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Service Continuity and Termination Disputes: Supreme Court’s Judgment in APSRTC vs. A. Sanjeev Reddy

The case of APSRTC & ORS. vs. Sri A. Sanjeev Reddy addresses a crucial employment law dispute regarding termination and service continuity. The appeal, arising from Special Leave Petition (Civil) No. 7809 of 2014, was filed by APSRTC (Andhra Pradesh State Road Transport Corporation) against the respondent, Sri A. Sanjeev Reddy, challenging a High Court decision granting service continuity to the respondent despite a departmental inquiry leading to termination.

The legal question in this case was whether a terminated contractual employee could be granted continuity of service despite a valid departmental inquiry and whether such continuity could be extended without setting aside the termination order.

Background of the Case

The respondent, A. Sanjeev Reddy, was employed as a contract conductor at the Kamareddy Depot, Nizamabad District, under APSRTC. However, a departmental inquiry was initiated against him, leading to the following key events:

  • The Enquiry Officer found him guilty of misconduct, leading to termination.
  • His departmental appeal was dismissed.
  • Upon review, the Regional Manager ordered his re-engagement as a contract employee on 21.02.2011.
  • After re-engagement, the respondent filed a writ petition in the High Court under Article 226, seeking continuity of service and consequential 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 continuity of service 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 solely for the purpose of regularization.

Appeal to the Supreme Court

APSRTC, dissatisfied with the High Court’s ruling, challenged it before the Supreme Court on the following grounds:

  • The High Court erred in granting service continuity without setting aside the termination order.
  • The case was inappropriately linked to an earlier ruling without considering individual facts.
  • The respondent was terminated based on a full departmental inquiry, making him ineligible for service continuity.
  • Extending service continuity to an employee terminated for misconduct was unjust 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 could not have been issued by the learned Single Judge without the termination being put into question.”

The Court emphasized that continuity of service could only be granted if the termination order was set aside. The Court ruled that 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: APSRTC & ORS..
Respondent Name: Sri A. Sanjeev 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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