Holding

The order of 30 March 2013 was a stigmatic termination and the respondents failed to comply with the procedural requirements of Clause 4 of the RGPSM, rendering the order void.

Summary

Swati Priyadarshini was appointed on a contract as Assistant Project Coordinator under the Sarv Shiksha Abhiyan in October 2012. After receiving several show‑cause notices alleging lateness, failure to report on a hostel and other alleged inefficiencies, the State of Madhya Pradesh decided on 30 March 2013 not to extend her contract, stating her work was unsatisfactory. She challenged the order under Article 226, and a Single Judge quashed it, holding that the order was stigmatic and required a proper enquiry. The Division Bench of the High Court reversed, treating the order as a simple non‑renewal. The Supreme Court held that the order was indeed a termination in disguise, fell within Clause 4 of the RGPSM which mandates either a one‑month notice for inefficiency or immediate termination for ‘undesirable activities’, and that the respondents complied with neither requirement. Consequently, the Court set aside the order, revived the Single Judge’s decision with modification, granting the appellant notional continuation of service and back wages at 50%, and barred the respondents from fresh action.

Issues considered

The nature of the order dated 30‑03‑2013: whether it was a stigmatic termination requiring compliance with Article 311(2) and natural‑justice safeguards, or a non‑stigmatic non‑extension of a contract.
Whether the respondents complied with Clause 4 of the Rules of Rajiv Gandhi Prathmik Shiksha Mission governing termination for inefficiency or for ‘undesirable activities’.
Whether the appellant, as a contractual employee, was entitled to notice and an enquiry before termination of her services.

Legislation cited

Constitution of Indias. Article 226, s. Article 311(2)
Rules of Rajiv Gandhi Prathmik Shiksha Missions. Clause 4

Subjects

Service LawContractual ServiceNon‑extension of contractTermination orderStigmatic terminationNatural justiceArticle 311RGPSMSarv Shiksha Abhiyan

Judgment

[2024] 8 S.C.R. 901 : 2024 INSC 620

Swati Priyadarshini
v.
The State of Madhya Pradesh & Ors.
(Civil Appeal No. 9758 of 2024)
22 August 2024
[Hima Kohli and Ahsanuddin Amanullah,* JJ.]

Issue for Consideration
An Order dated 30.03.2013 passed by the Respondent No.4
deciding not to extend the contract of the appellant as Assistant
Project Coordinator from 31.03.2013 on the ground of dereliction
of duty, as the work/performance of the appellant was found to
be unsatisfactory.

Headnotes†
Service Law – Service on contract basis – Non-extension of
contract – Appellant was appointed by the Respondent No.4
to the post of Assistant Project Coordinator (APC) under the
Sarv Shiksha Abhiyan (SSA) on contract basis – By an order
dated 30.03.2013, the respondent no.4 decided not to extend
the contract of the appellant – Appellant contended that the
order dated 30.03.2013 was stigmatic in nature and could
not have been passed without giving her an opportunity of
being heard – The Single Judge of the High Court quashed
the order dated 30.03.2013, holding that the termination orders
being stigmatic in nature, relating to alleged misconduct
involving moral turpitude, the same could not have been
passed without holding a regular enquiry – However, the
Division Bench of the High Court decided in favour of the
respondents – Correctness:
Held: While serving as such, complaint(s) against her, in brief,
were that she was not performing her duties, primarily on two
counts – (i) Not punctual in attending to her duties, and; (ii) Not
correctly reported with regard to the events in the hostel – As
borne out from the record, with regard to the hostel, charge was
given to her for only 5/6 days – As such, it cannot be said that
within such a short period, the appellant, without fully understanding
the attendant issues, could have straightaway given any opinion/
report on the hostel – Clause 4 of the RGPSM’s General Service
* Author
902 [2024] 8 S.C.R.

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Conditions lays down that ordinarily, for inefficiency, one month’s
notice is sufficient – The Clause also makes it clear that if someone
is found to have indulged in “undesirable activities”, the Mission
Director was competent to terminate such person’s services “with
immediate effect” – Respondents have placed themselves in a
Catch-22 situation – If the order dated 30.03.2013 falls within the
former part of Clause 4, as contended by the respondent, on the
premise that it is a case of termination simpliciter and non-stigmatic,
then one month’s notice was required to be issued to the appellant,
which admittedly was not done in the instant matter – Arguendo,
were the order dated 30.03.2013 to be seen as falling under the
latter part of Clause 4, it would be stigmatic, as made clear by the
use of the words “indulged in undesirable activities amounting to
degradation of dignity of Mission” – In view of the dictum laid down
in Parshotam Lal Dhingra case, it is clear that the Respondents
did not comply with Clause 4-either the first part or the second
part thereof – The order dated 30.03.2013 does visit the appellant
with evil consequences and would create hurdles for her further
employment – Therefore, the impugned Judgment is quashed and
set aside. [Paras 30, 32, 36]
Service Law – Non-extension of contract – Non-mention of
of the background situation or the Show Cause Notice (SCN)
in the order:
Held: The mere non-mention of the background situation or
the SCNs in the order dated 30.03.2013 cannot, by itself, be
determinative of the nature of the order – It is settled that the
form of an order is not its final determinant and the Court can
find out the real reason and true character behind terminating/
removing an employee – In the instant case, the impugned judgment
also does not deal with Clause 4 of RGPSM’s General Service
Conditions. [Para 33]

Case Law Cited
Parshotam Lal Dhingra v. Union of India [1958] 1 SCR 828 : (1957)
SCC OnLine SC 5 – followed.
Anoop Jaiswal v Government of India [1984] 2 SCR 453 : (1984)
2 SCC 369; Gujarat Steel Tubes Ltd. v. Mazdoor Sabha [1980] 2
SCR 146 : (1980) 2 SCC 593; State Bank of India v. Palak Modi
[2012] 12 SCR 628 : (2013) 3 SCC 607; State of Uttar Pradesh
v. Ram Bachan Tripathi [2005] Supp. 1 SCR 924 : (2005) 6 SCC
[2024] 8 S.C.R. 903

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

496; Rajesh Kumar Shrivastava v. State of Jharkhand [2011] 3 SCR
823 : (2011) 4 SCC 447; State of Uttar Pradesh v. Ram Chandra
Trivedi [1977] 1 SCR 462 : (1976) 4 SCC 52; Chandra Prakash
Shahi v. State of Uttar Pradesh [2000] 3 SCR 529 : (2000) 5 SCC
152; Samsher Singh v. State of Punjab [1975] 1 SCR 814 : (1974)
2 SCC 831 – referred to.

List of Acts
Rules of Rajiv Gandhi Prathmik Shiksha Mission; Constitution of
India.

List of Keywords
Service Law; Service on contract basis; Non-extension of contract;
Non-mention of the background situation in order; Termination
order; Removal from service; True character of order.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9758 of 2024
From the Judgment and Order dated 03.02.2020 of the High Court of
M.P. Principal Seat at Jabalpur in WA No. 956 of 2017
Appearances for Parties
Prashant Bhushan, Adv. for the Appellant.
Nachiketa Joshi, A.A.G., Pashupathi Nath Razdan, Nirmal Kumar
Ambastha, Mirza Kayesh Begg, Ms. Maitreyee Jagat Joshi, Astik
Gupta, Ms. Akanksha Tomar, Argha Roy, Ms. Ojaswini Gupta, Ms.
Ruby, Advs. for the Respondents.
Judgment / Order of the Supreme Court

Judgment
Ahsanuddin Amanullah, J.
Heard learned counsel for the parties.
2. We are inclined to grant leave; hence, granted.
3. The present appeal has been filed against the Final Judgment and
Order dated 03.02.2020 (hereinafter referred to as the “Impugned
Judgment”) passed by the Division Bench of the High Court of Madhya
Pradesh at Jabalpur (hereinafter referred to as the “High Court”) in
904 [2024] 8 S.C.R.

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Writ Appeal No.956/2017, whereby it overruled the Judgment dated
20.06.2017 passed by the learned Single Judge in Writ Petition
No.8404/2013.
FACTUAL MATRIX:
4. On 15.10.2012, the sole appellant was appointed by the Respondent
No.4 to the post of Assistant Project Coordinator (hereinafter referred
to as “APC”) under the Sarv Shiksha Abhiyan (hereinafter referred
to as “SSA”) on contract basis, initially for one academic session (1
year), renewable in subsequent years for two years each “subject
to evaluation of work in the first year.”
5. It was contended by the appellant that she received some information
about alleged misconduct and immoral activity going on in the CWSN
(abbreviation for “Children with Special Needs”) Girls’ Hostel, Sehore
(hereinafter referred to as the “hostel”) run by one Bright Star Social
Society, a non-governmental organization (hereinafter referred to
as “Bright Star”). The State Level Committee raided the hostel on a
complaint made by the appellant. The State Level Committee found
the allegations, made by the appellant to be true eventually leading
to termination of the Memorandum of Understanding with Bright Star
to run the hostel with effect from 08.01.2013.
6. On 09.01.2013, the appellant was made in-charge of the hostel. An
order was issued by the Sub-Divisional Officer and Magistrate, Sehore
on 10.01.2013 to the District Coordinator, State Education Centre,
Sehore to lodge a First Information Report against the warden under
whose supervision the alleged crime(s) was/were being committed
in the hostel.
7. By order dated 14.01.2013, charge of the hostel was withdrawn from
the appellant after 5/6 days of assigning the charge. The appellant
received a Show-Cause Notice (hereinafter abbreviated to “SCN”)
issued by the Respondent No.5 which reads as under1:
“The attendance register was perused by the District Project
Coordinator District Education Centre, Sihore under the
above subject. Absent was marked on 4th and 5th January,
2013 by me in the attendance register. (sic)

1 For convenience, English translation is used. The original SCN was issued in Hindi.
[2024] 8 S.C.R. 905

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

Signatures were made by you in the said dates in the
attendance register and your coming in the office at 12:00
hours on 14.02.13 is a negligence on your part towards
duties and is violation of orders of officer.”
To the above, the appellant replied on 16.02.2013, stating that
signatures have not been made by her on the attendance register.
She stated that due to the arrival of her daughter from Bhopal on
14.02.2013, she was late on the said date. The appellant contended
that whenever she comes late to work, she stays late in the office
till evening 7-8 PM and completes all the work.
8. On 15.03.2013, another SCN was issued by the Respondent No.4
to the appellant with the following charges:
"i. Marking of disabled boys/girls and verification of the
specified list prepared by Social Justice was to be
done by you for the execution of several activities
through Arushi Institution but marking and verification
was not done by you.
ii. The proceedings of appointing volunteers and MRC
are prevalent in the Arushi Institution. You are also
nominated therein as representative of District
Education Centre but due to your in-cooperative,
obstruction and negligent attitude, the appointment
on the said posts could not be made and due to
this reason, the other activities including education
is adversely being affected.
iii. No report was submitted when the monitoring of
CWSN hostel was done and what improvements
were made.
iv. Entry of unauthorized persons in the hostel is strictly
prohibited and you being posted at a responsible post,
it is your duty to ensure prohibition on the entrance
of unwanted persons in the hostel but telling about
this is very far and you yourself has tried to enter the
hostel along with the crowd of outsiders. Further you
put pressure on the senior officers to give entrance
to the unauthorized persons in the hostel. The work
done beyond your official duties, comes under the
category of indiscipline.
906 [2024] 8 S.C.R.

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v. Your head office is situated at Sihore, but you are not
residing at the headquarter and come from Bhopal
everyday
vi. You do not come in the office at right time also and
in spite of being late,you made signature on the
attendance register. It is indiscipline on your part.”
(sic)
9. The appellant vide representation dated 20.03.2013 stated that all
tricks were being adopted for removing her from the post of APC.
She stated that SCNs were being issued to her even for small things.
She alleged non co-operation from other officers and that she was
being harassed as she had complained about the hostel.
10. The appellant replied to the SCN dated 15.03.2013 on 22.03.2013,
inter alia, countering that she was being subjected to non-cooperation
and mental harassment by the officers. She further alleged that her
reputation was being spoiled by giving negative feedback to senior
officers.
11. Order dated 30.03.2013 was passed by the Respondent No.4 deciding
not to extend the contract of the appellant as APC from 31.03.2013
on the ground of dereliction of duty, as the work/performance of the
appellant was found to be unsatisfactory. English translation of this
order as annexed by the appellant with the paper-book reads as under:
“Under the above subject matter and under the Sarv
Shiksha Abhiyan on 30.03.2013 in the meeting of the
District Appointment Committee after the consideration
and determination is done and subsequent to the same
this decision has been taken that as you work is not
satisfactory and due to this reason from the end dated
31.03.2013 of the Education Session your contract service
may not be increased.
In the context of the above decision from dated 31.03.2013
furthermore your contract service is not increased.”
(sic)
12. Aggrieved, the appellant/original writ-petitioner invoked Article 226 of
the Constitution of India (hereinafter referred to as the “Constitution”)
to file Writ Petition No.8404/2013 before the High Court against the
[2024] 8 S.C.R. 907

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

order dated 30.03.2013 supra refusing to renew/extend her services.
A learned Single Judge allowed this writ petition on 20.06.2017 and
quashed the order dated 30.03.2013, holding that the termination
orders being stigmatic in nature, relating to alleged misconduct
involving moral turpitude, the same could not have been passed
without holding a regular enquiry.
13. Aggrieved by the learned Single Judge’s judgment dated 20.06.2017,
the official respondents filed Writ Appeal No.956/2017 under Section
2 of The Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth
Ko Appeal) Adhiniyam, 2005 before the Division Bench, which was
allowed on 03.02.2020, and now stands impugned by the appellant.
APPELLANT’S SUBMISSIONS:
14. Mr. Prashant Bhushan, learned counsel for the appellant submitted
that the order dated 30.03.2013 was clearly stigmatic in nature and
thus could not have been passed without giving her an opportunity
of being heard. It was submitted that the learned Single Judge has
rightly held so, and the Division Bench has gone only by the text of
the order dated 30.03.2013 to erroneously hold that the same was
“simpliciter ”.
15. It was contended that the rules stipulate that the minimum tenure
of service of a contractual appointee will be at least one year in the
first instance and two years each subsequently, subject to evaluation
of work in the first year whereas in the present case, the appellant
had put in only 5 months and 15 days. Further, it was submitted
that the curtailment of the tenure of the appellant was in violation
of the provisions of the rules of the Rajiv Gandhi Prathmik Shiksha
Mission2 (hereinafter referred to as “RGPSM”) which provide that for
persons working on contract, notice of one month is to be served, if
their tenure is to be curtailed on the ground of inefficiency. Moreover,
learned counsel submitted that the respondents were further bound by
orders dated 09.03.2012 and 13.03.2012 issued by the Respondent
No.2, which specifically provide that contractual workers in the SSA
could not be terminated on the ground of inefficiency without affording
them an opportunity of being heard, in accordance with the principles
of natural justice.

2 Erstwhile name of the SSA.
908 [2024] 8 S.C.R.

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16. It was pointed out by the learned counsel that the Division Bench
also failed to take into consideration that the appellant was the victim
of malafide counter-action by the Respondents No.4 and 5 as it was
she who had brought to the notice of the authorities the misdeeds
being committed at the hostel run by Bright Star, under the aegis
of the State, which was sought to be buried by the respondents.
17. Learned counsel contended that the glaring fact was that the
appellant was assigned the charge of the hostel on 09.01.2013,
which was revoked on 14.01.2013 without giving any reason/ground
for such action. Learned counsel submitted that this discloses that
the respondents made an ex-post-facto justification for removing her
and that during those 5/6 days, no incident had occurred, which may
have justified such extreme action against the appellant.
18. Further, the stand of the learned counsel was that under the
RGPSM, the Appointing Authority for the post of APC is the State
Level Appointing Authority, whereas she had been removed by the
District Level Committee, in contravention of Article 311(2)3 of the
Constitution.
19. In support of his contentions, Mr. Bhushan relied upon the following
decisions of this Court:
1. Anoop Jaiswal v Government of India (1984) 2 SCC 369
2. Gujarat Steel Tubes Ltd. v Mazdoor Sabha (1980) 2 SCC 593
3. State Bank of India v Palak Modi (2013) 3 SCC 607
RESPONDENTS’ SUBMISSIONS:
20. Per contra, Mr. Nachiketa Joshi, learned Additional Advocate
General, for the respondents – the State of Madhya Pradesh and
its functionaries – in support of the Impugned Judgment submitted
that it was rightly held by the Division Bench that it was within the
competence of the authority to determine as to whether the service of

3 “311. Dismissal, removal or reduction in rank of persons employed in civil capacities under the
Union or a State.
xxx
(2) No such person as aforesaid shall be dismissed or removed or reduced in rank except after an inquiry
in which he has been informed of the charges against him and given a reasonable opportunity of being
heard in respect of those charges.
xxx”
[2024] 8 S.C.R. 909

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

a person claiming continuation was satisfactory. For this proposition,
reliance was placed on State of Uttar Pradesh v Ram Bachan
Tripathi, (2005) 6 SCC 496 and Rajesh Kumar Shrivastava v
State of Jharkhand, (2011) 4 SCC 447.
21. It was submitted that the order dated 30.03.2013 was an order
simpliciter without involving any stigma being basically an order of
non-extension of the appellant’s contractual services. He submitted
that it does not involve any evil consequences nor is founded on any
misconduct. The further submission was that the appellant, having
been appointed on contractual basis, has no right of service as such.
22. Relying upon the terms of service, it was pointed out that the same
clearly indicated that the appointment would be purely temporary
in nature and subject to the contractual conditions stipulated in the
contract. It was submitted the even the letter of appointment dated
15.10.2012, under “Service Conditions” stated that:
“1. This appointment will be absolutely temporary and will
be under the contract conditions of Mission.
2. If the work is not found satisfactory or if the post is not
required, then the service can be terminated without any
prior information.
…”
23. In the aforesaid light, it was submitted that in the present case
despite the appellant having been issued SCNs seeking explanation
for her non-performance, there was no improvement from her end
and since her work was found to be unsatisfactory, the contract was
not extended. In support of his contentions, learned counsel also
relied upon the following:
1. State of Uttar Pradesh v Ram Chandra Trivedi (1976) 4 SCC 52
2. Chandra Prakash Shahi v State of Uttar Pradesh (2000) 5
SCC 152
24. It was submitted that the appellant was in the habit of remaining absent
from work and neither discharged her duty of marking the names
of specially-abled boys/girls and nor did verification of the specified
list prepared by the Department of Social Justice for execution of
several activities through the Arushi Institutions. Further, it was
910 [2024] 8 S.C.R.

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contended that in the Committee constituted to appoint volunteers
and MRC in the Arushi Institutions, the appellant was appointed as
the representative of District Education Centre and due to her non-
cooperative, obstructive and negligent attitude, such appointment
were not made, leading to other activities, including education, being
adversely affected.
25. Moreover, it was submitted that the appellant did not submit a
report on the hostel when it was under her monitoring and she
did not inform whether there was any improvement or not and if
so, the details thereof and steps taken. It was submitted that only
because the appellant had previously been issued some appreciation
letters, future unsatisfactory conduct cannot be saved basis her
past conduct.
26. Learned counsel further pointed out that initially the appellant
was placed at Serial No.5 in the Provisional Merit List issued
on 09.12.2011 which was because of non-submission of proper
Certificate of Experience alongside her application for the post of
APC. Later, when the Certificate of Experience was submitted, the
Merit List was revised and rectified on 12.09.2012, whereupon she
was placed at Serial No.1.
27. Apropos the appellant’s allegations against Respondents No.4 & 5 to
the effect that they were interested for the appointment of one Dheeraj
Singh Dhakad, learned counsel submitted that in the Provisional
Merit List, he was below the appellant, which would not have been
the case had he been favoured. It is also submitted that had there
been any malafide intent towards the appellant, Respondents No.4 &
5 would have rejected her application on the basis of her submitting
an expired Certificate of Experience, but they chose to give time to
her to submit a proper Certificate, which would demonstrate that the
said respondents did not harbour any bias against her.
28. Learned counsel summed up by stating that the judgment impugned
was well-considered and needed no interference under Article 136
of the Constitution.
ANALYSIS, REASONING AND CONCLUSION:
29. Having bestowed our anxious consideration to the lis, we find that the
interference of the Division Bench with the judgment dated 20.06.2017
of the learned Single Judge, has to be interdicted at our hands.
[2024] 8 S.C.R. 911

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

30. A bird’s eye views reveals thus. The appellant topped the revised
Merit List, leading to her appointment as an APC. While serving
as such, complaint(s) against her, in brief, were that she was not
performing her duties, primarily on two counts – (i) not punctual in
attending to her duties, and; (ii) not correctly reported with regard to
the events in the hostel. As against these, the appellant’s response,
via her replies to the SCNs, is that she, inter alia, frankly admits to
being late on occasion, but to compensate for her late-coming, she
used to sit till late evening in the office for completion of work. On
this count, the Respondents cannot be faulted. It is no justification
for the appellant to contend that she was late, but worked late/
overtime such that the work did not suffer. However, as borne out
from the record, with regard to the hostel, charge was given to her
for only 5/6 days. As such, in our view, it cannot be said that within
such a short period, the appellant, without fully understanding the
attendant issues, could have straightaway given any opinion/report
on the hostel. Be that as it may, this case turns on our findings infra.
31. Clause 4 of the RGPSM’s General Service Conditions under the
heading “Resignation/Termination” provides as below:
“Persons working on contract can be terminated with one
month notice if found inefﬁcient. In case of persons
found indulged in undesirable activities amounting
to degradation of dignity of Mission, Mission Director
shall reserve right to terminate him / her with immediate
effect.”
(emphasis supplied)
32. Perusal of Clause 4 makes it clear that ordinarily, for inefficiency,
one month’s notice is sufficient. The Clause also makes it clear that
if someone is found to have indulged in “undesirable activities”, the
Mission Director was competent to terminate such person’s services
“with immediate effect ”. We are afraid that the Respondents have
placed themselves in a Catch-22 4 situation. If the order dated
30.03.2013 falls within the former part of Clause 4, as contended
by the respondent, on the premise that it is a case of termination
simpliciter and non-stigmatic, then one month’s notice was required

4 Colloquially, when one is placed in a dilemma due to two contradictory conditions. The phrase was
popularized by Joseph Heller’s novel of the same name, first published in 1961.
912 [2024] 8 S.C.R.

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to be issued to the appellant, which admittedly was not done in the
instant matter. Arguendo, were the order dated 30.03.2013 to be seen
as falling under the latter part of Clause 4, it would be stigmatic, as
made clear by the use of the words “indulged in undesirable activities
amounting to degradation of dignity of Mission”.
33. In either of the above-noted eventualities, the Impugned Judgment
would have to necessarily be set aside. Nevertheless, let us examine
the reasoning of the Division Bench, which opined that the order is
non-stigmatic and simpliciter non-renewal of contract. The order dated
30.03.2013 was, quite obviously, the culmination of the process set
into motion by the two SCNs, which has been overlooked by the
Division Bench. The mere non-mention of the background situation
or the SCNs in the order dated 30.03.2013 cannot, by itself, be
determinative of the nature of the order. As held by this Court in
Samsher Singh v State of Punjab (1974) 2 SCC 8315 and Anoop
Jaiswal v Government of India (1984) 2 SCC,6 the form of an
order is not its final determinant and the Court can find out the real
reason and true character behind terminating/removing an employee.
Moreover, the Impugned Judgment also does not deal with Clause 4.
Interestingly, this Clause also escaped the attention of or/and was
not brought to the notice of the learned Single Judge either.
34. It is profitable to refer to what five learned Judges of this Court
laid down in Parshotam Lal Dhingra v Union of India, 1957 SCC
OnLine SC 5:
“28. The position may, therefore, be summed up as follows:
Any and every termination of service is not a dismissal,
removal or reduction in rank. A termination of service
brought about by the exercise of a contractual right is
not per se dismissal or removal, as has been held by this
Court in Satish Chander Anand v. Union of India [(1953)

5 “80. …The form of the order is not decisive as to whether the order is by way of punishment. Even
an innocuously worded order terminating the service may in the facts and circumstances of the case
establish that an enquiry into allegations of serious and grave character of misconduct involving stigma
has been made in infraction of the provision of Article 311 …”
6 “12. It is, therefore, now well settled that where the form of the order is merely a camouflage for an
order of dismissal for misconduct it is always open to the court before which the order is challenged to
go behind the form and ascertain the true character of the order. If the court holds that the order though
in the form is merely a determination of employment is in reality a cloak for an order of punishment,
the court would not be debarred, merely because of the form of the order, in giving effect to the rights
conferred by law upon the employee.”
[2024] 8 S.C.R. 913

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

1 SCC 420: (1953) SCR 655]. Likewise the termination of
service by compulsory retirement in terms of a specific rule
regulating the conditions of service is not tantamount to the
infliction of a punishment and does not attract Article 311(2),
as has also been held by this Court in Shyam Lal v. State
of Uttar Pradesh [(1955) 1 SCR 26]. In either of the two
abovementioned cases the termination of the service did
not carry with it the penal consequences of loss of pay, or
allowances under Rule 52 of the Fundamental Rules. It is
true that the misconduct, negligence, inefficiency or other
disqualification may be the motive or the inducing factor
which influences the Government to take action under the
terms of the contract of employment or the specific service
rule, nevertheless, if a right exists, under the contract or
the rules, to terminate the service the motive operating on
the mind of the Government is, as Chagla, C.J., has said
in Shrinivas Ganesh v. Union of India [LR 58 Bom 673 :
AIR (1956) Bom 455] wholly irrelevant. In short, if the
termination of service is founded on the right flowing
from contract or the service rules then, prima facie, the
termination is not a punishment and carries with it no
evil consequences and so Article 311 is not attracted.
But even if the Government has, by contract or under
the rules, the right to terminate the employment without
going through the procedure prescribed for inflicting
the punishment of dismissal or removal or reduction
in rank, the Government may, nevertheless, choose
to punish the servant and if the termination of service
is sought to be founded on misconduct, negligence,
inefficiency or other disqualification, then it is a
punishment and the requirements of Article 311 must
be complied with. As already stated if the servant has got
a right to continue in the post, then, unless the contract
of employment or the rules provide to the contrary,
his services cannot be terminated otherwise than for
misconduct, negligence, inefficiency or other good and
sufficient cause. A termination of the service of such a
servant on such grounds must be a punishment and,
therefore, a dismissal or removal within Article 311,
for it operates as a forefeiture of his right and he is
914 [2024] 8 S.C.R.

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visited with the evil consequences of loss of pay and
allowances. It puts an indelible stigma on the officer
affecting his future career. A reduction in rank likewise
may be by way of punishment or it may be an innocuous
thing. If the government servant has a right to a particular
rank, then the very reduction from that rank will operate
as a penalty, for he will then lose the emoluments and
privileges of that rank. If, however, he has no right to the
particular rank, his reduction from an officiating higher
rank to his substantive lower rank will not ordinarily be
a punishment. But the mere fact that the servant has no
title to the post or the rank and the Government has, by
contract, express or implied, or under the rules, the right
to reduce him to a lower post does not mean that an order
of reduction of a servant to a lower post or rank cannot
in any circumstances be a punishment. The real test for
determining whether the reduction in such cases is
or is not by way of punishment is to find out if the
order for the reduction also visits the servant with
any penal consequences. Thus if the order entails or
provides for the forfeiture of his pay or allowances
or the loss of his seniority in his substantive rank or
the stoppage or postponement of his future chances
of promotion, then that circumstance may indicate
that although in form the Government had purported
to exercise its right to terminate the employment or
to reduce the servant to a lower rank under the terms
of the contract of employment or under the rules, in
truth and reality the Government has terminated the
employment as and by way of penalty. The use of the
expression “terminate” or “discharge” is not conclusive.
In spite of the use of such innocuous expressions, the
court has to apply the two tests mentioned above,
namely, (1) whether the servant had a right to the post
or the rank, or (2) whether he has been visited with
evil consequences of the kind hereinbefore referred
to? If the case satisfies either of the two tests then
it must be held that the servant has been punished
and the termination of his service must be taken as a
dismissal or removal from service or the reversion to
[2024] 8 S.C.R. 915

Swati Priyadarshini v. The State of Madhya Pradesh & Ors.

his substantive rank must be regarded as a reduction
in rank and if the requirements of the rules and Article
311, which give protection to government servant
have not been complied with, the termination of the
service or the reduction in rank must be held to be
wrongful and in violation of the constitutional right
of the servant.”
(emphasis supplied)
35. We would only be adding to verbosity by multiplying authorities.
In view of the above dictum, it is clear that the Respondents did
not comply with Clause 4 – either the first part or the second part
thereof. The order dated 30.03.2013 does visit the appellant with
evil consequences and would create hurdles for her re further
employment.
36. In view of the discussions made hereinabove, the Impugned Judgment
is quashed and set aside. The judgment of the learned Single Judge
dated 20.06.2017 stands revived, however with a modification to
the extent that the appellant shall be entitled to all consequential
benefits including notional continuation in service at par with other
similarly-situated employees, but with the back wages restricted to
50%. Further, in view of the long passage of time, we deny liberty
to the respondents to proceed afresh against the appellant as was
granted by the learned Single Judge. However, this will not preclude
the respondents from taking action against the appellant in accordance
with law in futuro apropos her official duties on the post in question,
if the situation so arises. The exercise be completed within three
months from the date of receipt of this judgment.
37. The appeal is allowed and disposed of on the above terms while
leaving the parties to bear their own expenses.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan