Madya Pradesh Hasta Shilpa Vikas Ltd Vs.
Devendra K. Jain  INSC 646 (7 December 1994)
FAIZAN UDDIN (J) FAIZAN UDDIN (J) AGRAWAL,
CITATION: 1995 SCC (1) 638 JT 1995 (1) 198
1994 SCALE (5)164
The Judgment of the Court was delivered by
FAIZAN UDDIN, J.-
appellant is a government company within the meaning of Section 617 of the
Companies Act which is controlled and owned by the State Government and a
subsidiary company of M.P. Laghu Udhyo Nigam Limited which is carrying on
business activities of development of handicrafts and handloom products. At the
relevant time one Shri K.P Thakur was the Managing Director of the appellant-
company who by an order dated 6-7-1989 Annexure-D appointed Respondents 1 to 3,
namely, Devendra Kumar Jain, Dilip Goel and Promod Mishra as temporary Junior
Managers and by two subsequent orders both dated 8-6-1989 (Annexure E/1 and 2)
appointed Respondents 4 and 5, namely, Mehboob Hussain and Liaquat Mohd. Khilzi
as temporary Junior Managers in the appellant Company. Soon after their
appointment the appellant-Company noticed that the aforesaid appointments of
Respondents 1 to 5 were made by the then Managing Director, Shri K.P. Thakur in
contravention of the Government Order dated 1-4-1989 Annexure B without the
approval of the State Government and therefore, another Managing Director
successor of Shri K.P. Thakur by order dated 31-7-1989 terminated the services
of Respondents 1 to 5. The respondents challenged the aforesaid order of termination
in the High Court of Madhya Pradesh in Miscellaneous Petition No. 3973/83 which
was allowed by judgment dated 1-12-1993 whereby the order of termination of the
respondents was quashed. It has been directed that the respondents will
continue in service till their services are not validly terminated. It is this
order which has been challenged in this appeal.
High Court quashed the order of termination of service of respondents mainly on
two grounds. Firstly, the High Court took the view that the respondents'
services were terminated without giving them any opportunity of hearing in
consonance with the rules of natural justice and, therefore, the order of
termination of service was contrary to law and violative of Article 14 of the
Constitution and; secondly, Government approval was not necessary for the
appointment as contended by the appellant and that in any case no material was
placed to show that the appointment was contrary to the Government
instructions. In our considered opinion the High Court fell in serious error in
taking the aforesaid view and, therefore, the order of the High Court could not
be sustained in law.
the appointment of the respondents was made purely on temporary basis which is
evident from the order of their appointment. The 640 first order dated 6-7-1989
Annexure D by which Respondents 1 to 3 were appointed reads as follows:
"Bhopal, 6-7-1989 ORDER The following
persons are appointed to the post of Junior Manager in the pay scale of
1290-30-1560-40-2040 from the date of taking over, till further orders
temporarily and are posted to the Headquarters:
(1) Shri D.K. Jain (2) Shri Pramod Mishra (3)
Shri Dilip Kumar Goyal
2. Employee has to submit Medical Fitness
Certificate from Civil Surgeonof the District.
3. Dearness Allowance and other facilities
according to the rules of the Corporation shall be payable.
Above appointments are purely temporary and
are liable to termination without notice or assigning any reason.
By order of Managing Director General Manager
Hastashilp Vikas Nigam Ltd., Bhopal" 6-7-1989 The subsequent two orders
both dated 8-6-1989 with regard to the appointment of Respondents 4 and 5 are
identical one of which is reproduced herein below:
"6-7-1989 ORDER Shri Mohammad Hussain is
appointed to the post of Junior Manager in the pay scale of 1290-30-
1560-40-2040 from the date of taking over, temporarily and posted at
Employee has to obtain Medical Fitness
Certificate from Civil Surgeon and submit to office.
Dearness Allowance and other facilities
according to the rules of the Corporation shall be payable.
Above appointment is purely temporary and is
liable to termination at any time without notice or assigning a reason.
plain reading of these two orders will go to show that the appointments were
made purely on temporary basis and their services were liable to be terminated
at any time without notice or assigning any reason. In the case of appointment
on temporary basis a servant who is so appointed does not acquire any
substantive right to the post, even though the post itself may be permanent and
it is an implied term of such appointment that it may be terminable at any time
and without notice. A temporary government servant does not become a permanent
government servant unless he acquires 641 that capacity by force of any rule or
he is declared or appointed as a permanent servant. In the present case there
is no rule under which the respondents may be deemed to have become permanent
by force of such rule nor they were so declared by any subsequent order of the
appellant-Company to have acquired that status. On the contrary the respondents
all along continued to be temporary and according to the terms of the order of
appointment their services could be terminated at any time without any notice
or assigning any reasons. In such a case it is not necessary to follow the
formalities contemplated by Article 311 of the Constitution.
In these facts and circumstances the High
Court was not right in holding that the respondents were entitled for being
heard before passing the said order of termination of their services and that
the order of termination was bad in law on that account.
regards the second ground the learned counsel appearing for the appellant
contended that the appellant- Corporation had prepared a project in January
1980 (a copy of which is filed as Annexure A in this appeal) for the
development of handicrafts through exhibitions and proposed that five officers
of junior manager rank and some salesgirls/salesmen be appointed in that
connection. But when the Government came to know about the said project it
disapproved the same by order dated 1-4-1989 (Annexure B) and directed that no
appointments shall be made to the said post without obtaining prior approval of
the State Government. The learned counsel for the appellant, therefore,
contended that the appointment of the respondents was made against the
directions of the State Government and while quashing the order of the
termination the High Court did not take into consideration the said directions
of the State Government.
may be pointed out here that the appellant- Corporation is a government company
fully financed by the State Government and that being so the Government would
be very much concerned to see that any project which is not economically
beneficial for the Corporation and which is likely to result in any loss should
not be given effect to.
The Government, therefore, would be justified
in issuing instructions that no appointments of any staff in connection with
the said project will be made without the approval of the Board of Directors of
M.P. Hasta Shilpa Vikas Nigam Limited and passed the order to that effect which
has been filed as Annexure B in this appeal. But it appears that the High Court
ignored the said order of the State Government while observing that no material
in support of the contention that the Government has issued instructions not to
make appointment was produced by the appellant.
is noteworthy that Shri K.P. Thakur, the then Managing Director himself was
retiring on 31-7-1989 and in hot haste he issued the orders of appointment of
the respondents on 6-7-1989 and 8-6-1989 in spite of the instructions of the
State Government to the contrary. In these facts and circumstances the impugned
order passed by the High Court quashing the termination of service of the
respondents cannot be sustained.
the result the appeal succeeds and is hereby allowed. The impugned order dated
1-12-1993 passed by the High Court in Miscellaneous Petition No. 3973 of 1989
is set aside and the said writ petition is dismissed but without any order as