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CASE NO.: Appeal (civil)  7999 of 2002

PETITIONER: District Rehabilitation Officer & Ors

RESPONDENT: Jay Kishore Maity & Ors.

DATE OF JUDGMENT: 10/11/2006

BENCH: S.B. Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T WITH  Civil Appeal Nos. 4313-4319 of 2003

S.B. Sinha, J.

       Union of India filed a Scheme for Rehabilitation of the disabled  people.  The project started with financial assistance of Central  Government/Union of India.  The full financial assistance was extended till  1993, whereafter only 50% of financial assistance was provided for by the  Central Government.  The Union of India, however, took up the entire  financial burden for the project with effect from 31.1.1998.           Pilot projects were started under which centres were established in  several States of the country with a view to identify the services required by  the disabled population, to assist the man power required for delivering  those services to them or to work out the modalities for the types of man  power etc.  One of such centres was established in Kharagpur in the State of  West Bengal and another in the district of Mysore in the State of Karnataka.   For the purpose of execution of the said projects, a Project Coordination  Committee was constituted.  A set of detailed guidelines were circulated.   The Project Coordinator would be the main agency to implement the Project  and would function through Member Secretary of the State Level Advisory  Committee.  The Scheme dated 3.1.1983 was circulated with the concerned  State Governments by the Joint Secretary of the Union of India.  The total  package of services for the disabled starting with awareness in the  community and ending with their economic rehabilitation was to contain  with the following elements:-

"1)     Creation of community awareness about the  disabled population in order to seek community  participation in the measures for the welfare of the  disabled. 2)      parent counseling about the home care and  management of the disabled child. 3)      promote dissemination of information on  prevention, early detection and possibilities of  treatment of the disabled. 4)      arrangements for screening of disabilities and early  referrals. 5)      arrangements for physical rehabilitation including  medical or surgical intervention. 6)      integration of disabled children in normal schools  schedule and establishment or special schools  wherever necessary. 7)      provision of vocational training for the disabled. 8)      employment guidance and placement services both  in integrated as well as sheltered conditions of the

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disabled."

       The category of employees found suitable for recruitment for the  project were: (i) Community Health Workers; and (2) Anganwari Workers.   The Scheme envisaged that the Pilot Scheme with the infrastructure  provided should be utilized by the State Governments with an intent to  continue the project.  The infrastructures created for these pilot projects was  expected to prove to be useful for training the required manpower for future  pilot projects and similar centres which the State Governments may like to  establish.  The Project Coordinators of the Rehabilitation Centres were the  officers of the State Governments of States of West Bengal and Karnataka.   They selected the employees for the said Rehabilitation Centres.  The  employees were offered a salary of Rs. 660/- in the scale of Rs.660-60-1100- 50-5600.  Indisputably they have been working for a long time.  Initially as  noticed hereinbefore, although funds were provided by an outside agency,  the same have been taken over by the Central Government.  Terms and  conditions of service of the employees appointed were governed by the rules  applicable to the employees of the State Governments.  The pay-scales  applicable to employees of the State Government were also applied to their  case.  The employees, however, filed Original Applications before the  Central Administrative Tribunal, Calcutta as also Karnataka at Bangalore,  inter alia, contending that they being the employees of the Central  Government, the terms and conditions of services applicable to the Central  Government should apply in their case also.  A preliminary objection was  taken as regards of the jurisdiction of the Tribunal on the premise that the  applicants were the employees of the State Governments.  By a judgment  and order dated 14.7.2000, the Tribunal held:-

"12...So we are, therefore, of the clear opinion that  applicants were appointed by the Project Officer for and  on behalf of the Central Government and the Central  Government had direct control over the DRC and fund is  being provided by Central Government and we are  satisfied from facts that the prima facie it is for  determination of the relationship between the employer  and the employee which is in existence in this case;  Central Government is employer of the applicants and  the employees are entitled to claim to be employees of  the Central Government.  In view of the aforesaid  circumstances, we find that there cannot be any dispute  in this case that the Tribunal has no jurisdiction to  adjudicate the grievance of the applicants who were  directly appointed and being controlled by the Central  Government.  It is true that the aforesaid applicants are  getting the pay and allowances as per rate prescribed by  the Govt. of West Bengal.  It is found that the scale  prescribed by the government of West Bengal has been  adopted by the concerned authorities under the scheme.   So, were adoption of the scale of the State Government  does not disentitle the applicants the right of status of the  Central Government employees under the scheme. 13. In view of the aforesaid circumstances we are of the  view that the applicants are the employees of the Central  Government though their salary is being paid as per scale  of the State Government.  Under the circumstances stated  above, we allow the application with a direction upon the  respondents to treat the aforesaid applicants as employees  of the Central Government and to grant the relief’s to the  applicants in accordance with the rules in respect of  salary, provident fund etc. with immediate effect.  No  cost."           

       A writ petition filed thereagainst by Appellants herein has been

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dismissed by a Division Bench of the Calcutta High Court by reason of the  impugned order.  The Division Bench although noticed the pleadings of the  parties as also the submissions made at the bar at great details, but merely  held:-

"We have carefully considered the submissions made on  behalf of the respective parties and we are inclined to  agree with the findings of the learned Tribunal regarding  the status of the private respondents herein.  The Scheme  for setting up the Pilot Projects for the District  Rehabilitation Centres amply demonstrate that the same  was a Scheme of the Ministry of Social Welfare,  Government of India, and the State Government was  merely the implementing agency through its officers of  the Social Welfare Directorate.  The entire funding and  recruitment process and the manner of functioning, as  provided for in the Scheme, is under the direct control of  the Central Government, and even the State Level  Advisory Committee, which was to be chaired by the  Secretary of the Social Welfare Department, was  required to send periodical reports of the functioning of  the District Rehabilitation Centre to the Central  Government."

       Mr. Doabia, the learned Senior Counsel appearing on behalf of  Appellant, inter alia, contended that keeping in view the scheme floated by  the Central Government, the manner in which the funds were secured and  implementation of the scheme that took place, it is evident that Respondents  were the employees of the State of West Bengal and State of Karnataka  respectively.  It was submitted that in any event as the project has been  wound up from 1st April, 2006 and no budgetary provisions therefor having  been made for payment of salaries to the employees, this Court should pass  an appropriate order.  It was urged that the Central Administrative Tribunal  as also the High Court applied wrong tests in determining the relationship of  ‘Employer and Employee and failed to consider that effective control over  the employees was with the State Governments and not the Central  Government.  Mr. Doabia has also pointed out that some of the State  Governments e.g. State of Chhattisgarh, Rajasthan and Tamil Nadu have  taken similar projects on their own.

       Mr. Jaideep Gupta and Mr. P. Vishwanath Shetty, learned Senior  Counsel appearing on behalf of the State of West Bengal and State of  Karnataka, on the other hand, supported the impugned judgments.   

       They, moreover, appealed that having regard to the number of years  Respondents had served in the projects, the Scheme should either be directed  to be continued or the employees be directed to be absorbed either by the  Central Government or by the State Governments of West Bengal  Karnataka, as the case may be.

       By an order dated 13.9.2006, we recorded as under:-  

"A statement has been made by Mr. T.S. Doabia, learned  senior counsel appearing on behalf of the Union that the  Central Government has stopped releasing any fund from  1.4.2006.  On a query made by us in that behalf it was  stated at the Bar that so far as the employees of the State  of West Bengal are concerned, they have been paid  salary up to July 2006 and so far as the employees  working in the State of Karnataka are concerned, they  have been paid their salary up to August 2006.  We have  been given to understand that the salary to the  respondents herein could be disbursed by the Council  only from the excess fund available with it from the last

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years’ budget and the amount now stands exhausted in  view of stoppage of the grant by the Central Government.         We direct the State of Karnataka as also the State  of West Bengal to state on oath as to whether they would  like to continue with the projects in lieu of the scheme as  has been done by the States of Chhattisgarh, Rajasthan  and Tamil Nadu.  Learned counsel for the Central  Government shall hand over a copy of the project  adopted by the State of Tamil Nadu, Rajasthan or  Chhattisgarh, as the case may be, to Mr. Tapash Ray,  learned senior counsel appearing on behalf of the State of  West Bengal and Mr. Sanjay Hegde, learned counsel  appearing on behalf of the State of Karnataka so as to  enable them to seek instructions as to whether their States  are prepared to continue with the said projects on the  terms adopted by the said States.         We would also direct the Government of India to  file an affidavit as to what steps, if any, are feasible to be  taken by it for continuation of the project at least for  some time more so that solution of the problem may be  found out by this Court in the meanwhile in the event the  States express their inability to continue with the existing  project.  We also direct the respondents to file affidavit(s)  stating as to whether they are ready and willing to serve  other projects run by the Central Government, in the  event the Government of West Bengal and Government  on the other are not ready and willing to continue with  the projects.         The directors of Social Welfare Department of the  State of West Bengal as also the State of Karnataka  would also file a status report as regards the project by  26.9.2006."            

       Pursuant to the said direction, the Director of Social Welfare as also  the Secretaries of the Social Welfare Departments of the States of West  Bengal and Karnataka have filed their respective status reports.  According  to the respective State Governments, they are not in a position to take over  the project.  It was urged that the State Governments run other projects and  also provide adequate funds to Non-Governmental Organisations which  have been working in the field and the projects should, thus, be directed to  be continued by the Central Government only.

       In its counter-affidavit, the State of West Bengal, inter alia, contended  that the Central Government has been running four other projects in the  District of Midnapore.  The State Governments has other projects for which  budgetary provisions to the extent of Rs. 6 crores per annum have been  made and thus in view of the acute financial constraints, continuation of the  projects like the present one would not serve any purpose.  An affidavit has  also been filed by the State of Karnataka almost to the same effect.   

       The Parliament enacted the Persons with Disabilities (Equal  Opportunities, Protection of Rights and Full Participation) Act, 1995.  The  Act was enacted to give effect to the proclamation on the full participation  and equality of people with disabilities on both Central and State  Governments.  Implementation of its provisions is the primary responsibility  of the State Governments.  The projects were started at different centres in  different States by the Central Governments by way of a Scheme.  The funds  for the said projects initially came from the Central Government.  The  purpose of a pilot project has been noticed by us hereinbefore.  The control  of the Rehabilitation Centres for the benefit of the people for whom the same  were started was with the concerned State Governments.   

       The employees do not become the employees of the Central  Government only because the project was conceived by it or it used to give

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directions from time to time.  The tests which are determinative for  ascertaining the relationship of ‘Employer and Employee’ are well known  viz. functional test or control test or organisational test etc.  For  determination of relationship of the employer and the employees, separate  tests may have to be applied having regard to the factual matrix involved in  each case.  The parties did not adduce any oral evidence before the Central  Administrative Tribunal. The Central Administrative Tribunal although  referred to some of the decisions of this Court, but without applying them,  opined that Respondents are the employees of the Central Government.  No  reason has been assigned therefor.  No analysis of the available materials  was made.

       The question has been considered by this Court in Workmen of Nilgiri  Coop. Mkt. Society v. State of T.N. and Others [(2004) 3 SCC 514], wherein  it has been held:- "Determination of the vexed questions as to whether a  contract is a contract of service or contract for service  and whether the employees concerned are employees of  the contractors has never been an easy task.  No decision  of this Court has laid down any hard and fast rule nor is it  possible to do so.  The question in each case has to be  answered having regard to the fact involved therein.  No  single test \026 be it control test, be it organization or any  other test \026 has been held to be the determinative factor  for determining the jural relationship of employer and  employee."  

       [See also Haldia Refinery Canteen Employees Union and Others v.  Indian Oil Corporation Ltd. and Others 2005 (5) SCC 51].

       In State of Karnataka and Others v. KGSD Canteen Empoyees’  Welfare Assn. and Others [(2006) 1 SCC 567], this Court held:-

"We, however, intend to point out that in a case of this  nature even an industrial adjudicator may have some  difficulty in coming to the conclusion that employees of a  canteen for all intent and purport are employees of the  principal employer."

       We, therefore, with respect, are unable to agree with the findings of  the Central Administrative Tribunal as also the Division Bench of the High  Court.   

       A question has arisen as to whether the employees are the employees  of the State of West Bengal or the District Rehabilitation Centres.  In view  of the order proposed to be passed by us, it may not be adverted to at this  state as we are of the opinion that the projects should be continued by the  State of West Bengal and the State of Karnataka as the case may be.  Even if  the States think it fit to close down the project, the services of the employees  working in the rehabilitation centres should be continued.

       In a case of this nature, however, we think it expedient to invoke our  jurisdiction under Article 142 of the Constitution of India.  The Central  Government has categorically stated that those employees who would opt  for employment under the Central Government may be accommodated in its  ongoing projects.  Pursuant thereto or in furtherance thereof, the concerned  employees who have affirmed affidavits showing inclination to serve any  project under the Central Government, may be absorbed by it.  Services of  those employees may be utilized by the Central Government in any of its  project.  They would, however, be continued to be paid salaries on the same  scale of pay.  Their experience may also be considered for the purpose of  determination of their seniority, subject of course to any rule which is in  operation in the field.  All other financial benefits including those of  superannuatory benefits should be protected.  It is, however, clarified that  such employment under the Central Government would be temporary and

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personal posts which would come to an end with the retirement of the  concerned employees.   

       Similarly those Respondents who have opted for their employment  with the State of West Bengal or the State of Karnataka, as the case may be  would be absorbed by the  States of West Bengal and Karnataka, as the case  may be, on the same terms and conditions as referred to hereinbefore.

       Keeping in view the nature of order passed by us, it is clarified that  the same shall not be treated as a precedent.  We also make it clear that these  orders have been passed by us keeping the stand taken by the parties.  These  appeals are disposed of with the aforementioned directions.  There shall be  no order as to costs.