TaxTMI 
TaxTMI 
2010 (12) TMI 97
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....ued by the first respondent, Department of Revenue, by which the period of probation of the Applicant as Member (Judicial) in the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has been extended retrospectively for a period of two years simultaneously; and (b) Order number 5 of 2009 issued by the first Respondent, whereby the Applicant has been discharged forthwith from service as Member (Judicial) in the CESTAT, under Rule 8(3) of the Customs, Excise and Service Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1987 (hereafter the Rules of 1987)." 2. The CESTAT was created by introducing Sections 129 to 129E in the Customs Act, 1962 to hear appeals against the orders passed by the Commissioners of Customs and Excise (Service Tax included later on), which were being heard by the High Courts under their writ jurisdiction. The appeals lie directly to the Honourable Supreme Court in cases involving valuation or rate of duty and to the Honourable High Courts in other cases. The eligibility conditions for being Judicial Member of the CESTAT prescribed in the Rules of 1987 are : "(i) for being eligible for Judi....
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.... of them during his tenure of service as Member (Judicial). The Applicant also got his increment in his salary. Just when he assumed that his probation would have come to an end, to his utter chagrin he received the order dated19-11-2009extending his probation first up to21-11-2008and then further up to21-11-2009. The Applicant tendered his resignation from the post of Member on20-11-2009(Annex A-8). However, the order number 5 of20-11-2009discharging the Applicant from service was issued. The Applicant withdrew his resignation by letter dated23-11-2009under Rule 9 (2) of the Rules of 1987, within the prescribed period. 3. The learned counsel for the Applicant has drawn our attention to the note dated26-11-2007in file number F.No. 27/22/2005-Ad.1C, obtained under the Right to Information Act, 2005, in which it has been mentioned that action for initiation of the process of confirmation of the Applicant, which was due on22-11-2007, would be initiated in a new file. On23-1-2008a noting was made for calling for the ACRs of the Applicant and two other Members. On6-6-2008Justice S.N. Jha, President of the CESTAT, wrote to the Secretary, Department of Revenue, requesting him to take s....
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....petitioners completed his one year of service, which marked the expiration of the period of probation, 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 depend upon the satisfaction of the appointing authority that the 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 completed their one-year service by June 1980. An increment was released in favour of each of them. It is implicit in release of increment that the petitioners had satisfactorily discharged their duty during the probation period, and at any rate the work and conduct was not shown to be unsatisfactory, which permitted an increment to be earned. Assuming, as contended for on behal....
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....ted15-4-1959, the learned counsel would contend that the probation should not be extended as a matter of routine. The said instructions are extracted below : "Confirmation of probationers - A person appointed against a permanent post as a direct recruit with definite conditions of probation is to be confirmed in the grade with effect from the date on which he successfully competes the period of probation. The decision whether he should be confirmed or his probation extended should be taken soon after the expiry of the initial probationary period, i.e., ordinarily within 6 to 8 weeks and communicated to the employee together with the reasons in case of extension. Even though the meetings of the DPC may be held after the termination of the period of probation of direct recruits, a person appointed against a permanent post with definite conditions of probation is to be confirmed in the grade with effect from the date on which he successfully competes the period of probation. A probationer who is not making satisfactory progress or who shows himself to be inadequate for the service should be informed of his shortcomings well before the expiry of the original probationary period so t....
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....rned it is noteworthy that when the High Court considered the matter on21-3-1985the appellant's annual report was available only for the first year of his service namely 1983-84. The report for that year was satisfactory. Entry for the year 1984-85 was awarded by Justice S.P. Goyal who was Inspecting Judge on15-4-1985. He awarded Grade 'B' plus to the appellant which means that appellant's work was good. But this entry could not be taken into consideration by the High Court as it had already taken the decision on21-3-1985to dispense with the appellant's services. We are distressed to find that when the aforesaid entry for 1984-85 came up for consideration before the full court of the High Court it modified the same and down-graded the entry from 'B' plus to 'C' which means appellant's work was unsatisfactory. During the hearing we asked the learned counsel appearing for the High Court to produce material on the basis of which the High Court modified the entry given by Justice S.P. Goyal for the year 1984-85 but he was unable to place any material before us to support the decision of the High Court in modifying the entry. The modification of the entry is therefore without any materi....
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....ion his overall unsatisfactory performance. He requested for the discharge of the Applicant from the CESTAT "in the best interest of our institution." The President also mentioned in the aforementioned communication that many of the orders passed by the Applicant ex facie disclose that he entertains appeals against the orders of the Commissioner (Appeals), which is specifically barred under Section 35C of the Central Excise Act, 1944 and he invariably interface in such orders. It was also stated that in spite of being assigned the work of Single Member, he entertains and decides the appeal which are to be heard by a Division Bench. It was further mentioned that the jurisdiction of the Single Member Bench was restricted to the maximum limit of Rs. 10 lakhs. 6. The learned counsel for the Applicant submitted that no specific order of the Applicant had been mentioned and, therefore, it would be difficult to deny or explain the allegation regarding transgression of jurisdiction. However, it was contended that the point regarding the absence of jurisdiction had never been taken in appeal by the Respondents before the higher judicial forum. He would contend that several precedent....
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....r period of one year after completion of an year in November 2007, the Applicant would be deemed to have been confirmed. Reliance has been placed on State ofPunjabv. Dharam Singh, AIR 1968 SC 1210, in which the Honourable Supreme Court has observed in paragraph 5 and 9 as under : "5. In the present case, Rule 6(3) forbids extension of the period of probation beyond three years. Where, as in the present case, the service rules fix a certain period of time beyond which the probationary period cannot be extended, and an employee appointed or promoted to a post on probation is allowed to continue in that post after completion of the maximum period of probation without an express order of confirmation, he cannot be deemed to continue in that post as a probationer by implication. The reason is that such an implication is negatived by the service rule forbidding extension of the probationary period beyond the maximum period fixed by it. In such a case, it is permissible to draw the inference that the employee allowed to continue in the post on completion of the maximum period of probation has been confirmed in the post by implication. 9. Immediately upon completion of the ....
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.... was discussed. However, the argument regarding deemed confirmation has been revived by the learned counsel for the Applicant citing the judgment of Dharam Singh (supra). 8. The Respondents would contend that the reliance of the Applicant on the notes in the file on the subject of confirmation is futile because the process of confirmation was far from complete even in May 2009, as would be seen from the note dated 11-5-2009, placed at page 156 of the paper book, in which it was mentioned that the comments from the President, CESTAT, were still awaited. A reminder was sent to the CESTAT in this regard. It was contended that grant of increments does not ipso facto mean confirmation. The learned counsel for the Respondents would contend that the case of Ajit Singh (supra) was not a case for the proposition that if an employee earned an increment than he/she would be considered to have been confirmed. It was submitted that, as recorded in paragraph 5 of the judgment in the above cited case, the controversy was regarding the period of probation of each of the appointee. Paragraphs 7, 9 and 10 of the judgment have been cited to illustrate the above point : "7. When the ma....
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....ng 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. ...      ...      ... 9. Having clearly ascertained the purpose and intendment underlying the concept of probationary period in service jurisprudence, one can confidently 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 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 petitioners 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 years. And the appointing authority, in this case the State Government, not any lower officer, noting their worth and value may either wholly dispense with the period of probation or reduce it conside....
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....hat the increment was released would at least permit an inference that there was satisfactory completion of the probation period and that during the probationary period, the work and conduct of each of the petitioner was satisfactory." It was further contended that in case of the probationer it would not be necessary to advise him/her about his shortcomings in work. The Respondents have placed reliance on High Court of Judicature at Patna v. Pandey Madan Mohan Prasad Sinha and Others, (1997) 10 SCC 409, in which the Honourable Supreme Court has held thus in paragraphs 6 and 7 of the judgment : "6. An order terminating the services of a probationer can be questioned only if it is shown that it has been passed arbitrarily or has been passed by way of punishment without complying with the requirements of Article 311(2) of the Constitution. Since a probationer has no right to hold the post on which he has been appointed on probation, he cannot claim a right to be heard before an order terminating his services is passed. The obligation to communicate the adverse material to a person before taking action against him on the basis of the said material is a facet of the principle....
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....e 55-B, this court held that the government employee was entitled to be informed of the grounds on which his services were sought to be terminated and given an opportunity to show cause against the same. The said decision cannot be construed as laying down a general proposition that in every case where services of a probationer are terminated during the period of probation, he must be apprised of the grounds for such proposal and given an opportunity to show cause against it. Since there is no provision similar to Rule 55-B in the rules governing the post of Munsif on which Respondent 1 had been appointed on probation, he cannot seek any assistance from the said decision of this court." (emphasis added) Reliance has also been placed on Progressive Education Society and Another v. Rajendra and Another, (2008) 3 SCC 310, in which it was held thus in paragraph 15 of the judgment : "15.....The law with regard to termination of the services of a probationer is well established and it has been repeatedly held that such a power lies with the appointing authority which is at liberty to terminate the services of a probationer if it finds the performance of the probationer to be unsati....
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.... to the respondent herein. Since the overall performance of the respondent was found to be unsatisfactory by the High Court during the period of probation, it was decided by the High Court that the services of the respondent during the period of probation of the respondent be terminated because of his unsuitability for the post. In this view of the matter, order of termination simpliciter cannot be said to be violative of Articles 14, 16 and 311 of the Constitution. The law on the point is crystallised that the probationer remains a probationer unless he has been confirmed on the basis of the work evaluation. Under the relevant Rules under which the respondent was appointed as a Civil Judge, there is no provision for automatic or deemed confirmation and/or deemed appointment on regular establishment or post, and in that view of the matter, the contentions of the respondent that the respondent's services were deemed to have been continued on the expiry of the probation period, are misconceived. (emphasis added) It was further contended that the arguments about deemed confirmation are merely academic in the present context considering the fact that the Applicant had not complet....
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....ns of Article 311(2) he can claim protection." Reliance has also been placed on Rajesh Kohli v. High Court of J and K and Another, 2010 (10) SCALE 134. The contentions of the petitioner had been noted in paragraphs 6 and 8 of the judgment as follows : "6. Further, during the period when the petitioner was posted to District Kargil as Principal District & Sessions Judge, he did not join there, w.e.f., 24-12-2001 to 18-1-2002 and an explanation was sought from him in that regard. Even thereafter, a complaint from a judicial employee of District Kargil was received wherein it was alleged that the petitioner had been abusing the employees and had created lot of problems at the District Kargil. These matters are recorded in the personal records of the petitioner. After completion of the initial two years of his probationary period, his records and his case were required to be placed beforeFull Courtfor consideration of his case for confirmation or extension of period of probation or otherwise. Consequently his records were considered by the High Court in its full court meeting held on26-4-2003atJammu, wherein it was resolved as under :- "..........................resolved ....
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..............A reading thereof would clearly indicate that every candidate appointed to the cadre shall undergo training initially for a period of six months before he is appointed on probation for a period of two years. On his completion of two years of probation, it may be open to the High Court either to confirm or extend the probation. At the end of the probation period, if he is not confirmed on being found unfit, it may be extended for a further period not exceeding two years. It is seen that though there is no order of extension, it must be deemed that he was continued on probation for an extended period of two years. On completion of two years, he must not be deemed to be confirmed automatically. There is no order of confirmation. Until the order is passed, he must be deemed to continue on probation. 5. Under these circumstances, the High Court was justified in discharging the petitioner from service during the period of his probation. It is not necessary that there should be a charge and an enquiry on his conduct since the petitioner is only on probation and during the period of probation, it would be open to the High Court to consider whether he is suitable for confi....
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....t to casting any aspersion on the petitioner nor it could be said that stating in the order that his service is unsatisfactory amounts to a stigmatic order. ...      ...      ... 20. In the case of Krishnadevaraya Education Trust v. L.A. Balakrishna reported in (2001) 9 SCC 319, the services of respondent-Assistant Professor were terminated on the ground that his on the job proficiency was not upto the mark. This Court held that merely a mention in the order by the employer that the services of the employee are not found to be satisfactory would not tantamount to the order being a stigmatic one. This Court held in para 5 thus :- "5. There can be no manner of doubt that the employer is entitled to engage the services of a person on probation. During the period of probation, the suitability of the recruit/appointee has to be seen. If his services are not satisfactory which means that he is not suitable for the job, then the employer has a right to terminate the services as a reason thereof. If the termination during probationary period is without any reason, perhaps such an order would be sought to be chal....
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....nting of yearly increments would not in any manner indicate that after completion of the probation period the full court of the High Court was not competent to scrutinize his records and on the basis thereof take a decision as to whether or not his service should be confirmed or dispensed with or whether his probation period should be extended. The High Court has a solemn duty to consider and appreciate the service of a judicial officer before confirming him in service. The district judiciary is the bedrock of our judicial system and is positioned at the primary level of entry to the doors of justice. In providing the opportunity of access to justice to the people of the country, the judicial officers who are entrusted with the task of adjudication must officiate in a manner that is becoming of their position and responsibility towards society." (emphasis added) 10. We have also perused the file Number26/8/2006-AdlC, which is the personal file of the Applicant, of the Department of Revenue, in which the matter regarding the discharge of the Applicant has been dealt with. The background of the case has been discussed in a note dated19-11-2009of the Under Secretary of the Fir....
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....p; Miscellaneous orders - contradictions and other difficulties. 6. From the above, it is clear that on overall appreciation of the record of service of Sh. P.K. Das, President, CESTAT is of the considered opinion that Sh. P.K. Das, Member (Judicial) is unsuitable for being confirmed in CESTAT. The matter was discussed with Solicitor General of India on17-11-2009and as per his advice, the recommendation tendered by President, CESTAT for termination of services of Sh. P.K .Das, Member (Judicial) may be accepted and he may be discharged from service on or before21-11-2009, the date of completion of probation, under clause 8(3) of the RRs. Submitted for kind approval of Hon'ble FM." The proposal has been approved by the Finance Minister. 11. We have given utmost consideration to the rival contentions and have gone through the record placed before us. 12. The matter regarding the deemed confirmation of probation is now well-settled. The judgment in Dharam Singh (supra) has been considered in High Court of MP v. Satya Narayan Jhavar (supra) and after considering various judgments of the Honourable Supreme Court including the seven-Judge Bench judgment in ....
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....       ...        ... "43. But the facts and circumstances in the case on hand are entirely different and the administrative side of the High Court and the Full Court were right in taking the decision to terminate the services of the respondent, rightly so, on the basis of the records placed before them. We are also satisfied, after perusing the confidential reports and other relevant vigilance files, etc. that the respondent is not entitled to continue as a judicial officer. The order of termination is termination simpliciter and not punitive in nature and, therefore, no opportunity needs to be given to the respondent herein. Since the overall performance of the respondent was found to be unsatisfactory by the High Court during the period of probation, it was decided by the High Court that the services of the respondent during the period of probation of the respondent be terminated because of his unsuitability for the post. In this view of the matter, order of termination simpliciter cannot be said to be violative of Articles 14, 16 and 311 of the Constitution. The law on the point is crystallised t....
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....ght to his notice are only administrative instructions and would not create any right in his favour. 13. As regards the issue about the order of discharge being punitive as it was based on the letter dated 16-11-2009 of the President, it is our considered view that eventually the discharge of the Applicant has been on the basis of his unsuitability for the job and unsatisfactory performance of his duties. There is a distinction between the case of the Applicant and the case of Dr. Punita K. Sodhi in as much as in the latter case the service of the said Dr. Sodhi was terminated on the basis of several allegations against her brought out in the note and not on the basis of her unsuitability for the job or unsatisfactory performance of duties. The semantic minefield of 'form', 'motive' and 'foundation' has been clarified in Pavanendra Narayan Verma (supra), already adverted to above. Paragraph 19 of the judgment has been reproduced below : "Thus some courts have upheld an order of termination of a probationer's services on the ground that the enquiry held prior to the termination was preliminary and yet other courts have struck down as illegal a similarly worded termination orde....
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....ent to the employee to show cause why disciplinary action should not be taken against him. The inquiry officer was appointed but before the inquiry was completed, the services of the employee were terminated with one month's salary in lieu of notice. The Constitution Bench upheld the order of termination and drew a distinction between a preliminary inquiry and a departmental inquiry. It was held that a preliminary inquiry held to satisfy the Government whether there was no reason to dispense with the services of the temporary employee should not be mistaken for a departmental inquiry held to decide whether punitive action should be taken. 24. In State of U.P. v. Kaushal Kishore Shukla the employee had been appointed on a temporary basis for a fixed tenure. During the period of his service, adverse entries were made in his character roll. Complaints were also received by the auditors of the employer. A summary inquiry was held. It was found that the auditor's complaint was correct. The employee was transferred to another post. He did not join and the employer terminated his services. This Court, while upholding the order of termination said that the mere fact that prior to t....
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....what is implicit in every order of termination of a probationer's appointment is also not stigmatic. The decisions cited by the parties and noted by us earlier also do not hold so. In order to amount to a stigma, the order must be in a language which imputes something over and above mere unsuitability for the job. 30. As was noted in Dipti Prakash Banerjee v. Satyendra Nath Bose National Centre for Basic Sciences : (SCC p.73, para 28). "28. At the outset, we may state that in several cases and in particular in State of Orissa v. Ram Narayan Das it has been held that use of the word 'unsatisfactory work and conduct' in the termination order will not amount to a stigma." It is thus clear that there has not been any full-scale formal enquiry, but only facts have been brought to the notice of the competent authority about the unsatisfactory performance of the Applicant. Although it has been mentioned that the Applicant has exceeded his jurisdiction, yet it is not judgmental in the sense that allegation of favouring anyone has been made. It is only in support of general unsuitability of the Applicant. No allegations of moral turpitude are involved in this case. The compete....