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CASE NO.: Appeal (civil)  7051 of 2002

PETITIONER: Principal, Mehar Chand Polytechnic & Anr

RESPONDENT: Anu Lumba & Ors.

DATE OF JUDGMENT: 08/08/2006

BENCH: S.B. Sinha & Dalveer Bhandari

JUDGMENT: J U D G M E N T  W I T H CIVIL APPEAL NOS.7052/2002, 6028-30/2004,7505-06/2004 & 2922/2005  AND CIVIL APPEAL NOS.    3436/2006, 3438/2006 & 3437/2006 [Arising out of  SLP (Civil) Nos.7925/2004, 8133/2004 &  8154/2004] AND T.C. (Civil) NOS.65-71/2004  T.C. (Civil) No.            OF 2006  [Arising out of T.P. (CIVIL) NO.850/2005]

S.B. SINHA, J :

       Delay condoned in S.L.Ps.   

       Leave granted in S.L.Ps.

       These civil appeals and transfer applications involve a common  question  as regards the legal right of regularization of the Respondents in  services, although appointed for a fixed period in a project and, thus, are  being disposed of by this common judgment.   

We would notice the factual matrix of the matter from Civil Appeal  No. 7051 of 2002.  The First Respondent was appointed as an Assistant  Computer Instructor.  Mehar Chand Polytechnic, Jalandhar, undertook a  Community Polytechnic Project, a scheme issued by the Ministry of Human  Resources Development, Government of India.  The Central Government  issued "provisional norms" for implementing the scheme.  Specific amounts  by way of both recurring and non-recurring expenses used to be granted by  the Central Government.  Under the head ’non-recurring’ expenses, a sum of   Rs. Ten lacs was earmakred for acquisition of tools and equipments for five  extension centres.  As regards recurring nature of expenditure, Instructor  were to be appointed on a consolidated amount of  Rs.1,500/- or Rs.2,000/-  as the case may be.  The total amount of recurring expenditure was fixed at           Rs. Seven lacs only.  In the circular letter, it  was, inter alia, stated :

       "The expenditure shown above are at the  maximum limit and the actual expenditure on each  item should be limited to the bare minimum.  The  payment of salary/honorarium should also be  limited considering the nature of duties and  responsibilities entrusted and no regular staff  should be appointed till the final guideline  document is approved and necessary instructions  are intimated.  Engagement of Part-time/Full-Time  staff should be based on the actual requirement."

It was directed that the total wages payable to the employees should

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not exceed 2/3rd of the amount of the grant.  It was further stated that even  deputation should not be encouraged.  By a circular letter dated 07.04.1998,  the Technical Teachers’ Training Institute, inter alia, issued the following  directions to the Principal of the Polytechnic :

"2.     Those who have been taken on deputation  from the Polytechnic to Community Polytechnic,  their salaries can be protected but total wage  salaries of whole CP Scheme should not in any  circumstances exceed 2/3rd  of the allotted  recurring grant.  As such CPs must be careful in  taking the person on deputation and in no  circumstances, two persons \026 Project Officer and  Asstt. Project Officer or both should not be taken  on deputation.

3.      As already indicated, as per the guidelines of  Govt. of India which have already been circulated,  persons can be taken on deputation or on  contract/tenure basis.  But certain cases have come  to the notice of undersigned where CP have  appointed PO or APO or both on scale basis.  As  this is a plan and project scheme of GOI, taking  the person on the scale is not permissible as per the  instructions of GOI, MHRD and also this is not  permissible to give them revised scales as per the  5th Pay Commission of Central Government or 4th  Pay Commission of respective State Government.   As such, it is intimated that under no  circumstances, you should give the revised scales  to the persons working under CP/CDRT Scheme  unless clear-cut guidelines are issued by GOI,  MHRD."

Indisputably, no post was created.   The objective of the project was  not to provide employment but to give some input to the people at the rural  level by educating them so as to enable them to utilize their lands more  beneficially.   The project although lasted for a long time, but visualized to  be of limited duration, by reason thereof no substantive appointment was to  be given.  The project was to be manned by a few persons on a temporary  basis.   

The First Respondent herein was appointed in the said project in terms  of the said policy decision of the Central Government. One of the  appointment letters issued to the First Respondent reads as under :-

       "Please refer to your application dated  31.7.1992 for the post of Asstt. Computer  Instructor at this wing.

You are hereby offered the post of Asstt.  Computer Instructor on purely temporary basis  w.e.f. 3.8.1992 on a consolidated salary of  Rs.1500/- per month for a period of one year i.e.  upto 31.7.1993.

3.      Your services can be terminated by giving  15 days notice on either side."

It is not the case of the Respondents that prior to issuance of the said  offer of  appointment any vacancy existed or the same was notified to the  Employment Exchange. It is furthermore not their case that they were  recruited in terms of the statutory rules and/or upon compliance of the

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requirements envisaged under Articles 14 and 16 of the Constitution of  India. It is also not their case that prior to their appointments any  advertisement was issued enabling the eligible candidates to file applications  therefor or the vacancies were notified to the Employment Exchange.   

They made a representation for grant of scale of pay, which was  rejected.  A writ petition was filed before the Punjab & Haryana High Court.  An interim order was passed directing the Central Government to put them  on a regular scale of pay.   

While considering the matter, the officials of the Directorate of  Technical Education, Punjab, sought for an information as to whether the  Respondents had obtained a certificate in computer training from a  recognized institute.  A resolution to the said effect was taken by the  appropriate committee.

Pursuant to the said resolution, the said Respondent was asked as to  whether she possessed the requisite qualification, to which she stated that  she had obtained a certificate from M/s Babbage Institute of Computer  Studies, which although was registered with the Registrar of Firms and  Societies but was not recognized by any competent authority.   

The High Court by reason of the impugned judgment allowed the writ  petition directing the appellant to create suitable posts as also consider the  question of regularization of her services to the said post within three  months, directing :

"\005The petitioner has been in position since the  year 1992.  The post is still needed.  In this  situation, we consider it appropriate to direct  that  the petitioner’s case for regularization on the post  held by her shall be considered within three  months.  The respondents shall fix an appropriate  scale of pay and place her in that scale.  The  emoluments shall not be below Rs.5500/- per  month as mentioned above."   

A limited noticed was issued by this Court confined only to the  question as to whether the High Court could direct for regularization of  services of the Respondent.

Mr. Sunil Gupta, the learned Senior Counsel appearing on behalf of  the Appellants, submitted that in view of the fact that the Respondent was  appointed in a project, the High Court could not have directed  regularization  of her services.  Such a direction, the learned counsel contended,  is contrary  to the decisions of this Court in Delhi Development Horticulture Employees’  Union v. Delhi Administration, Delhi and Others [(1992) 4 SCC 99], State  of Himachal Pradesh  v. Nodha Ram and Others [AIR 1997 SC 1445] as also  a recent Constitution Bench decision in Secretary, State of Karnataka and  Others v.  Umadevi  and Others  [(2006) 4 SCC 1].                 

Mr. T.L. Iyer, the learned Senior Counsel appearing on behalf of the  Respondents, on the other hand, urged that keeping view the  fact that the  scheme was in operation since 1979, and the number of such Community  Polytechnics has gone up throughout India, the Union of India, being a  model employer, could not have taken recourse to arbitrary exercise of  power by imposing such harsh conditions of service.  Putting of long years  of service, according to the learned counsel, itself would be sufficient for  directing regularization of service.   

Public employment is a facet of right to equality envisaged under  Article 16 of the Constitution of India.  The State although is a model  employer, its right to create  posts and recruit people therefor emanates from  the statutes or statutory rules and/or rules framed under the proviso

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appended to Article 309 of the Constitution of India.  The recruitment rules  are framed  with a view to give equal opportunity to all the citizens of India  entitled for being considered for recruitment in the vacant posts.  

The Parliament for giving effect to the provisions of the Article 16 of  the Constitution enacted the Employment Exchanges (Compulsory  Notification of Vacancies) Act, 1959. The statutes and the statutory rules  framed by the Union of India and other States also invariably require  issuance of a public notices so as to enable all eligible candidates to file  applications thereof.  The Constitution and/or statutes or statutory rules do  not make any distinction between post and posts.  The recruitment process  for all posts is the same.   

In a large number of cases, this Court noticed that the holders of  public posts had been making recruitments in total violation of the  recruitment process.  In regard to the question of regularization also,  different orders had been passed by different benches.  Some benches  pointed out that the equality doctrine enshrined in Articles 14 and 16 of the  Constitution of India had been grossly violated by the authorities, and the  provisions of recruitment rules were given a complete go by.  Even the  beneficent provisions of the reservation applicable to the backward classes  of people had not been adhered to.  

This Court also noticed a growing tendency of giving backdoor  appointments to a large section of employees on ad hoc basis or on daily  wages.   

With a view to give a quietus to the controversies arising out of  differences in opinion expressed in different decisions, in Secretary, State of  Karnataka and Others v. Umadevi  and Others [(2006) 4 SCC 44], a three- Judge Bench of this Court thought it fit to refer the matter for authoritative  pronouncements by a Constitution Bench, stating :  

"1. Apart from the conflicting opinions  between the three-Judge Bench decisions in  Ashwani Kumar v. State of Bihar; State of  Haryana v. Piara Singh; and Dharwad District  PWD Literate Daily Wage Employees Assn. v.  State of Karnataka  on the one hand and State of  H.P. v. Suresh Kumar Verma; State of Punjab v.  Surinder Kumar; and B.N. Nagarajan v. State of  Karnataka  on the other, which have been brought  out in one of the judgments under appeal of the  Karnataka High Court in State of Karnataka v. H.  Ganesh Rao, decided on 1.6.2001 the learned  Additional Solicitor General urged that the scheme  for regularization is repugnant to Articles 16(4),  309, 320 and 335 of the Constitution 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 provisions of  Articles 14 and 21 of the Constitution.

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

4.      After having found that there is  conflict of opinion between the three-Judge Bench  decisions of this Court, we are of the view that

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these cases are required to be heard by a Bench of  five learned Judges.

5.      Let these matters be placed before the  Hon’ble the Chief Justice for appropriate orders."  

The Constitution Bench of this Court while answering some of the  said questions  in no uncertain terms held that any appointment made in  violation of the statute or in derogation of the equality clause contained in  Articles 14 and 16 of the Constitution would be void and of no effect.  It was  opined that  such persons who had obtained such illegal appointments were  not entitled to claim regularization.   

We may at this juncture notice that way back in 1992, a three-Judge  Bench of this Court in Delhi Development Horticulture Employees’ Union  (supra) observed as under : "The above figures show that if the resources  used for the Jawahar Rozgar Yojna were in their  entirety to be used for providing full employment  throughout the year, they would have given  employment only to a small percentage of the  population in need of income, the remaining vast  majority being left with no income whatsoever. No  fault could, therefore, be found with the limited  object of the scheme given the limited resources at  the disposal of the State. Those employed under  the scheme, therefore, could not ask for more than  what the scheme intended to give them. To get an  employment under such scheme and to claim on  the basis of the said employment, a right to  regularisation, is to frustrate the scheme itself. No  court can be a party to such exercise. It is wrong to  approach the problems of those employed under  such schemes with a view to providing them with  full employment and guaranteeing equal pay for  equal work. These concepts, in the context of such  schemes are both unwarranted and misplaced.  They will do more harm than good by depriving  the many of the little income that they may get to  keep them from starvation. They would benefit a  few at the cost of the many starving poor for whom  the schemes are meant. That would also force the  State to wind up the existing schemes and forbid  them from introducing the new ones, for want of  resources. This is not to say that the problems of  the unemployed deserve no consideration or  sympathy. This is only to emphasise that even  among the unemployed a distinction exists  between those who live below and above the  poverty line, those in need of partial and those in  need of full employment, the educated and  uneducated, the rural and urban unemployed etc."

Yet again in Nodha Ram (supra) in regard to the status of the  temporary employees employed in the Government project, it was held :                  "It is seen that when the project is completed  and closed due to non-availability of funds, the  employees have to go along with its closure. The  High Court was not right in giving the direction to  regularise them or to continue them in other  places. No vested right is created in temporary  employment. Directions cannot be given to  regularise their services in the absence of any  existing vacancies nor can directions be given to

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the State to create posts in a non-existent  establishment. The Court would adopt pragmatic  approach in giving directions. The directions  would amount to creating of posts and continuing  them despite non-availability of the work. We are  of the considered view that the directions issued by  the High Court are absolutely illegal warranting  our interference. The order of the High Court is,  therefore, set side."

Strong reliance has been placed by Mr. Iyer in Jacob M.  Puthuparambil and Others etc. v. Kerala Water Authority and Others [(1991)  1 SCC 28], for the proposition that even if statutory rules do not operate in  the field, direction for regularization is permissible in law.   

Jacob (supra) was decided in a different fact situation.  In that case the  employees concerned were working in the erstwhile Public Health  Engineering Department.  Upon creation of the Kerala Water and Waste  Water Authority constituted under Section 3(1) of the Ordinance 14 of 1984  repealed and replaced by Act 14 of  1986, their services were transferred.   The cases of regularization of the employees appointed during different  periods came up for consideration in the light of Rule 9(a)(i) of the Kerala  State and Subordinate Service Rules, 1958 and the Resolution adopted by  the Authority in terms thereof.

The contention of the employees therein was that they were having  been appointed in terms of the Rule 9(1) of the Rules and their names having  been called for from the Employment Exchange, the services of those who  possessed requisite qualifications, could not be terminated.  Clause (iii) of  Rule 9 provided for regularization of service of any person appointed under  clause (i) of sub-rule (a).  A resolution had also been passed by the Authority  recommending to the State regularization of the service of the employees  recruited in the erstwhile PHED and still working in the Kerala Water  Authority.

It is in the aforementioned backdrop this Court directed regularization  of those who possessed the requisite qualifications.

In this case, neither a policy decision was taken by the Central  Government  nor their existed any rules in this behalf.  Although this Court  is not directly concerned as to whether such a policy decision could have  been taken in view of the provisions contained in Article 309 of the  Constitution of India, we may notice that in A. Uma Rani v. Registrar,  Cooperative Societies and Others  [(2004) 7 SCC 112], this Court opined :

"No regularization 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."

Reliance has also been placed by Mr. Iyer on Karnataka State Private  College Stop-Gap Lecturers Association etc. v. State of Karnataka and  Others  [(1992) 2 SCC 29], wherein this Court issued some directions; but  while doing so it did not take into consideration the relevant constitutional  provisions.  It may, however, be  noticed that even  therein it was opined :

"\005A temporary or ad hoc employee may not have  a claim to become permanent without facing  selection or being absorbed in accordance with  rules but no discrimination can be made for same  job on basis of method of recruitment. Such  injustice is abhorrent to the constitutional scheme.

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        Reliance placed by the learned counsel on the said decision is,  therefore, misplaced.

Reliance has also been placed on State of Haryana and Others v. Piara  Singh and Others   [(1992) 4 SCC 118].  We need not dilate on the said  decision as the same was considered  by the Constitution Bench in Umadevi,  supra opining that the direction made therein to some extent is inconsistent  with the conclusion, stating :

"With respect, the direction made in  paragraph 50 of Piara Singh is 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."                  Baseruddin M. Madari and Others v. State of Karnataka and Others  [(1995) Supp. 4 SCC 111], whereupon again reliance has again been placed  by the Senior Counsel, this Court following the decision in Karnataka State  Private College Stop-Gap Lecturers’ Association (supra) did not lay down  any law that services of all ad hoc employees are required to be regularized.

The Constitution Bench in Umadevi (supra) in regard to the temporary  employees clearly opined : "\005There is no fundamental right in those who  have been employed on daily wages or temporarily  or on contractual basis, to claim that they have a  right to be absorbed in service. As has been held  by this Court, they cannot be said to be holders of  a post, since, a regular appointment could be made  only by making appointments consistent with the  requirements of Articles 14 and 16 of the  Constitution. The right to be treated equally with  the other employees employed on daily wages,  cannot be extended to a claim for equal treatment  with those who were regularly employed. That  would be treating unequals as equals. It cannot  also be relied on to claim a right to be absorbed in  service even though they have never been selected  in terms of the relevant recruitment rules. The  arguments based on Articles 14 and 16 of the  Constitution are therefore overruled.

It was further observed :

"\005The rule of law compels the State to make  appointments as envisaged by the Constitution and  in the manner we have indicated earlier. In most of  these cases, no doubt, the employees had worked  for some length of time but this has also been  brought about by the pendency of proceedings in  tribunals and courts initiated at the instance of the  employees. Moreover, accepting an argument of  this nature would mean that the State would be  permitted to perpetuate an illegality in the matter  of public employment and that would be a  negation of the constitutional scheme adopted by  us, the people of India. It is therefore not possible  to accept the argument that there must be a

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direction to make permanent all the persons  employed on daily wages. When the court is  approached for relief by way of a writ, the court  has necessarily to ask itself whether the person  before it had any legal right to be enforced.  Considered in the light of the very clear  constitutional scheme, it cannot be said that the  employees have been able to establish a legal right  to be made permanent even though they have  never been appointed in terms of the relevant rules  or in adherence of Articles 14 and 16 of the  Constitution."

The respondents did not have legal right to be absorbed in service.   They were appointed purely on temporary basis.  It has not been shown by  them that prior to their appointments, the requirements of the  provisions of  Articles 14 and 16 of the Constitution had been complied with.  Admittedly,  there did not exist any sanctioned post.  The project undertaken by the Union  of India although continued for some time was initially intended to be a time  bound one.  It was not meant for generating employment.  It was meant for  providing technical education to the agriculturalists.  In absence of any legal  right in the respondents, the High Court, thus, in our considered view, could  not have issued a writ of or in the nature of mandamus.   

In Umadevi  (supra), it was stated :

"There have been decisions which have  taken the cue from the Dharwad case and given  directions for regularization, absorption or making  permanent, employees engaged or appointed  without following the due process or the rules for  appointment. The philosophy behind this approach  is seen set out in the recent decision in The  Workmen v. Bhurkunda Colliery of Central  Coalfields Ltd., though the legality or validity of  such an approach has not been independently  examined. But on a survey of authorities, the  predominant view is seen to be that such  appointments did not confer any right on the  appointees and that the Court cannot direct their  absorption or regularization or re-engagement or  making them permanent"

See also State of U.P. v. Neeraj Awasthi and Others [(2006) 1 SCC  667].

Yet again in National Fertilizers Ltd. & Ors. v. Somvir Singh  [(2006)  6 SCALE 101], it was held :

"Regularization, 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 the purported period of probation would  not arise\005"                  It was further opined :

       "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

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by itself would not be a ground for directing  regularization of their services in view of the  decision of this Court in Uma Devi (supra)."          For the reasons aforementioned, the impugned judgments cannot be  sustained.  In view of the fact that limited notice was issued in Civil Appeal  Nos.7051 and 7052 of 2002 arising out of S.L.P. (Civil) Nos.11597 and  22493 of 2001, we set aside only that part of the judgment whereby and  whereunder the Appellants had been directed to create posts and regularize  the services of the Respondents therein.  The impugned judgments of the  High Court to the aforementioned extent are set aside.   

In view of our findings aforementioned, the transfer cases are also  disposed on the same terms.  The appeals are, thus, allowed, to the extent  mentioned hereinabove.  The parties shall, however, pay and bear their own  costs.