Holding

Termination of a probationer on the basis of alleged misconduct without a proper enquiry is invalid and vitiated, entitling the employee to reinstatement with back wages only from the date of the High Court order, while the employer may initiate fresh disciplinary proceedings.

Summary

The Nehru Yuva Kendra Sangathan terminated the services of Mehboob Alam Laskar, a probationary youth coordinator, alleging financial irregularities and citing a preliminary enquiry conducted without his knowledge. Laskar filed representations and multiple writ petitions seeking reinstatement, arguing that the termination was based on misconduct and that he was denied a proper hearing. The High Court directed the Sangathan to consider his representations, ultimately ordering his reinstatement but allowing the employer to initiate fresh departmental proceedings. The Supreme Court held that termination of a probationer on the basis of alleged misconduct without a proper enquiry is invalid and vitiates the order, granting reinstatement with back wages only from the date of the High Court's order. Consequently, the Court allowed Civil Appeal No. 1125 and dismissed Civil Appeal No. 1123, directing that the employer may now pursue disciplinary action under due process.

Issues considered

Whether termination of a probationer on alleged financial irregularities without a proper enquiry violates principles of natural justice.
Whether an order of termination founded on misconduct requires a hearing and is vitiated if no enquiry is held.
Whether the original termination order dated 24‑May‑1995 is legally valid.
Whether the employee is entitled to back wages and, if so, from what date.
Whether the High Court erred in directing reinstatement without addressing the validity of the termination order.
Whether the employer may initiate fresh departmental proceedings after reinstatement.

Subjects

service lawprobationterminationmisconductnatural justiceback wagesdepartmental proceedingsreinstatement

Judgment

[2008) 1 S.C.R. 1069

A NEHRU YUVA KENDRA SANGATHAN ~ ;
v.
MEHBUB ALAM LASKAR
(Civil Appeal No. 1123 of 2006)
JANUARY 22, 2008
B
[S.B. SINHA AND HARJIT SINGH BEDI, JJ.]
...
Service law: Termination - Services of employee ~

terminated during probation period on a/legations of financial
c irregularities - Enquiry conducted behind his back -
Representations by employee - Subsequent order thereto that
services terminated on basis of prima facie a/legations of
financial irregularities and no inquiry required by Authority
since charges already proved/admitted by employee -
D Challenge to - Order of re-instatement by High Court - On
appeal held: Termination of service of probationer is justified ':-
when there is unsatisfactory performance by employee - When •
foundation for such order is misconduct, employee should be
given opportunity of hearing - On facts, employer disclosed
foundation of the order at a later stage, the original order must
E be held to be vitiated in law- Thus, services of employee could
not have been terminated - Employee entitled to back wages
for the later period - Moreover, presently employee being in
service, employer to initiate departmental proceeding against
him.
F '( '
The respondent was appointed with the appellant-
Sangathan. It is alleged that during the probation period,
the respondent committed financial irregularities. An
enquiry was conducted behind his back and on basis
G thereof his services were terminated during the probation
period. Respondent filed representations seeking review
}
of the termination order dated 24.5.1995 but the same were
not considered. Respondent then filed a writ petition. The
High Court directed the appellant to consider the

H 1069
NEHRU YUVA KENDRA SANGATHAN v. 1070
MEHBUB ALAM LASKAR

representation of the respondent in view of the decision A
•• 1 of the High Court in Ajay Gupta's case Civil Rule No. 5582
of 1995. The representation was rejected since the case
of Ajay Gupta was not similar to the instant case and the
services were terminated on basis of certain prima facie
allegations of financial irregularities which were admitted B
by the respondent and as such no inquiry was required
~
by the Authority. Respondent filed another writ petition
'< and the same was allowed. The respondent was directed
to be re-instated in service and the appellant was entitled
to initiate a departmental proceeding against the c
respondent. However, the order was not complied with
and as such the contempt petition was filed and the
contemnor was directed to comply with the Orders of the
Court. Writ Appeal was also filed against the order of High
Court and the same was dismissed. Hence the present
D
appeal.
'>·
• Allowing Civil Appeal No. 1125 of 2006 and dismissing
Civil Appeal No. 1123 of 2006, the Court.
HELD: 1.1 The Office Order dated 24.5.1995 was not
a speaking one. Respondent was given a notice. He E
accepted that he had put the money withdrawn from the
banks in his own accounts. He justified his action in his
letter dated 14.6.1995. It, however, does not transpire that
any further enquiry was made. Respondent was found to
,I .,.
be guilty of misappropriation of the Appellant's fund. F
Evidently, the said explanation was not considered. Had
an enquiry been held, the said explanation of the
respondent might have been found to be acceptable by
the appellant. [Para 10] [1077-E-F]
G
1.2 Respondent was appointed on a temporary basis.
He was put on probation. Indisputably, the period of
probation was required to be completed upon rendition
of satisfactory service. Only in the event of unsatisfactory
performance by the employee, the termination of
H
1071 SUPREME COURT REPORTS [2008] 1 S.C.R.

A probation would have been held to be justified. It is,
however, well-known that when the foundation for such
)..
•
an order is not the unsatisfactory performance on the part
of the employee but overt acts amounting to misconduct,
an opportunity of hearing to the concerned employee is
B imperative. If the employee is found to have committed a
misconduct, although an order terminating probation
would appear to be innocuous on its face, the same would
.~-
be vitiated, if in effect and substance it is found to be '
stigmatic in nature. [Para 11] [1077-G-H; 1078-A]
c 1.3 Mere holding of a preliminary enquiry where
explanation is called for from the employee, if followed
by an innocuous order of discharge, may not be held to
be punitive in nature but not when it is founded on a
finding of misconduct. When the report submitted by a
D competent authority in a disciplinary proceeding forms
the foundation therefor, it would be stigmatic in nature as ...-
such an order will have civil consequences. [Paras 12 and •
13] [1078-8, DJ
1.4 The respondent evidently, was not aware that his
E services had been terminated on a finding of misconduct
or the fact that an enquiry had been conducted by the
appellant behind his back. He pleaded bona fide in his
action. It was not an admission on his part in regard to
the imputation of misconduct. He filed representations
F after representations. He also moved the High Court. If 't •
the respondent had come to know at a later stage, the
real object and purport for which the order dated 24.5.1995
was issued, he could challenge the same thereafter. The
foundation of the order having been disclosed by the
G appellant, at a later stage, the original order must be held
to be vitiated in law. [Para 16] [1080-H; 1081-A-C]
/
1.5 In the earlier round of the writ petition, the High
. Court did not go into the question as to whether the order
dated 24.5.1995 was legal or not. The High Court merely
H asked the officers of the appellant to consider his
NEHRU YUVA KENDRA SANGATHAN v. 1072
MEHBUB ALAM LASKAR

representation. His representation was also to be A
considered keeping in view the case of Ajay Kumar Gupta.
Ajay Kumar Gupta's case was distinguished by the
appellant. A 'State' within the meaning of Article 12 of the
Constitution should have placed full facts before the High
Court. Only in its anxiety to show that the case of Ajay B
Kumar Gupta was different from that of the respondent, it
came out with the truth that the respondent was guilty of
a serious misconduct. Therefore, there is no any legal
infirmity in the judgment of the High Court. [Para 16]
{1081-C-F] c
1.6 In any event, the respondent is in service now.
Appellant even in terms of the direction of the Single
Judge is entitled to initiate a departmental proceeding
against the respondent. If such a proceeding is initiated,
explanation offered by the respondent may be accepted D
or may not be accepted, but in the facts and
circumstances of this case, services of the respondent
could not have been terminated. [Para 16) (1081-G-H]
1.7 The respondent should not be granted the entire
backwages. He would be entitled to back wages only from E
the date of the order of the Single Judge of the High Court.
In view of the aforementioned directions, no further order
is required to be passed in the contempt matter. {Para 17]
[1082-A-B]
F
Abhijit Gupta Vs. S.N.B. National Centre, Basic Sciences
and Ors. 2006 (4) SCC 469 - distinguished.
Dipti Prakash Banerjee Vs. Satyendra Nath Bose
National Centre for Basic Sciences, Calcutta and Ors. 1999
(3) SCC 60; Jf!SWantsingh Pratapsingh Jadeja Vs. Rajkot G
Municipal Corporation and Anr 2007 (12) SCALE 115; Jai
\ Singh Vs. Union of India and Ors. 2006 (9) SCC 717 - referred
to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1123
of2006. H
1073 SUPREME COURT REPORTS [2008] 1 S.C.R.

A WITH
~ -
Civil Appeal No. 1125 of 2006.

From the final Judgment and Order dated 25.3.2004 of ..!
the Gauhati High Court at Gauhati in W.A. No. 298/2003.
B Rana Ranjit Singh for the Appellant.

P.K. Goswami, Raj iv Mehta and Ahanthem Henry for the
~
Respondent.

The Judgment of the Court was delivered by
c
S.B. SINHA, J. 1. These two appeals involving common
questions of fact and law were taken up for hearing together
and are being disposed of by this common judgment.
Appellant is an autonomous body operating under the
D Department of Youth Affairs and Sports, Ministry of Human
Resource Development, Government of India. It is a "State" within 'f'

the meaning of Article 12 of the Constitution of India. •
Respondent herein was appointed as a Youth Co-ordinator
in terms of an offer of appointment dated 28.9.1994; paragraph
E
5 whereof reads as under:-
"5. You will be on probation for a period of one year from
date of joining. Your probation period may be extended if
considered necessary by the Sangathan. During the
F probation period, you will have the option of resigning, if 'I' •
you so desire, without any notice. Likewise, the Sangathan
will be at liberty to terminate your services without any
notice and without assigning any reasons whatsoever,
during the probation period. Upon successful completion
G of this period you will be advised in writing of the fresh
terms and conditions of your employment."
,1
2. He allegedly withdrew some amount from the
Government Fund (to wnich he was entitled to) and deposited it
in his personal bank account. Ar. enquiry in that behalf was
H conducted behind his back and en th(~ basis of the result thereof,
NEHRU YUVA KENDRA SANGATHAN v. MEHBUB ALAM 1074
LASKAR [S.B. SINHA, J.]

his probation was terminated, stating: A
~ i
"SeNices of Sh. Mehboob Alam Laskar S/o Late Latif
Ahmed Laskar working as Youth Coordinator in NYK-North
Tripura, are terminated forthwith.
He shall handover the charge to Sh. Topan Nag, Youth B
Coordinator, NYK-Karimganj immediately after receipt of
this order. Sh. Nag will hold the additional charge of the
~
Kendra till further orders.

Sd/- S.Y. Quraiahi
Director General" c
3. He filed a representation before the appropriate authority·
for reconsideration of his case. He also filed another
representation/appeal seeking review of the order of termination
dated 24.5.1995 on or about 20.2.1999.
D
"I As the said representation was not being responded to
t> within a reasonable time by the respondents, he filed a writ
petition before the High Court which was marked as Writ Petition
(C) No. 3136 of 1999. The said Writ Petition was disposed of
by the High Court directing the appellant to consider his E
representation keeping in mind the decision of the High Court
.. in the case of Ajay Gupta being Civil Rule No. 5582 of 1995
wherein an order of reinstatement had been passed.
4. The said representation of the appellant was rejected
' F
i ~ ,.. by an Order dated 13.10.1999 stating that the case of Ajay Gupta
j which was the subject matter of above-mentioned Civil Rule,
I was not similar, stating;
"'1
i
i "7. In view of the above explained facts, it is submitted that
your case cannot be treated as similar with that of Shri
G
Ajay Kumar Gupta, his seNices were terminated during
\ the probation period after conducting preliminary inquiry.
Later, he refuted the allegatinns against hirn and appealed
to the disciplinary authority. Though his termination was
well within the rules of the Sangathan and also as per the
H
1075 SUPREME COURT REPORTS (2008] 1 S.C.R.

A conditions mentioned in the appointment letter, it was ~ ~
decided to give him a chance as per principles of natural
justice. However, on further inquiry, he was found to be
guilty of misappropriation and the termination of his
services was found justified.
B
On the other hand, your services were terminated during
the probation period on the basis of certain prima facie
allegations of financial irregularities. The same charges
were also admitted by you in your letter dated 14th June,
1995. Therefore, no other inquiry was considered
c necessary by the competent authority since the charges
were already proved/admitted by you."

5. The legality/validity of the said Order was questioned
by the respondent by filing another writ petition before the High
Court which was registered as Writ Petition (Civil) No. 480 of
D
2001. By reason of a judgment and order dated 9.4.2003, the ...
said order was set aside and the writ petition was allowed, ~
holding:
"The law is well settled that if a probationer does not satisfy
the requirements of the employer, his services can be

.
E
dispensed with by an order of discharge; but if in the order
of discharge there is any imputation of misconduct, which
may have a bearing on the future employment of the

F
probationer an enquiry in the matter should l'.le conducted
and the probationer ought to be given an opportunity to
defend himself. Though in the initial order of termination,
there is no imputation or any misconduct against the
petitioner, in the subsequent order, it has been elaborately
T • -
recited that the foundation of the order of discharge is on
account of financial irregularities committed by the
G
petitioner. The subsequent order which is now challenged,
has the effect of casting a stigma on the petitioner and, (
f
therefore, not much persuasion is required for this Court
to hold that the authority should not have passed the order
without affording a reasonable opportunity to the writ
H
I

NEHRU YUVA KENDRA SANGATHAN v. MEHBUB ALAM 1076
LASKAR [S.B. SINHA, J.]

petitioner to defend himself of the charges leveled. A
( ,~ ~ Admittedly no enquiry was held. That being the position,
this Court has no Option but allow the writ petitioner and
to interfere with the order dated 18-10-99. The writ
..
-f petitioner shall now be reinstated in service and the
Authority will be at liberty to initiate a fresh proceeding B
against him in accordance with law, if is so advlsed. The
question of the entitlement of the writ petitioner to any
~
back wages will be considered by the authority in
accordance such norms as may be in force."
6. The Order dated 24.5.1995 was, indisputably based c
on the findings that an enquiry had been made behind the back
of the respondent. Had the result of the preliminary enquiry been
taken into consideration only for the purpose of judging the
suitability of the respondent to continue in service, the same
could not have been said to be a foundation for terminating the D

. Ci
probation.
There exists a distinction between motive and foundation.
If misconduct is the foundation of such an order, the same would
be bad in law even if it appears to an innocuous one.
E
7. As the said Order was not complied with, a contempt
petition was also filed wherein by an Order dated 11.5.2004,
the Contemnor was directed to comply with the Orders of the
Court without delay. A Writ Appeal was also preferred against
the Order dated 9.4.2003 which by reason of the impugned F
• 'r judgment dated 11.05.2004 has been dismissed.
These appeals are directed against the aforementioned
Orders dated 25.3.2004 and 11.5.2004.
8. Mr. Rana Ranjit Singh, learned counsel appearing on
G
behalf of the petitioner submitted that a subsequent order which
was passed on the representation of the respondent himself
\ could not have been taken into consideration by the High Court
for the purpose of arriving at a finding that the initial order of
termination of his probation was not valid. It was furthermore
H
1077 SUPREME COURT REPORTS [2008] 1 S.C.R.

A urged that, in any event, the representation having been filed by
the respondent in the year 1999, the writ petition ought not to
have been entertained.
.... .
'

9 . Mr. P.K. Goswami, learned senior counsel appearing
on behalf of the respondent, on the other hand, submitted that
....
I

B
the learned Single Judge, as also the Division Bench of the
High Court rightly opined that the foundation of the order being
a misconduct, the Order dated 24.5.1995 was wholly ~

unsustainable. It was pointed out that this Court by an order dated
14.6.2004 stayed the operation of the order subject to the
c condition that until further orders, the appellant would pay to the
respondent, every month the last drawn salary but the said order
was vacated by an order dated 13.2.2006 and pursuant thereto
the respondent had been taken in service and in that view of the
matter, this Court, may not exercise its discretionary jurisdiction
D under Article 136 of the Constitution of India.

10. The Office Order dated 24.5.1995 was not a speaking
one. Respondent was given a notice. He accepted that he had
put the money withdrawn from the banks in his own accounts.
>(

.
He justified his action in his letter dated 14.6.1995. It, however,
E does not transpire that any further enquiry was made.
Respondent was found to be guilty of misappropriation of the
Appellant's fund. Evidently, the said explanation was not
considered. Had an enquiry been held, the said explanation of
the respondent might have been found to be acceptable by the
F appellant. 'r •

11. Respondent was appointed on a temporary basis. He
was put on probation. Indisputably, the period of probation was
required to be completed upon rendition of satisfactory service.
Only in the event of unsatisfactory performance by the employee,
G
the termination of probation would have been held to be justified.
!t is, however, well-known that when the foundation for such an /
.,.
order is not the unsatisfactory performance on the part of the
employee but overt acts amounting to misccnduct, an opportunity
of hearing to the concerned employee is imperative. In other
H
NEHRU YUVA KENDRA SANGATHAN v. MEHBUB ALAM 1078
LASKAR [S.B. SINHA, J.]

\ .... ~ words, if the employee is found to have committed a misconduct, A
although an order terminating probation would appear to be
innocuous on its face, the same would be vitiated, if in effect
and substance it is found to be stigmatic in nature.
12. Mere holding of a preliminary enquiry where explanation
is called for from the employee, if followed by an innocuous order B
of discharge, may not be held to be punitive in nature but not
"(
when it is founded on a finding of misconduct.

13. In Dipti Prakash Banerjee Vs. Satyendra Nath Bose
National Centre for Basic Sciences, Calcutta and Others c
[(1999) 3 SCC 60], this Court held that the material which
amounts to stigma need not be contained only in the termination
order, but may also be contained in an Order or proceeding
referred to in the order of termination or annexure thereto.
When the report submitted by a competent authority in a D
;i disciplinary proceeding forms the foundation therefor, it would
be stigmatic in nature as such an order will have civil
consequences.
14. It is not necessary for us to consider a large number of
E
decisions operating in the field as this Court recently in
Jaswantsingh Pratapsingh Jadeja Vs. Rajkot Municipal
Corporation & Anr. [(2007) 12 SCALE 115] has considered
the question at some length.

)< t' Reliance, however, is placed by Mr. Rana Ranjit Singh on F
Abhijit Gupta Vs. S.N.B. National Centre, Basic Sciences and
Others [(2006) 4 SCC 469]. The said decision has been taken
into consideration in Jadeja (supra), stating :
"If the satisfaction of the employer rested on the
unsatisfactory performance on the part of the appellant, G

." the matter might have been different, but in that case, from
the impugned otder it is evident that it was not the
unsatisfactory nature and character of his performance
only which was taken into consideration but series of his
acts as well, misconduct on his part had also been takeA H
1079 SUPREME COURT REPORTS [2008] 1 S.C.R.

A into consideration therefor. It is one thing to say that he -.. ~ ·
was found unsuitable for a job but it is another thing to say
that he was said to have committed some misconduct."
As in the instant case, it now stands admitted that the
services of the respondent had been terminated on a finding of
8 misconduct, the said decision of this Court in Abhijit Gupta
(supra) has no application.
15. Reliance has also been placed on Jai Singh Vs. Union
of India and Others [(2006) 9 sec 717]. In that case, the
c appellant's conduct was shown in the records as
"Unsatisfactory".
Therein, this Court noticed that the order of termination
was the only motive and not the foundation therefor stating :
"9 . The question whether the termination of service is
D
simpliciter or punitive has been examined in several ~
cases e.g. Dhananjay v. Chief Executive Officer, Zilla
Parishad and Mathew P. Thomas v. Kera/a State Civil
Supply Corpn. Ltd. An order of termination simpliciter
passed during the period of probation has been
E generating undying debate. The recent two decisions of
this Court in Dipti Prakash Banerjee v. Satyendra Nath
Bose National Centre for Basic Sciences and
Pavanendra Narayan Verma v. Sanjay Gandhi PG/ of .
Medical Sciences after survey of most of the earlier
F decisions touching the question observed as to when an 'f '
order of termination can be treated as simpliciter and
when it can be treated as punitive and when a stigma is
said to be attached to an employee discharged during
the period of probation. The learned counsel on either
G side referred to and relied on these decisions either in .,..
support of their respective contentions or to distinguish ~
them for the purpose of application of the principles stated
therein to the facts of the present case. In Dipti Prakash
Banerjee after referring to various decisions it was
H indicated as to when a simple order of termination is to
NEHRU YUVA KENDRA SANGATHAN v. MEHBUB ALAM 1080
LASKAR [S.B. SINHA, J.]

be treated as 'founded' on the allegations of misconduct A
and when complaints could be only as a motive for
passing such a simple order of termination. In para 21
of the said judgment a distinction is explained thus: (SCC
pp. 71-72)
' 21 . If findings were arrived at in an enquiry as to 8
misconduct, behind the back of the officer or without a
regular departmental enquiry, the simple order of
termination is to be treated as 'founded 'on the allegations
and will be bad. But if the enquiry was not held, no findings
were arrived at and the employer was not inclined to C
conduct an enquiry but, at the same time, he did not
want to continue the employee against whom there were
complaints, it would only be a case of motive and the
order would not be bad. Similar is the position if the
employer did not want to enquire into the truth of the D
allegations because of delay in regular departmental
proceedings or he was doubtful about securing adequate
evidence. In such a circumstance, the a/legations would
be a motive and not the foundation and the simple order
of termination ~would be valid.' E
From a long line of decisions it appears to us that whether
an order of termination is simpliciter or punitive has
ultimately to be decided having due regard to the facts
and circumstances of each case. Many a times the
> -I
. distinction between the foundation and motive in relation F
to an order of termination either is thin or overlapping. It
may be difficult either to categorise or classify strictly
orders of termination simpliciter falling in one or the other
category, based on misconduct as foundation for passing
the order of termination simpliciter or on motive on the G
ground of unsuitability to continue in service."
(emphasis in original)
16. The respondent evidently, was not aware that his
services had been terminated on a finding of misconduct or the H
1081 SUPREME COURT REPORTS [2008] 1 S.C.R.

A fact that an enquiry had been conducted by the appellant behind ~ ~

his back. He pleaded bona fide in his action. It was not an
admission on his part in regard to the imputation of misconduct.
He filed representations after representations. He also
moved the High Court. If the respondent had come to know at a
B later stage, the real object and purport for which the order dated
24.5.1995 was issued, he could challenge the same thereafter.
The foundation of the order having been disclosed by the ~

appellant, at a later stage, the original order must be held to be .....
vitiated in law.
c
In the earlier round of the writ petition, the High Court did
not go into the question as to whether the order dated 24.5.1995
was legal or not. The High Court merely asked the officers of
the appellant to consider his representation. His representation
was also to be considered keeping in view the case of Ajay
D
Kumar Gupta. Ajay Kumar Gupta's case was distinguished by
~
the appellant on the premise that whereas the services of Ajay
Kumar Gupta were terminated upon holding a disciplinary
proceeding the services of the respondent had been terminated
on the basis of an enquiry.
E
A 'State' within the meaning of Article 12 of the Constitution
1 of India should have placed full facts before the High Court. Only

in its anxiety to show that the case of Ajay Kumar Gupta was
different from that of the respondent, it came out with the truth
F that the respondent was guilty of a serious misconduct. We,
therefore, do not find any legal infirmity in the judgment of the
~ .
High Court.
In any event, the respondent is in service now. Appellant
even in terms of the direction of the learned Single Judge is
G entitled to initiate a departmental proceeding against the
respondent. If such a proceeding is initiated, explanation offered , r
by the respondent may be accepted or may not be accepted,
but in the facts and circumstances of this case, we are of the
opinion that services of the respondent could not have been
H terminated.
NEHRU YUVA KENDRA SANGATHAN v. MEHBUB ALAM 1082
LASKAR [S.B. SINHA, J.]

17. We, however, are of the opinion that the respondent A
should not be granted the entire backwages. He will be entitled
to back wages only from the date of the order of the learned
Single Judge of the High Court, namely 9.4.2003. In view of the
aforementioned directions, we are of the opinion that no further
order is necessary to be passed in the contempt matter. B
18. Civil Appeal No. 1125 of 2006 is, therefore, allowed
and Civil Appeal No. 1123 of 2006 is dismissed. No order as to
costs.
N.J. Civil Appeal No. 1125 of 06 allowed and c
Civil Appeal No. 1123 of 2006 dismissed

. """