Case Note & Summary
The petitioner, Shri R.D. Avhad, was employed by the Maharashtra State Farming Corporation Ltd., a government company under the Companies Act, 1956, with the entire shareholding held by the State of Maharashtra. He was initially appointed as an Assistant in 1972 and later promoted to Superintendent and then Controller of Stores and Purchase. On 28.9.1993, the management of the corporation passed an order terminating his services on account of abolition of the post of Controller-Stores and Purchase, effective from 30.9.1993. The petitioner challenged this termination by way of a writ petition under Article 226 of the Constitution of India. The main legal issues were whether the termination was valid and whether the petitioner was entitled to any relief. The petitioner argued that the termination was arbitrary and violated principles of natural justice, and that he should have been absorbed in another post. The respondents contended that the abolition of post was a bona fide organizational decision taken by the Board of Directors, and that the petitioner was not entitled to any relief as the corporation was not 'State' under Article 12. The court analyzed that the termination was due to abolition of post, which is a management decision and not punitive, and therefore no natural justice was required. The court also held that a government company is not 'State' under Article 12 for service matters, and the writ petition was not maintainable. The court dismissed the petition, upholding the termination.
Headnote
A) Service Law - Abolition of Post - Termination - The termination of an employee due to abolition of post is not punitive and does not require compliance with principles of natural justice. The employer has the right to reorganize its business and abolish posts. (Paras 1-10) B) Constitutional Law - Writ Jurisdiction - Government Company - A government company under Section 617 of the Companies Act, 1956 is not 'State' under Article 12 of the Constitution for the purpose of service disputes, and a writ petition challenging termination due to abolition of post is not maintainable. (Paras 3-10) C) Service Law - Absorption - Abolition of Post - An employee whose post is abolished is not entitled to automatic absorption in another post unless there is a statutory rule or contract to that effect. (Paras 5-10)
Issue of Consideration
Whether the termination of the petitioner on account of abolition of the post of Controller-Stores and Purchase is valid and whether the petitioner is entitled to any relief under Article 226 of the Constitution of India.
Final Decision
The writ petition is dismissed. The termination of the petitioner due to abolition of post is upheld.
Law Points
- Abolition of post is a management decision
- not a disciplinary action
- no requirement of natural justice
- government company not 'State' under Article 12 for service matters
- writ petition not maintainable against termination due to abolition of post
