Termination Order Referring To FIR Against Employee Without Departmental Inquiry Is Stigmatic: Gujarat High Court

Background

The Petitioner, an employee at the Gujarat Livelihood Promotion Company Ltd as a Taluka Manager was appointed on a contractual basis. In 2018 an FIR was filed against the Petitioner and other employees for certain allegations. Subsequently, the impugned communication was issued against the Petitioner, terminating her services. Notably, the Petitioner's appointment contract stipulated that employees could be terminated on grounds of misconduct, moral turpitude or cheating.

The Petitioner submitted that even though the employment was contractual, the communication was stigmatic and could not be passed without appropriate inquiry. To bolster this contention, the Petitioner relied on Union of India vs Madhusudan Prasad [(2004) 3 SCC 43] and in State of Gujarat vs Rahul Aydanbhai Vank [Letters Patent Appeal No. 841 of 2019] and other cases.

Per contra, the Respondent contended that the appointment contract stipulated that in case of misconduct or fraud, disobedience and so on, the services of the Petitioner could be terminated. The Respondent referred to the FIR lodged by the Taluka Development Officer for financial irregularities committed by the Petitioner basis which her services were terminated. To buttress this argument, the Respondent relied on Rajasthan State Roadways Transport Corporation vs. Paramjeet Singh (2019) 6 SCC 250 wherein it was held that an employee who was engaged on a temporary basis, could be terminated without notice following the principles of natural justice.

Judgement

The Court identified the primary question as whether the impugned communication could be termed as stigmatic. To address this, the Bench relied on Niteshkumar Pradeepbhai Makwana vs. District Program Coordinator and Director [Special Civil Application No. 48 of 2019.] where the Gujarat HC had held:

"The authority has readily concluded that the petitioners were directly involved in the irregularities and that the petitioners committed financial defalcation and that they indulged into corrupt practice. This was a finding arrived at without holding any inquiry. A straightway finding was reached and the termination orders passed only on the ground that F.I.R. was registered. The order is founded on the allegation of misconduct and therefore, it is manifestly stigmatic. Such orders could not have been passed even though petitioners' service was under a contract in MNREGA Scheme."

This judgement was affirmed by the Division Bench of the Gujarat HC in LPA No. 1596 of 2019, as well. Further, in Dipti Prakash Banerjee vs. Satvendra Nath Bose National Centre For Basic sc., Calcutta [AIR 1999 SC 983], to address if an order is passed on a motive or foundation and whether it can be termed as stigmatic, the Supreme Court had opined:

"…we hold that the 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."

Justice Vaishnav concluded that even though the order of termination did not refer to anything except the terms of the contract which could grant the Respondent the benefit to terminate the Petitioner, it was evident from the Dipti Banerjee judgement, that the material which amounts to stigma need not be contained in the order of termination but may contain in the documents referred to in the termination order or its annexures. Thus, by referring to the FIR and the case filed against the Petitioner, the order of termination became stigmatic. Accordingly, the Bench quashed the impugned communicated and directed that the Petitioner be reinstated.

Case Title: MINAKSHIBEN LAXMANBHAI PARALIYA Versus STATE OF GUJARAT

Citation: 2022 LiveLaw (Guj) 33

Case No.: C/SCA/22681/2019

Click Here To Read/Download Judgment