Contract Employee Subjected To Disciplinary Rules Can't Be Terminated Without Departmental Enquiry: Gauhati HC

A Division Bench of the Gauhati High Court comprising Chief Justice Ashutosh Kumar and Justice Arun Dev Choudhury held that if a contractual employee's appointment expressly incorporates statutory disciplinary rules, then the termination on grounds of misconduct is punitive and invalid without following the prescribed enquiry procedure under such rules. Background Facts The employee was engaged as a Project Officer (Disaster Management) on a fixed-term contractual basis under the Assam State Disaster Management Authority. His engagement letter specifically made his service subject to the Assam Services (Discipline & Appeal) Rules, 1964. In August 2018, his father fell seriously ill, due to which he verbally informed his superiors and left headquarters. He intended to submit a formal leave application later. He remained absent from duty. The authorities treated his absence as unauthorised and issued a show-cause notice proposing termination of his contract for gross indiscipline. Later the authorities terminated his contractual engagement due to his unsatisfactory reply. Aggrieved by the termination, the employee approached the Gauhati High Court by filing a writ petition. The Single Judge directed the appellants to reinstate the employee with a liberty to the appellants to proceed against the employee afresh. Aggrieved by the same, the State of Assam filed an appeal against the Single judge's order. It was contended by the State that the respondent was a contractual employee. They argued that even if the Service Rules are made applicable in the contract, the full rigour of Rule 9 of the Rules, 1964, is not applicable to contractual employees. It was further submitted that renewal of the contract was discretionary and dependent on performance and satisfaction of the concerned authority. It was submitted that the employee was a habitual absentee and insincere, and therefore the termination was lawful. Relying on Supreme Court precedent in GRIDCO Ltd. Vs Sabananda Doloi & Ors, the State argued that in cases of pure contractual employment, termination without disciplinary enquiry is permissible. On the other hand, it was contended by the employee that although he was working on a contractual basis, his engagement letter specifically made him subject to the Assam Services (Discipline & Appeal) Rules, 1964. It was further contended that termination, being a major penalty under Rules, 1964, could only be imposed in terms of Rule 9 by initiating a departmental inquiry, which was never conducted. Findings of the Court It was observed by the Court that the employee's engagement was contractual in nature. However, the terms of his engagement expressly made his service subject to the Assam Services (Discipline & Appeal) Rules, 1964. It was noted that once the employer consciously incorporates statutory service rules governing discipline and penalties into a contract, it cannot later contend that such rules would apply only partially or selectively. It was held that incorporation of 1964 Rules into the contract is not an empty formality, it had binding legal consequences for both the contracting parties. The Rule 9 of the 1964 Rules was relied upon by the Division Bench which states that “imposition of a major penalty can only be preceded by a regular departmental enquiry, which includes framing of definite charges affording reasonable opportunity of defence and adherence to the principles of natural justice.” It was further observed that termination on the ground of unauthorised absence or gross indiscipline is punitive in nature and carries civil consequences. Such termination amounts to imposition of a major penalty. Therefore, it could only be effected after following the procedure prescribed under Rule 9, which mandates a regular departmental enquiry. The Court rejected the State's contention that the 1964 Rules do not apply in full rigour to the contractual employees. It was held by the Division Bench that the employer having voluntarily extended the applicability of 1964 Rules by contract, cannot retract from them while imposing a major penalty. It was further held that since the contract itself included the Rules of 1964, the authorities were bound to comply with them. Hence, the order of the Single Judge was upheld by the Division Bench. Accordingly the Writ Appeal filed by the State was dismissed by the Division Bench. Case Name : The State of Assam & Others vs. Ikbal Hussain Laskar Case No. : Case No. : WA/361/2025 Counsel for the Appellant : Jogen Handique Counsel for the Respondent : Md. A J Atia, A H AtiaClick Here To Read/Downoad Order

Contract Employee Subjected To Disciplinary Rules Can't Be Terminated Without Departmental Enquiry: Gauhati HC

Namdev Singh

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