:
"The said scheme was one time measure and subject to the conditions that (a) the contract officer should be in employment as on 14.07.2010 (2) the said contract officer should have achieved 60% of the target assigned.
Since the Petitioner had not achieved the target of 60% he was terminated on 10.08.2009. The Petitioner was not in employment as on 14.07.2010 and further he had not achieved 60% of target during the year 2009-2010 and hence he was not eligible to be permanently absorbed. I deny the allegation that the petitioner surpassed 60% target and achieved 80%. It is denied that there documentary evidence for the same.
The policy was to accommodate the employee who worked for 2 years. The scheme will apply only if the officer achieved the target and not to the Petitioner who has failed to achieve the target.
I state that the scheme for absorption will apply to all officers whether they have filed the court cases claiming absorption or not.
The petitioner was not in employment and he did not file any such case except the above Writ Petition. (Even) If the scheme is applied to the petitioner he is not eligible for permanent absorption."
(x) However the learned judge was not persuaded to accept the contentions of the appellant and hence, he dismissed the Writ Petition by a judgment dated 8.6.2011. In paragraph 14 to 17 of his judgment, the learned judge gave the following reasons for dismissing the writ petition:- "14. The appointment having been made for a term of two years, the petitioner is bound by the
terms of the contract appointment and the renewal of the contract appointment for further period is not automatic and it is based on performance, suitability and need.
15.The circular relating to permanent absorption applies to those contract appointees, who are in the service of the bank as on 14.7.2010. The petitioner was not serving as contract employee as on 14.7.2010 and as per the circular the candidates must have achieved 60% targets during the year 2009-2010. Thus the petitioner is not entitled to rely on the said circular to sustain his contentions.
16. Petitioner's contract appointment from 20.8.2007 to 19.8.2009 is not disturbed. The renewal of contract for a further period cannot be demanded as a matter of right as extension of service is within the employer's discretion. The view taken by the employer to grant or not to grant such extension is for the interest of the employer or the establishment. At best, petitioner can claim a right to get considered. Petitioner's claim was also considered and based on his inadequate performance the impugned order is passed. The non-renewal of contractual appointment based on the performance appraisal made by the respondents cannot be treated as illegal in the light of the statutory provision and it attaches no stigma in the career of the petitioner. Petitioner is also bound by the clause contained in the appointment order.
Even though renewal of the contractual appointment is contemplated, the said clause only gives a right to get considered and not beyond that. 17.In the light of the said statutory Rule and the petitioner having not achieved his target of 60% and his performance being only 25.47% during the entire service of 2 years, he was found not suitable by the respondents. Thus, the petitioner is not entitled to seek regular appointment or renewal of contract appointment for further period. No case is made out to interfere with the impugned order passed by the respondents."
(xi) It is as against that dismissal of the Writ Petition, the present writ appeal has been filed. To the good fortune of the appellant, he is now armed with a judgment of the same learned judge, made while presiding over a Division Bench in W.A.1902 of 2012 on 28.8.2014.
11. Even in this appeal the appellant has filed an affidavit dated 8.3.2015 contending that some of the documents filed by the respondent bank were not put to him while he was in service. He has further contended that under para 29.2 of the Service Rules, the services of an officer, who had put in more than one year of service, can be terminated only after giving three months notice and that in his case even though he had already put in a service beyond one year, he was not given the required three months notice. The respondent bank has filed a reply affidavit dated 30.3.2015. With reference to the documents filed by the appellant it is stated in para 6 of that reply affidavit as follows:- "I submit that Rule 9.
3 of the State Bank of India Service Rules for Customer Relationship Executives (Personal Banking) specifies that variable pay would be sanctioned only if the concerned achieves atleast 50% of the target. Some of the documents that have been produced by the Appellant in his typed-sets are actually his quarterly performance reports submitted before verification of the correctness and accuracy of the particulars in those reports by the concerned Reporting Authorities. After that exercise had been completed, it had been found that the Appellant had not achieved even the required 50% of the targets stipulated for variable pay.
The other documents produced by the Appellant in support of that claim are mere unsigned rough working-sheets of calculations made without applying the stipulated weightage for the various parameters and hence, the same are unauthentic and self-serving and cannot at all be even looked into. Even if it is assumed for the sake of arguments only, without admitting that the data given by the Appellant in those working sheets are taken to be correct, and if proper weightage is applied to the identified parameters, it is still found that the performance of the Appellant has not crossed the required 60% of the target stipulated for the financial year from 01.04.2008 to 31.03.2009 for renewal of contract."
12. With reference to the contention that the notice given to him on 10.8.2009 was short of the period as contemplated under para 29.2 it was averred in para 10 as follows:- "I submit that the reliance placed by the Appellant on Rule 29.2 State Bank of India Service
Rules for Customer Relationship Executives (Personal Banking) to contend that he had not been given notice or paid wages in lieu of notice when he was terminated from service on 19.08.2009, is without any substance. The question of issuing prior notice or paying wages in lieu of notice is confined only to cases where there is pre-mature termination during the tenure of contract and it would not arise in the instant case where the Appellant has been relieved from service on 19.08.2009 on the expiration of the tenure of his contractual appointment and in any event, the legal position is well established that violation of such rule regarding notice would not invalidate termination from service."
13. The appellant has filed a rejoinder affidavit dated 8.3.2015 contending that he has achieved 63.67% as per the original target. In another paragraph, he has stated that it is 66%. He further added that regarding the adverse observations made by the AGM, he was not given any notice. Perhaps this statement was made after taking advantage of the Division Bench judgment dated 28.8.2014 wherein the order of discharge was set aside on the ground of not granting an opportunity of hearing to the aggrieved officer. It must be noted that this is an intra-court appeal and parties cannot go on improving their case by filing additional pleadings for the purpose of taking advantage of some observations in some other judgment. In any event, no such pleas were raised before the single bench.
14. It was contended before us by Mr.N.G.R.Prasad, learned counsel for the appellant that the appellant had achieved more than 60% of the target and that the appellant's performance were appreciated earlier. Further if the appellant was given renewal of contract, he also would have got the benefit of absorption.
15. Before we proceed to deal with the submissions made on behalf of the appellant, it is important to note that when the writ appeal by the other person by name D.Raja in W.A.No. 1902 of 2012 came up for hearing, the management of the Bank placed reliance upon the Judgment of the learned single Judge in W.P.No. 22698 of 2009, since the said decision was that of the same learned Judge presiding over the Division Bench. However, the Division Bench distinguished in W.A.No.1902 of 2012, the decision in W.P.No.22698 of 2009, out of which the present appeal arises. Therefore, it is necessary to see how the decision out of which the present appeal arises, was distinguished by the Division Bench, while allowing W.A.No.1902 of
2012. Paragraphs 16 to 18 of the judgment in W.A.No. 1902 of 2012 reads as follows:- "16. The learned counsel for the respondents relied on an unreported decision made in W.P.No.22698 of 2008 dated 08.06.2011, rendered by one of us ((N.PAUL VASANATHAKUMAR,J.) We are of the view that the said decision is distinguishable on facts. In that case, the renewal was contemplated as discretionary action of the Bank as per Rule 4 of the State Bank of India Service Rules for Customer Relation Executives (Personal Banking), 2007, wherein it was stated that the contract may be renewedμ on condition of contract period. Whereas in the present case, the Rule 4.
1 of State Bank of India Officers Marketing and Recovery (Rural) Service and Conduct Rules contemplates that the contract will be renewableμ on completion of contract period, which reads as follows:- 4.1 The appointment of Officers Marketing & Recovery (Rural) will be purely contractual in nature for a specified period. The contract will be renewable on completion of contractual period depending on the performance and suitability of the Officers Marketing & Recovery (Rural) at the Bank's discretion and need of the Bank.
17. Therefore, we find that the above said unreported decision does not lend any support to the present case. At any event, as we find that the order is stigmatic in nature and passed without considering Rule 20 of the OMR Rules, the said decision cannot be pressed into service, since that issue was not at all raised and decided therein.
18. Since we are convinced that the impugned order of discharge was made in violation of principles of natural justice and without referring to Rule 20.2 of the OMR Rules, we are not going into the other issues raised by the appellant before this Court, more particularly, with regard to his claim that the Bank has discriminated him even though some of the juniors were given the benefit of absorption, who have got lessor percentage than the appellant and that one year performance is sufficient to grant the benefit of extension of service or absorption. As we propose to remit the matter back to the respondents, more particularly, the third respondent for considering the matter afresh after affording an opportunity of
personal hearing to the appellant, all those issues can be raised by the appellant before the third respondent who in turn will consider the same and decide it on merits."
16. The first premises under which the earlier judgment was distinguished, was due to the presence of the words "will be renewable" found in the relevant rule applicable to Writ Appeal 1902 of 2012. The words "may be renewed" found in the rule applicable to the case on hand, was held by the Division Bench to put his case on a different pedestal. But this premise appears to be incorrect. In respect of both the cadres, the renewal depended upon the performance and suitability and based upon the need and discretion of the bank. We are afraid that we cannot read both the terms as if they are found in a statute. In both cases, an evaluation of the performance had to be done by the bank before renewal of the contract was granted. Renewal was not a matter of right.
While dismissing the writ petition which is under appeal, the learned judge has correctly interpreted the relevant rule and the appointment order given to the appellant. The relevant portion of the order is reproduced once again :- "The renewal of contract for a further period cannot be demanded as a matter of right as extension of service is within the employer's discretion. The view taken by the employer to grant or not to grant such extension is for the interest of the employer or the establishment. At best, petitioner can claim a right to get considered. Petitioner's claim was also considered and based on his inadequate performance the impugned order is passed.
The non-renewal of contractual appointment based on the performance appraisal made by the respondents cannot be treated as illegal in the light of the statutory provision and it attaches no stigma in the career of the petitioner. Petitioner is also bound by the clause contained in the appointment order. Even though renewal of the contractual appointment is contemplated, the said clause only gives a right to get considered and not beyond that."
17. The second finding in W.A.No.1902 of 2012 was based upon the observation made by the Supreme Court in Gridco Limited v. Sadananda Doloi [2011 (15) SCC 16]. Though the learned Division Bench extracted in W.A.No.1902 of 2012, only a portion found in para 38 of the SCC report, it is necessary to extract paras 36 to 39 of the report, in order to understand the correct ratio of the said judgment. They read
as follows:- "36. In Parshotam Lal Dhingra v. Union of India (AIR 1958 SC 36), this court followed the view taken in Satish Chandra's case (supra). Any reference to the case law on the subject would remain incomplete unless we also refer to the decision of the Constitution Bench of this court in Delhi Transport Corporation v. D.T.C. Mazdoor Congress & Ors. (1991) supp (1) SCC 600, where this Court was dealing with the constitutional validity of Regulation 9 (b) that authorized termination on account of reduction in the establishment or in circumstances other than those mentioned in clause (a) to Regulation 9 (b) by service of one month's notice or pay in lieu thereof. Sawant, J. in his concurring opinion held that the provision contained the much hated rules of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract and that any such rule would have no place in service conditions.
37. To the same effect was an earlier decision of this Court in Central Inland Water Transport Corporation Ltd. & Anr. v. Brojo Nath Ganguly & Anr. (1986) 3 SCC 156, where the Court had refused to enforce an unfair and unreasonable contract or an unfair and unreasonable clause in a contract entered into between parties who did not have equal bargaining power."
"38. A conspectus of the pronouncements of this court and the development of law over the past few decades thus show that there has been a notable shift from the stated legal position settled in earlier decisions, that termination of a contractual employment in accordance with the terms of the contract was permissible and the employee could claim no protection against such termination even when one of the contracting parties happened to be the State. Remedy for a breach of a contractual condition was also by way of civil action for damages/compensation. With the development of law relating to judicial review of administrative actions, a writ Court can now examine the validity of a termination order passed by public authority. It is no longer open to the authority passing the order to argue that its action being in the realm of contract is not open to judicial review.
39. A writ Court is entitled to judicially review the action and determine whether there was any illegality, perversity, unreasonableness, unfairness or irrationality that would vitiate the action, no matter the action is in the realm of contract. Having said that we must add that judicial review cannot extend to the Court acting as an appellate authority sitting in judgment over the decision. The Court cannot sit in the arm chair of the Administrator to decide whether a more reasonable decision or course of action could have been taken in the circumstances. So long as the action taken by the authority is not shown to be vitiated by the infirmities referred to above and so long as the action is not demonstrably in outrageous defiance of logic, the writ Court would do well to respect the decision under challenge."
18. In Gridco's case, the Supreme Court only delineated the parameters of judicial review over a termination of a contract and did not lay down any law relating to the requirement of a show cause notice before termination and the observance of principles of natural justice before bringing a contract to an end after its term is completed.
19. Admittedly, the appellant was appointed purely on a contract basis. His contract was not continued based upon his performance. The contract came to an end after the specified period and hence the question of any prior notice that too for a period of three months does not arise. We are not prepared to disbelieve the target details given by the respondent bank and the notes put up by the managers of the bank. There are no allegations of malafides against the officers of the bank who prepared the details regarding the target achieved by the appellant. It is not as if the notes were prepared for the purpose of this case.
On the other hand, on the basis of the note put up by the managers who reviewed the performance of all persons who were of the 2007-2008 batch, 53 persons were found eligible for the renewal of the contract and 8 persons including the appellant were found ineligible. The appellant's self-styled assertion that he had crossed 60% target and hence eligible for continuation of the contract cannot be believed in the light of the details given by the bank. Further, the other assertion that had he been continued in service, he would have had the benefit of regular absorption also does not stand to reason.
20. Mr.N.G.R. Prasad, learned counsel for the appellant next contended that even as per Rule 29 of the Service Rules of the year 2007, the appellant was entitled to one month's notice before termination of the contractual appointment. Rule 29.1 stipulates that the services of the officers recruited on contract basis can be terminated by giving due notice or emoluments in lieu thereof. Rule 29.2 stipulates that the bank may terminate the contractual appointment by giving one month's notice or one month's gross emoluments in lieu thereof. Therefore, it is contended by the learned counsel that the termination of the contract of the appellant was contrary to Rules.
21. But we have no doubt that the contention lacks merit. Rule 29.1 and 29.2 deals with cases of termination during the subsistence of the contract. This is why Rule 29.2 stipulates two different periods of notice. If an officer appointed on contract basis for a period of two years is to be sent out during the first year, the bank is obliged to give one month's notice or one month's gross emoluments. If his services are to be terminated during the second year, the notice period is prescribed as three months in Rule 29.2. Therefore, these Rules naturally apply only to termination of the contractual appointment during the subsistence of the contract and do not apply to cases of automatic expiry of the contract.
22. It is next contended that under Rule 29.2 (ii), the bank has the option to terminate the contract of appointment, for unsatisfactory performance. This Rule 29.2 (ii) reads as follows:- "In case any officer is not sanctioned annual increment/ raise consecutively for 2 years his contractual appointment may be terminated at Bank's discretion as it will be deemed that he has not rendered satisfactory performance. "
23. Pointing out that the appellant was paid an increment upon completion of the first year of service, it is contended by the learned counsel for the appellant that his services would not fall under the category of unsatisfactory performance in terms of Rule 29.2 (ii) and that therefore, there was no case for termination.
24. But the above argument is also unsustainable for the very same reason that we have indicated in paragraph 21 above. The above Rule applies to cases of termination of contract and not to cases of non-renewal of contract. For compelling the management to renew a contract by way of mandamus, something more is required.
25. The next contention that the appellant was entitled to a hearing before the non-renewal of his contract and that the principles of natural justice ought to have been followed, can be tested easily on the strength of a few decisions of the Supreme Court. In Ramanthan Pillai v.State of Kerala [1973 (2) SCC 650], a constitution bench of the Supreme Court examined the difference between a penal order and an order which is a termination simplicitor in the context of Article 311(2) of the Constitution.
It was observed :- "In Moti Ram Deka case (supra) it was said that the statement of law in Dhingra case (supra) "in the absence of a contract, express or implied, or service rule the permanent servant cannot be turned out" would permit the authority to terminate the service of a permanent servant under terms of contract or service rules without taking the case under Article 311 though such termination might amount to removal or compulsory retirement. This Court in Moti Ram Deka case (supra) did not agree with this statement of law in Dhingra case (supra) and laid down the law to be that where a rule is alleged to violate the constitutional guarantee afforded by Article 311 (2) the argument of contract between the parties and its binding character is wholly inappropriate.
The introduction of the two clauses "in the absence of a contract, express or implied, or service rule" in Dhingra. case (supra) was by reason of consideration of Rule 49 in that case. Rule 49 spoke of termination of employment of a probationer or a temporary servant or a servant under a contract not to amount to removal or dismissal within the meaning of that Rule. That is why these two clauses, it was pointed out in Moti Ram Deka case, would have no relevance or application to permanent servants....
The statement of law in Dhingra case (supra) that in the absence of a contract, express or implied, or a service rule, a permanent servant cannot be turned out of his post unless the post is abolished or unless he is guilty of misconduct was examined In Moti Ram Deka case. In Moti Ram Deka case (supra) it has been said that in regard to temporary servants or servants on probation the terms of contract or service rules may provide for the termination of the service on notice of a specified period or on payment of
salary for the said period, and if in exercise of the power thus conferred the services of a temporary or probationary servant are terminated,' it may not necessarily amount to removal. If it is shown that the termination of services is no more than discharge simpliciter effected by virtue of the contract, or the relevant rules, Article 311 (2) may not be applicable to such a case, If, however, the, termination of a temporary servant's service in substance represents a penalty imposed on him or punitive action is taken against him then such termination would amount to removal and Article 311(2) would be attracted."
26. In Registrar, High Court Of Gujarat Vs C.G.Sharma [2005 (1) SCC 132], the Supreme court once again went into the issue of the difference between a punitive order and a discharge simplicitor in the context of Article 311(2) and the following passage may be usefully quoted:- "The order of termination is termination simplicitor and not punitive in nature and, therefore, no opportunity needs to be given to the respondent herein. Since the overall performance of the respondent was found to be unsatisfactory by the High Court during the period of probation, it was decided by the High Court that the services of the respondent during the period of probation of the respondent be terminated because of his unsuitability for the post. In this view of the matter, order of termination simplicitor cannot be said to be violative of Arts.
14, 16 and 311 of the Constitution of India. The law on the point is crystalised that the probationer remains probationer unless he has been confirmed on the basis of the work evaluation. Under the relevant Rules under which the respondent was appointed as a Civil Judge, there is no provision for automatic or deemed confirmation and/or deemed appointment on regular establishment or post, and in that view of the matter, the contentions of the respondent that the respondent's services were deemed to have been continued on the expiry of the probation period, are misconceived."
27. Again in Central Electricity Supply Utility Of Odisha Vs. Dhobei Sahoo & Ors [2014 (1) SCC 161] while examining a challenge to an appointment by way of writ of quo warranto, the Supreme court
analysed the scope of an automatic extension in the case of a contractual appointment. It was observed as under:- "From the factual depiction it is seen that though the policy and the Scheme provide that the age of the candidate shall not exceed 55 years as on 1.9.2007, yet the tenure is extendable thereafter depending upon the performance. We have referred to the same only for the purpose that though there is a maximum age limit at the time of submission of an application, yet the term can be extended. It may be apposite to note here that even if the maximum age limit is provided for submission of application and the period of appointment is three years, it is extendable depending upon the performance.
Having regard to the nature of language used, it is to be construed that it is a contract appointment to choose a highly qualified and skilled person. The extension is also dependant upon performance. No limit is provided for number of extensions. It would depend upon the capability, efficiency and suitability as adjudged by the employer. Needless to say, for grant of extension the person would not have a right."
28. Therefore, it is clear that there is no right for renewal of a contract. The appellant is governed by the terms of his contract and the statutory rules framed by the bank. This court cannot read any principles of natural justice into such a contract especially when the contract came to an end and there was no renewal of contract. Further the bank had also supplied the necessary factual basis for not renewing the appellant's contract. It is also not as if the appellant was the only one who was not given the renewal. There were 8 others whose contracts were also not renewed and no mala fides are attributed to the respondents.
29. Referring to the word "initially" appearing both in Rule 4.1 of the Service Rules for Customer Relationship Executives (Personal Banking), 2007 and in Clause 3 of the order of appointment dated 8.8.2007, it was contended by Mr. N.G.R.Prasad, learned counsel for the appellant that when the contract stipulated a period only initially, with a rider for the continuation thereafter, the appointment cannot be treated as purely and solely contractual.
30. But the above contention is fallacious, as can be seen from Rule 4.1, which we have already extracted in para 10 (ii) above. Rule 4.1 confers no right upon the appointee. On the contrary, it merely states that "the period for which these officers are to be
appointed / continue in the services of the bank, shall be decided by the DMD and CDO." Rule 4.1 goes a step further, giving the option even to the appointees not to renew the contract after the expiry of the term. If there was any doubt about the nature of appointment, that stands cleared by Rule 4.2 which stipulates that "officers appointed under this category shall have no claim for permanent absorption in the bank's regular cadre". Therefore, the word "initially" does not improve the case of the appellant, either initially or finally.
31. The learned counsel for the appellant placed reliance upon the judgment of the Supreme Court in Harjinder Singh Vs. Punjab State Warehousing Corporation [2010 (3) SCC 192] and referred to the following passage found in paras 30 and 31 of the report:- "30: Of late, there has been a visible shift in the courts approach in dealing with the cases involving the interpretation of social welfare legislations. The attractive mantras of globalization and liberalisation are fast becoming the raison d'etre of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganized workers.
In large number of cases like the present one, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating by-lanes and sidelanes in the jurisprudence developed by this Court in three decades. The stock plea raised by the public employer in such cases is that the initial employment/engagement of the workman-employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. The courts have readily accepted such plea unmindful of the accountability of the wrong doer and indirectly punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood.
31: It need no emphasis that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status and of opportunity, the freedoms enshrined in the Constitution remain illusory. Therefore, the
approach of the courts must be compatible with the constitutional philosophy of which the Directive Principles of State Policy constitute an integral part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer - public or private."
32. But in that case, the workman concerned was working in a work charged establishment as a motor-mate in the Punjab State Warehousing Corporation which is a state owned public sector establishment. After his termination, he raised an industrial dispute and took up the matter for adjudication before the labour court. The Labour Court found that there was a infringement of section 25G of the I.D.Act and granted relief of reinstatement with 50% backwages. The High Court set aside the award of reinstatement and granted monetary compensation. Reversing the judgment of the high court and restoring the award of the labour court, the Supreme Court emphasized the need to protect the lowly paid workmen and their livelihood.
33. But we are afraid the said decision has no application to the case on hand. We are dealing here with the case of an Executive (and not that of a lowly paid workman) appointed on a contract basis with a specific target to be achieved every quarter. The contract was not renewed after its expiry on the ground that targets were not achieved. We have tested the correctness of the impugned action on the basis of time tested principles and not on the basis of any principle evolved after a visible shift took place in the approach of courts towards labour matters, as pointed by the Supreme court in the above decision.
34. On facts, we also find that the appellant cannot have the benefit of the judgment rendered in the case of D.Raja Vs. The Chief General Manager, State Bank of India in Writ Appeal No. 1902 of 2012 dated 28.8.2014. As a matter of fact, it was not held by the Division Bench in D.Raja v. The Chief General Manager (W.A. No.1902 of 2012), that the decision in W.P.No. 22698 of 2009, which is under appeal before us was bad in law. On the contrary, the Division Bench held in D.Raja's case that the decision in W.P.No. 22698 of 2009 was distinguishable on facts. Therefore, a tacit approval has been given in W.A.No.1902 of 2012 by the Division Bench, to the judgment which is under appeal before us. In such circumstances, we are of the considered view that the order of the learned Judge does not call for any interference.
35. In view of the above, the Writ Appeal is devoid of merits and hence it is dismissed. However there will be no order as to costs. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar gr Copy to:
1. The General Manager, State Bank of India, Local Head Office, 16, College Lane, Chennai - 600 006.
2. The Chief Manager, State Bank of India, Pudukottai Branch, Pudukkotai Taluk & District, Tamil Nadu.
3. The Branch Manager, State Bank of India, Mylapore Branch, Chennai - 600 004.
+1cc to M/s.Row & Reddy, Advocate, S.R.No.40578 +1cc to Mr.P.D.Audikesavalu, Advocate, S.R.No.40849 W.A.NO.1901 OF 2012 GR(CO) CA(01/09/2015)