Holding

Rule 9(2) is a directory provision permitting the State Government to prescribe a probation period of up to two years, and the one‑year probation stipulated in the appointment orders was valid; consequently, the dismissals were arbitrary and unconstitutional.

Summary

The petitioners were appointed as Trust Executive Officers under the Punjab Town Improvement Act, 1922, with a contractual clause stating a one‑year probation period. After completing that year and receiving an increment, the State Government dissolved the improvement trusts and, invoking Rule 9 of the Punjab Trust Services Rules, dismissed all eleven petitioners, paying only a month's salary in lieu of notice. The petitioners challenged the dismissal, arguing that the applicable probation period for direct recruits was two years and that the government’s reasons – incomplete probation, dissolution of trusts, and fiscal burden – were untenable and arbitrary, violating Articles 14 and 16 of the Constitution. The Court examined the language of Rule 9, held that the word “shall” does not make the two‑year period mandatory and that the rule is directory, permitting a shorter probation period at the appointing authority’s discretion. It further found that the petitioners had satisfactorily completed their one‑year probation, that the trusts continued to function, and that the dismissals were motivated by extraneous considerations, rendering them arbitrary and unconstitutional. Accordingly, the dismissal orders were set aside, the petitioners were reinstated with full salary, and they were awarded half‑salary for the period of wrongful termination and costs.

Issues considered

Whether Rule 9(2) of the Punjab Trust Services (Recruitment and Conditions of Service) Rules makes a two‑year probation period mandatory for direct recruits or allows a shorter period.
Whether the State Government could lawfully dispense with the petitioners' services after one year of probation on the grounds of trust dissolution and alleged unsatisfactory performance.
Whether the dismissal of the petitioners violated the constitutional guarantees of equality before law and equal opportunity in public employment under Articles 14 and 16 of the Constitution.
Whether the use of the word “shall” in the statutory provision determines its mandatory or directory nature.
Whether the dissolution of the improvement trusts justified the termination of the petitioners' employment.

Legislation cited

Constitution of Indias. Article 14, s. Article 16, s. Article 32
Punjab Town Improvement Act, 1922s. 17(4)

Subjects

probation periodservice lawarbitrary dismissalequality before lawpublic employmentinterpretation of statutesdirectory vs mandatory provisionPunjab Town Improvement ActRule 9Rule 10Article 14Article 16

Judgment

517
•' A
)
AJIT SINGH & OTHERS ETC.

v.
·' STATE OF PUNJAB & ANOTHER B

March 10, 1983

[D.A. DESAI AND V. BALAKRISHNA ERADI, JJ.)

Civil service-Service rule prescribed probation of two years-Order of c
appointment stated probation as one year-Government, if competent to prescribe
shorter period of probation.

Probation-Meaning of-Object in prescribing.

Interpretation-Mandatory or directory-TestJ for determining.

The Punjab Town Improvement Act, 1922 envisages the setting up of D
Trusts and the Trusts so set up were to be bodies corporate with perpetual sue..
cession and a common seaJ. The duti(:S and functions entrusted to the Trusts
Jncluded, among others, preparation of schemes for improvement and expansion
of towns in the State. For the purpose of manning the senior posts under the
Trusts, the Act conferred power on the State Government to constitute certain
services. One of the services constituted by the Government was the Punjab
Service of Trust Executive Officers. Exercising power under the Act the State E
Government framed the Punjab Trust Services (Recruitment and Conditions of
Service) RuJes, 1978, The Rules envisaged the setting up of a Selection Committee
called tho Punjab Trust Services Selection Committee for selecting Officers. After
folL>wing the procedure prescribed under the Rules, the Selection Committee
recommended the appointment of the eleven petitioners herein to the posts of
Trust Executive Officers, Class 1, II and III. The State Government accepted the
recommendations of the Selection Committee and in May, 1979 appointed the
petitioners to the respective posts. Condition (c) of the terms and conditions
annexed to the order of appointment issued to each of the appointees stated :
"AU the appointees shall remain on probation for a period of one year under
rule 10(1) of the Rules. The regular appointments shall be subject to the satisM
I factory completion of the period of probation by such appointee after the expiry
of one year from the date of his joining." On the completion of one year of ser.. G
vice an increment was released in favour of each of the appointees.

: In August, 1980 tho State Government dissolved 21 Trusts. Purporting to
act under rule 9 of tho 1978 Rules, the Governor dispensed with immediate effect
the services of each of the II petitioners after paying a moqth"s salary in lieu of a H
111onth's notice,
518 SUPRBMB COURT REMRTS (1983J 2 S.C.ll.

A In their petitionS:filed under Anicle 32 of the Constitution impugning the
order of the State Government dispensing with their services, the p.etitioners
alleged that after they bad satisfactorily completed the period of probation of one
year it was not oPen to the State Government to dispense with their services; the
power to dissolve the Trusts was used by the Government to get rid or the peti-
tioners; that sometime after dispensing with their services the Trusts bad been
reconstituted but even so they had not been recalled to their posts and that the
(_ .
B action of the Government in the case was thoroughly arbitrary, actuated by extra·
neous considerations. ·
In reply it was stated that under rule 9 (2) the State Government had
power to dispense with the services of a probationer if his work and conduct
during the period of probation were not satisfactory; payment of a month's pay
in lieu of notice was made by way of abundant caution and that it could not con-
fer any right on the petitioners; the period of probation of one year, mentioned in
clause (c) of the anncxure to the order of appointment was a typographicaJ~cum
clerical error, which in terms of rule 9 (2) should have been two years in respect
of direct recruits and lastly their se:rvices had been dispensed with because with
. the dissolution of the Trusts the Executive Officers had become surplus and their
continuance in)ervice would be an avoidable burden on the exchequer. ,
It was contended on behalf of the State Government that the expression
D 'shall' in rule 9 (1) on its own force would apply so that the direct recruits would
automatically be on probation for a period or two years and no power or discre-
tion is conferred on anyone to reduce this period.

Allowing petition,

HELD : It is not necessary to prescribe a period of probation and the
E State Government as the appointing authority would have discretion in the matter
subject to rules by which the appointment is governed. [529 C]

Under the archaic law of hire and fire the concept of probation in service
jurisprudence was practically absent; but with the advent of the concept of
security in public service it came to acquire a certain connotation. In order that
an incompetent or inefficient servant is not foisted upon the master the concept of
F probation was devised. A new recruit is put on test for a period before he is
absorbed in the service or has acquired a right to the post. In so far as the master
is concerned the period of probation.gave a sort of locus pententlae to him to
observe the work, ability, efficiency, sincerity and competence of the servant and
if the servant is not found suitable fo-r the post the master reserved the right to .l
dispense with bis service during or at the end of the period of probation. The
period of probation, therefore, furnisbed a valuable opportunity to the master to
G closely observe the work of a probationer. The termination of service of a pro-
bationer during or at the end of the probation 'did not ordinarily and by itself
constitute a punishment for, the servant had no right to continue to hold such a
post. The period of probation may vary from post to post or from master to
master. It is not obligatory on the part of the master to prescribe a'. period of
probation; it is open to him to employ. a person without putting him on proba-'
H tion. In short the power to keep a servant on probation and the period. during
which his performance is to be observed remained the prerogative of the master.
[526 A-HJ
AJIT SINGH v. PUNJAB 519

Purshottam IA/ Dhingra v. Union of India, [1958] SCR 828, followed. A
There is no general rule which may help in determining whether a provi-
·'
) . aion is mandatory or directory. It is the duty of the court to try to get at the real
intention of the Legislature by carefully attending to the whole scope of the statute
to be construed. The use of the expression 'shall' is not decisive and the question
whether a provision is mandatory or directory depends upon the intent of the
Legislature and not upon the language in which the intent is clothed. [527 G-HJ B
Cul/imore v. Lyme Rogis Corporation, [1962] 1 Q.B. 718; State of U.P. &
Ors. v. Babu Ram Upadhaya, [1961] 2 SCR 679 at 710; State of U.P. v. Manbodhan
Lal Srivastava, [19S8] 2 SCR 533 and Motrtreal Street Railway Company v. Nor-
-..... mandin, L.R. [1917] A.C. 170, referred to.

Rule 9 (2) is directory and confers a discretion on the State Government c
to prescribe a period of probation shorter than the maximum set out in it. The
period of two years prescribed in this rule is the maximum period which means
that the rule placed an embargo on the appointing authority's right to prescribe a
period of probation longer thaq tWo years. But the rule does not admit of a
construction that a period shorter than two years could not be prescribed. The
rule enables the appointing authority to determine the suitability of the person
appointed and the State Government may, having regard to the biodata and other D
information it has about the officers, feel that a period shorter than two years
would suffice to make up its mind whether to retain him in service or to dispense
with his service. Power in this respect is vested in the State Government which is
the highest authority and that power has to be exercised on the recommendation
of a statutory body. This power is not taken away by the use of the expression
'shall' in the rule. [527 C-F]
E
In the instant case two of the pct1t1oners who were appointed to class I
post possessed high educational qualifications. had considerable experience in the
education department of the State and left the permanent service under the State

....
\
to take up the present jobs. Persons of such long experience and high qualifica-
tions would be disinclined to be put OD probation again for a period Of two years .
It is thcrerore reasonab!C to infer that, having regard to the high attainments of
the candidates, the State Government had prescribed a period or probation of one F
year. A few other petitioners, who were appointed to class II and Ill posts were
practising advocates. In all the cases, on the completion or the period of probation
of one year tbey were given an increment which is released only if the work and
conduct of the person arc found to be satisfactory. It is implicit in this that they
had satisfactorily discharged .their duties during the period of probation. Jn the
face of this position to hold that the wording of the appointment order stating
that each of the appointees would be on probation for one year was a typographi· G
cal-cum-clerical error. would be doing violence to commonsense.
[525 B-E, 529 C.F)

That the dissolution of the Trusts was a device to get rid of the petitionen
; is evident from later events. By the very order by which the Trusts were dissol-
ved certain officers were appointed to carry on the functions of the Trusts. There. H
fore the Tru!ts. independent of the Board of Trustees, bad a corporate persona-
lity, with a perpetual succession and their functions had to be carried out. The
520 SUPREMll COURT REPORTS 119831 2 s.c .••

A effect of the 'dissolution was me rely to dissolve the Board of Trustees. The corpo·
rate personality of the Trust recnained inviolate. If the Trusts were functioning,,
if their schemes were being i mpleIJaented, ir all other staff was retained there is no ·-
substance in the contention that the services of the petitioners alone were no
longer required because' of the dissolution of Trusts. Even if the charge of mala
fide is not true there are certain aspects which unerringly point in the direction
that the action was arbitrary and i.s violative of Articles 14 and 16 of the Consti·
B tution. [535 A-El

There is equally no force in the contention that after the dissolution of the
Trusts their continued retention in service was imposing an unnecessary burden
on the State exchequer. After removing the petitioners 11 other officers were
asked to take over their duties. This apart, the State exchequer was not responsi ..
ble for the salary and prequisiles of the Trust Executive Officers; their salaries,
c allowances and prequisites were charged on the fund of the Trusts as envisaged
by section 17 (4) of the Act. [534 A]

The argument that the performance of the petitioners was not satisfactory
is equally untenable. On the expiry of the period of probation they were allowed
an increment and wcte continued in service. It would be unjust to say that their
work was unsatisfactory till they earned their increments but that their work and
b conduct were found to be unsatisfactory within less than six weeks tbereafcer,
meriting dispensing with their services. [530 8-0]

ORIGINAL JURISDICTION : Writ Petition (Ci vii) Nos. 5274-81,
5463, 5348 & 5606 of 1980.
E
(Under article 32 of the Constitution of lnuia)

M.K. Ramamurt.W.• J Ramamurthy, Miss R. Vaigui for the
Petitioners.

Hardyal Hard)' and D.D. Sharma for the Respondents.
F
The Judgment of the Court was delivered by ,..
DESAI, J. These writ petitions under Article 32 of the Constitu-
tion questioned the validity of the orders dispensing with servi.ce of
each of the petitioner with immediate effect made by the Director
G Local Government, Punjab dated September 25, 1980 as being I
violative of Arts. 14 and 16 of the Constitution.

The Punjab Town lmpmvement Act, 1922 ('Act' for short) was
enacted to make provision for the improvement and expansion of
H towns in Punjab. The act envisages the creation and constitution of
Trusts and the Trust so created will have a corporate personality with
perpetual succession and a common seal. The duties and functions
. AJIT SINOH v. PUNJAB (Desa.I, J.) 521

of the Trust inter a/la include preparing of schemes under the Act A
for various purposes. Section 17 conferred power on the State
Government to constitute certain services in the manner therein
)
prescribed. One such service contemplated by the section was Punjab
Service of Trust-Executive Officers. Sub-section (2) of section 17
conferred power on the State Government to make rules for regula·
ting the recruitment and the conditions of service of members of the 8
Trust Services constituted by the State Government. Armed with
this power, the State Government constituted Punjab Service of
Trust Executive Officers. In exercise of the power conferred by sec.
73 read with sec. 17 (2) of the Act, the State· Government framed
rules styled as Punjab Trust Services (Recruitment and Conditions
of Service) Rules, 1978 ('Rules' for short). Rule 5 (2) (i) inter alia c
provided that fifty precent of the vacancies in the cadre of Executive
Officers shall be filled by direct recruitment and for this purpose rule
5(4) envisaged the setting up of a Selection Committee called Punjab
Trust Services Selection Committee.
D
In the year 1978, Directorate of Local Government, Punjab
issued advertisement No. 1078 inviting applications for the posts in
Class I, II and III of Trust Executive Officers. Pursuant to this
advertisement, large number of person's applied for various posts.
The Punjab Trust Services Selection Committee interviewed various
candidates and ultimately .recommended eleven persons for the post
of Trust Executive Officers. Ajit Singh and Rajinder Singh were
recommended for Class I post; S. Sarup Singh and R.L. Bhagat were
recommended for Class II Post of Trust Executive Officers and the
~- remaining 7 petitioners in this group'ofpetitions were recommended
for Class III Post of Trust Executive Officers. These recommenda-
tions were accepted and appointment orders were issued by Punjab
Government on May 28, 1979 and it is not in dispute that all the
,
appointees joined the respective posts. Each one of the appointees
was issued an order of appointment to which terms and conditions
of appointment were annexed. One such condition worth-noticing
reads as under : G

"(c) All the appointees shall remain on probation/or a
period of one year under rule 10 (I) of the Rules. The regu-
lar appintments shall be subject to the satisfactory comple-
tion of the probation period by such appointee after th~
''
expiry of one year from th.~ ~ate of his joininf'
542 'UPREMB COl:JRT REPORTS (1983) 2 s.c.~.

After each appointee completed one year of service, an incre·
ment was released in his favour: Suddenly in exercise of the power
conferred by Rule 9 of the '1978 Rules', Director of Local
Government, Punjab dispensed with the service of each of the 11
Trust Executive Officers, who were appointed on May 28, 1979.
These orders are impugned in these petitions.
B
As the language of the order was the subject matter of some
discussion, the one in respect of petitioner No. 3 R.L. Bhagat may be
extracted. It reads as µnder :

"P•rn}ab Government
c Local Government Department

ORDER

In exercise of the powers conferred under Rule 9 of the
Punjab Trust Services (Recruitment and Conditions of Ser-
D
vice) Rules, 1978 and all other powers enabling him in.this
behalf the Governor of Punjab is pleased to dispense with
immediate effect the services of Shri Rattan Lal Bhagat who
• was appointed to the Punjab Trust Service of Executive
Officer Class. II vide office order No. DLG (TSC)-79/126
E dated 28th May, 1979. He will be paid one month's salary
in lieu of the month's notice.

Sd/- R.D. Joshi,

Director, Local Government, Punjab. ._.
f Endst. No. DLG (TSC) 80/8648/51 Dated Chandigarh the 25th
Sept. 1980".

Validity of this order styled as order dispensing with the service
of each of the petitioner is questioned in this group 'of petitions on
the ground that the action is thoroughly arbitrary actuated by extra-
neous considerations and violative of equality of opportunity in the
matter of employment. It is also challenged on the additional ground
that aftenhe completion of the period of prnbation it was not open
to the State Government to terminate the service of the petitioners,
H in theJmanner in which it is done. One more ground of attack was
that the action was malafid·e in that the petitioners were appointed
when a political party of other hl!e an4 colol!r WllS in power and on a
AJIT SINGH v, PUNJAB (Desai, J.)

change of Government, the petitioners were victimised. Iilsupport of
the last contention it was urged that the power to dissolve trust con·
ferred by section I 03 was used to get rid of the petitioners which can
)
be demonstrably established by the fact:that after dispensing with the
service of petitioners, the trusts have been reconstituted without cal-
l I ling hack petitioners to their posts.
I B
A return was filed on behalf of the respondents-the State of
Punjab and Director-cum·Joint Secretary, Local Government Depart·
ment, Punjab by Prithipal Singh Sodhi. Apart from the usual preli-
""'--- "t

~-
-·
minary objection . that the petition involves disputed and tangled
questions of facts which cannot be resolved under a petition under
Article 32 of the Constitution, it was contended tbat the Government c
had dissolved all the 21 Improvement Trusts in the State of Punjab
by its order dated August II, 1980 and since the Trusts were dissol·
ved, services of Executive Officers were no longer required because
,. , their continuance would inflict an unnecessary burden on the· State
Exchequer and therefore, the State Government decided to dispense
with the services of those Executive Officers appointed by direct rec· D
ruitment who had not completed the probationary period of 2 years
under Rule 9 (I) of '1978 Rules'. It was contended that all the
petitioners were appointed through direct recruitment as Executive
Officers in the Punjab Trust Services on May 28, 1979 and according
to the respondents the period of probation was two years which
would expire on May 27, 1981. It was said that the State Govero·
ment in exercise of the power conferred by Rule 9 (2) could dispense E
with a service of a probationer, if the work and ·conduct of a person
to a service during the period of liis probation is in the opinion of
the appointing authority not satisfactory. Armed with this power, it
was contended that the services of the petitioners were terminated
which would mean that the work and .conduct of each of the petitio·
ner who was appointed by direct recruitment was not satisfactory.
F
Explaining why one month pay in lieu of notice was paid, it was
contended that payment was ex majorie cautela and it can
confer no right on the petitioners. · Referring to clause (c) in the
~ -., annexure to the appointment order of the petitioners which G
prescribed a probation period of one year, it was submitted that
that was a typographical·cum·clerical error because Rule 9 (2)
which prescribes peric d of probation in terms specifies the
probation period of two years . in respect of direct recruits.
J
It was lastly contended that as the Trusts were dissolved,
the services of the· petitioner§ '-~ {j~~'!U,tiv~ 9fficen tia.~ g~on.iq
524 SUPREME COURT REPORTS (1983] 2 s.c.R.

A surplus and therefore, had to 1be dispensed with as a compelling
necessity.

Pleadings have been set out in some detail to highlight a very
narrow controversy which requires to be resolved in this case. There
is no dispute that petitioners were appointed to Class I, II and III
B post of Trust Executive Service after they were recommended by the
statutory body called Punjab Trust Service Selection Committee. That
each petitioner in response to the appointment order dated May 28,
1979 joined the service is again undisputed. Terms and conditions
were set out as an annexure to the appointment order of each of the
petitioners and clause (c) in the annexure clearly specifies the proba-
c tion period to be of one year as prescribed under Rule 10 (!) of
'1978 Rules.' Now if each of the petitioners was appointed as a pro-
bationer and the period of probation which he wu informed by the
annexure to the appointment order was of one year, indisputably on
May 27, 1980 each one completed the period of probation. However,
the contention of the respondents is that tlie recital in clause (c) of
D the annexure to the appointment order specifying the probation
period of one year in respect of each petitioner is a typographical-
cum-clerical error in view of the provision contained in Rule 9 (I)
of '1978 Rules'. Rule 9 (I) and 9 (2) provide as under:

"9-Probation :- (I) A person appointed to a service
E shall remain on probation for a period of two years, if
appointed by direct recruitment, and one year, if appointed
otherwise.

(2) if the work or conduct of a person appointed to a
service during the period or his probation is, in the opinion
F of the appointing authority, not satisfactory, it may;

(a) if appointed by direct recruitment, dispense with
his services."

It would thus appear at a glance that the real question in
G controversy was what was the period of probation in respect of each
of the appointee. It is not in dispute nor is it controverted by the
respondents that the appointment order issued by the Punjab Govern-
ment did recite that the person mentioned in the order is appointed
to Punjab Trust Services of Executive Officers Class I or Class II or
H III as the case may be subject to the conditions annexed to the order
etc. Therefore, the appointme11t was subject to the conditions
anne)t~d to the ord~r and as pointed out earlier condition (c) annexed
AllT SINGH V, PUNJAB U>e8qi, J,)
to the order prescribes a. period of probation of one year, Nowhere A
in the affidavit in opposition, the respondents state as to whether
rule 10 (1) also confers power to prescribe a period of probation.
Refe~ence is to Rule 9 (1) which prescribed a period of probation of
two years for those appointed by direct recruitment. Now examining.
the matter from the point of view of petitioners, all the petitioners·
were appointed by direct recruitment. But at this stage one may B
point out that petitioner No. I Ajit Singh, who was selected for
c1,ss I post of Trust Executive Officer, bad 26 ye'ars of service to his
credit in the Education Department of Punjab Government and he
had to resign that post in order to take the post of Trust Executive·
Officer' Class I. Similarly, Rajinder Singh-petitioner No. 2, who was
appointed to Class I post was Class II Gazetted Officer in Punjab c
Government service with 26 years of service to his credit till Septem·
ber 22, 1978. He had also worked from September 22, 1978 to the
date of joining the post of Class I Trust Executive Officer as
>, Executive Officer Class II in the same Local Government Depart-
ment. Thus both Ajit Singh and Rajinder Singh who were
appointed to Class I post had rendered service for a long time, D
Both were highly educated. Both had to leave permanent service
I.
to take up the post of Trust Executive Officer. R.L. Bhagat,
Pavittar Singh Gill, Gulam Sabir Ali Khan and Harjinder Singh,
who were directly recruited to Class II and III posts of
Executive Officers were practising advocates. If the Service Selection
> Board had the bio-data of each of these persons before it, one can
say with certain amount of confidence that the Service Selection
Committee as well as the Punjab Government having taken into
\- •. consideration such high educational attainments and past experience
may prescribe a shorter period of probation. Mr. Hardy, learned
counsel for the respondents, however, seriously contended that rule
9(1) does not permit anyone to prescribe shorter period of probation
than the prescribed period of two years. He relied on the use of
the expression 'shall' in Rule.9 (!)as mandatory and submitted that
even if the appointment order did not carzy any specification about
the prescribed period of probation, the rule on its own force will
apply- and a direct recruit appointed to Trust Executive Service and
governed by the '1978 Rules' will automatically be on probation for
a period of two years. It was also pointed out that the rules do
not confer any power or discretion on 2any authority to reduce t))is
) period. We find it difficult to subscribe to this view;
This requires examination of the genesis why period of proba- lJ
tion is prescribed. · And how the period of probation has been
understood in service jurisprudence.
st11>tt2t.IB rouat RBl>Oats (1983] 2 s.c.I\.

A When the master servant relation was govern ed by the archaic
law of hire and fire, the concept 'of probation in service jurisprudence
was practically absent. With the advent of security in public service
when termination or removal became more and more difficult and
order of termination or removal from service became.a subject matter
of judicial review, the concept of probation came to acquire a certain
B connc>tation. If a servant could not be removed by way of punish-
ment from service unless be is given an opportunity to meet the alle·
gations if any against him which necessitates his removal from ser·
vice, rules of natural justice postulate an enquiry into the allegations
and proof thereof. This developing master servant relationship put
c the master on guard. In order that an incompetent or inefficient
servant is not foisted upon him because the charge of incompetence
or inefficiency is easy to make but difficult to prove, concept of pro-
hibition was devised. To guard against error of human judgment in
. selecting suitable personnel for service, the new recruit was put on
test for a period before he is absorbed in service or gets a right to
the post. Period of probation gave a sort of locus pententiae to the
D
employer to observe the work, ability, efficiency, sincerity and compe-
tence of the servant and if be is fonnd not suitable for the post, the
master reserved a right to dispense with bis service without anything
more during or at the end of the prescribed period which is styled
as period of probation. Viewed from this aspect, the courts held
E that termination of service of a probationer during or at the end of
a period of probation will not ordinarily and by itself be a punish-
ment because the servant so appointed has no right to continue to
hold s4cb a post any more than a servant employed on probation
by a private employer is entitled fo. (See Purshotam Lal Dhingra v.
Union of lndia.(1) The period of probation therefore furnishes a
r valuable opportunity to the master to closely observe the work of
the probationer and by the time the period of probation expires to
make up bis mind whether to retain the servant by absorbing him
in regular service or dispense with his service. Period of prol)ation
may vary from post to post or master to master. And it is not obli·
gatory on the master to prescribe a period of probation. It is always
G ·open to the employer 'to employ a person without putting him on
'Probation.· Power to put the employee on probation for watching
his performance and the period during which the performance is to
be observed is the prerogative of the employer.
B
(!) [1958] S,C.R. 828.
•

AJIT SiNOH v. PUNiAil (besai, J.) 521
ltule 9 (2) provides that a person appointed to a service shall A
temain on probation for a period of two years if appointed by direct
recruitment etc. Emphasis was placed on the use of the · expression
'shall' and it was urged that it is mandatory. It was also urged that
)\ the rule leaves no discretion in the. appointing authority to prescribe
/
a period of probation shorter than two years. And even if someone
has attempted to do the same that being clearly illegal, the person B
concerned having been fastened with the knowledge of the statutory
rule cannot contend that his period of probation is less than two
years, and the court will have to proceed on the basis that period
of probation shall be two years. This submission raises a vital ques-
tion whether the use of the expression 'shall' in rule 9 (2) indicates
that the rule was to be mandatory in its application and no one will
c
have a discretion to prescribe a period shorter than two years. On a

.
t
,
plain grammatical construction of the rule it appears clear that the
prescribed period of two years was the maximum period and that
placed an embargo on the appointing authority denying it a right to
prescribe a period of probation longer than two years. But the rule D
• does not admit of a construction that a period shorter than two
years cannot be prescribed. The purpose underlying the rule was to
give an opportunity to the appointing authority, in this case the State
Government, to determine the suitability of the person appointed and
the State Government having the bio-data of officers before it may
> feel that a period shorter than 2 years would suffice it to make up its
mind whether to retain the employee concerned or to dispense with
E
his service. Rule 9 (2) is thus an enabling provision which permits
the Government to prescribe a period of probation and the period
can be anywhere upto two years and not in excess of 2 years. Such
enabling provision is generally held to be directory and not manda-
tory. The rule is cast in affirmative language and there is no pro hi bi·
F.
tion placed in public interest. In order to determine whether a pro-
vision is mandatory or directory, there is no general rule which may
help. It is the duty of Court to try to get at the real intention of the
legislature by carefully attending to the whole scope of the statute
to be cons.trued. (See Cullimore v. Lyme Regis Corporation. (1) The G
use of the expressioo 'shall' is not considered decisive and the ques·
tion whether a provision is mandatory or directory depends upon the
• intent of the Legislature and not upon the language in which the
' intent it clothed. This Court in State of U.P. & Ors. v. Babu Ram

(I) (1962] 1 Q.B. 718,
sUPRllMB d6tl&t Rl'!POJi.ts [i983j ~ s.e.t.

Upadhaya,(') after referring to Crawford "On the Construction of
Statutes", Craies on "Statute Law", Maxwell on "The Interpretation
of Statutes", State of UP. v. Manbodhan Lal Srivastava(') and
Montreal Street Railway Company v. Nirmandin,( 3) briefly formulated
the relevant rules for interpretation a8 under : ,,
B.
"When a statute uses the word 'shall', primafacie, it is
mandatory but the Court may ascertain the real intention
of the Legislature by carefully attending to the whole scope
of the statute. For ascertaining the real intention of the
Legislature, the Court may consider inter alia, the nature
c and the design of the statute and the consequences which
would follow from construing it the one way or the other,
the impact of other provisions whereby t!:ie necessity of
complying with the provisions in question is avoided, the
circumstance, namely, that the statute provides for a
D contingency of the non-compliance with the provisions, the
fact that the non-compliance with the provisions is or is not
.
visited by some penalty, the sedous or trivial consequences
that flow therefrom and, above all, whether the object of
the Legislation will be defeated or furthered."

E This rule of interpretation was re-affirmed recently in Muni-
cipal Corporation of Greater Bombay v. B. E. S. T, Workers
Union('). In order to as,certain whether rule 9(2)1is mandatory
or directory, the setting in which it is placed, the purpose under-
lying the provision, the object sought to be achieved would help
in determining whether it is mandatory or directory. As we have
F pointed out above that rule 9(2) was an enabling provision con-
feriog power on the State Government to put a person appointed
by direct recruitment on a probation of maximum period of two
years and no consequence of failure to comply with the same is
provided in the relevant rules, the provision appears to be direc:

G
tory. Obviously, the appointing authority having regard to all the
circumstances may not be inclined to prescribe any period of
probation or may prescribe a shorter period of probation. This
power is not taken away by the use of the expression 'shall' in rule
·•
(I) (1961) 2 S.C.R. 679 at 710.
H
ai [1958J 2 s.c.a. 533.
(3) LR (1917) AC 170.
(4) (197313 s.c.a. 288.
A11T SINGH v. PUNJAB (Desai, 1.)

9(2). And let it be remembered that the power of appointment A
is vested in the highest executive namely the State Government
and the power is to be exercised on the recomm~ndation of a
statutory body. Viewed from all these angles, it appears clear to
us that rule 9(2) is directory and confers a discretion on the State
Government to prescribe a period of probation shorter than the
maximum set out in rule 9(2). B
Having clearly ascertained the purpose and intendment under·
lying the concept of probationary period in service jurisprudence,
one can confi~ently say, that it is not absolutely necessary to prescribe
a period of probation in each case and the State Government as
an appointing authority will have discretion in this matter subject c
to rules by which appointment is governed, otherwise the rule would
be counter-productive. Highly qualified and experienced persons
coming into service at a later stage in life like petitoners
' '
Ajit Singh and Rajinder Singh, who after rendering service for a
long period of 26 years came to be appointed as direct recruits,
would be disinclined to be on a probation for a period of two D
years. And the appointing authority, in this case the State Govern·
ment, not any lower officer, noting their worth and value may
either wholly dispense with .the period of probation or reduce it
considerably. If such be the purpose and intendmcnt underlying
> the concept of probationary period, it is reasonable to infer that
in ·respect of such experienced and highly qualified persons, the B
appointing authority the State Government must have prescribed
the period of probation of one year. And that is why uniformly
in each appointment order, the appointee concerned was told that
his period of probation would be one year only. To bold with the
' respondents that this is a typographical-cum-clerical error is such
over simplification as would be doing violence to common sense.
j We arc therefore, of the opinion that in case of each of the
I
appointee, the period of ptobation prescribed was one year only.

t' This conclusion is buttressed by another circumstance appear-
ing in the record. When each of the petitioners completed his one G
.. year of service, which marked the expiration of the period of pro·
bation, an increment was released in his favour. Subject to the
specific rule to the contrary, ordinarily no increment is earned
. during the period of probation. But at any rate, if an increment can
be· earned after the expiry of the period of probation, it would H
depend upon the satisfaction of the appointing authority that the
530 SUPIU!ilB COURT REPORTS [1983J 2 s.C.i.I..

A work and conduct of the probationer was satisfactory. Further
rule 4. 7 of the Punjab Civil Service Rules Vol. 1 provides that
an increment shall ordinarily be drawn as a matter of course, unless
it is withheld. An increment may be withheld from a Government
employee by a competent authority if his conduct has not been good
or his work has not been satisfactory. Now almost all the petitioners
8 completed their. one yeat service by fone, 1980. An increment was
released in favour of each of them. It is implicit in release of incre·
meat that the petitioners bad satisfactorily discharged their duty
during the probation period, and at any rate the work and conduct
was not sho~n to be unsatisfactory, which permitted an increment
c to be earned. Asst1ming, as contended for on behalf of the respon·
dents that period · of probation was two years, the fact that on the
expiry of one year of service an increment was released, would imply
that during the period of one year the work and conduct has not .'
been unsatisfactory. If it was otherwise the release of increment could
have been interdicted on the ground that neither the work nor the
D conduct was satisfactory. The fact that the increment was released
would atleast permit an inference that there was satisfactory comple·
•
tion of the probation period and that during the probationary period,
the work and conduct of each of the petitioner was satisfactory.

If upto the end of June, 1980, the work and conduct of each of
ll the petitioner was satisfactory and if the service of each of them was
simultaneously on the same day Septem her 28, 1980 disi)ensed with
on the ground mentioned in rule 9 (2) (a) in that in the opinion of
the appointing authority, the work and conduct of each of the peti·
tioner was not satisfactory, then between June 1980 and September
F 1980 something was simultaneously done by each of the petitioners
to permit the appointing authority-the State to reach an affirmative
conclusion that the work and conduct, became wholly unsatisfactory {
l
and the degree of dissatisfaction with the service was so high that
the service of all the 11 petitioners recruited on the same day was
required to be dispensed with on identical ground. This is too for·
tuitous to carry conviction.
\'
G
Mr. M.K. · Ramamurthi, in this connection, contended that
there is no satisfactory explanation as to what suddenly occurred in
respect of all the 11 petitioners recruited on the same day to render
H thefr otherwise satisfactory service as unsatisfactory and that too
during the short period after release of increment ? Mr. Ramamurthi
urged that between recruitment and termination of service, the politi·
AllT SINGH v. PUNJAB (/)esai, J.)

· cal hue of the party in power changed. Maybe, there may be some A
substance in the contention, but for paucity of evidence we are not
,)_ inclined to examine this contention. We would rather confine oursel-
ves to the positive averment in the return filed on behalf of the res-
pondents for dispensing with the service of all the petitioners. In
Para 9 of the return, following reasons are assigned for dispensing
with the services of the petitioners : B
"The services of the petitioners have been dispensed
with and not terminated because :-
(i) They had not completed their period of pro-
bation on the date of order; C
"
(ii) .Their services were no longer required as the
Improvement Trusts in the State of Punjab bad been
•• >
dissolved;
(iii) Their continuance in service was only causing
unnecessary burden to the State Exchequer;
D
(iv) They being probationers had no right to the
posts.
(v) Their performance, in the opinion of the
appointing authority, was not upto the mark."
> We will meticulously examine the validity of each one of E
these reasons seriatim.
The first submission is that each of the petitioners had not
completed the period of probation on the date of impugned order.
This proceeds on the assumption that the period of probation was
two years. For the reasons berein·above stated, this submission is F
contrary to the record. If the period of probation was one year as
held by us, indisputably each one of the petitioners had completed
his period of probation on the date of the impugned order. There-
fore this reason is untenable and will have to be ignored.
G
The second reason assigned for the impugned action was that
the services of lhe petitioners were no longer required as the. Impro-
vement Trusts in the State of Punjab had been dissolved. By an order
dated August 11, 1980, Government of Punjab in exercise of the B
power conferred by sec. 103 (I) of the Act dissolved with immediate
effect the trusts therein set out. ,Jn all 21 Trusts were dissolved.
532 SUPlBllE couaT llll1'0ltT$ (19&3! 2 s.c.R ..
A Each Trust had an Executive Officer. If 21 Trusts were dissolved,
21 Executive Officers bc;_came surplus and their services W?uld no
longer be necessary as contendcid on behalf of the respondents. Only
11 direct recruits of 1979 recruitment were adversely affected by the
dissolution of the Trusts in that their services were dispensed with. We
were not informed as to how Trusts Executive Officers of other 10
B Trusts were dealt with, but as petitioners have not made any grievance
in that behalf, we would overlook that aspect. Petitioners on the
contrary contend that dissolution of the Trusts was a device to get
rid of the petitioners. It would be stretching credibility too far to
hold on the material placed before us that the State Government l"ent
to the extreme length of dissolving Trusts to get rid of 11 petitioners,
c though in the circumstances of the case it is equally difficult to disa-
buse our mind that such may be tlie unde_rlying·motive. We are how-
ever determined not to be influenced by the alleged possible moti-
vation. The question is if the Trusts were dissolved, what happened
to the assets, liabilities and the ongoing and continuing functions of
D the Trusts. If the assets, liabilities and ongoing functions were taken
over by some other bodies, but with their own staff carried on the
activities, there would have been some semblence of justi-
fication in the action of the respondent in treating the petitio-
\
ners as surplus and dispensing with the services on that
account. On the contrary, it becomes evident from the record
l!I and it was not disputed that except the 11 Executive Officers-
petitioners herein, all other staff of all the Trusts were
retained and they carried out the functions of the Trust under
the supervision of an officer appointed by !the Municipal Commit-
tee or in some cases by the State Government. It thus unquestion-
ably appears that what was dissolved was the Board of Trustees
and not the Trusts. Only the nomenclature changed. The work con-
tinued. And this is evident from the fact that as late as August 19,
1980, Batala Improvement Trust issued a notice inviting objections
from the public in respect of its development scheme. Similarly on 1.
October 11, 1980 Amritsar Improvement Trust invited applications
for allotment of plots to the local displaced persq,ns. available in
G certain schemes framed by it. We can multiply such illustration.
But we consider it unnecessary to do so. And it is impossible to
believe that on mere dissolution of the Board of Trustees,
all its functions were wound up. As many as
1500 officers and other members of the staff continued
to work for the so-called dissolved Trusts. The only persons whose
services were dispensed with as no more necessary were the

•
- ....
AJlT SINGH v. PUNJAB (Desai, !.) 533

11 petitioners i. e. the direct recruits of 1979. In this back·
-<'i)
•. .
ground, it becomes difficult to escape the conclusion though we are
trying our level best to do so that dissolution of the aTrusts was a
device to get rid of the petitioners. But on that point we say no
more. Mr.•Hardy pointed out that by the Ordinance .No. 6 of
1980 styled as Punjab Town Improvement (Amendment) Ordinance,
1980, sub-sec. (2) was introduced to sec. 103 which took care of B
the situation arising out of the dissolution of the Trusts. It provided
that all properties, funds and dues vested in or realisable by the
Trust and Chairman respectively shall vests in and be realisable by
the State Government till they stand transferred to the Municipal
Committee under sub·sec. 3. Sub-clause (c) ofsub·section (2) enabled
the Government to appoint a Class I Officer of the State Govern-
ment for the purpose of completing the execution of any scheme
which the Trust may be implementing. And 1!u_b·sec. (3) provided
... for the consequsnces after all the functions Eof the dissolved Trusts
were discharged. We fail to see how this section can throw any light
~
I~[-1
.. on the point under discussion? On the contrary, by the very order
dissolving the Trusts, certain officers were appointed in respect of
D
each trust to carry on the functions of the Trusts. Therefore, the
• Trust independent of the Board of Trustees had a corporate person·
ality. It had a perpetual succession and its functions had to be carried
oul They effect of the dissolution of the Trusts was merely dissolving

> the Board of Trustees. The corporate personality of the Trust
remained, inviolate. But the Punjab Government took advantage
of the dissolution order dissolving in effect the Board of Trustees
( and dispensed with the services of 11 petitioners. If the Trusts are
.A.- - functioning, if its schemes are being implemented, if all other staff is
retained, we find it difficult to accept the submission of Mr. ljardy
that the services of the petitioners were no longer required because p
of the dissolution of the Trusts, and therefore the same have
been dispensed with.

The third reason assigned is that their continuance in service was
only imposing an unnecessary burden on the State Exchequer. In
fact this is actually begging the issue. After removing the peti·
G
tloners, 11 other officers were asked to take over the duties of the
petitioners. In the order dissolving the Trusts, it is mentioned
that in exercise of the power conferred by clause (2) (c) of sec. 103
of the Act. the Governor of Punjab is further pleased to direct that
the officers indicated in column 2 shall perform the functions of the B
Trust and the Chairman under the Act. Trust Executive Officer
Wl!S the hi~hest exe\:utive off!cer and qis funvtion js to \le discharged
534 SUPREME COURT REPORTS [1983] Z s.c.11.
A by the newly appointed officer. It is therefore, difficult to accept
the submission that the continued retention in service of the peti- , I '•

tioner after the dissolution of the Trusts was imposing an unneces• ~ '/'
sary burden on the State Exchequer. '

This submission does nor. commend to us for the additional
B reason that the State Exchequer was not responsible for the salary
and perquisites of the Trust EJCecutive Officers, in view of the provi·
sion contained in sub.sec. (4) of sec 17 of the Act which provides
that salary, allowances, gratuity, annuity, pension and other
payments required to be made to the members of the Trust Service
in accordance with the conditions of. their service shall be charged
c from the funds of the Trust in the prescribed manner.

The fourth and fifth grounds for dispensing with the sel'Vices
of the petitioners were that the petitioners being probationers bad no
right to the posts, and their performance in the opinion of the
• ..
D appointing authority was not satisfactory are wholly untenable be-
cause the period of probation had expired and they were continued
in service after allowing each one of them to earn an increment. It is
a permissible inference that till allowing each petitioner to earn his •
increment, his service and work were deemed to be satisfactoty and
nothing is pointed out to us as to what occurred in respect of 11
l!I petitioners simultaneously within hardly a period of less than six
weeks since the release of increment to stigmatise each one of them
that his work and conduct was not satisfactory. Therefore, the con-
clusion is inescapable tba.t none of the reasons assigned for dispen.
sing with the services of the 11 petitioners is tenable.

F
Now if the reasons for dispensing with the services of petitio·
ners are untenable, the question is whether the action of dispensing
with services of the petitioners is arbitrary. Mr. Hardy, learned
counsel for the respondents contended that even if the Court is
satisfied that the reasons set out in the return for dispensing with the
G services of the petitioners are untenable and irrelevant, nonetheless
f;<.
.. \
the Trusts having been dissolved the conclusion cannot be escaped
that services of the petitioners as Trust Executive Officer were no
more necessary and therefore, this Court cannot interfere with the
order dispensing with the services of the petitioners. We remain un-
H convinced. Though there was formal dissolution of Trusts, in effect
and substance the Board of Trustees was dissolved. Corporate perso·
nality of Trusts remained 11nalf~te<1. St11ff r~lllaiqed. fu11c!io11s w~r~
Am SINGH v. PUNJAB (Deaal; .J.) 535

being carried out. By the time the writ petitions came up for
hearing Mr. Ramamulthi pointed out that the Trusts have been re·
constituted and that was not seriously disputed by Mr. Hardy. Fur·
.
A
ther, it is crystal clear that what was dissolved was the Board of·
Trustees and not the Trusts because functions of the Trusts
were being discharged by other officers. The entire staff of the Trusts
except the 11 petitioners was retained. Schemes formulated by the
Trusts were being implemented. In other words, the corporate per· B
sonality remained almost inviolate. Even if we decline to examin.e
the charge of malafides, there are certain aspects herein discussed
which cannot be overlooked and which compulsively and unerringly
point in the direction that the·action was arbitrary. To recapitulate
these circumstances, it is crystal clear that the Board of Trustees was
dissolved, the Trusts without the name of Trust continued, their func- c
tions continued, the staff excluding the II Trust Executive Officers
was retained, and in place of the officers whose services were dispen·
sed with, some other. officers were asked to take over their functions
and duties, and within a short time, the Trusts were formally consti·
tuted. The only effect sought to be achieved by the bizarre exercise
of first acquiring power to disolve the trusts and then c;rdering their D
dissolution was to dispense with service of only 11 Trusts Executive
Officers of 19?9 recruitment. And having achieved the desired result
the Trusts have been reconstituted albeit without showing the fair·
ness of recalling the discharged 11 Trust Executive Officers. There·
fore, without imputing any motive, the conclusion is inescapable that
the action was thoroughly arbitrary and violative of the guarantee of E
equality of opportunity enshrined in Art. 16 read with Art. 14 of the
Constitution and such thoroughly arbitrary action cannot be sustain·
ed, and deserves to be quashed.

The last contention of Mr. Hardy was that in any event even if
the Court comes to the conclusion that the petitioners had completed
the period of probation, yet they would be temporary government
servants and their services were dispensed with after giving them
salary for one month in tieu of notice and as the Trusts no more
exists, they atleast cannot be reinstated. We find no substance in
this contention. We would have been required to examine this con· G
tention in some depth, but we are spared the exercise in view of the
decision of this Court in The Manager, Government Branch Press and
Anr. v. D.B. Belliappa, wherein it was observed as under :

"Conversely, if the services of a temporary government H
~rv~nt ~re termin~ted ~rbitrarily, and l)Ot OJ) the ~round of
536 SUPREME COURT REPORTS [1983) 2 s.c.R.

A his unsuitability, unsatisfactory conduct or the like which
would put him in a class apart from bis juniors in the same
service, a question of unfair discrimination may arise, not-
withstanding the fact that in terminating his service, the
appointing authority was purporting to act in accordance
with the terms of the employment. Where a charge of un-
B fair discrimination is levelled with specificity, or inproper
motives are imputed to the authority making the impugned
order of termination of the service, it is the duty of the
authority to dispel that charge by disclosing to the Court
the reason or motive which impelled it I<) take the impug-
ned action."
.c
We have reached the conclusion that the action was thoroughly
arbitrary and if it is arbitrary, it smacks of discrimination an~ a
discriminatory treatment in the matter of public employment cannot
be overlooked.
D
Accordingly, these petitions must succeed. The order dated
September 25, 1980 dispensing with the service of each of the peti-
tioner is quashed and set aside and it is declared that all the peti- ·~
.tioners continue to be in service and they should be forthwith reins-
tated. By an interim order made by this Court, respondents were
E directed to pay !half the salary to the prtitioners from the date of
dispensing with their services till further orders. Now that it is dec-
lared that the petitioners continue to be in service, each of the
petitioners shall be paid bis full salary with effect from the date of
bis judgment, but, for the period between the date'.of dispensing with
the service and till today, each of the petitioners should be paid only
F half the salary. The respondents shall pay the costs to the petitioners
and bear their own.

P.B.R. Petitions allowed.