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CASE NO.: Appeal (civil)  1270 of 2006

PETITIONER: Branch Manager, M.P. State Agro Industries Development  Corpn.Ltd. & Anr

RESPONDENT: Shri S.C. Pandey

DATE OF JUDGMENT: 24/02/2006

BENCH: S.B. Sinha & P.K. Balasubramanyan

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No. 24842 of 2004)  

S.B. SINHA, J. Leave granted.           The appellant herein is a statutory corporation and, thus, a ’State’  within the meaning of Article 12 of the Constitution of India.   

The respondent herein was temporarily appointed as a Typist.  He was  appointed by the Branch Manager, Morena Branch of the appellant  whereafter intimation thereto was given to the Regional Manager, stating:  

"Shri Vinod Bharga has left the services from this Office  and now Shri S.C. Pandey has been temporarily  appointed as a Typist w.e.f. 16th  September, 1985.  

The original application of Shri Pandey is enclosed  herewith. Please issue necessary orders."

       He appears to have been appointed an daily wages.  His services were  terminated by an order dated 18.7.1987 with immediate effect by the  Regional Manager on the ground that  his services were no longer required.

       On or about 23.8.1987, assailing the said order of termination, he filed  an application before the Presiding Officer, Labour Court No. 2, Gwalior  wherein an interim order was passed not to remove him from services.    Although, the order had been given effect to, but in view of the said interim  order, he was allowed to continue in service.  

Before the Labour Court the appellant inter alia raised a contention     that the respondent had been illegally appointed by the then Branch Manager  and, thus, he derived no legal right to continue in service. It was  categorically stated that the employees of the said undertaking are governed  by the Rules and Regulations framed by the Corporation known as  Service  Recruitment Selections Regulations, 1976 (hereinafter referred to as  ’1976  Regulations’) in terms whereof only the Managing Director was designated  as the appointing authority.   

The issues which inter alia arose for consideration before the Labour  Court were:  

"(4) Whether the petitioner was appointed on  contingency and due to which he is not entitled to be  regularized?

(6) Whether the order of termination of petitioner is legal  and valid, because his appointment itself  was illegal?"

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       The Labour Court held that the M.P. Industrial Employment (Standing  Orders) Rules, 1963 framed under M.P. Industrial Employment (Standing  Order) Act, 1961 are applicable to the Corporation.  On a finding that the  respondent was appointed against a vacant post, it was held that he had  acquired a  right to be appointed as a regular/permanent employee in the post  of typist purported to be in terms of the  proviso appended to Rule 2 (4) of  the Standing Orders.  The order of termination was also held to be bad in  law, although, no reason therefor was assigned.  The Labour Court without  considering the contentions raised by the appellant - Corporation held:  

"Since the petitioner is in continuous service of the  respondents in compliance of the interim orders of  this Court and it has already been decided that the  petitioner is entitled to be regularized on the post  of Typist, therefore, the respondents are hereby  directed to regularize/classify the petitioner on the  post of typist within a period of 30 days of this  order with effect from 6 months after 16.9.1985  and will also pay to the petitioner the difference  between regular pay scale of permanent post and  pay scale given to him, from the date of his  regularization along with other consequential  benefits."

       An appeal preferred by the appellant herein against the said order  before the Tribunal was dismissed inter alia on the ground that the  respondent was accepted  as a working staff in the Morena Office  and he  had been transferred  to Gwalior by an order of the Regional Manager  himself.   

Before the Tribunal reliance was placed on behalf of the appellant- Corporation upon a decision  of a Full Bench of the Madhya Pradesh High  Court in  M.P.S.R.T.C  v. Narayan Singh Rathor and Ors. [ 1994 MPLJ  959].  The said decision was distinguished by the Tribunal stating that as  therein the employee was claiming the benefit of the Standard Standing  Order  in the promotional post, it had no application to the fact of the case.  

       Despite the fact that before the Labour Court the respondent made a  prayer that his services may not be terminated, although it stood terminated,  the Tribunal opined that the law of pleadings should not be strictly applied   to the labour cases on the purported ground that the services of the  respondent were not terminated legally or properly.  

       The writ petition filed by the appellant-Corporation herein before the  High Court of Madhya Pradesh at Gwalior was also dismissed.  The High  Court applied the principles contained in Section 25B of the Industrial  Disputes Act and opined that the termination of services of the respondent  was illegal.  

       A Letters Patent Appeal  thereagainst was summarily dismissed by a  Division Bench of the High Court.  

       Ms. Hetu Arora, the learned counsel appearing on behalf of the  appellant-Corporation in assailing the judgment of the High Court, would  contend that as the respondent herein had not been able to establish that he  was appointed in the services of the appellant-Corporation in terms of the  provisions of the regulations governing  selection and appointment, the  impugned order cannot be sustained.  Reliance, in this behalf,  has been  placed on Mahendra Lal Jain & Ors.  v.  Indore Development Authority  &  Ors.  [(2005) 1 SCC 639] .  

       Mr. Ashok Mathur, the learned counsel appearing on behalf of the

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respondent, on the other hand, submitted that as a finding of fact has been  arrived at that there was a clear vacancy, and as he has satisfactorily worked  for a period of more than six months, he was rightly held entitled to be  classified as a permanent employee in terms of the provisions of the  Standing Orders.   It was furthermore contended that in view of the fact that  the provisions of the Standing Orders relating to classification were rightly  invoked at the entry point being a case of appointment and not promotion.   Strong reliance has been placed on Dwarika Prasad Tiwari v. M.P. State  Road Transport Corporation & Anr.  [(2001) 8 SCC 322].  

       The Industrial Courts and High Court inter alia proceeded on the basis  that the respondent having completed 240 days of service during the  preceding 12 months, he should have been regularized in service.  Section  25-B  of the Industrial Disputes Act was also invoked on that premise.  The  Labour Court, however, wrongly equated classification with regularization.   The term ’regularization’ does not connote permanence.

       The question raised in this appeal is now covered by a decision of this  Court in  M.P. Housing Board & Anr.  v. Manoj Srivastava [ Civil Appeal  arising out of SLP (Civil) No. 27360/04 disposed of this date] wherein this  Court clearly opined that: (1) when the conditions of service  are governed  by two statutes; one relating to selection and appointment and the other  relating to the terms and conditions of service,  an endeavour should be  made to give effect to both of the statutes; (2) A daily wager does not hold a  post as he is not appointed in terms of the provisions of the Act and Rules  framed thereunder and in that view of the matter he does not derive any legal  right; (3) Only because an employee had been working for more than 240  days that by itself would not confer any legal right upon him to be  regularized in service; (4) If an appointment has been made contrary to the  provisions of the statute the same would be void and the effect thereof would  be that no legal right was derived by the employee by reason thereof.   

       The said decision applies on all fours to the facts of this case.  In  Mahendra Lal Jain (supra) this Court has categorically held that the Standing  Orders governing the terms and conditions  of service must be read subject  to the constitutional and statutory limitations for purpose of appointment  both as a permanent employee or as a temporary employee.  An appointment  to the post of  a temporary employee can be made where the  work is  essentially of temporary nature.   In a case where there existed a vacancy,  the same was required to be filled up by resorting to the procedures known  to law i.e. upon fulfilling the constitutional requirements as also the  provisions contained in the 1976 Regulations. No finding of fact has been  arrived at that before the respondent was appointed, the constitutional and  statutory requirements were complied with.  

A Constitution Bench of this Court in  State of Punjab  v. Jagdip  Singh & Ors.  [(1964 (4) SCR 964]  has categorically held that if an  order of  confirmation is passed when no post was available and that too  by  a person  who was not authorized therefor, the appointment would be void.  We have  noticed hereinbefore  that the Branch Manager in his letter dated 27.9.1985   addressed to the Regional Manager stated that the respondent had already  been appointed w.e.f. 16.9.1985.  Before the Labour Court,  the offer of  appointment had not been produced.  It had not, therefore, been disclosed as  to on what terms and conditions he was appointed.   

A Full Bench of the Madhya Pradesh High Court  in Narayan Singh  Rathor (supra) held:  

"Service conditions are essentially matters of agreement  between employer and the employee.  Where the  employer frames regulations or rules relating to  conditions of service, they are treated as part of the  conditions of service of the employee.  M.P. Industrial  Employment (Standing Orders) Act, 1961 was enacted to  provide for rules defining with sufficient precision in

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certain matters the conditions of service of employees in  certain undertakings in the State.  It contemplates  statutory interventions in service conditions of employees  in certain undertakings.  Rules have been framed under  the Act.  There is no doubt that the intention is to  improve the service conditions of the employees and  ensure that they are not adversely affected by unilateral  action of the employers.  But the contours of intervention  cannot be extended beyond the statutory frame work\005."

        In Dwarika Prasad Tiwari (supra), whereupon Mr. Mathur placed  reliance, a Division Bench of this Court accepted the views of the Full  Bench in Narayan Singh Rathor (supra).  However, it was held that the  Standing Order categorizes the nature of employment and it does not classify   individual employees in different posts according to the hierarchy created in  a department and thus the proviso to Rule 2 does  not apply to promotions or  regularizations in higher grade.  

Such appointments, in our opinion, having regarding to the decisions  in Mahendra Lal Jain (supra) and  Manoj Srivastava (supra)  must be made  in accordance  with extant rules and regulations. It is also a well settled legal  position  that only because a temporary employee has completed 240 days of  work, he would not be entitled to be regularized in service. Otherwise also  the legal position in this behalf is clear as would appear from the decision of  this Court in  Dhampur Sugar Mills Ltd. v. Bhola Singh  [(2005) 2 SCC 470]  apart from  Mahendra Lal Jain (supra).    

       The Industrial Court as also the High Court applied the principles of  estoppel  on the finding that the respondent was transferred from Morena to  Gwalior.  If his appointment was void, being contrary to regulations, in our  opinion, the procedural provisions like estoppel or waiver were not  applicable.  If an appointment made by the Branch Manager was wholly  without jurisdiction, the order of appointment itself was void.  Furthermore,  the contention of the appellant had been that in terms of Regulation 16 of  1976 Regulations only the Managing Director of the Corporation could issue  an offer of appointment.  It has not been found  by the Industrial Courts or  the High Court that the Branch Manager and the Regional Manager were  authorized to make  such appointments.  The appointment of the respondent,  thus, must be held to have been made only to meet the exigencies of services  and not in terms of the service regulations.  The appointment of the  Respondent, thus, could not have been made for filling up a regular vacancy  for the purpose of invoking Rule 2 of the Standing Orders.   

However, it has not been contended that the services of the  respondent were not governed by the provisions of the Industrial Disputes  Act.  He worked from 16.9.1985 to 19.5.1987.  He must have, thus,  completed 240 days of service.  The termination of his services without  complying with the provisions of Section 25F of the Industrial Disputes Act  was, thus, illegal.  He, however,  had unjustly been directed to continue in  service by  reason of an interim order.  He has been continuing in service  pursuant thereto.  

       The appellant, in our opinion, cannot be made to suffer owing to a  mistake on the part of the court.  The respondent also cannot take advantage  of a wrong order.

In the peculiar facts and circumstances of the case, we, therefore, of  the opinion that interest of justice would be sub-served  if, in place of  directing reinstatement of the services of the respondent, the appellant is  directed to pay a sum of Rs. 10,000/- by way of compensation to him.  It is  directed accordingly.  The orders under challenge are set aside.  The appeal  is allowed with the aforementioned directions and observations.    

       There shall be no order as to costs.