Holding

The termination order was vitiated because it was founded on misconduct findings derived from an informal inquiry without a regular departmental inquiry and contained stigma, thus it must be set aside and the appellant reinstated with back wages.

Summary

The appellant, appointed as Office Superintendent on a one‑year probation, was served with several letters alleging misconduct, including preparation of false bills and misbehaviour with women staff, and later an informal inquiry report that labelled him of "dubious character". Despite extensions of his probation, his services were terminated on 30 April 1997 on the ground of unsatisfactory performance. The Supreme Court held that the termination was founded on findings of misconduct that were arrived at without a regular departmental inquiry and that the letters and inquiry report contained stigmatizing language. Consequently, the termination order was set aside, and the appellant was ordered to be reinstated with back wages and continuity of service. The Court also clarified the distinction between "foundation" (misconduct findings) and "motive" (desire to remove an employee) and the meaning of stigma in termination orders.

Issues considered

The termination of a probationer’s services: when is it founded on misconduct versus being a mere motive?
When does an order of termination contain stigma, and can stigma be inferred from documents referred to in the order?
Whether findings of misconduct arrived at in an informal inquiry without a regular departmental inquiry can constitute the foundation for termination.
Whether the appellant is entitled to reinstatement and back wages.

Subjects

service lawtermination of probationdepartmental inquirystigmamisconductinformal inquiryprobation extensionreinstatementback wages

Judgment

A DIPTI PRAKASH BANERJEE
~
v.
<::
SATVENDRA NATH BOSE NATIONAL CENTRE FOR BASIC
SCIENCES, CALCUTTA AND OTHERS.

FEBRUARY 10, 1999
B
(M. JAGANNADHA RAO AND D.P. MOHAPATRA, JJ.)

Service Law-Termination of services of probationer without
departmental enquiry---{Jrder of termination referring to conduct of the
c probationer during the entire period of probation-Probatio11er initially served
a letter maki11g serious allegatio11s of misconduct-Later a11other letter extract-
ing fi11dings of a11 infannal I11qui1y Committee about probationer's involve-
mellt in a scufj1e a11d his "misdeeds" like obtai11i11g false signatures-Whether
such fi11di11gs of misconduct co11stituted 'motive' or 'fou11dation' of the order
of tennination-Held, they constituted the 'fou11datio11' and hence the order
D of tennination required to be set aside.

Service Law-Terniination of services of probationer without •
departme11tal e11quiry---{Jrder of tenni11atio11 referring to an earlier letter ex-
tracting fi11di11gs of a11 earlier infannal I11quiry Committee about probationer's
E involvement in a scuffle and his 'misdeeds' like obtaining false signa-
tures-Held, words used in proceedings referred to in tenni11atio11 order were
in the nature of a stigma; order liable to be set aside 011 that ground as well.

Service Law-Tennination of probationer's services without departmen-
ta/ inquiry-Termi11utio11 held to be illegal-Probationer not gainfully
F employed-Held, probationer entitled to reinstateme11t and backwages till date
of rei11stateme11t from date of tenni11ation a11d to continuity of service.

Service Law-Terminatio11 of services without departmental en-
quiry-When could it be said that misconduct was the 'foundation' of order
or temiination and when 011/y the 'motive' for such tennination-Held, where
G findings of misconduct arrived at in an inquiry behind the back of the
employee, the order of tennination to be treated as 'founded' on such allega-
tion and would be bad; where no inquiry held, the allegatio11s would be a 1
motive a11d the order of tenni11ation would be valid.
•
H Service Law-Tenninatio11 of services without inquiry-Whether words
532
l'

D.P. BANERJEE v. S.N. BOSE NATIONAL CEN'IRE FOR BASIC SCIENCES 533
casting stigma could be gather~d from proceedings leading up to order of A
) tennination even if the order itself contained no such words--Held, yes.

The appellant was appointed on January 11, 1995 as Office Super·
intendent in the respondent organisation, on probation for one year on
condition that he might be confirmed after one year provided the ad-
ministration was satisfied with quality of the appellant's service. In a letter B
to the appellant dated December 11, 1995 the respondent stated that
appellant had prepared false bills and that be had misbehaved with women
academic staff members. The appellant sent a reply denying the allega·
tions. Thereafter the appellant's probation was extended by six months

- from May 2, 1996.

On October 17, 1996 the Director of the Respondent wrote to the
Appellant pointing out 'serious deficiencies' in the latter's performance.
Reference in this letter was made to the findings of an informal inquiry
c

committee which had looked into the appellant's complaint against a
Helper. The letter extracted the findings of the committee to the effect that D
the appellant's behaviour before it was reprehensible; that he had been
involved in a scuffie; that he had committed other 'misdeeds like obtaining
false signatures' and that he was a person of'dubious character'. This was
followed by a report of an Administrative Officeer on October 17, 1996
which was totally in the appellant's favour. On October 31, 1996 the E
appellant's probation was extended for a further period of six months.

By an order dated April 30, 1997, the Appellant's services were
terminated. Reference was made in the order to the appellant's unsatisfac·
tory performance during initial period of probation and to the letter dated
October 17, 1996. The order stated that the respondent had 'closely F
watched and examined your conduct, performance, ability and capacity
during the whole period of probation but your performance is found to be
unsatisfactory and you are considered unsuitable for the post against
which you have been appointed".

The appellant's writ petition challenging the order of termination G
was dismissed by Single Judge of the Calcutta High Court. A Division
Bench of that Court dismissed his further appeal.
•
In this Court it was contended for the appellant that the order of
termination was illegal since the findings arrived at behind his back in an H
534 SUPREMECOURTREPORTS · [1999] 1 S.C.R.

A informal inquiry constituted the foundation of the termination order.
Secondly, the material on which the order of termination was based
contained words amounting to a 'stigma'. For the respondent it was
maintained that it had terminated the appellant's services after giving him
opportunities to improve and it had thus acted fairly. There was no
question of any stigma in the termination order nor was it a case where
B certain findings were arrived at which could be the foundation of the order.

Allowing the appeal, this Court

HELD : 1.1. The definite conclusions of misconduct evident on the
C face of the letter dated 11.12.1995 were part of the foundation of the
impugned order and it was not a case of mere motive. On this ground, the
order requires to be set aside. [552-G-H]

1.2. The findings of the informal inquiry committee were the founda-
tion for the impugned order and could, in law, be arrived at only in a
D regniar departmental inquiry. [553-F]

Bishan' Lal Gupta v. State of Haryana, [1978) 1 SCC 202, referred to.

Hindustan Paper Corporation v. Pumendu Chakraborty, [1996) -11
sec 404, distinguished.
E 1.3. If findings were arrived at in inquiry as to misconduct, behind
the back of the officer or without a regnlar departmental enquiry, the
simple order of termination was to be treated as 'founded' on the allega-
tions and would be bad. But if the inquiry was not held, no findings w~re
arrived at and the employer was not inclined to conduct an inquiry but, at
F the same time, did not want to continue the employee against whom there
1
were complaints, it would only be a case of motive and the order would n ot
be bad. Similar was the position if the employer did not want to inquire
into the truth of the allegations because of delay in regular departmental
proceedings or he was doubtful about securing adequate evidence. In su~h
G a circumstance, the allegations would be a motive and not the foundation
and the sil.nple order of termination would be valid. [545-E-F]

Madan Gopal v. State of Punjab, AIR (1963) SC 531; R.S. Gupta v.
U.P. State Agro Industries Corporation Ltd., J.T. (1998) 8 S.C. 585; Purshot-
tam Lal Dhingra v. Union of India, [1958) SCR 828; State of Orissa v. Ram
H Narayan Das, [1961) 1 SCR 606; Samsher Singh v. State of Punjab, [1974)
D.P. BANERJEE v. S.N. BOSE NATIONAL CENTRE FOR BASIC SCIENCES 535
2 SCC 831; Gujarat Steel Tube v. Gujarat Steel Tubes Mazdoor Sangh, [1980] A
;; SCC 593; State of Punjab v. Sukh Raj Bahadur, [1968] 3 SCR 234 and
A.S. Benjamin v. Union of India, Civil Appeal No.1341 of (1996) dt.13.12.96
SC, referred to.

2.1. The words used in connection with the findings of the Inquiry
• Committee about the scuffie and about the appellant obtaining false B
signatures were in the nature of a stigma. Thus on the ground of 'stigma'
also the impugned order was liable to be set aside. [553-D]

2.2. It depended on the facts and circumstances of each case and the
langnage or words employed in the order of termination of the probationer C
to judge whether the words employed amounted to stigma or not. [549-D-E]

Samsher Singh v. State of Punjab, [1974] 2 SCC 831; Bishan Lal Gupta
v. State of Haryana (supra), [1978] 1 SCC 202; Kamal Kishore Lakshman v.
Pan American world Abways, [1987] 1SCC146; Allahabad Bank Officer's
Association v. Allahabad Bank, [1996] 4 SCC 504; Hari Singh Mann v. State D
of Punjab, [1975] 1 SCC 774; State of Orissa v. Ram Narayan Das, AIR
(1961) SC 177; Ravindra Chandra v. Union of India, AIR (1963) SC 1552;
State of Guja!at v.Akhilesh C. Bhargav, [1987] 4 SCC 482; State of Bihar v.
Gopi Kishore Prasad, AIR (1960) SC 689; Jagdish Mitter v. Union of India,
AIR (1964) SC 449; State of U.P. v. Madan Mohan Nagur, AIR (1967) SC E
1260; Kunwar Arnn Kumar v. U.P. Hill Electronics Corporation, [1997] 2
sec 191; Chandu Lal v. Pan American World Airways, [1985] 2 SCC 727;
Jagdish Prasad v. Sachiv Zila Gaon Committee, [1986] 2 SCC 338; Union
of India v. R.S. Dhabe, [1969] 3 sec 603 and High Court of Judicature at
Patna v. Pandey Madan Mohan Prasad Sinha, [1997] 10 SCC 409, referred
to. F

2.3. Words amounting to 'stigma' need not be contained in the order
of termination but may also be contained in an order or proceeding
referred to in the order of termination or in an annexure thereto and would
vitiate the order of termination. [551 -H; 552-A]
G
Indrapal Gupta v. Managing Committee, [1984) 3 SCC 384; Hindustan
Paper Corporation v. Purendu Chakraborty, [1996] 11 SCC 404; Oil &
Natural Gas Commission v. Md. S. Iskendu, [1980] 3 SCC 428; Unit Trost
of India v. T. Bijaya Kumar, (1992) 5 Serv. L.R. 855 SC; Principal, Institute .
of P.G. Medical Education & Research, Pondicherry v. S. Ande~. [1995] H
536 SUPREME COURT REPORTS [1999] 1 S.C.R.
A Suppl. 4 SCC 609; Oswal Pressure Die Caning Industry v. Presiding Officer,
(1998] 3 sec 225, referred to. .

3. The appellant was entitled to reinstatement and backwages till
date of reinstatement from the date of termination and to continuity of
service. [554-F]
B
State of Haryana v. Jagdish Chander, [1995) 2 SCC 567 and Managing
Director, ECIL v. B. Karunakar, [1993) 4 SCC 727, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 750 of
1999. ;
c
From the Judgment and Order dated 23.4.98 of the Calcutta High
Court in MA.T. No. 1690 of 1997.

J. Gupta, Ms. Rana Mukherjee and Ms. Sumita Mukherjee for the
Appellant.
D
S.K. Jain and AP. Dhamija for the Respondents. !

The Judgment of the Court was delivered by

M. JAGANNADHA RAO, J. Leave granted.
E
This Civil Appeal has been filed by the appellant questioning the
correctness of the judgment of the Calcutta High Court in M.A.T. No.1691)
of 1997 dated 23.4.1998. By that judgment, the Division Bench affirmed t~
judgment of the learned Single Judge dated 15.5.1997 in W.P. No. 8484(\\()
of 1997 dismissing the writ petition tjled by the appellant, a probationer
F and refusing to quash the order dated 30.4.1997, terminating his probatiori.
I
The facts of the case in brief are as follows: '

The appellant was appointed on 11.1.1995 as Office Superintenderit
in the respondent organisation, namely, Sri Satyendra Nath Bose Natiomh
G Centre for Basic Sciences, Calcutta The order of appointment dated
11.1.1995 stated that the appellant would be on probation for one year and
that he might be confirmed after one year provided the administration was
satisfied with the quality of the appellant's service. His pay scale was to be
in the scale of Rs.1400-1600-2300-2600 with allowances. The appellant
H joined on 2.5.1995. As we are concerned with the question of validity of
D.P. BANERJEE'· S.N. BOSE NATIONALCEN1RE F,ORBASIC SCIENCES (M. JAGANNADHARAO, J.] 537

)
the appellant's termination of probation, it is necessary to refer to the A
events that took place during the period of probation.

On 11.12.1995, the Director of the respondent organisation informed
the appellant that the appellant's work was not satisfactory on several
counts. The points mentioned in this letter are as follows:-
B
"(i) Your handling of the movement to the new campus was good
till the good impression was spoiled by your refusal to handle the
furniture in the Director's room and your statements about other
administrative staff members, which were not corroborated by
academic members present. Later movement to the' JD Block by
Prof. A.Mookerjee and the Director's office found you non-
c
cooperative.

(ii) You have been preparing false bills; the fact that they were
passed by your immediate superior does not mitigate your guilt.
D
(iii) Your handling of quotations about cleaning agencies, xerox
machines, purchases of stationery etc. were faulty and several times
you were told to redo the whole job. Unfortunately your perfor-
mance has not improved even after repeated advice.

(iv) You have misbehaved with women academic staff members;
E
one of them has even submitted a written complaint.

(v) You are rather frequently absent from office premises and the
faculty members complained about your absence. Your handling
of the room allocations in the guest house, confirmatory reply to F
.... people asking for accomodation, and general supervision have
been unsatisfactory, In general your attitude to office work leaves
much to be desired.

It is expected that you would rectify the faults noted above and G
improve your performance in the corning months, so that your
confirmation could be favourably considered."

On 30.4.1996, the appellant was informed that he was on probation
and his confirmation would be considered soon. On 15.4.1996, the Director
wrote another letter stating as follows: H
538 SUPREME COURT REPORTS [1999] 1 S.C.R.

A "1. It appears that your attitude concerning the guests for the guest
house has not shown any improvement. When Dr.R.Bhat fell sick
with chicken pox and was in quarantine for three weeks, you were
nowhere to be seen, and the A.O. was also not seen to take any
interest. similarly when a Canadian professor (Professor Dragland)
fell sick, you were not to be found.
B
· Most of the time, you left the work to be done by others, who
had to do extra work for your inefficiency. Y

2. You have not done a proper job of releasing the houses at DB
17 and CD 85. It is known that the date 31.1.1996 is not the actual
c date of release of DB 17 and the landlord showed us proof that
this was so.

3. You have not explained how the revenue stock verification was
done by you and the A.O.
D
Please refer to SNB/DIR/ADM/95- 96/84 dated 20.2.1996 about
stock verification (especially numbering and locating new furni-
ture). Has any progress been made? No activity on this important
job has been noticed by me.

E Please report to me on point 3 by April 16, 1996.

Your performance leaves a lot to be desired and you must show
evidence of good work to the academic staff members to merit
confirmation."

F The appellant submitted an elaborate reply of five pages denying all
the allegations and giving his version of the incidents mentioned against
him, and also sought for a copy of the Written Complaint given by the
woman 'academic' staff member. He pointed out that though as per the
order of the Director, he was to report to the Administrative Officer, the
G Director was perhaps sending the above letters without consulting the said
Administrative Officer.

The report dated 25.4.1996 of the Administrative Officer to the
Director gives a contrary version. It states that the appellant was found to
be an "excellent working hand, conscientious and willing" to take respon-
H sibility, that he had always been discharging his assigned works even
D.P. BANEtUEE '· S.N. BOSE NATIONAL CENTRE FOR BASIC SCIENcES [M. JAGANNADHARAO, J.] 539

) despite constraints, that he was regular and punctual, and was conducting A
himself very well in the discharge of his duties even when there was no
helping hand and that "his service during the period of probation has been
extremely satisfactory".

But the Director issued a further letter dated 30.4.1996 stating that
the appellant's performance during the period of probation had been B
reviewed and stating that "regrettably your performance has been far from
satisfactory", that by letters dated 11.12.1995 and 15.4.1996 his attention
had been drawn to various areas of unsatisfactory performance, but no
improvement was discernible. It was stated that in order to afford the
appellant an opportunity to improve performance and in order to enable c
the organisation to consider the appellant's case favourably for confirma-
tion, his probationary period was being extended by six months from
2.5.1996. The letter stated that it was hoped that the appellant would
improve his performance generally and also in the areas pointed out to
him.
D
On 17.10.1996, the Director wrote to the appellant that the
appellant's performance in the previous six months was again assessed and
that there were 'serious deficiencies' as follows:

"(i) Your attendance to office work has been irregular and per- E
functory. It was found that you had often left the office earlier than
the time you signed in the attendance register.

(ii) You could not complete the job of stock taking of the fixed
stock, marking of furniture, etc. for the whole financial year 1995- p
96. You were told again (letter SNB/DIR/ADM/96-97/52 dated
11.9.1996) but you tried to avoid work by writing irrelevant notes.
There has been no evidence that the work was started for the FY
1996-97.

(iii) Your complaint of 28.5.1996 against Sri P.Chakraborty, He!- G
per, was duly investigated. Your behaviour before the inquiry
committee was reprehensible. It wa:s confinned by the committee
that you were involved in the scuffle and did other misdeeds like
obtaining/alse signature, so that you were characterized as a person
of 'dubious character'. H
540 SUPREME COURT REPORTS (1999] 1 S.C.R.
A
A You are guilty of inefficient performance of duty, irregular
attendance without permission, rude and disorderly behaviour, and
wilful insubordination.

Unless your performance improves considerably it would be
difficult to recommend your confirmation. It is expected that you
B would pay attention to the faults~pointed out to you."

The above letter, it will be seen, refers to an inquiry. The Counter
affidavit filed by the respondent explains that the said report was given by
a High Level Enquiry Committee on 15.7.1996. The Committee was to deal
C with the complaint by the appellant against one Sri P.Chakraborty, a
partially handicapped person. We get some details of the Enquiry report
from the counter affidavit as follows:

"(a) In pursuance of a complaint made by the petitioner against
Shri P.Chakraborty a specific enquiry was made on the following
D questions by a High Level Enquiry Committee consisting of three
high officials, namely (1) Professor (Smt.) Monisha Bose, (2)
Dr.N.Nayak and (3) Dr. D.Gangopadhyay, headed by Prof. (Smt.)
Monisha Bose -

(i) Why Sri P.Chakraborty went downstairs, whether he used
E unacceptable language and whether he was involved in physical
assault, and

(ii) Whether Sri D.P.Banerjee used provocative language and
whether he was involved in physical assault?

F The petitioner was not very cooperative in the enquiry. The
said enquiry committee inter alia made the following recommen-
dation:

Sri D.P.Banerjee was involved in the scuffle and also used Mr.
Pradip Bose to obtain the false signatures. As such, he should surely
G be punished. We recommend that a person of such dubious char-
acter should not be confirmed." •

On 30.10.1996, we have a report of a different kind from the Ad-
ministrative Officer. That report is totally in favour of the appellant. It
H states that, with reference to the letter dated 17.10.1996, the Administrative
:>. D.P. BANERJEE v. S.N. BOSE NATIONAL CENTRE FOR BASIC SCIENCES [M. JAGANNADHA RAO, J.] 541
).
Officer had to state that his earlier note dated 25.4.1996 regarding the A
appellant's performance was obviously not taken into account by the Direc-
tor, that reports were being called on 'selective basis' rather than by
standard format applicable to all employees. He stated that the appellant's
performance was "exemplary, well mannered and disciplined, he had been
discharging his duties conscientiously and diligently''. He referred to some
of the specific items of complaint and stated that there was no truth in
B
them.

Then comes the second order of extension of probation dated
31.10.1996 from the Director extending the probation by another six
months, from 2.11.1996. Appellant was asked to submit an account of his c
monthly work .to Dr. Samir K. Pal, who would judge his performance. The
appellant was asked to improve his performance.

On 29.3.1997, the Director wrote to the appellant that on the basis
of Dr. S.K.Pal's reports, the appellant's performance in regard to stock-
taking or handling quotations was not good and that the appellant must D
.. change his attitude to work, avoid neglect of work allotted, avoid careless-
ness or inefficiency & change his behaviour which often bordered on
insubordination.

It was in this background that on 30.4.1997, the impugned order of
E
..., termination was passed. As the case turns also upon the question whether
this order is vitiated by 'stigma', it is necessary to extract the body of this
letter. It reads:

"4. Since the performance during the initial period of probation
)•
was not satisfactory, by letter no.SNB/PER 4 1201/D0-5 dated 30 F
April 1996 your period of probation was extended by six months
from 2 May 1996.

.... 5. By letter dated 17 October 1996 your attention was drawn to
unsatisfactory performance and the areas of unsatisfactory perfor-
mance were brought to your notice. You were advised to improve G
.. your performance considerably.

6. Since during the extended period also your performance was
not satisfactory, the Management was constrained to further ex-
tend your period of probation and accordingly by letter H
-"\

r-
542 SUPREME COURT REPORTS
r-
(1999) 1 S.C.R.
~
A no.SNB/PER 4 1201/D0-100 dated 31 October 1996 your period /..
of probation was extended further six months.
I-
7. During the period of further extension of probation you could
not improve your performance. I-

B 8. We have closely watched and examined your conduct, perfor-
mance, ability and capacity during the whole period of probation
but your performance is found to be unsatisfactory and you are
•
considered unsuitable for the post against which you have been
appointed. The period of probation was extended with the expec-
c tation that you would improve your performance but there was no
improvement in your performance.

9. Under the circumstances, the Management is unable to confum
your service in the Centre and as such the Management is unable
to continue your service on the expiry of the stipulated period or ,_
D probation on the 1st May 1997 and your service shall stand ter- •
minated after the close of working hours of 1 May 1997. In case • \:
you want to appeal against the decision, you may appeal to the
Governing Body of the Centre.

10. You will be paid one month's pay although the contract of
E
employment does not stipulate any such payment."

It is this order of the respondent that was unsuccessfully challenged
before the single Judge and the Division Bench of the High Court.

F -In this appeal, it is contended by Sri Jaideep Gupta, learned counsel
for the appellant that the order terminating the appellant's probation is
liable to be set aside on two grounds. Firstly, that the findings in the letter
of the Director dated 11.12.95 shows that certain findings arrived at behind
the back of the appellant were the foundation of the impugned order;
secondly, on the ground that it refers to certain communications by the
G Director to the appellant which contain material amounting to 'stigma' and
also because these documents and the record of the case clearly establish
that it is a case where certain findings arrived at in a non-departmental
inquiry were the 'foundation' for the termination and it is not a case where
certain allegations against the appellant could be treated as the 'motive'
H behind the order. He contended that the Administrative Officer's reports
,,

D.P. BANERJEE v. S.N. BOSE NATI0NALCEN1REFORBASIC SCIENCES (M. JAGANNADHA RAO. J.) 543

j in his favour were not considered by the Director. The communications to A
the appellant contaii].ed not only certain allegation but clear adverse find-
ings by the Director as well as by a Committee and they were the founda-
tion. The differences between the Director and the Administrative Officer,
led to the appellant being made the scape-goat.
.
.,
-~ On the other hand, learned senior counsel for the respondent Sri B
--1 P.P.Rao contended that this was a case where the appellant's performance
..,
during probation was not satisfactory, the organisation so informed the
appellant during the first one year period on 11.12.1995 and 15.4.1996 and
1 he was asked to improve. Thereafter on 30.4.1996, his probation was
extended giving him an opportunity to improve. During this six month
period, again the Director wrote on 17.10.1996 pointing out his deficiencies
c
and asking him to improve by giving a further extension of probation on
31.10.1996 by another six months. A note was sent on 29.3.1997 to him
-;
regarding his deficiencies and finally the termination order was passed on
30.4.1997. Therefore the employer acted fairly and there was no question
of any stigma in the order nor was it a case where certain findings were D
arrived at which could be the foundation of the order. If on account of
unsatisfactory performance a probation could not be terminated then it
would lead to serious problems for any employer.

On the basis of the above contentions, the following points arise for
E
consideration:

(1) In what circumstances, the termination of a probationer's services can
be said to be founded on misconduct and in what circumstances could it
be said that the allegations were only the motive?
F
·i- (2) When. can an order of termination of a probationer be said to contain
an express stigma?

(3) Can the stigma be gathered by referring back to proceedings referred
to in the order of termination?
G'
(4) To what relief?

" Point 1:

As to in what circumstances an order.~ termination of a probationer
can be said to be punitive or not depends upon whether certain allegations H
"'I

544 SUPREME COURT REPORTS [1999] 1 S.C.R.

A which are the cause of the termination are the motive or foundation. In ..
this area, as pointed out by Shah, J. (as he then was) in Madan Gopal v. ..
~

State of Punjab, AIR (1963} S.C. 531 there is no difference between cases
where services of a temporary employee are terminated and where a
probationer is discharged. This very question was gone into recently in
R.S.Gupta v. U.P.State Agro Industries Corporation Ltd. & Anr., J.T. (1998}
B 8 S.C. 585 and reference was made to the development of the law from
time to time starting from Purshottam Lal Dhingra v. Union of India, [1958]
SCR 828, to the concept of 'purpose of inquiry' introduced by Shah, J. (as
he then was) in State of Orissa v. Ram Narayan Das, [1961] (1) SCR 606
and to the seven Bench decision in Samsher Singh v. State of Punjab, (1974]
c 2 SCC 831 and to post Samsher Singh case-law. This Court had occasion
to make a detailed examination of what is the 'motive' and what is the
'foundation' on which innocuous order is based.

This Court in that connection referred to the principles laid down by
Krishna Iyer, J. in Gujarat Steel Tube v. Gujarat Steel Tubes Mazdoor Sangh,
D (1980] 2 SCC 593. As to 'foundation', it was said by Krishna Iyer, J. as
follows::

"..... a termination effected because the master is satisfied of the
misconduct and of the desirability of terminating the service ~f the
delinquent servant, it is a dismissal, even if he had the right in law
E
to terminate with an innocent order under the standing order or
.otherwise. Whether, in such a case, the grounds are recorded in
different proceedings from the formal order, does not detract from
its nature. Nor the fact that, after being satisfied of the guilt, the
master abandons the inquiry and proceeds to terminate. Given an
F alleged misconduct and a live nexus between it and the termination
'I
of service, the conclusion is dismissal, even if full benefits as on
simple termination, are given and non-injurious terminology is
used."

and as to motive:
G
"On the contrary, even if there is suspicion of misconduct, the
;
master may say that he does not wish to bother about, it and may
not go into his guilt but may feel like not keeping a man he is not
happy with. He may not like to investigate nor take the risk of
H continuing a dubious servant. Then it is not dismissal but termina-
D.P. BANERJEE, .. S.N. BOSE NATIONALCEN"IRE FOR BASIC SCIENCES (M. JAGANNADHARAO, 1.J 545
tion simpliciter, if no injurious record of reasons or pecuniary A
cut-back on his full terminal benefits is found. For, in fact, mis-
conduct is not then, the moving factor in the discharge."

As to motive one other example is the case of State of Punjab v. Sukh Raj
Bahadur [1968] 3 SCR 234 where a charge memo for a regular inquiry was
served, reply given and at that stage itself the proceedings were dropped B
and a simple termination order was issued. It was held, the order of simple
termination was not founded, on any findings as to misconduct. In that case,
this Court referred to A.S'. Benjamin v. Union of· India, Civil .Appeal
No.1341 of (1966) dt. 13.12.1966 (SC) where a charge memo was issued,
explanation was received, an inquiry officer was also appointed but before c
the inquiry could be completed, the proceedings were dropped and a
simple order of termination was passed, the reason for dropping the
proceedings was that "departmental proceedings will take. a much longer
time and we are not sure whether after going through all the foundation,
we will be able to deal with the accused in the way he deserves',
D
The termination was upheld.

If findings were arrived at in inquiry as to misconduct, behind the
back of the officer or without a regular departmental enquiry, the simple
order of termination is to be treated as 'founded' on the allegations and E
will be bad. But if the inquiry was not held, no findings were arrived at and
the employer was not inclined to conduct an inquiry but, at the same time,
he did not want to continue the employee against whom there were
complaints, it would only be a case of motive and the order would not be
bad. Similar is the position if the employer did not want to inquire into the
truth of the allegations because of delay in regular departmental proceed- F
ings .or he was doubtful about securing adequate evidence. In such a
circumstance, the allegations would be a motive and not the foundation
and the simple order of termination would be valid.

In the light of the ~bove principles, laid down in R.S.Gupta's case we
do not think anything more is to be added. Point 1 is decided accordingly. G
Points 2:

In the present case before us, the order of termination dated 30.4.97
is not a simple order of termination but is a lengthy order which we have H
/\

546 SUPREME COURT REPORTS [1999] 1 S.C.R.
A extracted above. It not only says that performance during probation is not
satisfactory but also refers to a letter dated 30.4.1996 by which the period
of probation was extended by six months from 2.5.1996, and to letters dated
17.10.96 and 31.10.96. I.t concludes by saying that the appellant's 'condu..t,
performance, ability and capacity duritig tlie whole period of probation was
B not satisfactory and that he was considered 'unsuitable' for the post for
which he was appointed.

The contention for the appellant is that if the appellant is to seek
employment elsewhere, any new employer will ask the appellant to provide
the copies of the letters dated 30.4.96, 17.10.96 and 31.10.96 referred to in
C the impugned order and that if the said letters contain findings which were
arrived at without a full fledged departmental inquiry, those findings will
amount to stigma and will come in the way of his career.

In the matter of 'stigma', this Court has held that the effect which an
order of termination may have on a person's future prospects of employ-
D ment is ·a matter of relevant consideration. In the seven Judge case in
Samsher Singh v. State of Punjab, (1974] 2 SCC 831, Ray, CJ observed that
if a simple order of termination was passed, that would enable the officer
to "make good in othet walks of life without a stigma. "It was also stated
in Bishan Lal Gupta v. State of Haryana, [1978] 1 SCC 202 that if the order
E contained a stigma, the termination would be bad for "the individual
concerned must suffer a substantial loss of reputation which may affect his
future prospects".

. There is, however, considerable difficulty in finding out whether in a
given case where the order of termination is not a simple order of termina-
F tion, the words used in the order can be said to contain a 'stigma'. The
other issue in the case before us is whether - even if the words used in the
order of termination are innocuous, -the court can go into the words used
or language employed in other orders or proceedings referred to by the
employer in the order of termination?
G As to what amounts to.stigma has been considered in Kamal /(jshore
Lakshman v. Pan American World Airways, (1987) 1 SCC 146. This Court
explained the meaning of 'stigma' as follows {p150):

"According to Webster's New World Dictionary, it (stigma) is
H something that detracts from the character or reputation of a
D.P. BANERJEE v. S.N. BOSE NATIONA LCENTRE FOR BASIC SCIENCES (M. JAGANNADHA RAO, J.] 547

person, a mark, sign etc., indicating that something is not con- A
sidered normal or standard. The Legal Thesuras by Burton gives
the meaning of the word to be blemish, defect, disgrace, disrepute,
imputation, mark of disgrace or shame. The Webster's Third New
International Dictionary gives the meaning as a mark or label
indicating a deviation from a norm. According to yet another
dictionary 'stigma' is a matter for moral reproach."
B

Similar observations were made in Allahabad Bank Officer's Association v.
Allahabad Bank, [1996) 4 SCC 504.

At the outset, we may state that in several cases and in particular in C
State of Orissa v. Ram Narayan Das, AIR (1961) S.C. 177, it has been held
that use of the word 'unsatisfactory work and conduct', in the termination
order, will not amount to stigma.

We may advert to a few cases on the question of stigma. We shall D
refer initially to cases where a special Rule relating to termination of
probationer required a particular condition to be satisfied and where the
said condition was referred to in the order of termination. In Hari Singh
Mann v. State of Punjab, [1975) 1 SCC 774, the probationer was governed
by Rule S(b) of the Punjab Service Rules, 1959 and the fact that the word E
'unfit' as required by the Rules was used, was held not to be a ground for
quashing the order on the ground of 'stigma', for to hold that it amounted
to 'stigma' would amount to robbing the authority of the right under the
rule. Similarly where a Rule required a show cause notice issued and an
inquiry to be conducted before terminating probation, such as Rule 55-B
of the Central Civil Services (CCA) Rules, there would be no question of F
characterising the simple order of termination as one founded on the
allegations which were the subject of the inquiry. That was because, in such
a case, the purpose of the inquiry was to find out if the officer was to be
continued in service and not to find out if he was guilty State of Orissa v.
Ram Narayan Das, AIR (1961) SC 177; Ravindra Chandra v. Union of G
India, AIR (1963) S.C.1552. In State of Gujarat v. Akhilesh C. Bhargav,
[1987] 4 SCC 482, the termination order merely referred to Rule 12(bb) of
the Indian Police Service (Probationer-) RUies 1959. It was contended that
the reference to the said Rule 12(bb) itself amounted to a stigma but this
was rejected following Ram Narayan Das case. H
548 SUPREME COURT REPORTS [1999] 1 S.C.R.
A We shall next advert to some more cases and to particular words
employed while passing orders of termination of probationers. In State of
Bihar v. Gopi Kishore Prasad, AIR (1960) S.C. 689, a show cause notice
was given seeking a reply to the allegation regarding the officers' bad
reputation and in regard to .certain perverse decisions given by him in his
B Judicial functions during the period of probation. The termination order
stated that certain facts were brought to the notice of the Government
about his unsatisfactory work and conduct and that grave doubts had arisen
about his integrity which indicated that he was a corrupt and an unreliable
officer. It was also said that confidential inquiries revealed that he was a
corrupt officer and that annual confidential reports of his superior officer
C referred to his bad reputation and therefore his work during the period· of
probation was not satisfactory. The Constitution Bench of this Court held
that it was a clear case of stigma and the matter indeed required a full
fledged departmental inquiry under Rule 55 of the CCS (CCA) Rules. In
Jagdish Mitter v. Union of India, AIR (1964) S.C. 449 the use of the words
D "undesirable to be continued" in service was held by the Constitution Bench
to amount to stigma. This case was followed in State of U.P. v. Madan
Mohan Nagur, AIR (1967) S.C. 1260 where the order said that the officer
had 'outlived his utility' and such an order was held to amount to a stigma.
Jagdish Mitter was approved by the Seven Judge Bench in Samsher Singh's
E case on this point. But in Kunwar Arnn Kumar v. U.P. Hill Electronics
Corporation, [1997] 2 SCC 191, the termination order used the word
'unsatisfactory' and the same was upheld as it did not amount to stigma.
In two cases arising under industrial law, one in Chandu Lal v. Pan
American World Airways, [1985) 2 SCC 727 and Kamal Kishore Lakshman
F v. Pan A'!lerican Land Ways Inc., [1987) 1SCC146 where the termination
order used the word 'loss of confidence', the said orders were held to
contain stigma and therefore punitive. In Jagdish Prasad v. Sachiv Zila
Gaon Committee, [1986] 2 SCC 338, the termination order stated that the
officer had concealed certain facts relating to his removal from an earlier
service on charge of corruption and therefore not suitable for appointment.
G This was held to amount to stigma. But in Union of India v. R.S.Dhabe,
[1969) 3 sec 603 where the order merely said 'found unsuitable', it was
held not to amount to stigma. In Allahabad Bank Officers Association v.
Allahabad,Bank, [1996) (4) SCC 504, the order was one of compulsory
retirement and said that a Special Committee had unanimously recom-
H mended for the officers' compulsory retirement, that the Chairman and

'·
D.P. BANERJEE v. S.N. BOSE NATIONAL CENTRE FOR BASIC SCIENCES (M JAGANNADHA RAO, J.] 549

Managing Director agreed with the Committee's views regarding 'want of A
application to Bank's work and lack of potential and that the officer was
also found to be not 'dependable'. This Court after referring to a number
of cases explained that the words 'not dependable' were used, in the context
of theiacts of the case and not as an aspersion on his reputation but in relation
to his work and were to be understood in that sense in the setting of the words
B
'want of application' and or 'lack of potential'. H was observed:

"Any person reading the letter on. the order of compulsory retire-
ment would not be led to believe that there was something wrong
with Appellant 2 as regards his conduct or character. They would
only indicate that he had ceased to be useful to the Bank in his c
capacity as a Manager".

Again in High Court of Judicature at Patna v. Pandey Madw1 Mohan Prasad
Sinha & Others, (1997] 10 SCC 409, it was held that termination of
probationer on basis of uncommunicated adverse remarks, was valid.
D
Thus, it depends on the facts and circumstances of each case and the
language or words employed in the order of termination of the probationer
to Judge whether the words employed amount to stigma or not. Point 2 is
decided accordingly.
E
Point 3:

The next question is whether the reference in the impugned order to
the three earlier letters amounts to stigma if those three letters contained
anything in the nature of a stigma even though the order of termination
itself did not contain anything offensive. F
Learned counsel for the appellant relies upon liuirapal Gupta v.
Managing Committee, (1984] 3 SCC 384 decided by a three Judge Bench
of this Court. In that case the order of termination of probation, which is
extracted in the judgment, reads as follows :
G
"With reference to the above (viz. termination of service as Prin-
cipal), I have to mention that in view of the resolution No.2 of the
Managing Committee dated April 27, 1969 (copy enclosed) and
subsequent approval by the D.1.0.S., Bulandshahar, you are hereby ·
informed that your service as Principal of this Institution is ter- H
550 SUPREME COURT REPORTS (1999] 1 S.C.R.

A minated ..... "

Now the copy of Resolution of the Managing Committee appended to the
order of termination stated that the Report of tb.e Manager was read at
the meeting and that the "facts contained in the Report of the Manager
,I..

-
being serious and not in the interests of the institute, that ther9ore the
B Committee unanimously resolved to terminate his probation." The Report
of the Manager was not extracted in the enclosure to the termination order
but was extracted in the Counter filed in the case and read as follows:
..
"It will be evident from the above, that the Principal's stay will not
be in the interest of the Institution. It is also evident that the serious.
c view of the lapses is enough to justify dismissal but no educational
institution should take all this botheration. As such my suggestion
is that our purpose will be served by termination of his services.
Why, then, we should enter into any botheration. For the termina-
tion of his petiod of probation, too, the approval of the D IOS will
D be necessary. Accordingly, any delay in the matter may also be
harmful to our interests.

Accordingly, I suggest that instead of taking serious action, the
period of probation of Sri Inder Pal Gupta be terminated without
waiting for the period to end."
E
It was held by Venkataramiah, J. (as he then was) (p. 392) that the letter
of termination referred to the resolution of the Managing Committee, that
the said resolution was made part of the order as an enclosure and that
the Resolution in its turn referred to the report of the Manager. A copy
F of the Manager's report had been filed alongwith the counter and the said
report was the 'foundation'. Venkataramiah, J. (as he then was) held that ..
the Manager's report contained words amounting to stigma. The learned
Judge said: "This is a clear case where the order of termination issued is
merely a camouflage for an order imposing a penalty of termination of
service on the ground of misconduct", that these findings in the Manager's
G report amounted to a 'mark of disgrace or infamy' and that the appellant
there was visited with evil consequences. The officer was reinstated with
~
all benefits of backwages and continuity of service. ~

'
.t will be seen from the above case that the resolution of the committee
H /was part of the termination order being an enclosure to it. But the offensive
D.P. BANERJEE'· S.N. BOSE NATIONAL CEN1RE FOR BASIC SCIENCES [M. JAGANNADHA RAO, J.) 551

part was not really contained in. the order of termination nor in the A
Resolution which was an enclosure to the order of termination but in the
Managers's report which was referred to in the enclosure. The said report
of the Manager was placed before the Court along with the counter. The
allegations in the Manager's report were the basis for the termination and
the said report contained words amounting to stigma. The termination
B
order was, as stated above, set aside.

The above decision is, in our view, clear authority for the proposition
that the material which amounts to stigma need not be contained in the
order of termination of the probationer but might be contained in any
document referred to in the termination order or in its Annexures. Ob- c
viously such a document could be asked for or called for by any future
employer of the probationer. In such a case, the order of termination would
stand vitiated on the ground that no regular inquiry was conducted. We
shall presently consider whether, on the facts of the case before us, the
documents referred to in the impugned order contain any stigma.
D
It was in this context argued for the Respondent that the employer
in the present case had given ample opportunity to the employee by giving
him warnings, asking him to improve and even extended his probation twice
and this was not a case of unfairness and this Court should not interfere.
It is true that where the employee had been given suitable warnings, E
requested to improve, or where he was given a long rope by way of
extension of probation, this Court has said that the termination orders
cannot be held to be punitive. Hindusian Paper Corporation v. Purendu
Chakraborty, [1996] 11 SCC 404. See in this connection, Oil & Natural Gas
Commission v. Md. S.Iskendu, [1980) 3 SCC 428, Unit Tmst of India v. T.
Bijaya Kumar, [1992] 5 Serv. L. R. 855 SC; Principal, Institute of P.G.Medi- F
cal Education & Research, Pondichery v. S. A11del & Others, [1995) Suppl.
4 SCC 609 and a labour case Oswal Pressure Die Carting llldustry v.
Presiding Officer, (1998) 3 SCC 225. But in all these cases, the orders were
simple orders of termination which did not contain any words amounting
to stigma. In case we come to the conclusion that there is stigma in the
impugned order, we cannot ignore the effect it will have on the G
probationer's future whatever be earlier opportunities granted by the
respondent organisation to the appellant to improve.

On this point, therefore, we hold that the words amounting to
'stigma' need not be contained in the order of termination but may also be H
552 SUPREME COURT REPORTS f1999] 1 S.C.R.
A contained in an order or proceeding referred to in the order of termination
or in an annexure thereto and would vitiate the order of termination. Point
3 is decided accordingly.

Point 4:

B Under this point, two aspects of the case fall for consideration, firstly
whether the impugned order is founded on any conclusions arrived at by
the employer as to his misconduct or whether the termination was passed
because the employer did not want to continue an employee against whom
there were some complaints. The second aspect is whether there is any
C stigma in the order of termination or in the documents referred to in the
termination order.

Taking up the first aspect, we have noticed that during the first one
year of probation, a letter dated 11.12.95 was served on the appellant. That
letter stated, among other things, that the appellant 'prepared false bills'
D and that he "misbehaved with women academic staff members". The appel-
lant sent a reply denying the allegation and he also sought for a copy of
the complaint said to have been given by the lady academic staff member.
It is true that subsequently, there were two orders of extension of probation
each for six months. But in the impugned order dated 30.4.97, it was stated
in para 8 that the order of termination was being passed because of the
E 'conduct', performance, ability and capacity of the appellant during the
"whole period''. This would clearly take in the facts stated in the letter dated
11.12.95. It is obvious that findings of preparation· of false bills or of
misbehaviour with women which ought to be arrived at only in a regular
departmental inquiry, were referred to in this letter without any inquiry. It
will be noticed that the letter dated 11.12.95 does not merely say that there
F are such complaints against the appellant but it says conclusively that the
appellant had "prepared false" bills and "misbehaved" with women
academic staff members.

The above language in the letter dated 11.12.95 would clearly imply
G that this was not a case of any preliminary fmdings. If these were referred
to as mere allegations, it would have been a case of motive. But as these
definitive conclusions of misconduct are evident on the face of this letter
dated 11.12.95 and this letter falls within the "whole period", the conclusion
is inescapable that these findings were part of the foundation of the
impugned order and it is not a case of mere motive. On this ground, the
H order requires to be set aside.
D.P. BANERJEE'· S.N. BOSE NATIONAL CENTREFORBASIC SCIENCES [M. JAGANNADHA RAO, J.J 553

We shall next take up the second aspect relating to stigma. We shall A
assume that the words used in the impugned order do not contain any
stigma. We shall then refer to the three other letters to which the order
makes a reference. In the first letter dated 30.4.96, we do not find anything
objectionable. Coming to the next letter, we however find that para (iii)
refers to the scuffle between the appellant and one P.Chakraborty regard-
ing which the appellant made a complaint on 28.5.96. An Inquiry Commit-
B
tee is said to have been appointed and it gave a Report. The extract from
the report of the Committee dated 15.7.1996 is found in the Counter of the
respondents. The Inquiry Committee found the appellant's "behaviour
reprehensible", and it confinned that the appellant was involved in a scuffle
and did misdeeds like obtaining false signatures", and said that the appel- c
lant was "guilty of inefficient performance or duty, irregular attendance
without permission, rude and disorderly behaviour and wilful insubor-
dination". Whatever may be said about the other words, the words used in
connection with the finding of the Inquiry Committee about the scuffle and
about the appellant obtaining false signatures, are, in our opinion, clearly D
in the nature of a stigma. Further, the Inquiry Committee said he must be
'punished'. It did not say that proceedings for disciplinary action were to
be initiated. Thus on the ground of 'stigma' also the impugned order is
liable to be set aside.

It was argued that the appellant was given notice of the above Inquiry E
by the Committee but he was 'not cooperative'. In our view findings arrived
at by such an informal Committee against the appellant, which Committee
was, in fact, constituted on a complaint by the appellant agains Mr.
Chakraborty, - cannot be used for terminating the appellant's probation,
without a proper departmental inquiry. The said findings, in our view, were p
the foundation for the impugned order among other facts. Such findings
must, in law, be arrived at only in a regular departmental inquiry.

As pointed out in Bishan Lal Gupta v. State of Haryana, [1978] 1 SCC
202, an ordinary inquiry by a show cause might be sufficient for the purpose
of deciding whether the probatiioner could be continued. But where the G
findings regarding misconduct are arrived at without conducting a regular
departmental inquiry, then the termination order will be vitiated. The
learned senior counsel for the respondent relied upon Hindustan Paper
Corporation v. Pumendu Chakraborty, [1996] 11 404 where it was held that
for termination of 'lien', no detailed inquiry was necessary and that if tha:t H
)

554. SUPREME COURT REPORTS [1999) 1 S.C.R.
A be the position, termination of probation stands on a lesser footing. But
the case turned upon a special Rule in that case which specifically provided
that for 'termination of lien' a regular inquiry was not necessary. That case
cannot therefore be of any assistance to the respondents. -

B We do not find anything objectionable in the third letter dated
31.10.96 but the second letter, as stated above, is clearly objectionable.

For the aforesaid reasons, the imugned order is liable to be set aside.

C Learned senior counsel for the respondent submitted on the basis of
State of Haryana v. Jagdijh Chander, [1995) 2 SCC 567, that merely because
an order of termination was set aside on grounds of lack of opportunity, it
was not necessary to direct reinstatement and back wages. Reliance in
Jagdish Chandra's case was placed upon Managing Director, ECIL v. B.
Kanmakar, [1993) 4 sec 727. It is true that such an order not granting
D reinstatement or back wages was passed inlagdish Chander's case following
Kmunakar's case. But it has to be noticed that in Karnnakar's case, there
was a regular departmental inquiry but the inquiry report was not given to
the officer. This Court directed the report to be given and set aside the
proceedings from that stage and stated that no order for reinstatement or
E backwages need be passed at that stage. But in cases like the present where
no departmental inquiry whatsoever was held, Kmunakar's case, in our
view, cannot be an authority. As to backwages, on facts, the position in the
present case is that there is no material to say that the appellant has been
gainfully employed. The appellant is, therefore, entitled to reinstatement
and backwages till the date of reinstatement from the date of termination
F and to continuity of service. Point 4 is decided accordingly.

For the aforesaid reasons, the appeal is allowed, the Judgments of
the Division Bench & learned Single Judge of the High Court are set aside,
the impugned order of termination is quashed, and the appellant is hereby
G directed to be reinstated with backwages till the date of reinstatement and
continuity of service. It will be open to the respondents to take such action
as they may deem fit in accordance with law against the appellant. The .-.. -
appeal is allowed as stated above. There will be no order as to costs.

S.M. Appeal allowed.