judgement:
Civil Appeal Nos.
2242 2247 of 1972.
Appeals by special leave from the Judgment and Order dated 1 12 1971 of the Kerala High Court in Income Tax Ref.
No. 29/70, 30/70, 71, 92, 97 and 98/69.
P. A. Francis, G. A. Shah and Miss A. Subhashini for the Appellant.
section T. Desai, Mrs. section Vaidyalingam, J. B. Dadachanji, Mrs. A. K. Verma and Monjel Kumar for the Respondents.
The following Judgments were delivered: UNTWALIA, J.
These six appeals by special leave preferred by the Commissioner of Income tax from the judgments of the Kerala High Court are all inter connected and arise out of different proceedings in relation to one assessment year only.
They have, therefore, been heard together and are being disposed of by this judgment.
The assessee respondent is a Hindu undivided family owning large agricultural lands in the State of Kerala.
In 1905 the family purchased in court auction some lands covering an area of about 200 acres.
There were two irrigational channels in the land drawing water from a river.
According to the Sanad, there were about 772 trees of various kinds like Karimpana, coconut trees, jack trees, tamarind trees, Maruthu etc.
There were other trees of spontaneous growth but they were not in one block.
They were interspersed among the paddy fields as the land aforesaid was meant for paddy 542 cultivation.
By an agreement dated November 28, 1960 the assessee sold to one Velappa Rowther trees from about 60 acres of land forming part of the 200 acres aforesaid.
Since the original term stipulated in connection with the payment of money by Rowther could not be adhered to by him, further agreements were entered into deferring and spreading the payments over some years.
The assessee under the impression that the money which it received from Rowther on account of sale of trees was not chargeable to income tax under the Indian Income Tax Act did not file any voluntary return.
On February 28, 1963 the Income Tax Officer, Palghat wrote to the Karanavan of the assessee family pointing out that he had information that the assessee had leased certain private forests to Velappa Rowther for cutting timber; and that the assessee had received Rs. 75,000/ during the relevant year.
The corresponding assessment year would be 1961 62.
The assessee was asked to explain why no voluntary return had been filed.
In reply to the letter of the Income Tax Officer the assessee wrote a letter dated the 3rd April, 1963 stating therein that there was no lease but an out and out sale of the entire standing timber trees except certain specified varieties and that the sale was affected with a view to extend wet or dry cultivation in its fields in the area; the receipt therefrom were of a capital nature or in any event it was an agricultural income.
The assessee, however, concluded its letter by stating that he had no deliberate intention of avoiding to file any return.
If the Income Tax Officer so desired, he was ready to comply with his direction.
Thereafter the Income Tax Officer served a notice on the assessee under section 148 of the Income Tax Act, 1961, hereinafter called the Act.
In response to the same the assessee filed a return on 25.3.1966 showing a total net income of Rs. 626.63 paise for the previous year ending on 31.3.1961.
The Income Tax Officer held that out of the total number of trees numbering 772 four varieties were not sold and roughly speaking the number of trees sold and allowed to be cut as per the agreement came to 367.
The trees were of spontaneous growth and the whole of the amount of Rs. 1,75,000/ , although the whole of it was not paid during the accounting year, represented the assessee 's income which had accrued as per the terms of the agreement in that very year.
He accordingly assessed the whole of the amount to income tax.
The Appellate Assistant Commissioner allowed the appeal of the assessee in part and held that only a sum of Rs 75,000/ , the amount actually received during the accounting year, was assessable to income tax in the assessment year 1961 62.
The assessee as well as 543 the department both preferred appeals before the Income Tax Appellate Tribunal from the order of the Appellate Assistant Commissioner.
The Tribunal by its order dated the 16th November, 1968 dismissed both the appeals.
At the instance of the assessee the Tribunal stated a case which was numbered as Reference No. 30 of 1970 and referred the following question of law to the High Court for its opinion: "Whether, on the facts and in the circumstances of the case, the receipts from the sale of trees of spontaneous growth were assessable to tax and if so, whether assessable under 'Other Sources '?" The High Court by its judgment, since reported in Ambat Echukutty Menon vs Commissioner of Income Tax, Ernakulam(1) has answered the question in the negative, in favour of the assessee and against the department.
Civil Appeal No. 2247 arises out of Reference No. 30 of 1970.
At the instance of the Revenue also the Tribunal made a Reference being Reference No. 29/1970 and the question of law referred to the High Court is in the following terms: "Whether on the facts and in the circumstances of the case, the whole of the sum of Rs. 1,75,000/ was not assessable to tax in the previous year ending on 31.3.1961 relevant for the assessment year 1961 62." Since the High Court in the main Reference opined that the receipt from the sale of the trees were of a capital nature this Reference was also answered in favour of the assessee.
Civil Appeal No. 2242 arises out of Reference No. 29 of 1970.
The Income Tax Officer initiated penalty proceedings against the assessee, one under section 271 (1) (a) of the Act and the other under section 273 (b), the former being for the alleged failure of the assessee to furnish the return for the period in question and the latter for its alleged failure to furnish an estimate of the advance tax payable.
In relation to the penalty proceeding under section 271(1)(a) of the Act, two References were made to the High Court, one at the instance of the Revenue and the other at the assessee 's instance and two 544 References were similarly made in relation to the penalty proceeding under section 273(b).
As a consequence of the main judgment of the High Court in Reference No. 30 of 1970 all these four References also had to be disposed of in favour of the assessee.
Civil Appeals 2243 to Civil Appeals 2246 have been preferred by the department in these penalty proceedings.
Since, in our view, for the reasons to be stated hereinafter the judgment of the High Court in the main Reference giving rise to Civil Appeal 2247 is correct and the said appeal has to fail on that account, it is plain that the other five appeals fail as a corollary to the same and have got to be dismissed as such.
I now proceed to discuss and decide the relevant question of law in the main appeal.
Before I notice and advert to some special facts of this case it would be better to have a resume of some decisions of the High Courts and this Court taking one view or the other in relation to the sale of trees, some cases holding that it is a capital receipt and some cases concluding in different situations and on different facts that it is a revenue receipt.
In Commissioner of Income tax, Madras vs T. Manavedan Tirumalpad(1) a Full Bench of the Madras High Court held that the receipts from the sale of timber trees by the owner of unassessed forest lands in Malabar were chargeable to income tax.
Such trees were treated as usufruct from the land like paddy from land and minerals from mines.
Similarly the Oudh Chief Court expressed the view in Maharaja of Kapurthala vs Commissioner of Income Tax, C.P. & U.P.(2) that the net receipts from the sale of forest trees are income liable to income tax even though the forest would be gradually exhausted by fellings.
This was a case of forest trees of spontaneous growth growing on land which was assessed to land revenue.
The Patna case viz. Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income Tax, Bihar and Orissa(3) was also a case of the receipts from the sale of forest trees.
In Fringford Estates Ltd., Calicut vs Commissioner of Income Tax, Madras(4) the sale of timber comprised in the trees from the forest was on a business line and the profits derived from the same were held to be assessable to income tax on the principle that profits derived from capital which is consumed or exhausted in the process of realization are nonetheless the taxable income.
545 The other cases taking the view that money received by sale of trees is a capital receipt are of the nature where trees have not been treated as usufruct of the land.
They were treated as part of the capital assets and the receipts from the sale of such trees retained the same character.
In Commissioner of Income Tax, Bombay South vs N. T. Patwardhan(1) the Bombay High Court was dealing with a case of the sale once for all of the trees with roots even though they were of the spontaneous growth.
The receipts from such sales were held to be capital in nature.
The Kerala High Court in State of Kerala vs Karimtharuvi Tea Estate Ltd.(2) was concerned with the sale of firewood of gravelia trees grown and maintained in tea gardens for the purpose of affording shade to tea plants.
Even sale proceeds of forest trees failed for the purpose of coffee plantation in the land were held to be capital receipts by the Mysore High Court in the case of Commissioner of Income Tax, Mysore vs H. B. Van Ingen(3) and the Madras High Court in the case of Commissioner of Income Tax, Madras vs M. section P. Nadar Sons(4).
Similarly sale of dead and wind fallen trees and trees planted for shades were held to be bringing receipts of capital nature vide Flixir Plantations Ltd. vs Commissioner of Income Tax(5) and Consolidated Coffee Estates (1943) Ltd. vs Commissioner of Agricultural Income Tax, Mysore(6).
In Commissioner of Income Tax, Kerala vs Venugopala Varma Raja(7) the Kerala High Court was concerned with the trees of spontaneous growth.
Obviously the income was not agricultural income.
The owner of a forest had derived income from a lease of the forest which came within the ambit of the Madras Preservation of Private Forests Act, 1949.
The lease was for "clear felling" which had a definite and specific meaning under Rule 7 framed under the said Act.
It did not permit a removal of the trees along with their roots.
The felling of the trees had to be done in such a way as to permit the regeneration and future growth of the trees concerned.
"In other words, what is contemplated by the clear felling method is not the sterilisation of an asset but the removal of a growth above a particular height, leaving intact the roots and the stamps in such a manner as to ensure regeneration, future growth, further felling and a subsequent income" (page 803).
On that account it was held that it was a revenue receipt and 546 not a capital one.
The case came up to this Court and the view of the High Court was eventually upheld.
The decision of this Court is reported in V. Venugopala Varma Rajah vs Commissioner of Income Tax, Kerala(1).
A supplementary statement of the case was called for by this Court but ultimately the decision turned round the true import of the expression "clear felling".
Some of the earlier decisions of the various High Courts noticed by me above were referred and it was thought that there was some conflict between them, yet finally without resolving the conflict, the view expressed at page 466 by this Court with reference to the facts of the case was in these terms: "It is not necessary for the purpose of this case to enter upon a detailed analysis of the principle underlying the decisions and to resolve the conflict.
On the finding in the present case it is clear that the tress were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be difficult [subject to the special exemption under section 4(3) (viii) of the Income tax Act, 1922] to hold that the realization is not of the nature of income.
Where the trunks are cut so that the stumps remain intact and capable of regeneration, receipts from sale of the trunks would be in the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
We need not consider whether in case there is a sale of the trees with the roots so that there is no possibility of regeneration, it may be said that the realisation is in the nature of capital.
That question does not arise in the present case.
" The question, however, of sale of trees with roots arose before this Court shortly after in A. K. T. K. M. Vishnudatta Antharjanam vs Commissioner of Agricultural Income Tax, Trivandrum(2).
Shah J., as he then was, who had delivered the judgment in Venugopala 's case (supra) was a party in this case also, the judgment of which was delivered by Grover J.
The test laid down by the Privy Council in The Commissioner of Income tax, Bengal vs Messrs Shaw Wallace and Company(3) was applied and it was said at page 61: "According to that test, income connotes a periodical monetary return coming in with some sort of regularity or 547 expected regularity from definite sources.
The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall.
Once the teak trees were removed together with their roots and there was no prospect of regeneration or of any production of a return therefrom, it could well be said that the source ceased to be one which could produce any income.
" I am aware that the test laid down by Sir George Lowndes in Shaw Wallace case has been whittled down to a very large extent by subsequent pronouncements of the Privy Council e.g. in Gopal Saran Narain Singh vs C.I.T.(1) and Kamakshya Narain Singh vs C.I.T.,(2) yet in the matter of sale of trees when this Court applied the same test in Vishnudatta 's case it was for the purpose of laying stress on the object of the felling of the trees.
The return may be one and only one.
But if the object of felling the trees leaving the roots and stumps intact is for regeneration of income, then whether income is regenerated or not is immaterial.
But in a case where the trees are sold by uprooting the roots no body can say that there could be any object of regeneration of income from the trees growing again as there was no question of a second growth at all.
Similarly, ordinarily and generally, when the trees are sold and allowed to be felled by leaving the roots and stumps intact then in case of trees of spontaneous growth there is a likelihood of fresh sprouting and further growth of trees on the left out roots and stumps.
The presumption in such cases generally would be that the owner did it with the object of regenerating the income.
But there may be case, although few and far between, like the one with which we are concerned here where the roots and stumps were not allowed to be uprooted and cut by the licensee or the lessee yet the object was not the regeneration of the trees but a protection of the land eventually to be used for the purpose of cultivation.
In this background of the law, I now proceed to refer to the special facts of this case.
Clauses 12 and 13 of the agreement dated 28.11.1960 entered into between the assessee and Velappa Rowther are as follows: "(12) The trees in the reared forest have to but cut neatly and the relative stumps should not be either pulled out or cut out.
548 (13) No. 3 should not enter on the lands from where trees are cut or on the sprouts coming up from there.
After the cuttings sprouts are not to be cut.
" No. 3 referred in clause (13) is the said Rowther.
On the face of the agreement, therefore, the transaction was not a sale of trees with roots and stumps.
Rather there was a prohibition that after the cutting, sprouts were not to be cut.
The agreement, however, did not indicate as to what was the object of the assessee in incorporating clauses (12) and (13) in the agreement.
Was it the regeneration of the trees for earning more income or was it something else ? The subsequent conduct of the assessee as appeared from the facts placed before the Income tax authorities without anything more will indicate that the object of the assessee was to protect the land falling vacant after the cutting of the trees from being damaged by the licensee by at random cutting of the stumps and uprooting of the roots.
The trees sold were spread in an area of 60 acres of land only.
Even in that area the trees were not in any thick or continuous forest.
They were interspersed by paddy fields.
In its very first communication to the Income Tax Officer sent on 3 4 1963 the assessee perhaps was made aware of the decision of the Kerala High Court in Commissioner of Income Tax, Kerala vs Venugopala Varma Raja (1) which was a case of private forest governed by the Madras Act.
The assessee, therefore, claimed that there were no private forests in Cochin area of Kerala where the land was situated.
The assessee asserted that in substance and in effect the sale was of the entire standing timber i.e. totality of the trees and "the sale was effected with a view to extend wet or dry cultivation to that area as well since the standing trees were a hindrance for such extensions.
" In this very letter the assessee also asserted "This is the very first time that our Thavazhi has sold the trees.
The trees, the subject matter of the sale contract, were there at the time of the purchase of the agricultural lands by our Thavazhi in 1080 M.E.
The trees were old trees.
No tree had been sold after our Thavazhi became the owner of the agricultural lands.
A large extent of agricultural lands was purchased and these trees formed part and parcel of such holdings.
None of us know when the trees began to grow.
After purchase of the lands we had developed the same and in the process we sold the trees with the object mentioned above.
The present sale has been the only sale and it will be the last one also since our idea is to extend cultivation to this area as well.
" The Tribunal in its appellate order noticed the argument of the assessee that its sole occupation was agriculture and the attraction in 549 the purchase of the land in the year 1905 was two irrigational channels contained therein.
It also noticed the other facts stated in the letter aforesaid of the assessee and finally concluded on the basis of clauses (12) and (13) of the agreement "It is clear from these that the assessee was reserving to itself the results of the future growth and a source of income.
" The case was squarely covered, in its opinion, by the decision of the Kerala High Court in Venugopala 's case.
It further observed that the assessee was claiming exemption and it was upto him to furnish all the information as to what trees would not regenerate, what kind of trees were sold etc.
The assessee had failed to furnish these details.
Yet it would be noticed that without rejecting the assessee 's stand that the transaction in question was the first and the last sale of trees by the assessee and without finding that the object of the assessee was not to convert the land for cultivation but to earn income by regeneration of trees, it upheld the view of the departmental authorities that the receipt was a revenue receipt assessable to income tax.
It should be noted that the assessment made was not for default of the assessee to produce any relevant material but a regular assessment on consideration of such materials as were produced by it.
It was not asked to produce any other evidence or material to substantiate the stand taken by it.
Nor was the stand rejected.
In such a situation it was not a question of assessee 's claiming any exemption and failing to get it for its alleged failure to furnish any more details.
But it was a case where in order to net the receipt as a revenue receipt it was for the department to reject the assessee 's stand and to hold that the object of the assessee in not allowing the licensee to cut the stumps and uproot the roots was a regeneration of the income.
The High Court has also noticed the fact as found mentioned in the order of the Tribunal that by the time the assessment was completed by the Income Tax Officer an area of 10 acres had been converted into cultivable land.
In our opinion, therefore, the High Court rightly distinguished the decision in Venugopala 's case (supra) and applied the ratio of that of Vishnudatta 's case (supra).
As I have observed above the facts of this case were on a line which on the surface was blurred and indistinct, yet, on a careful examination of the matter I find that the dividing line, though thin, nonetheless, is distinct enough to make this case fit for application of the ratio of the decision of this Court in Vishnudatta 's case.
I accordingly uphold the view of the High Court.
In the result all the six appeals are dismissed but on the special facts and circumstances of this case we make no order as to costs in any of them.
PATHAK, J. I agree with my learned brother that the appeals should be dismissed.
And I shall set out my reasons.
550 The case is one where trees of spontaneous growth were sold on condition that the purchaser would cut and remove the trunks without disturbing the stumps and roots embedded in the soil.
Where trees are so felled and removed, and the stumps and roots are allowed to remain in the land with a view to regeneration of the trees, the intention of the owner would be to indulge in a profit making activity, and the case would fall within V. Venugopala Varma Rajah vs Commissioner of Income Tax, Kerala(1).
The receipts from sale of the trunks would be revenue receipts.
But in the present case there was no intention to reserve the stumps and roots for the purpose of allowing regeneration of the trees.
The intention and subsequent conduct of the assessee establishes that the stipulation against removal of the stumps and roots was intended to protect the surface of the land from indiscriminate injury because the land was to be applied to cultivation.
Intention is a material factor in such cases, and each case has to be decided on its particular facts.
Without evidence of the intention or object behind such a stipulation, the mere fact that the trees were sold without stumps and roots cannot lead to the necessary inference that a profit making activity was involved.
Where the evidence shows that the land had been acquired for the purpose of cultivation, and that the prohibition on the purchaser against removing the stumps and roots was intended to prevent undue interference with the soil, and the assessee did not intend to permit regeneration of the trees, and that the had in fact later put the land to cultivation, the payments received on sale of the trunks cannot be regarded as taxable income.
And yet the case is distinguishable from the facts in A.K.T.K.M. Vishnudatta Antharjanam vs Commissioner of Agricultural Income Tax, Trivandrum.(1) That was a case where the trees were sold with their roots, and it was held by this Court that by removal of the roots the source from which the fresh growth of trees could take place had also been removed and, therefore, the sale of such trees effected the capital structure, and could not give rise to a revenue receipt.
In my opinion, the present case does not fall either within V. Venugopala Varma Rajah (supra) or A.K.T.K.M. Vishnudatta Antharjanam (supra).
It is a case where although the stump and roots remained after the trees were felled and removed by the purchaser, the regeneration of the trees was not to be allowed and, therefore, a profit making activity could not be spelled out.
The appeals are dismissed, but there is no order as to costs.
N.V.K. Appeals dismissed.

summary:
On a vast area of agricultural land owned by the assessee there were about 772 trees some of which were of spontaneous growth.
Clauses 12 and 13 of the agreement by which the assessee sold some trees provided that the trees should be cut without pulling the stumps.
The Income Tax Officer, held that the trees were of spontaneous growth and assessed the whole of the income from the sale of trees to income tax.
The Appellate Assistant Commissioner allowed the assessee 's appeal in part holding that only the amount actually received during the accounting year, was assessable to income tax.
Appeals preferred by the assessee as well as the department to the Income Tax Appellate Tribunal were dismissed but references were made to the High Court on the question whether the receipts from the sale of trees of spontaneous growth were assessable to tax and if so, whether assessable under the head 'other sources '.
The High Court held that the receipts from the sale of the trees were of a capital nature, and decided the references in favour of the assessee and against the department.
Dismissing the appeals the Court, ^ HELD: (per Untwalia, J.) (1) The High Court rightly distinguished the decision in V. Venugopala Varma Rajah vs Commissioner of Income tax, Kerala, and applied the ratio of that in A. K. T. K. M. Vishnudatta Antharjanam vs Commissioner of Agricultural Income Tax, Trivandrum, [549F] (2) In Venugopala Varma Rajah vs Commissioner of Income Tax, Kerala, , this Court held that if a person sells merely leaves or fruit of the trees or even branches of the trees it would be difficult to hold that the realization is not of the nature of income.
Where the trunks are cut so that the stumps remain intact and capable of regeneration, receipts from sale of the trunks would be in the nature on income.
By selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
[546A, D E] 540 (3) In A. K. T. K. M. Vishnudatta Antharjanam vs Commissioner of Agricultural Income Tax, Trivandrum, , a case of sale of trees with roots, this Court applied the test laid down by the Privy Council in the Commissioner of Income Tax, Bengal vs M/s. Shaw, Wallace and Co., and held that, "the source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall.
Once the teak trees were removed together with their roots and there was no prospect of regeneration or of any production of a return therefrom, it could well be said that the source ceased to be one which could produce any income." Although the test laid down by the Privy Council has been whittled down by subsequent pronouncements, yet in the matter of sale of trees when this Court applied the same test in Vishnudatta 's case it was for the purpose of laying stress on the object of the felling of trees.
[546G, 547A C] (4) If the object of felling the trees leaving the roots and stumps intact is for regeneration of income, then whether income is regenerated or not is immaterial.
But in a case, where the trees are sold by uprooting the roots nobody can say that there could be any object of regeneration of income from the trees growing again as there was no question of a second growth at all.
Similarly when the trees are sold and allowed to be felled by leaving the roots and stumps intact then in case of trees of spontaneous growth there is a likelihood of fresh sprouting and further growth of trees on the left out roots and stumps.
The presumption in such cases would be that the owner did it with the object of regenerating the income.
There can be cases like the instant one, where the roots and stumps were not allowed to be uprooted and cut by the licensee or the lessee, yet the object was not the regeneration of the trees, but a protection of the land eventually to be used for the purpose of cultivation.
[547D F] In the instant case, the agreement dated 28 11 1960 indicates that the transaction was not a sale of trees with roots and stumps, for clauses 12 and 13 of the agreement impose a prohibition that after the cutting, sprouts were not to be cut.
The object of the assessee was to protect the land falling vacant after the cutting of the trees from being damaged by the licensee by at random cutting of the stumps and uprooting of the roots.
[547G, 548B C] (5) In order to net the receipt as a revenue receipt it is for the department to reject the assessee 's stand and to hold that the object of the assessee in not allowing the licensee to cut the stumps and uproot the roots was a regeneration of the income.
By the time the assessment was completed by the Income Tax Officer an area of ten acres had been converted into cultivable land.
[549 E F] (per Pathak, J. concurring) 1.
The instant case does not fall either within V. Venugopala Varma Rajah vs Commissioner of Income Tax, Kerala, or A. K. T. K. M. Vishnudatta Antharjanam vs Commissioner of Agricultural Income Tax, Trivandrum, It is a case where although the stumps and roots remained after the trees were felled and removed by the purchaser, the regeneration of the trees was not to be allowed and, therefore, a profit making activity could not be spelled out.
[550G] 2.
Where trees are felled and removed, the stumps and roots are allowed to remain on the land with a view to regeneration of the trees, the intention of the 541 owner would be to indulge in a profit making activity.
The receipt from the sale of the trunks would be revenue receipts.
[550B] 3.
There was no intention in this case to reserve the stumps and roots for the purpose of allowing regeneration of the trees, and the intention and subsequent conduct of the assessee established that the stipulation against removal of the stumps and roots was intended to protect the surface of the land from indiscriminate injury because the land was to be applied to cultivation.
Intention is a material factor in such cases, and each case has to be decided on its particular facts.
Without evidence of the intention or object behind such a stipulation the mere fact that the trees were sold without stumps and roots cannot lead to the necessary inference that a profit making activity was involved.
[550C D] 4.
Where the evidence shows that the land has been acquired for the purpose of cultivation, and that the prohibition on the purchaser against removing the stumps and roots was intended to prevent undue interference with the soil, and the assessee did not intend to permit regeneration of the trees, and that he had in fact later put the land to cultivation, the payments received on sale of the trunks cannot be regarded as taxable income.
[550E]


judgement:
Civil Appeal No. 628 of 1976.
Appeal by special leave from the Judgment and Order dated 4 3 1976 of the Bombay High Court in Spl.
Civil Appeal No. 138 of 1972.
M. N. Phadke, section K. Mehta and M. N. Shroff for the Appellant.
G. L. Sanghi, F. section Nariman and K. R. Nagaraja for Respondent No. 1.
The following Judgments were delivered: UNTWALIA J.
This appeal by special leave has been preferred by the State of Maharashtra from the judgment of the Bombay High Court given in a Writ Petition filed by respondent No. 1 for quashing the order of termination of his service.
The High Court has allowed the Writ Petition and quashed the order.
Respondent No. 1 was appointed a Civil Judge (Junior Division) and Judicial Magistrate, First Class, on probation in accordance with the Bombay Judicial Service Recruitment Rules, 1956 hereinafter referred to as the Rules.
In paragraph 3 of the appointment letter dated 31st October, 1960 it was clearly stated: "You will be on probation for a period of two years from the date on which you take charge of your appointment, and during this period your appointment is liable to be terminated without notice.
After the period of probation your services are liable to be terminated on one month 's notice as long as your appointment is temporary.
It should be clearly understood that your appointment at present is purely temporary." Respondent No.1 pursuant to the said letter of appointment joined the Judicial Service, Class II, in the State of Maharashtra on the 7th 556 December, 1960.
The two years ' probationary period originally fixed expired on 6th December, 1962 even so he was allowed to continue in the post only in an officiating capacity and was not confirmed.
His services were terminated by a simple order of termination dated the 15th December, 1971 which ran as follows: "The Government is pleased to terminate the services of Shri V. R. Saboji, Officiating Civil Judge (Junior Division) and Judicial Magistrate, First Class, Kalamnuri, District Parbhani with effect from 1st February, 1972.
" A copy of the above order was forwarded to and served upon the first respondent alongwith a covering letter of that date expressly stating therein: "Your appointment is still temporary and your services are liable to be terminated on one month 's notice.
I am to state that Government has decided to terminate your services with effect from 1st February, 1972 and that you will, therefore, cease to be in service with effect (from) that date.
A formal order is enclosed herewith.
" The first respondent challenged the order of his termination in the High Court by filing a Writ Petition impleading the then Law Secretary to the Government of Maharashtra as respondent No. 1, State of Maharashtra, respondent No. 2 and S/Shri K. N. Wahi and P. G. Karnik as respondents 3 and 4 respectively.
To put it briefly, the case made out by the first respondent in his Writ Petition was that he had become a confirmed Government servant and the order terminating his services simpliciter was by way of punishment.
Respondents 3 and 4 were respectively District and Inspecting District Judges in the District where respondent No. 1 happened to work under them.
They bore some ill feeling and ill will against him and had made certain enquiries and reported the matter to the High Court as a result of which, according to the belief of the said respondent, some adverse remarks were given to him and his services were terminated at the insinuation of the said two officers.
Affidavits were filed on behalf of the State of Maharashtra and respondents 3 and 4 as well.
The latter two in their counters denied the allegations of mala fides against them.
In the High Court the following five points were urged on behalf of respondent No. 1: "(1) That the order of termination has been passed as by way of punishment which amounts, in fact, to dis 557 missal and since the provisions of Article 311(2) have not been complied with, the order is void; (2) That the petitioner has been purposefully picked for discharge when many of his juniors were allowed to be retained.
Therefore, the order is violative of Article 16 of the Constitution; (3) The order has been passed mala fide with a view to circumvent the provisions of Article 311 of the Constitution; (4) The petitioner had, in fact, at the time of termination of his services become permanent employee in accordance with Rule 4(2)(iv) of the Bombay Judicial Service Recruitment Rules, 1956; and (5) The order is bad as it is passed in violation of the provisions of Article 235 of the Constitution.
" Point No. 5 was decided against respondent No. 1.
Apropos the other four points the High Court has held (1) that the respondent No. 1 will be deemed to have been confirmed in his post because his work was satisfactory and a vacancy in the permanent cadre was available.
The Government had no discretion in the matter and it was bound to confirm the said respondent under Rule 4(2) (iv) of the Rules; (2) that the appointment of respondent No. 1, therefore, could not be terminated by a simple notice of termination and it was passed by way of punishment in violation of Article 311(2) of the Constitution.
The High Court did not hear the counsel on either side on the point of mala fides and they also agreed not to advance any argument on that point, as mentioned in the High Court judgment.
Before us also, except in passing, no argument of any substance was advanced to press the point of mala fides.
The correctness of the decision of the High Court was assailed before us by Mr. M. N. Phadke, appearing for the appellant, while it was sought to be sustained by Mr. F. section Nariman appearing for respondent No. 1.
I now proceed to examine the rival contentions of the parties.
In the High Court judgment there is a reference to an undertaking given by respondent No. 1 showing his willingness to accept the employment on a temporary basis.
But that apart, the letter of appointment itself had indicated that he was being appointed on probation and in a temporary capacity.
It is necessary at this stage to read the relevant provisions of the Rules.
Sub rule (2) of Rule 4 deals with method of recruitment to the Junior Branch, Class II and clause (iv) of sub rule (2) states: 558 "Unless otherwise expressly directed, every person appointed under the last foregoing sub rule shall be on probation for a period of two years and on the expiry of such period he may be confirmed if (a) there is a vacancy; and (b) his work is found satisfactory.
" There was sub clause (c) also which was deleted in 1961 and we are not concerned with that sub clause.
There are two parts of clause (iv) (1) that it is imperative to put every person appointed under sub rule (2) on probation for a minimum period of two years "unless otherwise expressly directed" and (2) on the expiry of the said period of two years the person appointed may be confirmed if there is a vacancy and if his work is found to be satisfactory.
The plain meaning of the rule is that there is no automatic confirmation on the expiry of the probationary period of two years in the first instance.
On the expiry of the said period and on the fulfillment of the requirement of sub clauses (a) & (b) a Government servant becomes eligible for being confirmed and normally he is likely to be confirmed.
But it is a matter of common knowledge in many branches of Government service including the Judiciary that for administrative reasons or otherwise the confirmation is delayed and is made at a subsequent time.
It may also be delayed for watching the work of the Government servant for a further period.
The expression "unless otherwise expressly directed" governs only the first part of clause (iv) and not the second as was attempted to be argued by Mr. Nariman.
In my opinion the rule in question, therefore, comes under the ordinary and normal rule that without an express order of confirmation the Government servant will not be taken to have been confirmed in the post to which he was appointed temporarily and/or on probation.
It is not covered by the exceptional rule like the one which was the subject matter of consideration of this Court in State of Punjab vs Dharam Singh(1).
In Kedar Nath Bahl vs The State of Punjab and others(2) Palekar J. delivering the judgment on behalf of this Court said at page 876 column 2: "The law on the point is now well settled.
Where a person is appointed as a probationer in any post and a period of probation is specified, it does not follow that at the end of 559 the said specified period of probation he obtains confirmation automatically even if no order is passed in that behalf.
Unless the terms of appointment clearly indicate that confirmation would automatically follow at the end of the specified period, or there is a specific service rule to that effect, the expiration of the probationary period does not necessarily lead to confirmation.
At the end of the period of probation an order confirming the officer is required to be passed and if no such order is passed and he is not reverted to his substantive post, the result merely is that he continues in his post as a probationer.
" I am aware that a review against this judgment was allowed and the appeal was re heard recently by a Division Bench of this Court to which I was a party.
The appeal was again dismissed and no different view of law was expressed therein than the one extracted above.
Bachawat J. also while delivering the judgment on behalf of a Constitution Bench of this Court in Dharam Singh 's case (supra) has said at page 4 thus: "This Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation, he should be deemed to continue in his post as a probationer only, in the absence of any indication to the contrary in the original order of appointment or promotion or the service rules.
In such a case, an express order of confirmation is necessary to give the employee a substantive right to the post, and from the mere fact that he is allowed to continue in the post after the expiry of the specified period of probation it is not possible to hold that he should be deemed to have been confirmed." In Rule 6(3) of he Punjab Educational Service (Provincialised) Cadre) Class III, Rules, 1961 a certain period had been fixed beyond which the probationary period could not be extended.
It was because of that it was held that when the Government servant was allowed to continue in the post after completion of the maximum period of probation without an express order of confirmation he could not be deemed to continue in that post as a probationer by implication.
In other words because of the express provision in the rule vis a vis the maximum period of probation the confirmation was automatic.
There is nothing of the kind to be found in the rules in the 560 present case.
The view of the High Court to the contrary is erroneous and cannot be sustained.
Mr. Nariman submitted that if an interpretation were to be given to Rule 4(2) (iv) that it depended upon the sweet will of the appointing authority to confirm a Government servant as and when it liked, then the rule would be violative of Articles 14 and 16 of the Constitution.
He placed reliance upon a decision of this Court in section B. Patwardhan & others etc.
vs State of Maharashtra & others(1) in support of his contention I find no substance in the argument.
The question for consideration in that case related to the competition of seniority between the direct recruits and the promotees in the Engineering cadre.
In that connection it was said at page 796 thus: "Confirmation is one of the inglorious uncertainities of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies.
A glaring instance widely known in a part of our country is of a distinguished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court.
It is on the record of those writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed.
It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government." These observations were made with reference to apparent discriminatory results which followed by applying different standards to the members of the two groups for determining their seniority, one the direct recruits and the other promotees.
I am not concerned with such a situation in the present case.
It was not suggested on behalf of the Government that the confirmation depended on the sweet will and the pleasure of the Government.
What was, however, argued was that on the fulfillment of the two conditions mentioned in sub clauses (a) and (b) of clause (iv) of sub rule (2) of rule 4 of the Rules the Government servant became eligible but there may be several other reasons, administrative of otherwise, which may delay the confirmation.
The confirmation can surely be delayed if the suitability of the Government servant has got to be watched further to decide whether he should be confirmed in the post or not.
561 Mr. Nariman pointed out that the High Court in support of its view has relied upon a resolution of the Government dated the 19th April, 1963 and the Gazette Notification dated the 11th May, 1963.
It is not necessary to quote both in my judgment.
It would suffice to refer to the wordings of the notification only.
It reads as follows: "On satisfactory completion of the probationary period of two years, Shri V. R. Saboji is appointed with effect from 6th December, 1962 (afternoon) as officiating Civil Judge (Junior Division) and Judicial Magistrate, First Class.
" The submission was that respondent No. 1 had satisfactorily completed his probationary period of two years and, therefore, he should be deemed to have been confirmed on the strength of this notification.
But such an argument is in the teeth of the language of the notification itself as it says that he was appointed from 6th December, 1962 as "officiating Civil Judge (Junior Division) and Judicial Magistrate, First Class." In other words even after the completion of the two years period he continued in officiating capacity and was not confirmed in the post.
Two inferences are possible to be drawn from this (1) that the period of probation in case of respondent No. 1 stood extended beyond two years until and unless he was confirmed and (2) that in any event he continued in the post in his temporary or officiating capacity.
No order was ever made confirming respondent No. 1 in the post and without such an order it is difficult to sustain the view of the High Court that he was confirmed.
The question of violation of Article 311(2) has to be examined in two perspectives.
Firstly, if it could be held in agreement with the High Court that he should be deemed to have been confirmed in the post to which he was initially appointed, it is plain that terminating his services by a notice of termination simpliciter like the one given in this case, will be violative of the requirement of Article 311(2).
On my finding it is manifest that it is not so.
He was continuing in the post in an officiating capacity.
His services could be terminated by one month 's notice simpliciter according to the terms of the employment.
Secondly the question to be examined is whether the termination was by way of punishment.
Even in the case of a temporary or officiating Government servant his services cannot be terminated by way of punishment casting a stigma on him in violation of the requirement of Article 311(2).
This principle is beyond any dispute but the difficulty comes in the application of the said principle from case to case.
If a Government servant is compulsorily retired or one who is officiating in a higher post is reverted to his parent cadre, or when the services 562 of an officiating or temporary Government servant are dispensed with by an order of termination simpliciter, then problems arise in finding out whether it is by way of punishment.
In different kinds of situation, different views have been expressed.
Yet the underlying principle remains the same.
One should not forget a practical and reasonable approach to the problem in such cases.
Ordinarily and generally, and there may be a few exceptions, any of the three courses indicated above is taken recourse to only if there are some valid reasons for taking the action against the Government servant.
If a probe in the matter is allowed to be made in all such cases then curious results are likely to follow.
In a given case there may be valid reasons, may be of a serious kind, which led the authorities concerned to adopt one course or the other as the facts of a particular case demanded.
If one were to say in all such cases that the action has been taken by way of punishment then the natural corollary to this would be that such action could be taken if there was no such reason in the background of the action.
Then the argument advanced is that the action was wholly arbitrary, mala fide and capricious and, therefore, it was violative of Article 16 of the Constitution.
Where to draw the line in such cases? Ordinarily and generally the rule laid down in most of the cases by this Court is that you have to look to the order on the face of it and find whether it casts any stigma on the Government servant.
In such a case there is no presumption that the order is arbitrary or mala fide unless a very strong case is made out and proved by the Government servant who challenges such an order.
The Government is on the horns of the dilemma in such a situation.
If the reasons are disclosed, then it is said that the order of the Government was passed by way of punishment.
If it does not disclose the reasons, then the argument is that it is arbitrary and violative of Article 16.
What the Government is to do in such a situation? In my opinion, therefore, the correct and normal principle which can be pulled out from the earlier decisions of this Court is the one which I have indicated above.
I shall now proceed to refer to only three recent decisions of this Court, two relied upon by the appellant and the one by the respondent.
I do not consider it necessary to refer to others.
In section P. Vasudeva vs State of Haryana & Ors.
(1) a Bench of this Court to which I was a harty, Alagiriswami J. delivering the judgment of this Court said at page 187 : "In cases where enquiries have been held before orders of reversion of a probationer to his former lower post or discharge of a probationer or discharge from service of a 563 temporary servant were passed, certain decisions have taken the view that where the enquiry was held in order to find out the suitability of the official concerned the order would not be vitiated.
In certain other cases it has been held that the enquiry was held with a view to punish and as the enquiry did not satisfy the requirements of Article 311 the punishment was bad.
It appears to us that this theory as to whether the reversion to a lower post of a probationer in a higher post, or the discharge of a probationer, or the discharge from service of a temporary servant was meant as a punishment leads to a very peculiar situation.
After ali, if such an order gives no reasons the Court will not normally interfere because ex facie there is nothing to show that the order was intended as a punishment." Jaswant Singh J., delivering the judgment of this Court in State of U.P. vs Ram Chandra Trivedi(1) on behalf of a Division Bench of this Court, the other two members of which were Khanna and Sarkaria JJ., reviewed all the earlier cases of this Court very elaborately including the well known judgment of Das C.J., in Parshotam Lal Dhingra vs Union of India(2) and the comparatively recent decision of a Bench of 7 Judges in Shamsher Singh & Anr.
vs State of Punjab(3) Relevant extracts in extenso have been quoted from those two decisions as well as from others.
It would be of use to very briefly state the facts of Ram Chandra Trivedi (supra).
The respondent was appointed as a temporary clerk in a Canal Division in the year 1954.
Seven years later, he was required to appear in a departmental examination and there it was found that another clerk of another Canal Division was attempting to personate and appear for the respondent.
The Executive Engineer detected this and obtained the explanation of both the clerks and reported the matter to the Superintending Engineer.
Finding the explanations tendered by the clerks to be unsatisfactory, the Superintending Engineer brought the matter to the notice of the Chief Engineer.
The latter asked him to award suitable punishment to the two clerks.
The Superintending Engineer thereafter issued the orders terminating the services of both the clerks.
Eventually Ram Chandra Trivedi, the respondent, filed a suit challenging the order of termination of his service as having been made by way of punishment in disregard of Article 311(2).
The suit was dismissed.
The dismissal 564 was maintained by the First Appellate Court.
The High Court, however, allowed the second appeal filed by the respondent and decreed his suit.
The State came to this Court in such a situation.
This Court reviewed all the previous decisions and finally said at page 475 : "Keeping in view the principles extracted above, the respondent 's suit could not be decreed in his favour.
He was a temporary hand and had no right to the post.
It is also not denied that both under the contract of service and the service rules governing the respondent, the State had a right to terminate his services by giving him one month 's notice.
The order to which exception is taken is ex facie an order of termination of service simpliciter.
It does not cast any stigma on the respondent nor does it visit him with evil consequences, nor is it founded on misconduct.
In the circumstances, the respondent could not invite the Court to go into the motive behind the order and claim the protection of Article 311(2) of the Constitution.
" The case relied upon for the respondent is Manager Govt.
Branch Press & Anr.
vs D. P. Belliappa(1).
Speaking for the Court, Sarkaria, J., found that the order of termination was wholly arbitrary and had been passed because of some hostile motive which the authority terminating the services had against the Government servant concerned.
On the facts of this case it was found that the decision of the High Court allowing the Writ Petition of the Government servant was correct and was covered by some earlier decisions of this Court.
I may briefly refer to the facts of this case also from the judgment.
The appellant in the appeal was the Manager of a Government Press who had terminated the services of Belliappa by the impugned order without assigning any reason, albeit in accordance with the conditions of his service, while three employees, similarly situated, junior to Belliappa in the same cadre had been retained.
A charge of hostile discrimination was levelled with sufficient particularity against the appellant.
Hostile animus was also attributed by Belliappa in his writ petition to his superior officers.
He asserted that his service record was good.
This fact was not controverted by the appellant by filing any counter affidavit.
The impugned order was preceded by a show cause notice of proposed disciplinary action against Belliappa.
In such a situation it was observed in the judgment : "Of course, there is always some reason or cause for terminating the services of a temporary employee.
It is not 565 necessary to state that reason in the order of termination communicated to the employee concerned.
But where there is a specific charge of arbitrary discrimination or some hostile motive is imputed to the authority terminating the service.
It is incumbent on the authority making the impugned order to explain the same by disclosing the reason for the impugned action." (Emphasis supplied).
It would also be seen from the judgment that sufficient time was given to learned counsel for the appellant to show to the Court as to whether the services of the respondent had been terminated on the ground of unsuitability.
Yet learned counsel failed to produce any such material in the Court.
In that view of the matter the order of the High Court was upheld.
Now coming to the facts of the instant case, I find that the allegations of mala fides were made in the Writ Petition only against respondents 2 and 3 who were the immediate superior officers of respondent No. 1 at the relevant time.
No specific allegation was made against them that they made reports against him to the High Court due to any ulterior motive or to feed fat any grudge against respondent No. 1.
Merely to say, as was said by him in his Writ Petition, that their action was not justified and it was out of bias that they took the action, was not, in the least, any allegation of mala fide.
If it were to be permitted in such cases to examine all these reports in detail to find out whether the reports were justified or not and then to draw an inference of mala fide, on that basis, where will it lead to? Then in every case the reasons for termination of service will have to be scrutinised thread bare to arrive at a conclusion that the order passed was not mala fide.
On his own showing respondent No. 1 had earned adverse remarks before his service was terminated which clearly showed that his record was not satisfactory.
The High Court, therefore, recommended to the Government that the services of respondent No. 1 be terminated.
The Government accepted the recommendation of the High Court and terminated his services.
No allegation whatsoever of any hostile discrimination was made in the Writ Petition against the High Court or the Government, not even against the Chief Justice or any Judge of the High Court who might have dealt with this matter.
Nor was any such allegation made against the Law Secretary or the Chief Secretary or any Minister of the Government.
After all when the orders were passed against respondent No. 1 the High Court must have examined the 566 matter carefully and found that it was not desirable to allow respondent No. 1 to continue in the service and must have found further that the facts did not warrant or make it expedient to hold any regular enquiry against respondent No. 1 and to remove him from service by way of punishment.
I may add that the High Court file containing the recommendation in case of respondent No. 1 was ready in the High Court to be shown to the Division Bench which heard the Writ Petition.
But the learned Judges refused to see it because the State Counsel was not prepared to show it to respondent No. 1.
Obviously it could not be shown to him.
Otherwise he would have come out with a plea, right or wrong, that the order was made against him by way of punishment.
This is the delicate area where the Government and the State Counsel find themselves in a peculiar and delicate position.
Mr. Phadke also informed us that the High Court file was ready with him and if we liked we may see it.
On the facts and in the circumstances of this case we did not think it necessary to see and, therefore, we did not see.
It was also argued on behalf of respondent No. 1 that 162 officers had been appointed when respondent No. 1 was appointed to the Judicial Service of Maharashtra along with them.
The service of none else was terminated and, perhaps, others, junior to him were confirmed.
Mr. Phadke informed that till 1971 none of the 162 officers had been confirmed.
Some of them might have been or must have been confirmed later.
No occasion arose for terminating the services of any other out of those 162 officers except respondent No. 1 by the year 1971.
It is not quite correct to say that his service record was all through satisfactory, and this fact was not controverted in the counter filed on behalf of the State.
Having examined all the relevant paragraphs I find that apart from the denial being there in the counter, respondent No. 1 himself, as I have stated above, disclosed in his Writ Petition acts of commissions and omissions on his part which which led respondents 3 and 4 to submit adverse reports against him to the High Court.
That being so, in my opinion, the order of termination against respondent No. 1 was not passed by way of punishment contravening the requirement of Article 311(2) nor was it arbitrary or mala fide.
For the reasons stated above, I allow this appeal, set aside the judgment and order of the High Court and dismiss the Writ Petition filed by respondent No. 1.
In regard to costs, already an order was passed that costs will be paid by the appellant in any event.
Accordingly, the costs or any balance thereof, will be paid by the appellant.
567 PATHAK, J. I agree with the judgment and order proposed by my learned brother.
There are certain observations, however, in his judgment on the point whether a Government servant petitioner is entitled to information from the relevant official records forming the basis of the order terminating his services.
Unfortunately, I find myself unable to subscribe to these observations.
The law, it seems to me, is that where the services of a temporary Government servant or a probationer Government servant are terminated by an order which does not ex facie disclose any stigma or penal consequences against the Government servant and is merely a termination order simpliciter, there is no case ordinarily for assuming that it is anything but what it purports to be.
Where, however, the order discloses on the face of it that a stigma is cast on the Government servant or that it visits him with penal consequences, then plainly the case is one of punishment.
There may still be another kind of case where although the termination of service is intended by way of punishment, the order is framed as a termination simpliciter.
In such a case, if the Government servant is able to establish by material on the record that the order is in fact passed by way of punishment, the innocence of the language in which the order is framed will not protect it if the procedural safeguards contemplated by Article 311(2) of the Constitution have not been satisfied.
In a given case, the Government servant may succeed in making out a prima facie case that the order was by way of punishment but an attempt to rebut the case by the authorities may necessitate sending for the official records for the purpose of determining the truth.
It is in such a case generally that the official records may be called for by the Court.
It is not open to the Court to send for the official records on a mere allegation by the Government servant that the order is by way of punishment.
For unless there is material on the record before the Court in support of that allegation, an attempt by the Court to find out from the record whether the termination of service is based on the unsuitability of the Government servant in relation to the post held by him or is in reality an order by way of punishment will in effect be an unwarranted attempt to delve into the official records for the purpose of determining the nature of the order on the basis of a mere allegation of the Government servant.
On a sufficient case being made out on the merits before the Court by the Government servant it is open to the Court to resort to scrutiny of the official records for the purpose of verifying the truth.
I am unable to see why the Court should decline to peruse the official records in an appropriate case and why, where considerations of privilege and confidentiality do not suffer, the information set forth in the records should 568 not be made available to the Government servant.
The mere possibility that the official records could confirm what the Government servant had set out to prove and prima facie had, indeed, proved should not shut out disclosure of the information.
What I say here in no way detracts from what this Court has laid down in State of U.P. vs Ram Chandra Trivadi.(1) The Court did deprecate there the act of the High Court in probing into the departmental correspondence that passed between the superiors of the Government servant for the purpose of determining whether the impugned order was passed by way of punishment.
But it does not appear from the facts recited in that case that the Government servant had made out any case that the impugned order had been made by way of punishment and that on the claim being disputed by the State it was necessary to ascertain whether the case sought to be proved by the Government servant stood rebutted or confirmed by the departmental correspondence.
I am unable to spell out from the judgment any absolute rule enunciated by this Court that where the order terminating the services of a temporary or a probationer Government servant is ex facie an order of termination simpliciter, the Government servant is barred from establishing that it is in fact an order by way of punishment, and that on the Government servant succeeding in establishing it to be so the court is prohibited from examining the official records for the purpose of verifying the true position.
The question of scrutinising the official records arises where a government servant is entitled to show that although the order impugned by him purports to be an order of termination simpliciter it is in fact an order made by way of punishment.
In regard to that right this Court specifically referred in Ram Chandra Trivedi (supra) to the decisions in Union of India & Ors.
vs R. section Dhaba and R. section Sial vs The State of U.P. & Ors.(2) with approval and observed : "The form of the order, however, is not conclusive to its true nature.
The entirety of circumstances preceding or attendant on the impugned order must be examined by the court and the overriding test will always be whether the misconduct is a mere motive or is the very foundation of the order.
" 569 And it proceeded to quote from Shamsher Singh & Anr.
vs State of Punjab(1), decided by a Bench of seven Judges of this Court, that : "No abstract proposition can be laid down that where the services of a probationer are terminated without saying anything more in the order of termination than that the services are terminated it can never amount to a punishment in the facts and circumstances of the case.
If a probationer is discharged on the ground of misconduct, or inefficiency or for similar reason without a proper enquiry and without his getting a reasonable opportunity of showing cause against his discharge it may in a given case amount to removal from service within the meaning of Article 311(2) of the Constitution.
" In the same case, it was observed further : "Where a departmental enquiry is contemplated and if an enquiry is not in fact proceeded with Article 311 will not be attracted unless it can be shown that the order though unexceptionable in form is made following a report based on misconduct." It seems clear that if a Government servant is able to establish that, although the impugned order is innocent ex facie, it was made on the ground that he was guilty of misconduct and therefore, the order was intended by way of punishment.
The law still is that an order, although framed in terms which do not cast an aspersion against the character and integrity of the Government servant or visit him with evil consequences, may still be proved to be in fact one by way of punishment.
It is true that in section P. Vasudeva vs State of Haryana & Ors.(2) this Court laid down that ordinarily the courts should not go behind an order of reversion of a person who had no right to the post if ex facie it did not disclose that he was being reverted as a measure of punishment and did not cast any stigma on him.
But the words advisedly used were : ".
The courts will not normally go behind that order to see, if there were any motivating factors behind that order." No definite principle as a rule of law appears to have been laid down in that case on the point and the Court has merely suggested that 570 the question whether it should be open to the courts in such cases to go behind the order should be examined de novo, and it recommended that an order reverting a probationer from a higher to a lower post, or discharging a probationer, or discharging a temporary servant from service should not be questioned except on the basis of mala fides in making the order.
From the further comments of the Court, it appears that the observation was made with a view to lightening the burden of the Court having regard to the heavy load of work presently occupying it.
Until the day that the recommendation is accepted, I believe it to be true that the jurisdiction of the courts extends to examining and scrutinising the official records in the circumstances to which I have specifically adverted.
In the present case if the High Court refused to examine the official records, I presume that the reason was that the respondent Government servant had failed to make out any case whatever that the order was by way of punishment, and there being no doubt in the mind of the High Court on the point it was justified in declining to look into the official records.
That the respondent Government servant has been unable to make out any case at all that the impugned order is by way of punishment is clearly evident from the material before us.
No occasion arises in such a case for scrutinising the official records.
The appeal is allowed, the judgment and order of the High Court are set aside and the Writ Petition filed by the first respondent is dismissed.
In view of the order already made by this Court that the respondent will be entitled to his costs from the appellant in any event, the respondent will be paid his costs accordingly.
section R. Appeal allowed.

dataset_name: IN-Abs

summary:
Respondent 1 joined the judicial service Class II in the State of Maharashtra on the 7th December, 1960 as per his order of appointment which clearly states (i) that he would be on probation for a period of two years from the date of his joining, (ii) that during that period, his appointment would be liable to be terminated without notice, (iii) that after the period of probation his services would be liable to be terminated on one month 's notice as long as his appointment was temporary.
The two years ' probationary period originally fixed expired on 6th December of 1962 even so he was allowed to continue in the post only in an officiating capacity and was not confirmed.
His services were terminated with effect from 1 2 1972 by a simple order of termination dated 15th December 1971.
Respondent 1 challenged the order of his termination by filing a writ petition.
The High Court of Bombay allowed the petition holding (1) that Respondent 1 would be deemed to have been confirmed in his post because his work was satisfactory and a vacancy in the permanent cadre was available.
The Government had no discretion in the matter and it was bound to confirm him under Rule 4(2)(iv) of the Rules (2) that the appointment of respondent 1, therefore, could not be terminated by a simple notice of termination and it was passed by way of punishment in violation of Article 311(2) of the Constitution.
Allowing the appeal by special leave, the Court ^ HELD: Per Untwalia J. 1.
Sub rule (2) of Rule 4 of the Bombay Judicial Service Rules, 1956 deals with the method of recruitment to the Junior Branch Class II.
Clause (iv) of Sub rule (2) of Rule 4 deals with probation and confirmation.
There are two parts of clause (iv) (a) that it is imperative to put every person appointed under sub rule (2) on probation for a minimum period of two years "unless 552 otherwise expressly directed" and (b) on the expiry of the said period of two years the eprson appointed may be confirmed, if there is a vacancy and if his work is found to be satisfactory.
[557H, 558 B C] The plain meaning of the rule is that there is no automatic confirmation on the expiry of the probationary period of two years in the first instance.
On the expiry of the said period and on the fulfillment of the requirement of sub clauses (a) and (b) a Government servant becomes eligible for being confirmed and normally he is likely to be confirmed.
But, in many branches of Government service including the judiciary that for administrative reasons or otherwise the confirmation is delayed and is made at a subsequent time.
It may also be delayed for watching the work of the Government servant for a further period.
The expression "unless otherwise expressly directed" governs only the first part of clause (iv) and not the second part.
Therefore the rule in question comes under the ordinary and normal rule that without an express order of confirmation the Government servant will not be taken to have been confirmed in the post to which he was appointed temporarily and/or on probation.
It is not covered by the exceptional rule like the one in State of Punjab vs Dharam Singh, ; [558C F] State of Punjab vs Dharam Singh, ; , Kedar Nath Bahl vs State of Punjab and Ors., A.I.R. 1972 SC 873; referred to.
Rule 4(2) (iv) of the Bombay Judicial Service Recruitment Rules, 1956 does not violate Articles 14 and 16 of the Constitution; there being several other reasons administrative or otherwise, which may delay the confirmation of an officer.
The confirmation can surely be delayed if the suitability of the Government servant has got to be watched further to decide whether he should be confirmed in the post or not.
[560 B, G H] section B. Patwardhan and Ors.
etc., etc v State of Maharashtra; , ; distinguished.
The Government Resolution dated 19 4 1963 and the Gazette Notification dated 11 5 1963 do not give a deemed confirmation status.
Two inferences are possible to be drawn from them. (1) that the period of probation stood extended beyond two years until and unless he was confirmed and (2) that in any event be continued in the post in his temporary or officiating capacity.
[561A, D E] 4.
Termination of services by a notice of termination simpliciter will be violative of the requirement of Article 311(2) of the Constitution, if the Government servant be held either as confirmed or deemed to have been conformed in the post to which he has been initially appointed.
In the instant case Respondent 1 was continuing in the post in an officiating capacity.
His services could be terminated by one month 's notice simpliciter.
[561E G] 5.
If the termination was by way of punishment, then also Article 311(2) would be attracted.
Even in the case of a temporary or officiating Government servant his services cannot be terminated by way of punishment casting a stigma on him in violation of the requirement of Article 311(2).
[561 G H] 6.
Ordinarily and generally, any of the three courses, namely, compulsory retirement, reversion to parent cadre from a higher officiating post; dispensing 553 with the services of an officiating or temporary Government servant with an order of termination simpliciter, is taken recourse to only, if there are some valid reasons for taking the action against the Government servant.
If a probe in the matter is allowed to be made in all such cases, then curious results are likely to follow.
In a given case there may be valid reasons, may be of a very serious kind, which led the authorities concerned to adopt one course or the other as the facts of the particular case demanded.
If reasons are disclosed in the order, then it could be said that the order of the Government was passed by way of punishment.
If not disclosed then it would be said as arbitrary and violative of Article 16 of the Constitution.
Only a practical and reasonable approach to the problem would solve it.
Ordinarily and generally the rule laid down in most of the cases by this Court, is that the Court should look to the order on the face of it and find whether it casts any stigma on the Government servant.
In such a case, there is no presumption that the order is arbitrary or malafide unless a very strong case is made out and proved by the Government servant, who challenges such an order.
[562B E] section P. Vasudeva vs State of Haryana & Ors., ; ; State of U.P. vs Ram Chandra Trivedi, ; ; Parshotam Lal Dhingra vs Union of India ; ; Shamsher Singh vs State of Punjab, ; and Manager Govt.
Branch Press & Anr.
vs D. P. Belliappa, ; ; referred to.
Malafide should be pleaded by specific allegations.
Merely to say that the action was not justified and it was out of bias that the impugned action was taken, was not, in the least, any allegation of malafide.
[565 E] In the instant case, in the absence of any specific allegation against any of the respondents in the Writ Petition, the conclusion would be that when the orders were passed against Respondent 1 the High Court must have examined the matter carefully and found that it was not desirable to allow him to continue in the service and must have further found that the facts did not warrant or make it expedient to hold any regular enquiry against him and to remove him from service by way of punishment.
The order of termination against Respondent 1 was not passed by way of punishment contravening the requirement of Article 311 (2) of the Constitution.
[565H, 566A B, G] 8.
The State counsel rightly refused to show the records of the case to Respondent 1.
Obviously it could not be shown to him.
Otherwise he would have come out with a plea, right or wrong, that the order was made against him by way of punishment.
[566B C] Per Pathak J. 1.
Where the services of a temporary Government servant or a probationer Government servant are terminated by an order which does not ex facie disclose any stigma or penal consequences against the Government servant and is merely a termination order simpliciter, there is no case ordinarily for assuming that it is anything but what it purports to be.
Where however, the order discloses on the face of it that a stigma is cast on the Government servant or that it visits him with penal consequences, then plainly the case is one of punishment.
There may still be another kind of case, where although the termination of services is intended 554 by way of punishment, the order is framed as a termination simpliciter.
In such a case, if the Government servant is able to establish by material on the record that the order is in fact passed by way of punishment, the innocence of the language in which the order is framed will not protect it if the procedural safeguards contemplated by Article 311(2) of the Constitution have not been satisfied.
[567 B D] 2.
The jurisdiction of the Court extends to examining and scrutinising the official records in the following circumstances: (a) The official records may be called for by the Court generally in a given case, for the purpose of determination the truth; where the Government servant succeeds in making out a prima facie case that the order was by way of punishment, but an attempt to rebut the case is made by the authorities.
[567D E] (b) It is not open to the Court to send for the official records on a mere allegation by the Government servant that the order is by way of punishment.
For unless there is material on the record before the Court in support of that allegation, an attempt by the Court to find out from the record whether the termination of service is based on the unsuitability of the Government servant in relation to the post held by him or is in reality an order by way of punishment will in effect be an unwarranted attempt to delve into the official records for the purpose of determining the nature of the order on the basis of a mere allegation of the Government servant.
On a sufficient case being made out on the merits before the Court by the Government servant it is open to the Court to resort to scrutiny of the official records for the purpose of verifying the truth.
[567E G] (c) Courts should not decline to peruse the official records in an appropriate case.
Where considerations of privilege and confidentiality do not suffer, the information set forth in the records should be made available to the Government servant.
The mere possibility that the official records could confirm what the Government servant had set out to prove, and prima facie had indeed proved, should not shut out disclosure of the information.
[567G H, 568A] (d) There is no absolute rule that where the order terminating the services of a temporary or a probationer Government servant is ex facie an order of termination simpliciter, the Government servant is barred from establishing that it is in fact an order by way of punishment and on the Government servant succeeding in establishing it to be so the Court is prohibited from examining the official records for the purpose of verifying the true position.
[568D E] (e) The question of scrutinising the official records arises where a Government servant is entitled to show that although the order impugned by him purports to be an order of termination simpliciter it is in fact an order made by way of punishment.
[568E F] (f) If a Government servant is able to establish that, although the impugned order is innocent ex facie it was made on the ground that he was guilty of misconduct and, therefore, the order was intended by way of punishment, the law still is that an order, although framed in terms which do not cast an aspersion against the character and integrity of the Government servant or visit him with evil consequences, may still be proved to be in fact one by way of punishment.
[569E F] 555 (g) In the present case, the reason for the High Court refusing to examine the official records was that the respondent Government servant had failed to make out any case whatever that the order was by way of punishment.
There being no doubt in the mind of the High Court on the point, it was justified in declining to look into the official records.
[570C D] State of U.P. vs Ram Chandra Trivedi, ; , Union of India vs R. section Dhaba, , R. section Sial vs The State of U.P. & Ors., , Shamsher Singh & Anr.
vs State of Punjab, ; ; applied.
section P. Vasudeva vs State of Haryana and Ors., ; ; explained and relied on