Pradesh Hasta Shilpa Vikas Nigam Limited Vs. Devendra Kumar Jain & Ors
 INSC 642 (7
Uddin (J) Faizan Uddin (J) Agrawal, S.C.
(J) Faizan Uddin, J.:
1995 SCC (1) 638 JT 1995 (1) 198 1994 SCALE (5)164
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 Udhyog 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 6.7.89 Annexure-D appointed the respondents No. 1
to 3, namely, Devendra Kumar Jain.
and Promod Mishra as temporary Jr. Manager and by subsequent two orders both
dated 8.6.89 (Annexure-E/1 and 2) appointed the respondents No. 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 No. 1 to 5 were made by
the then Managing Director. Shri K.P. Thakur in contravention of the Government
Order dated 1.4.89 Annexure-B without the approval of the State Government and
therefore. another Managing Director successor of Shri K.P. Thakur by order
dated 31.7.89 terminated the services of the respondents No. 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 1.12.93 whereby the order of termination of the respondents was
quashed. It 200 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 violatire 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 fIl in serious error in
taking the aforesaid view and, therefore, the order of the High Court could not
be sustained in law.
Admittedly the appointment of the respondents was made purely on temporary
basis which is evident from the order of their appointment. The first order
dated 6.7.89 Annexure-D by which the respondents No. 1 to 3 were appointed
reads as follows:
6.7.89 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 10 the Headquarters:-
D. K. Jam
Dilip Kumar Goyal
Employee has to submit Medical Fitness Certificate from Civil Surgeon of the
Dearness Allowance and other facilities according to the rules of the
Corporation shall be payable.
appointments are purely temporary and are liable to termination without notice
or assigning any reason.
order of Managing Director GENERAL MANAGER Hastashilp Vikas Nigam LTd.,
Bhopal" 6.7.89 The subsequent two orders both dated 8.6.89 with regard to
the appointment of respondents No. 4 and 5 are identical one of which is
reproduced herein below:- 6.7.89 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 Headquarters.
has to obtain Medical Fitness Certificate from Civil Surgeon and submit to
Allowance and other facilities according to the rules of the Corporation shall
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 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.
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 8. this aPpeal) for the
development of handicrafts through Exhibitions and proposed that five officers
of junior manager rank and some sales- girls/sales-men be appointed in that
connection. But when the Government came to know about the said project it
disapproved the same by order dated 1.4.89 (Annexure-B) and directed that no
appointments shall be made to the said post without obtaining prior approval of
the State Government.
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.
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
is note worthy that Shri K.P. Thakur. the then Managing Director 202 himself
was retiring on 31.7.89 and in hot haste he issued the orders of appointment of
the respondents on 6.7.89 and 8.6.89 inspite 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
can not be sustained.
the result the appeal succeeds and is hereby allowed. The impugned order dated
1.12.93 passed by the High Court in Misc. Petition No. 3973/89 is set aside and
the said writ petition is dismissed but without any order as to costs.