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CASE NO.: Appeal (civil)  5632 of 2006

PETITIONER: Punjab Water Supply & Sewerage Board

RESPONDENT: Ranjodh Singh & Ors

DATE OF JUDGMENT: 06/12/2006

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (C) No.21796/2005) With  

CIVIL APPEAL NO. 5633/2006 (Arising out of S.L.P. (C) No.23775/2005)

Punjab Water Supply & Sewerage Board, Hoshiarpur        ..      Appellant

Versus

Hari Har Yadav & Ors.                                           ..      Respondents

S.B. Sinha, J.

       Leave granted.         These appeals involve the question of applicability of a purported  policy decision of the State as regards regularisation of services of the  employees of Appellant-Board.  

       It is a local authority.  It undertakes execution of schemes of various  nature including laying down of sewerage lines, water supply etc. for  Municipalities, Municipal Corporations and Improvement Trusts.  For each  scheme, estimates are prepared and expenses therefor are borne by the  principal.   

       Respondents in these appeals were engaged on contract basis in two  different schemes, i.e., for maintenance of water supply and sewerage lines  for Municipal Corporation, Ludhiana and for maintenance of tube wells  installed under URP project for Municipal Corporation, Hoshiarpur  respectively.  Their services were terminated.  Respondents prayed for  regularisation of the services.  The said prayer was rejected by the appellant  in terms of the scheme framed scheme for regularisation by the State of  Punjab on 23.1.2001 and 28.3.2003.   

       Writ petitions were filed by the respondents, inter alia, for issuance of  a Writ in the nature Mandamus directing the respondents therein including  appellant-Board to implement the said scheme of regulaisation of their  services and setting aside the orders rejecting such prayers made on their  behalf.  By reason of the impugned judgment, the High Court allowed the  writ petitions directing the appellant to reinstate the respondents in service  with all consequential benefits.  Appellant was also directed to regularise  their services.   

       Ms. Varuna Bhandari Gugnani, learned counsel appearing for the  appellant would submit that the purported scheme of State of Punjab cannot  be said to be applicable to the employees of the appellant-board as would

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appear from a copy of a letter dated 14.10.2002 issued by the Additional  Director, Local Government of Punjab, Chandigarh, which is in the  following terms \026

"OFFICE OF THE MUNICIPAL COUNCIL, HOSHIARPUR Receipt No.570 dated 22.10.2002

To         The Executive Officer,         Municipal Council, Hoshiarpur.

       Memo No.AS2-DSS(5-A)2002/23660         Dated 14.10.2002

Subject : To appoint employees working under URP                         scheme on the regular basis.

       With reference to your Memo No.530 dated  7.6.2001 on the subject cited above.

       You are hereby informed that in the absence of  instructions to regularize the services of those employees  who are working on contract basis, the Director, Local  Govt. Punjab after thoughtful consideration, has filed the  case.

                                                       Sd/-                                                Additional Director"       

       Learned counsel for the respondents, on the other hand, supported the  impugned judgment.

       Before we proceed to consider the rival contentions of the parties, we  would notice the purported scheme of regularisation issued by the State of  Punjab.  We may also notice that the said purported scheme was  communicated by a letter addressed to all Heads of Departments of the State  of Punjab, Registrar, Punjab & Haryana High Court, Chandigarh, all the  Commissioners and Deputy Commissioners and all the Corporations and  Boards in the State of Punjab.  In the letter dated 23.1.2001, it was stated:

"(iv)  For accommodating work charged/daily wage/other  category workers as per the above policy against  the existing vacancies the existing instructions  requiring permission of the DOP and FD for filling  up the vacancies would not apply.  Wherever for  the absorption/regularization of workers as per the  above policy any Department’s own Recruitment  Rules come in the way, such provisions of the  Recruitment Rules will stand relaxed."    

       By reason of letter dated 28.3.2003, it was clarified :

"Subject : Review of policy regarding regularization of  services of Work charge/Daily Wage Workers.

       Regarding the above mentioned subject, I am  directed to invite your attention to letter No.11/34/2000- 4PP. 3/1301-02 dated 23.1.2001 and to write that as per  the contents of Para No.4 of this letter, it is provided that  the work charge/daily wage workers who have completed  three years service, their services be regularized and  period of four months was specified for this purpose i.e.  this exercise was to be completed by 22.5.2001.

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2.      Certain Departments have sought clarification  from this Department that the work charge/daily wage  workers/employees, whose services could not be  regularized as per the provision of para No.4 of the above  said letter due to any reason, whether their services can  be regularized now or not though they fulfill the requisite  conditions.  This matter has been considered by the Govt.  and it has been decided that the services of such work  charged/daily wage workers/employees whose services  could not be regularized within the specified period as  per the instructions contained in Para No.4 of letter dated  23.1.2001, their services may be considered for  regularization now upto 30th June, 2003.  It is worth  mentioning here that in case any of the Department failed  to take necessary action in the matter within the period  specified above, then the concerned Administration  Secretary/Head of the Department shall be held  responsible."            A statutory board is an autonomous body.  Nothing has been brought  to our notice to show that under the statute any direction issued by the State  shall be binding on it.  The State may have some control with regard to  recruitment of employees of local authorities, but such control must be  exercised by the State strictly in terms of the provisions of the Act.  The  statutory bodies are bound to apply the rules of recruitment laid down under  statutory rules.  They being ’States’ within the meaning of Article 12 of the  Constitution of India, are bound to implement the constitutional scheme of  equality.  Neither the statutory bodies can refuse to fulfil such constitutional  duty, nor the State can issue any direction contrary to or inconsistent with  the constitutional principles adumbrated under Articles 14 and 16 of the  Constitution of India.  The purported directions of the State were otherwise  bad in law in so far as thereby the statutory rules were sought to be  superceded.  A circular letter furthermore is not a statutory instrument.  It  was not even issued by the State in exercise of the power under Article 162  of the Constitution of India.  Even a scheme issued under Article 162 of the  Constitution of India, would not prevail over statutory rules.     

       The High Court, unfortunately did not address itself to these  questions.  High Court’s attention was drawn to a decision of this Court in  Pankaj Gupta & Ors. vs. State of J&K & Ors. [(2004) 8 SCC 353],  wherein it was held :         "We heard the appellants’ counsel and counsel for  the respondents. The counsel for the appellants  contended that the appointments were made pursuant to a  government decision and the names of these appellants  were recommended by various Members of the  Legislative Assembly and the Legislative Council. It was  argued that the heads of various departments were  competent to make appointments to Class IV posts and,  therefore, the appointments of these appellants are legal.  We are unable to accept this contention. Admittedly,  these posts were not notified by the Government. There  was no publication of a notification inviting applications  for filling up these posts. The names of these appellants  were recommended by the Members of the Legislative  Council and the Legislative Assembly for appointment.  There is no evidence to show that any criteria approved  by the Government or any rules of recruitment were  followed while making these appointments. It may be  true that the appellants may have been habitants of rural  areas and there was no adequate representation for this  rural population in government jobs. But the Government  or the heads of various departments could have  formulated and resorted to some rational modalities  approved under the rules of recruitment to see that rural

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population also got adequate representation in public  employment. But the same could be done within the  constitutional limitations."  

       But the High Court unfortunately failed to consider the ratio of the  said decision in its proper perspective.

       In regard to the contention that the workmen had been working for  years and many of them had already crossed the age fixed for entry to the  Government service, as such they are entitled to regularisation, it was  opined:

       "No person illegally appointed or appointed  without following the procedure prescribed under the  law, is entitled to claim that he should be continued in  service.  In this situation, we see no reason to interfere  with the impugned order.  The appointees have no right  to regularisation in the service because of the erroneous  procedure adopted by the authority concerned in  appointing such persons."

                The dicta of said decision, however, was not followed by the High  Court.

       Once it is held that the terms and conditions of service including the  recruitment of employees were to be governed either by the statutory rules  or rules framed under the proviso to Article 309 of the Constitution of India,  it must necessarily be held that any policy decision adopted by the State in  exercise of its jurisdiction under Article 162 of the Constitution of India  would be illegal and without jurisdiction.  In A. Umarani vs. Registrar,  Cooperative Societies & Ors. [(2004) 7 SCC 112], a Three Judge Bench of  this Court has opined :         "No regularisation is, thus, permissible in exercise  of the statutory power conferred under Article 162 of the  Constitution if the appointments have been made in  contravention of the statutory rules."

       It was further held :

       "It is trite that appointments cannot be made on  political considerations and in violation of the  government directions for reduction of establishment  expenditure or a prohibition on the filling up of vacant  posts or creating new posts including regularisation of  daily-waged employees. (See Municipal Corpn., Bilaspur  v. Veer Singh Rajput)."

       The question came up for consideration before a Constitution Bench  of this Court in Secretary, State of Karnataka & Ors. vs. Umadevi &  Ors. [(2006) 4 SCC 1], wherein it was held that no person who was  temporarily or casually been employed could be directed to be continued  permanently.  It was opined that by doing so it would be creating another  mode of public employment which is not permissible.   

       The learned counsel appearing on behalf of the respondents, however,  placed strong reliance on paragraphs 15, 16 and 53 of the said judgment to  contend that the Constitution Bench itself directed the Central or State  Government to consider and adopt a one-time measure for regularisation of  services of the employees whose appointments were irregular.  For the sake  of clarity, we would reproduce the said paragraphs :

       "15. Even at the threshold, it is necessary to keep  in mind the distinction between regularisation and  conferment of permanence in service jurisprudence.  In

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State of Mysore v. S.V. Narayanappa this Court stated  that it was a misconception to consider that regularisation  meant permanence.  In R.N. Nanjundappa v. T.  Thimmiah this Court dealt with an argument that  regularisation would mean conferring the quality of  permanence on the appointment.  This Court stated:  (SCC pp.416-17, para 26)  

       "Counsel on behalf of the respondent  contended that regularisation would mean  conferring the quality of permanence on the  appointment whereas counsel on behalf of the  State contended that regularisation did dot mean  permanence but that it was a case of regularisation  of the rules under Article 309.  Both the  contentions are fallacious. If the appointment itself  is in infraction of the rules or if it is in violation of  the provisions of the Constitution illegality cannot  be regularised. Ratification or regularisation is  possible of an act which is within the power and  province of the authority but there has been some  non-compliance with procedure or manner which  does not go to the root of the appointment.  Regularisation cannot be said to be a mode of  recruitment. To accede to such a proposition would  be to introduce a new head of appointment in  defiance of rules or it may have the effect of  setting at naught the rules."

       16. In B.N. Nagarajan v. State of Karnataka this  Court clearly held that the words "regular" or  "regularisation" 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.  This Court  emphasised that when rules framed under Article 309 of  the Constitution are in force, no regularisation is  permissible in exercise of the executive powers of the  Government under Article 162 of the Constitution in  contravention of the rules.  These decisions and the  principles recognised therein have not been dissented to  by this Court and on principle, we see no reason not to  accept the proposition as enunciated in the above  decisions.  We have, therefore, to keep this distinction in  mind and proceed on the basis that only something that is  irregular for want of compliance with one of the elements  in the process of selection which does not go to the root  of the process, can be regularised and that it alone can be  regularised and granting permanence of employment is a  totally different concept and cannot be equated with  regularisation.   

       53. One aspect needs to be clarified. There may be  cases where irregular appointments (not illegal  appointments) as explained in S.V. Narayanappa, R.N.  Nanjundappa and B.N. Nagarajan and referred to in para  15 above, of duly qualified persons in duly sanctioned  vacant posts might have been made and the employees  have continued to work for ten years or more but without  the intervention of orders of the courts or of tribunals.  The question of regularisation of the services of such  employees may have to be considered on merits in the  light of the principles settled by this Court in the cases

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abovereferred to and in the light of this judgment. In that  context, the Union of India, the State Governments and  their instrumentalities should take steps to regularise as a  one-time measure, the services of such irregularly  appointed, who have worked for ten years or more in  duly sanctioned posts but not under cover of orders of the  courts or of tribunals and should further ensure that  regular recruitments are undertaken to fill those vacant  sanctioned posts that require to be filled up, in cases  where temporary employees or daily wagers are being  now employed. The process must be set in motion within  six months from this date. We also clarify that  regularisation, if any already made, but not sub judice,  need not be reopened based on this judgment, but there  should be no further bypassing of the constitutional  requirement and regularising or making permanent, those  not duly appointed as per the constitutional scheme."           A combined reading of the aforementioned paragraphs would clearly  indicate that what the Constitution Bench had in mind in directing  regularisation was in relation to such appointments, which were irregular in  nature and not illegal ones.   

       Distinction between irregularity and illegality is explicit.  It has been  so pointed out in National Fetilizers Ltd. & Ors. vs. Somvir Singh [(2006)  5 SCC 493] in the following terms :         "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 on 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, R.N. Nanjundappa v. T.  Thimmiah and B.N. Nagarajan v. State of Karnataka  wherein this Court observed: [ Umadevi (3) case 1 , SCC  p.24, para 16]   "16 . In B.N. Nagarajan v. State of Karnataka this  Court clearly held that the words ’regular’ or  ’regularisation’ 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."          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."  

       {See also State of Madhya Pradesh & Ors. vs. Yogesh Chandra  Dubey & Ors. [(2006) 8 SCC 67)] and State of M.P. & Ors. vs. Lalit  Kumar Verma [2006 (12) SCALE 642].}

       In the instant case, the High Court did not issue a writ of mandamus  on arriving at a finding that the respondents had a legal right in relation to  their claim for regularisation, which it was obligated to do.  It proceeded to

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issue the directions only on the basis of the purported policy decision  adopted by the State.  It failed to notice that a policy decision cannot be  adopted by means of a circular letter and, as noticed hereinbefore, even a  policy decision adopted in terms of Article 162 of the Constitution of India  in that behalf would be void.  Any departmental letter or executive  instruction cannot prevail over statutory rule and constitutional provisions.   Any appointment, thus, made without following the procedure would be  ultra vires.   

       This Court, recently in Indian Drugs & Pharmaceuticals Ltd. vs.  Workman, Indian Drugs & Pharmaceuticals Ltd. [2006 (12) SCALE 1],  opined that rules of recruitment cannot be relaxed and the Courts/Tribunals  cannot direct regularisation of temporary appointees de hors the rules, nor  can it direct continuation of service of a temporary employee (whether called  a casual, ad hoc or daily rate employee) or payment of regular salaries to  them.  {See also Municipal Corporation, Jabalpur vs. Om Prakash  Dubey [Civil Appeal No.5607/2006 @ S.L.P. (C) No.  5065 of 2006,  disposed of on 5th December, 2006].}

       Our attention was drawn to an order of a Division Bench of this Court  dated 7th September, 2006 in State of Punjab & Ors. vs. Lakhwinder  Singh & Ors. [Civil Appeal No.7995 of 2002], wherein the matters had  been remitted for consideration of the matters afresh in the light of the  decisions of this Court referred to therein.  Similar order appears to have  been passed in Chief Commissioner of Income Tax, Bhopal & Ors. vs.  M/s. Leena Jain & Ors. [2006 (12) SCALE 411].   

       We are not persuaded to do so as the decisions of this Court stare on  our face.  We cannot ignore the same.  It was faintly suggested that as the  respondents are qualified to hold the posts and they had been continuously  working for a long time, this Court may not interfere with the impugned  judgment.  On the face of a catena of decisions of this Court, we cannot  accept the said submission.   

       An endeavor was made also to submit that the respondents were  employed on daily rated basis and their services were transferred to the  Corporation.  No such case was made out and in any event, as and when the  respondents themselves agreed to be appointed on a contractual basis by the  appellant-Board, at this juncture they cannot be heard to say that the  purported transfer of their services by the State of Punjab to the appellant- Board was illegal.  Even no such case has been made out in the special leave  petition.         For the reasons aforementioned, the impugned judgment cannot be  sustained.  They are set aside accordingly.  Appeals are allowed.  However,  in the facts and circumstances of the case, there shall be no order as to costs.