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CASE NO.: Appeal (civil)  6337 of 2003

PETITIONER: National Fertilizers Ltd. & Ors.

RESPONDENT: Somvir Singh

DATE OF JUDGMENT: 12/05/2006

BENCH: S.B. Sinha & P.P. Naolekar

JUDGMENT: J U D G M E N T

W I T H CIVIL APPEAL NOS. 464, 465, 466, 467 of 2004 AND 7575 of 2005  

S.B. SINHA, J  :                  The Appellant is a Government Company.  It is a public sector  undertaking.  It is a ’State’ within the meaning of Article 12 of the  Constitution of India.  A policy decision was taken by the Appellant not  to make any further recruitment in Marketing Division in any category of  post stating:

"It has been decided that with immediate effect the  strength of the Marketing Division be pagged to the  number of individuals in position in the Marketing  Division as on 31.03.1998.  It has also been decided  that no further recruitment be made in the Marketing  Division in any category of post.  However, as and  when if any post is required to be filled up in any  category due to exigencies of work, the approval of  D(F)/MD be obtained and the paper routed through  the Corporate Office Personnel Department."

       Despite such ban the Respondents had been appointed.  Before  such appointment the employment exchange was not intimated about the  vacancy in terms of the provisions of Employment Exchange  (Compulsory Notification of Vacancies) Act, 1959 (for short "the 1959  Act").  Admittedly, no advertisement was also issued. According to the  Respondent, he worked at the Shimla Office of the Appellant for a period  of six months and, thus, he was entitled for recruitment in terms of Rule  1.5(g) of the Recruitment and Promotion Rules.  Rule 1.5(g) of the Rules  does not envisage regular recruitment but a recruitment on a contractual  basis.  The Respondent, thus, on his own showing was appointed on a  contractual basis.  It is trite that a person who obtained recruitment on  contractual basis cannot claim regularisation in service.   The  Respondents herein filed applications for their recruitment without any  vacancy having been notified.  They were said to have been interviewed  on 24.3.1991 by a purported Committee constituted by the General  Manager.  Appointment letters were issued on or about 9.4.1991.  An  advertisement was admittedly issued only on 30.11.1993 for the post of  Peon-cum-Messenger.

       The Appellant in the year 1994, however, took a decision to fill up  the posts in the Marketing Division inter alia stating:

"During the coordination committee meeting held in  October 1994, at C.O. the recognized union of

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marketing division requested for removal of ban in  filling up vacant posts in marketing division. It was  agreed that action to fill up the vacant posts in  marketing division will be taken by marketing  division, keeping in view the recruitments within the  overall manpower strength."

       Actions were initiated to fill up the vacant posts on permanent  status by following the recruitment procedure.  The Respondents were  also granted an opportunity to file applications thereagainst.  Relaxation  of age to the extent of their services as temporary employees had also  been granted.

       The Appellant has framed its own Recruitment and Promotion  Rules.  The recruitment of an employee is governed by the said Rules.   The terms and conditions of services are also governed by the same  Rules.  In terms of Rule 1.5 of the said Rules, recruitment of various  posts were to be made inter alia from the following sources:

(a)     Employment Exchange as per the provisions of the 1959 Act. (b)     Zila Saink Boards Director General Resettlement. (c)     Direct Recruitment by advertisement.

       Rule 1.6.1 provides for method and procedure for recruitment in  terms whereof all posts in the scale of pay of Rs. 1560-2160 is required to  be considered as ’corporate level’.  Direct recruitment can be resorted to  only when no suitable candidate for promotion was available in the  appropriate rank.  Rule 1.6.8 provides for the mode and manner in which  the advertisement is to be issued.  Rule 1.6.9 provides for reservation.   The manner in which Selection Committee has to be constituted has been  laid down in paragraph 1.11.  Such Selection Committee inter alia must  consist of two members from the discipline for which recruitment is to be  made apart from an officer from the Personnel Department as Member  Secretary.  In the event, a selection is to be made for reserved category,  an officer of appropriate status belonging to SC/ST will be included as a  member.  In a case of recruitment to Group C & D posts, a member  representing minority community will also be associated in the selection  committee.  The matter relating to interview is provided for in paragraph  12.1.  Appointments are to be made in terms of paragraph 1.13.

       The said Rules, therefore, lay down in great details as to how and  in what manner the selection process was to be initiated, the minimum  qualification therefor, the constitution of Selection Committee and other  relevant factors.

       It is not in dispute that the Respondents herein were appointed  without any advertisements and without any intimation to the  employment exchange.  Appointments are said to be made at the instance  of two officers.  Only after retirement of the said officers, writ petitions  were filed before several High Courts including Chhattisgarh, Punjab and  Haryana, Himachala Pradesh, Delhi, Madhya Pradesh and Rajasthan.

       The writ petitions involved 52 employees.  Different views were  expressed by different High Courts.   

       The writ petitions filed by the Respondents were allowed directing  the Appellant to regularise the services of the Respondents to pay them  all monetary benefits in terms of the appointment letters.

       Mr. Bhaskar P. Gupta, learned senior counsel appearing on behalf  of the Appellant submitted that the matter relating to regularisation of  services recruited on ad hoc basis is no longer res integra in view of the  recent Constitution Bench decision of this Court in Secretary, State of  Karnataka and Others v. Umadevi and Others [2006 (4) SCALE 197].

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       Mr. Ashok Mathur, learned counsel appearing on behalf of the  Respondents, on the other hand, submitted that the appointments of the  Respondents may be irregular but not illegal and in that view of the  matter, the impugned judgments need not be interfered with.          The Respondents herein were appointed only on applications made  by them.  Admittedly, no advertisement was issued in a newspaper nor  the employment exchange was notified as regard existence of vacancies.   It is now trite law that a ’State’ within the meaning of Article 12 of the  Constitution of India is bound to comply with the constitutional  requirements as adumbrated in Articles 14 and 16 thereof.  When  Recruitment Rules are made, the employer would be bound to comply  with the same.  Any appointment in violation of such Rules would render  them as nullities.  It is also well-settled that no recruitment should be  permitted to be made through backdoor.

       It was contended that for Class IV employees, the Employment  Exchanges were not required to be notified in view of Section 3(1)(d) of  the 1959 Act.  Section 3(1)(d) of the 1959 Act reads as under:

"3. Act not to apply in relation to certain vacancies  \026 (1) This Act shall not apply in relation to  vacancies \026  (a)     *** (b)     *** (c)     *** (d)     in any employment to do unskilled office  work;\005"

       Such a plea does not appear to have been raised before the High  Court.  The question as regards the nature of duties required to be  performed by the Respondents having not been raised.  No material was  placed by the employer to show as to whether the job of the Respondents  was within the purview of the aforementioned provision.  The  Respondents themselves stated that they raised the question of  applicability of the said provision of the Act in a suit filed at Jagadhri  when another person was appointed as Peon-cum-Messenger.  It,  therefore, cannot be said that they were not aware of the statutory  provisions contained in the said suit.

       The order of ban suggests that if any appointment was to be made  due to exigencies of work, the approval of the Director (Finance) or  Managing Director was to be obtained and the paper routed in respect  thereof should be through the corporate office.  The Respondents contend  that as at the point of time the Managing Director, Shri S.S. Jain had been  placed under suspension, the file was placed before the General Manager  (Marketing).  The said plea cannot be accepted for more than one reason.   If the regular incumbent or the Managing Director was placed under  suspension, somebody else must be incharge of the said post.   Furthermore, the file could be placed before the Director (Finance).  The  General Manager by no stretch of imagination could accord approval for  appointment.

       Submission of the learned counsel appearing on behalf of the  Respondents to the effect that the ban was only on paper is not a matter  which would fall for consideration of this Court inasmuch as it is not in  dispute that the ban was lifted only on 16.12.1994.  On what premise, an  advertisement was issued on 30.11.1993 is not known.  It is not the case  of the Respondent that despite existence of ban some other workman was  appointed prior to the lifting thereof.  Even if, recruitments have been  made illegally, the Respondents cannot claim any legal right on the basis  thereof.

       Regularisation, furthermore, is not a mode of appointment.  If  appointment is made without following the Rules, the same being a  nullity the question of confirmation of an employee upon the expiry of

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the purported period of probation would not arise.  The Constitution  Bench in Umadevi (supra) made a detailed survey of the case laws  operating in the field.

       The referral order to the Constitution Bench was made by a 3- Judge Bench of this Court stating:

"1.     Apart from the conflicting opinions between  the three Judges’ Bench decisions in Ashwani Kumar  and Ors. Vs. State of Bihar and Ors., reported in  1997 (2) SCC 1, State of Haryana and Ors vs., Piara  Singh and Ors. Reported in 1992 (4) SCC 118 and  Dharwad Distt. P.W.D. Literate  Daily Wage Employees Association and Ors. Vs.  State of Karnataka and Ors. Reported in 1990 (2)  SCC 396, on the one hand and State of Himachal  Pradesh vs. Suresh Kumar Verma and Anr., reported  in AIR 1996 SC 1565, State of  Punjab vs.  Surinder Kumar and Ors. Reported in AIR 1992 SC  1593, and  B.N. Nagarajan and Ors. Vs. State of  Karnataka and Ors., reported in 1979 (4) SCC 507  on the other, which has been brought out in one of  the judgments under appeal of Karnataka High Court  in State of Karnataka vs. H. Ganesh Rao, decided on  1.6.2000, reported in 2001 (4) Karnataka Law  Journal 466, learned Additional Solicitor General  urged that the scheme for regularization is repugnant  to Articles 16(4), 309, 320 and 335 of the  Constitution of India and, therefore, these cases are  required to be heard by a Bench of Five learned  Judges (Constitution Bench).

2.      On the other hand, Mr. M.C. Bhandare,  learned senior counsel, appearing for the employees  urged that such a scheme for regularization is  consistent with the provision of Articles 14 and 21 of  the Constitution.

3.      Mr. V. Lakshmi Narayan, learned counsel,  appearing in CC Nos.109-498 of 2003, has filed the  G.O. dated 19.7.2002 and submitted that orders have  already been implemented.

4.      After having found that there is conflict of  opinion between three Judges Bench decisions of  this Court, we are of the view that these cases are  required to be heard by a  Bench of five learned  Judges. 5.      Let these matters be placed before Hon’ble the  Chief Justice for appropriate orders."

       The Constitution Bench opined that any appointment made in  violation of the Recruitment Rules as also in violation of Articles 14 and  16 of the Constitution would be nullity.  The contention raised on behalf  of the employees that those temporary or ad hoc employees who had  continued for a fairly long spell, the authorities must consider their cases  for regularisation was answered, thus:

"With respect, why should the State be allowed to  depart from the normal rule and indulge in  temporary employment in permanent posts?  This  Court, in our view, is bound to insist on the State  making regular and proper recruitments and is bound  not to encourage or shut its eyes to the persistent  transgression of the rules of regular recruitment.  

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The direction to make permanent -- the distinction  between regularization and making permanent, was  not emphasized here  -- can only encourage the  State, the model employer, to flout its own rules and  would confer undue benefits on a few at the cost of  many waiting to compete.  With respect, the  direction made in paragraph 50 of Piara Singh  (supra) are to some extent inconsistent with the  conclusion in paragraph 45 therein.   With great  respect, it appears to us that the last of the directions  clearly runs counter to the constitutional scheme of  employment recognized in the earlier part of the  decision.  Really, it cannot be said that this decision  has laid down the law that all ad hoc, temporary or  casual employees engaged without following the  regular recruitment procedure should be made  permanent."

       It was furthermore opined:

"26.    It is not necessary to notice all the decisions of  this Court on this aspect.  By and large what emerges  is that regular recruitment should be insisted upon,  only in a contingency an ad hoc appointment can be  made in a permanent vacancy, but the same should  soon be followed by a regular  recruitment and that appointments to non-available  posts should not be taken note of for regularization.    The cases directing regularization have mainly  proceeded on the basis that having permitted the  employee to work for some period, he should be  absorbed, without really laying down any law to that  effect, after discussing the constitutional scheme for  public employment."

       Taking note of some recent decisions of this Court, it was held that  the State does not enjoy a power to make appointments in terms of  Article 162 of the Constitution of India.  It further quoted with approval a  decision of this Court in Union Public Service Commission v. Girish  Jayanti Lal Vaghela & Others [2006 (2) SCALE 115] in the following  terms:

"\005The appointment to any post under the State can  only be made after a proper advertisement has been  made inviting applications from eligible candidates  and holding of selection by a body of experts or a  specially constituted committee whose members are  fair and impartial through a written examination or  interview or some other rational criteria for judging  the inter se merit of candidates who have applied in  response to the advertisement made.  A regular  appointment to a post under the State or Union  cannot be made without issuing advertisement in the  prescribed manner which may in some cases include  inviting applications from the employment exchange  where eligible candidates get their names registered.   Any regular appointment made on a post under the  State or Union without issuing advertisement  inviting applications from eligible candidates and  without holding a proper selection where all eligible  candidates get a fair chance to compete would  violate the guarantee enshrined under Article 16 of  the Constitution..."

       It was clearly held:

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"These binding decisions are clear imperatives that  adherence to Articles 14 and 16 of the Constitution  is a must in the process of public employment."

       The contention of the learned counsel appearing on behalf of the  Respondents that the appointments were irregular and not illegal, cannot  be accepted for more than one reason.  They were appointed only on the  basis of their applications.  The Recruitment Rules were not followed.   Even the Selection Committee had not been properly constituted.  In view  of the ban in employment, no recruitment was permissible in law.  The  reservation policy adopted by the Appellant had not been maintained.   Even cases of minorities had not been given due consideration.

       The Constitution Bench thought of directing regularisation of the  services only of those employees whose appointments were irregular as  explained in State of Mysore v. S.V. Narayanappa [(1967) 1 SCR 799],  Nanjundappa v. T. Thimmiah & Anr.[(1972) 2 SCR 799] and B.N.  Nagarajan & Ors. v. State of Karnataka & Ors. [(1979) 3 SCR 937]  wherein this Court observed:

"In  B.N. Nagarajan & Ors. Vs. State of Karnataka &  Ors. [(1979) 3 SCR 937], this court clearly held that  the words "regular" or "regularization" do not  connote permanence and cannot be construed so as  to convey an idea of the nature of tenure of  appointments.  They are terms calculated to condone  any procedural irregularities and are meant to cure  only such defects as are attributable to methodology  followed in making the appointments\005"

       Judged by the standards laid down by this Court in the  aforementioned decisions, the appointments of the Respondents are  illegal.  They do not, thus, have any legal right to continue in service.

       It is true that the Respondents had been working for a long time.  It  may also be true that they had not been paid wages on a regular scale of  pay.  But, they did not hold any post.  They were, therefore, not entitled  to be paid salary on a regular scale of pay.  Furthermore, only because the  Respondents have worked for some time, the same by itself would not be  a ground for directing regularisation of their services in view of the  decision of this Court in Uma Devi (supra).

       In view of the authoritative pronouncement of the Constitution  Bench, in our opinion, the impugned judgments cannot be sustained.   They are set aside accordingly.   

       S/Shri Somvir Singh, Hansraj Benewal, Malkiat Singh, Ranjit  Singh are said to be working.  They may be relieved of their posts.  We  may, however, observe that their cases may be considered for future  appointment and age bar, if any, in view of the policy decision of the  Appellant itself may be relaxed to the extent they had worked.  The salary  or any remuneration paid to them, however, may not be recovered. This  order, however, is being passed in exercise of our jurisdiction under  Article 142 of the Constitution of India keeping in view the principles  embodied in Section 70 of the Contract Act.  The appeals are allowed. No  costs.