Isabella Mariam

The High Court of Gauhati Single Bench of Justice Suman Shyam held that stigmatic termination orders issued against several contractual employees, including Accredited Engineers and Assistants under the Panchayat and Rural Development Department of Assam, are unsustainable in law as they were issued without holding a proper enquiry and in violation of principles of natural justice. The Court set aside the termination orders and directed reinstatement of the petitioners. It further granted liberty to the authorities to proceed afresh against the petitioners in accordance with law. However, the Court clarified that if the term of the employment contract has already ended or is about to end, the respondents may issue non-stigmatic orders of discharge based on non-renewal.

The Court found that although show-cause notices were issued, the replies submitted by the employees were not duly considered before the termination decisions were made. The Court also noted that many of the findings in the termination orders were based on enquiry reports not shared with the employees, thus denying them a reasonable opportunity to respond. Consequently, the Court quashed the termination orders and allowed the writ petitions.

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The petitioners, including individuals engaged as Accredited Engineers, Accountant-cum-Computer Assistants, Gram Sahayaks, Computer Assistants, and Accounts Assistants, had been appointed on a contractual basis by the Panchayat and Rural Development Department, Government of Assam. Their respective appointments were governed by written contract agreements, which stipulated specific terms including maximum duration and grounds for termination.

In particular, one petitioner was engaged as an Accredited Engineer on 02.03.2019, pursuant to an appointment issued by the Commissioner of Panchayat & Rural Development, Assam. The contract agreement, signed on 05.03.2019, specified a maximum duration of 364 days, subject to termination as per clause-3 without further notice upon expiry. The petitioner continued in service beyond the contract period until his termination on 07.02.2024.

The termination was preceded by a show-cause notice dated 17.06.2022, citing a report submitted by the Joint Commissioner and Assistant Commissioner concerning anomalies in MGNREGA scheme implementation during 2020-2021 in Sonai Development Block. The notice alleged that the petitioner had prepared 53 INRM schemes without prioritising GPDP-approved projects, thereby violating government guidelines. The petitioner was charged with “gross negligence of duty and misappropriation of government money with malafide intention.” He was directed to respond by 27.06.2022.

The petitioner submitted his reply on 05.08.2023, denying any misconduct. He contended that he had always acted in good faith, followed instructions of superiors, and had no knowledge of any change in the scheme list. Nonetheless, by order dated 07.02.2024, the Commissioner terminated his service, citing unsatisfactory response and reliance on the findings of the preliminary enquiry.

The petitioner’s termination order stated that he had admitted to preparing 53 schemes not approved by the Gram Sabha, contrary to Paragraph 7.11.5 of the FY 2018-19 Master Circular, which prioritises ongoing works. The order also alleged failure to maintain work files, muster rolls, project initiation meetings, and proper attendance records. The termination was issued with immediate effect, accompanied by payment of one month’s salary in lieu of notice.

Other petitioners in the batch of writ petitions faced nearly identical circumstances: contractual appointments, show-cause notices citing preliminary enquiry reports, submission of rebuttals, and issuance of similarly worded termination orders containing allegations of negligence or misconduct.

The petitioners challenged their terminations on the grounds that:

1. The termination orders were stigmatic in nature and founded on allegations of misconduct.

2. No proper enquiry was held to substantiate such allegations.

3. The petitioners were denied the opportunity to cross-examine the enquiry findings or present evidence.

4. Their show-cause replies were not dealt with on merit.

They submitted that the orders violated the principles of natural justice and, therefore, deserved to be quashed. They relied on prior decisions of the Gauhati High Court including Ali Ahmed Barbhuiya v. State of Assam, Surajit Barman v. State of Assam, and others, where similarly situated contractual employees were reinstated due to lack of enquiry and breach of natural justice.

The respondents argued that:

1. The petitioners were contractually appointed and their termination was governed by the contract.

2. They had been issued show-cause notices and given an opportunity to reply.

3. Clause-9 of the agreement permitted termination based on unsatisfactory service.

4. Contractual employees are not entitled to the protections under Article 311 of the Constitution.

The State relied on several precedents, including Rabindra Kr. Roy v. State of Assam, Rajasthan SRTC v. Paramjeet Singh, and GRIDCO Ltd. v. Sadananda Doloi, to argue that judicial review is limited in cases involving contractual employment.

The Court observed, "bare perusal of the impugned order of termination demonstrates on the face of the record that the same was issued on the basis of findings of the enquiry proceeding conducted behind the back of the petitioner wherein, it had been projected that the petitioner was guilty of misconduct."

It stated that "an order of termination from service issued to the petitioner has the trappings of an order of dismissal/removal from service. Therefore, such an order could not have been issued without giving the employee an opportunity of being heard, even if the same pertains to a temporary and/or contractual employee."

The Court stated that "none of the orders, even remotely indicate, as to in what manner, the show-cause reply furnished by the respective employees had been dealt with by the concerned authority before issuing the order of termination."

It further recorded that, "the departmental authorities have also failed to establish the allegation of negligence/misconduct brought against the individual petitioners based on cogent materials."

In assessing the principle of natural justice, the Court cited the maxim "audi alteram partem", stating: "This rule cannot be sacrificed at the altar of administrative convenience or celerity."

Relying on the Supreme Court’s decision in Swadeshi Cotton Mills v. Union of India, the Court noted, "it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice."

It also cited Canara Bank v. V.K. Awasthy, observing: "The concept of natural justice has undergone a great deal of change in the recent years. Rules of natural justice are not always embodied expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty performed."

On the issue of judicial review in contractual matters, the Court referred to GRIDCO Ltd. v. Sadananda Doloi, observing: "It is no longer open to the authority passing the order to argue that its action being in the realm of contract is not open to judicial review."

"The power of judicial review can now examine the validity of a termination order passed by public authority to determine whether there was any illegality, perversity, unreasonableness, unfairness or irrationality that would vitiate the action."

The Court held that "for the reasons stated above, the impugned orders of termination from service involved in this batch of writ petitions are hereby set aside."

It directed, "The respondents are directed to reinstate each of the writ petitioners in service within two weeks from the date of receipt of a certified copy of this order."

The Court clarified: "Upon such reinstatement, it would be open for the departmental authorities to initiate fresh proceeding against the petitioners for establishing the charge(s) of misconduct brought against them if so advised."

It further directed that "a proper proceeding, in consonance with the principles of natural justice, preferably in the line of a proceeding conducted under Rule 9 of the Assam Services (Discipline and Appeal) Rules, 1964 be conducted so as to establish the charge."

The Court permitted the respondents to place the employees under suspension pending enquiry, stating that "the employer may place the employee under suspension, subject to payment of subsistence allowance."

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With regard to contract expiry, the Court noted, "Although the petitioners have urged that the respective contracts have been renewed/extended by the authorities beyond the original period, yet, no such documentary evidence... had been placed on record..."

Accordingly, it stated: "If the period of contract pertaining to each of the petitioners have come to an end... the present order would not preclude the departmental authorities from discharging the writ petitioners from service by issuing a non-stigmatic order of discharge on the ground of non-renewal."

However, it held: "Even in order to issue an order of discharge on the ground of non-renewal... the departmental authorities would first have to reinstate the respective writ petitioners, as per the directions passed by this Court."

Advocates Representing the Parties:

For the Petitioners: Mr. K. N. Choudhury, Senior Advocate; Mr. R. M. Deka, Advocate; Mr. K. Mira, Advocate

For the Respondents: Mr. S. Dutta, Standing Counsel, P & RD, Assam; Ms. A. Talukdar, Government Advocate, Assam

Case Title: Shayed Masud Mazumder v. The State of Assam and Ors.

Neutral Citation: 2025: GAU-AS:8486

Case Number: WP(C)/1093/2024

Bench: Justice Suman Shyam