Probationer's Performance Assessment Is The Function Of Employer,Judicial Review Not Warranted Unless It Is Arbitrary and Capricious: Delhi High Court

Justice Yashwant Varma, in a case pertaining to alleged unlawful termination of services of a probationer as Director (HRD) of Damodar Valley Corporation, further noted that even the Union government can only interfere in respect of matters which are not provided for in the Regulations framed by the Corporation and where the regulations clearly make provisions for the stipulation of work and assessment of such work and do not envisage any role to be played by Union government with regard to the same, only the corporation itself has the mandate to govern on such issues.

The undisputed facts of the case are that the petitioner was engaged as Director (HRD) in Damodar Valley Corporation of probation in July 2003 and his appointment was terminated with immediate effect in January 2004. The petitioner then appealed against this order of termination to the Chairman of the Corporation on 17 February 2004 and during the pendency of such appeal, he was offered another role, in Bokaro Power Supply Company Private limited (BPSCL) in June 2004 as Head of Personnel and Administration. The Petitioner then made a representation to the Ministry of Power, and on taking cognizance of the matter, the Ministry transferred it back to the Corporation for comments. Corporation Secretary then apprised the Ministry that the petitioner was found to be inefficient in discharging his duties and functions as Director (HRD) and had not paid any heed to the several pieces of advice and warnings given to him by the Chairman and the secretary to improve his performance, during his six-month probation period and thus, considering the overall interests of the Corporation, petitioner could not be allowed to continue as Director (HRD). The matter was also simultaneously being considered by the Board of the Corporation and even the Chairman acceded that it would be inappropriate to allow the extension of the probationary period of the petitioner which would work detrimental to the interest of the corporation. The petitioner has challenged through a writ petition filed before this court, his termination order, his new appointment at a subordinate post and the Union government's order to not interfere in the matter considering that the corporation is an independent statutory body.

Mr Jatin Mongia, the learned counsel for the petitioner had argued that

• As per the terms of the letter of appointment, the petitioner should have been given a three months' notice or pay in lieu thereof before his termination. This was also mandated in the Regulations framed by the Corporation itself. The Counsel further argued that since the Regulations (specifically Regulation no. 18) puts a duty on the probationer to give a three months' notice if he chooses to resign, it's illogical, ultra vires and arbitrary that the same duty is not cast upon the employer.
• Learned Counsel then argued that as per S.6 of the Regulations, if any matter is not provided for in the regulations, then that is to be governed by the Union government. Learned counsel drew sustenance from the Office Memorandum issued by the Ministry of Personnel, PG & Pensions in March 2019 relating to engagement of probationers and assessment of their performances and relevant factors for termination of their services.
• Learned Counsel further asserted that the Corporation was obliged in law (referring to the O.M.) to undertake a due assessment of petitioner's work and performance and inform the petitioner of his shortcomings before the expiry of the original probationary period, affording him an opportunity to make efforts towards self-improvement and that no written communications have been made to the petitioner in the perusal of the same.
• The last contention presented by the learned Counsel was that the petitioner services were terminated by the Secretary instead of the Chairman, who was the competent authority for appointment and termination of probationary services of a Director.

Per Contra, the arguments submitted by learned Counsel for respondents, Mr J.K. Das, were that

• The O.M. is restricted in its application to the Ministries and Departments of the Union Government and is not applicable to autonomous corporations and bodies and since the Corporation is an autonomous body and the terms and conditions of services of its officers and employees are governed solely by the provisions made in 1957 Regulations, the O.M. would not be applicable in this case.
• The chairman, secretary had independently assessed and evaluated the working and conduct of the petitioner and found him unable to discharge the duties attached to the post he was given and only then such a recommendation of his termination was made to the board. The offering of an alternate post to the petitioner (which he rejected) was made as a matter of grace and establishes the bona fides of the Corporation.
• The Learned Counsel further asserted that as Director (HRD), the petitioner was reporting both to the Secretary as well as the Chairman of the Corporation and thus, both had ample opportunity and had made unbiased opinion regarding the termination of his probation and thus, the contention that the action taken by the Corporation was arbitrary and founded on malice is incorrect. The learned counsel also submitted that since the petitioner's offer of appointment was penned by the Secretary and in this backdrop, it's not correct to now assert that the petitioner's services could only be terminated by the Chairman.
• Regarding the absence of written warnings to Petitioner about his lackadaisical performance, Mr Das submitted that petitioner was verbally informed on numerous occasions about the same and was made aware of the serious lapses in his duties by Secretary and Chairman both and thus, absence of written warnings would not render the impugned orders invalid.

The Court first dealt with the petitioner's submission that since he was not given a three months' notice as per the regulations, his termination was liable to be quashed. The court referred to the para pertaining to the nature of appointment in petitioner's appointment letter in conjunction with Regulation 12 which made it clear that "the services of a probationer are liable to be determined by the Corporation at any time and without notice and the regulation leaves the corporation free to determine the terms of the probation and confers the unfettered right to terminate his services at any time during that period without notice." And thus, the submission that Regulation 12 is ultra vires merits rejection, the Court held.

The Court then assessed the applicability of the O.M. to the present situation and on reading S.59 of the Damodar Valley Corporation Act, 1948 which talks about Power to make rules by the Central Government regarding salaries and allowances and other functions and duties of members and S.60 the Damodar Valley Corporation Act which talks about power to make regulations by Corporation, the Court concluded that while the Union government had the power to make provisions pertaining to salaries, allowances and conditions of service of members, the power to specify the conditions of such service of officers and servants and their appointments come exclusively under the purview of the corporation. The Court further observed that

"Rules and orders which may have been framed by the Union Government would stand attracted only in respect of matters which are not independently provided for in the regulations and since it's clear that the engagement/appointment of officers and servants on probation is not a subject which is left untouched by Regulations 1957", they will come directly under the purview of the Corporation as per Regulation 6 read in conjunction with Regulation 12.

Moving on to the principle issue in the case regarding whether petitioner's discontinuance from probation was arbitrary and capricious as urged by the petitioner, the Court carefully analysed the Secretary's report evaluating petitioner's work and Chairman's report regarding his termination and Minutes from the Board meeting pertaining to the same, all of which made it crystal clear that the petitioner had frequent interactions with the Secretary and the Chairman and after alluding to specific instances, they had come to opine that the petitioner was performing his duties inadequately and the department under his control and supervision had become the most "non-functional" department of the Corporation and thus, on petitioner's failure to attend to priority works, and his failure to heed the advice and directives of the Chairman, his performance was declared "extremely and unacceptably poor" and there was no justification found to even consider the reinstating of the Petitioner.

Court further asserted that "the assessment of the work and performance of a probationer is a function to be primarily discharged by the employer with the Court invoking its powers of Judicial Review only where such action can be said to be tainted by manifest arbitrariness and lack of probity." Further holding that only the matter that whether the performance and suitability of probationary were fairly evaluated and assessed by the employer and not arbitrarily and capriciously, would demand judicial scrutiny.

Thus, holding that the Secretary and the Director were right in their opinion to terminate the services of the petitioner, which was also unequivocally approved by the Board after fairly assessing petitioner's suitability for the position of Director (HRD) and that it was in no way capricious, biased or unfair. Court also noted that the petitioner was not offered permanent placement in the subsidiary corporation of BPSCL, and it was also subject to the petitioner's work and performance which was to be assessed for a period of six months, demolishing the contention of the petitioner's counsel that second offer of appointment was recognition of the merit of the petitioner. On the matter regarding the invalidity of impugned order due to lack of a written warning which was supposed to be issued to the petitioner, the court referred to the cases of Dr Mrs Sumati P. Shere v. Union of India & Ors., State of Orissa v. Ram Narayan Das & Ors. and V.P. Ahuja v. State of Punjab & Anr. and concluded that it is not a principle of law to warn the probationer in writing before dispensing his services and in the present case, since the petitioner was continually warned orally about his lacking performance, the validity of the impugned order is not questionable on this ground.

Further holding that the Union (which was also made a respondent in this case) was right in not interfering with matters relating to officers and employees of autonomous bodies and that it would have been wholly inappropriate, if not impermissible, for the Union to do the same.

For the above-mentioned reasons, the writ petition was dismissed.

Case Title: J. S. Arora v. DVC & Ors.

Citation: 2022 LiveLaw (Del) 47