Featured image for Supreme Court Judgment dated 07-12-2018 in case of petitioner name The Depot Manager vs Sri R.K. Reddy
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Employment Termination and Service Continuity: Supreme Court’s Ruling in Depot Manager vs. R.K. Reddy

The case of The Depot Manager vs. Sri R.K. Reddy is a pivotal employment law ruling regarding termination and service continuity. The appeal, arising from Special Leave Petition (Civil) No. 7812 of 2014, was brought before the Supreme Court by APSRTC (Andhra Pradesh State Road Transport Corporation) against the respondent, R.K. Reddy, who sought service continuity despite being terminated for misconduct.

The key issue was whether a terminated contractual employee could be granted continuity of service despite a departmental inquiry and whether such continuity could be extended without challenging the termination order.

Background of the Case

The respondent, R.K. Reddy, was employed as a contract driver under APSRTC. However, after a departmental inquiry, the following key events unfolded:

  • The Enquiry Officer found him guilty of misconduct, leading to his termination.
  • His departmental appeal was dismissed.
  • His review petition before the Regional Manager was also dismissed.
  • He raised an industrial dispute, which was dismissed by the Labour Court in Industrial Dispute No. 77 of 2011.
  • Subsequently, he filed a writ petition in the High Court under Article 226, seeking reinstatement and service continuity benefits.

Judgment by the High Court

The learned Single Judge of the High Court ruled in favor of the respondent, citing an earlier decision (W.P. No. 2786 of 2012). The Court directed APSRTC to extend service continuity from the termination date to the date of re-engagement, except for the period of absence. However, this benefit was granted without any monetary compensation and was meant solely for regularization.

Appeal to the Supreme Court

APSRTC, dissatisfied with the High Court’s ruling, appealed to the Supreme Court, arguing:

  • The High Court erred in granting service continuity without setting aside the termination order.
  • The case was wrongly linked to an earlier ruling without considering the specific facts.
  • The respondent was found guilty of misconduct following a proper departmental inquiry, making him ineligible for service continuity.
  • Allowing continuity of service for an employee terminated for misconduct was unfair to other contract employees with clean service records.

Supreme Court’s Observations and Verdict

The Supreme Court, comprising Dr. Dhananjaya Y. Chandrachud and M.R. Shah, found substantial merit in APSRTC’s arguments. The Court made the following key observations:

“Such a direction cannot be issued by the learned Single Judge without the termination being set aside. The ground of continuity was not sustainable for the simple reason that unless the order of termination is set aside, as a matter of first principle, continuity cannot be granted.”

The Court emphasized that continuity of service could only be granted if the termination order was set aside. Since the respondent did not challenge his termination or fresh appointment, he could not claim continuity of service.

The Court further stated:

“Granting continuity of service to a person such as the respondent, who was found to have committed misconduct, would place him on the same footing as other contractual employees who have a record without blemish.”

The Supreme Court ruled that:

  • The earlier High Court decision failed to consider the unique facts of the case.
  • The grant of service continuity was legally unsustainable as the termination order was never overturned.
  • The High Court’s ruling was therefore set aside, and the appeal was allowed.

Conclusion

The Supreme Court’s ruling reinforces the principle that service continuity cannot be granted without legally overturning a termination order. The judgment ensures that employees terminated for misconduct do not gain unfair advantages over those who maintain a clean service record.

Final Verdict: The appeal was allowed, and the High Court’s judgment was quashed.


Petitioner Name: The Depot Manager.
Respondent Name: Sri R.K. Reddy.
Judgment By: Justice Dhananjaya Y. Chandrachud, Justice M.R. Shah.
Place Of Incident: Andhra Pradesh.
Judgment Date: 07-12-2018.

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