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CASE NO.: Appeal (civil)  4092 of 2001

PETITIONER: State of U.P.

RESPONDENT: Neeraj Awasthi & Others

DATE OF JUDGMENT: 16/12/2005

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

JUDGMENT: JUDGMENT W I T H CIVIL APPEAL NOS. 3872, 3873, 4038, 4093-4102,  7545-7646, 7647-7748 of 2001,  CIVIL APPEAL NO. 6810 of 2005 and CIVIL APPEAL NO. 6814 of 2005

S.B. Sinha, J :  

       The jurisdiction of the High Court to issue a direction for framing a  scheme for regularisation of the employees of the U.P. State Agricultural  Produce Market Board (for short "the Board") is in question in this batch of  appeals which arise out of judgments and orders passed by the High Court of  Judicature at Allahabad in the writ petitions filed by the private respondents  either dismissing or allowing the same.   

ACT

       The legislature of the State of Uttar Pradesh enacted The Uttar  Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (for short "the Act").  The  Board has been established under Section 26-A of the Act.  Section 26-B  provides for the constitution of the Board.  In exercise of its power conferred  upon it by Section 25-A and 26-X of the Act, regulations have also been  framed by the Board laying down the terms and conditions of the service of  the employees of the Market Committees known as the Uttar Pradesh  Agricultural Produce Market Committees (Centralised) Services  Regulations, 1984 (for short "Services Regulations").  Similar regulations  have also been framed by the Board in respect of its own employees being  the Uttar Pradesh Agricultural Produce Markets Board (Officers and Staff  Establishment) Regulations, 1984 (for short "Establishment Regulations").

BACKGROUND FACT         In the State of Uttar Pradesh, there are 244 Market Committees.  3395  posts were sanctioned but indisputably 5600 appointments have been made.   We are herein concerned with the orders of appointments and orders of  terminations issued in respect of about 1021 employees who were appointed  between the period 1.4.1996 and 30.10.1997. A resolution was passed by the  Board on or about 30th September, 1996 proposing regularisation of the  services of those employees who have completed one thousand days of  service.  The Board had also its construction divisions.  The said proposal  was, however, confined to the employees working in the construction  divisions against contingency funds.  Approval having been sought for from  the State Government in relation to framing of appropriate rules, in this  behalf, informations were sought for from various departments including  Mandi Parishad in regard to the appointments made in past six months by a  letter dated 20th November, 1997.  Relevant informations were furnished by  the Director of the Mandi Parishad whereafter the State sought for further  informations and details regarding the appointments made in the Mandi

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Parishad and Mandi Samities by a letter dated 17.3.1998.  Such informations  were sought for by the State again by a letter dated 18.5.1998.  On or about  12.2.1999, an order was issued by the State directing that services of all such  employees who had been irregularly appointed during the period 1.4.1996 to  30.10.1997 be cancelled on last-come-first-go-basis stating:

"1. The irregular appointment made in the Mandi  Parishad and Mandi Samities during the period  w.e.f. 1.4.96 to 30.10.97 should be cancelled  immediately.  The following course should be  adopted to terminate such appointments: (a)     There is no legal impediment in terminating  the service of the employee concerned after  cancelling the appointments which have been  made without any created/ sanctioned post but the  reason therefor shall have to be recorded in the  order. (b)     There is no legal impediment in terminating  the service after cancelling the appointments of  such persons as did not have educational  qualifications prescribed for the post concerned but  the reason therefor should be recorded in the order. (c)     The termination of service of such persons,  as have been appointed in relation to some post  and also have educational qualification prescribed  for that post, should be made in accordance with  the procedure mentioned in their appointment  order.  In case, no procedure is mentioned in the  appointments order, their service should be  terminated after giving either notice or pay in lieu  thereof.

(2)     In this regard I have to inform this thing also  that after making intensive examination in respect  of irregular appointments made in the Mandi  Parishad and Mandi Samities before 1.4.96, kindly  furnish clear report alongwith detailed statement  by 20.2.99.

(3)     Kindly make available in each case by  18.2.99 your proposal with clear recommendation  to the Govt. for action against the officers  responsible for the said irregular appointments."

       Further directions were issued on 17.3.1999 in the following terms:

"In regard to the appointed subject and Semi Govt.  Letter No. Dire-Camp/99-468 dt. 8.3.99, I have  been directed to say that keeping in view, the  decision taken by Govt. in regard to irregular  appointments made on the post of various  categories in U.P. State Agricultural Production  Marketing Board, there has been no requirement of  prescribed procedure rules.  In such circumstances,  the proposal sent to Govt. vide letter 1418/Camp  dt. 18.10.96 of Marketing Board Office is rejected  by the Govt. after due consideration."

       Pursuant thereto or in furtherance of such directions, the services of a  large number of employees were terminated on or about 20th March, 1999.

       On 27.1.1998, the Director of the Board informed the Secretary,  Department of Agriculture that all appointments are unauthorized/ irregular  and, thus, void ab initio and, therefore, their appointments should be  terminated following the rules.  In the said letter, the opinion of the

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Chairman of the Board was quoted stating:

"As the action, whatsoever, taken in this matter  will create wide ranging ramifications (both  political and administrative) therefore it will be  proper to send the factual report of the whole case  to Govt. for guidance.  It will be expedient to take  further action after consulting the department of  justice and obtaining orders from the Hon’ble  Minister for Agriculture and the Hon’ble Chief  Minister."

       Photocopies of the notesheets and photocopies of the details of all  appointments and the report received from the Deputy Director  (Administration) were annexed thereto.

       It may be noticed that the State in the meantime had also refused to  approve the proposed rules framed by the Board for regularisation of its  employees.

PROCEEDINGS BEFORE THE HIGH COURT

       Questioning the aforementioned directions of the State, one Rajnish  Varsheny filed a writ petition before a Division Bench of the Allahabad  High Court in April, 1999.  By a judgment and order dated 11.8.2000, a  learned Single Judge of the Allahabad High Court allowed the same holding  that the orders of termination issued pursuant to the orders of the State  Government dated 12.2.1992 were illegal.  A Division Bench of the High  Court, Lucknow Bench, put its seal of approval to the order of the learned  Single Judge by a judgment and order dated 5.9.2000 in similar writ  petitions filed by other dismissed employees.  A writ petition filed by one  Anshuman Misra, however, was dismissed by another Division Bench of the  Allahabad High Court at Lucknow upholding the said order of the State  Government.

       The parties are, thus, before us.

SUBMISSIONS On behalf of the Board:

       Submission of Mr. M. L. Verma, learned senior counsel appearing on  behalf of the Board are:

(i)     In terms of the statutory mandate contained in Section 26-M of the  Act, the Board was bound by the directions issued by the State.   (ii)    The appointments having been made in utter disregard of the  mandatory provisions of the Services Regulations and the  Establishment Regulations, the employees did not derive any legal  right to continue in the said posts.   (iii)   Such appointments having been made on a pick and choose method  and on an adhoc basis, the judgments of the High Court cannot be  sustained.   (iv)    Indisputably the provisions of U.P. Industrial Disputes Act and the  rules framed thereunder relating to retrenchment of workmen were  complied with and in that view of the mater it cannot be said that the  orders of termination passed against the employees were illegal.   (v)     In any view of the matter, the remedy of the employees, if any, was to  approach the industrial courts.   (vi)    It is not a case, it was urged, where principles of natural justice were  required to be complied with.

On behalf of the State

       Mr. Uday Umesh Lalit, learned senior counsel appearing on behalf of  the State of Uttar Pradesh submitted that from the records it would appear

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that the State adopted a known criterion for cancellation of appointment of  such employees who were in the last slots, namely, 1.4.1996 to 30.10.1997.   Such orders of termination ensured that the principles of last-come-first-go  basis are followed and the employees are paid one month’s salary in lieu of  notice as also 15 days wages for each completed year of service by way of  compensation.  No appointment having been made after 30.10.1997, the  impugned judgment of the High Court cannot be sustained.

On behalf of the Writ Petitioners        

       Mr. Anoop G. Chaudhari, learned senior counsel appearing on behalf  of the Respondents, on the other hand, urged: (i)     that the appointments of the employees cannot be said to be illegal as  the provisions contained in the respective regulations apply to  appointments in regular cadre.   (ii)    There is no embargo in appointing employees on adhoc basis in  exigency of service or on work charge basis recognised in the  regulations in view of the fact that such employees do not derive the  benefits which are granted to the regular employees. (iii)   Section 26-M of the Act had no application in the facts of the case in  view of the fact that appointment of adhoc employees is not a matter  which would come within the purview of the functions of the Board as  envisaged under Section 26-F and 26-L of the Act.  In any event, so  far as the appointments of employees employed in the Market  Committees are concerned, the same being governed by Section 23 of  the Act, Section 26-M thereof will have no application. (iv)    By reason of purported directions issued under Section 26-M, the  rights and privileges granted to the employees under other statutes  cannot be taken away. (v)     In view of the decision of this Court in Rakesh Ranjan Verma and  Others v. State of Bihar and Others [1992 Supp (2) SCC 343] and  U.P. State Electricity Board v. Ram Autar and Another [(1996) 8 SCC  506], the statutory power of appointment being vested in the Board,  the State could not interfere therewith.   (vi)    In any view of the matter, the purported policy decision adopted by  the State must be held to be wholly illegal and without jurisdiction as  prior thereto the requirements of each of the samities had not been  taken into consideration.  It was pointed out that even by 1998 full  reports had not been submitted by the Board as regards the financial  position of the Market Committees vis-a-vis the strength of the  employees and, thus, the policy decision must be held to have been  made without any application of mind.   (vii)   A policy decision of a State cannot be communicated by a demi- official letter without complying with the constitutional norms.   (viii)  One set of adhoc employees and/ or daily wagers should not be  replaced by another set of adhoc employees/ daily wagers.   (ix)    The Board having adopted a resolution to regularise the services of its  employees, there was no need to obtain any approval from the State.   (x)     As admittedly no appointment whatsoever was made in terms of the  statutory regulations since the inception of constitution of the Market  Committees and Boards, the State could not have ignored the past  practice particularly in a case of this nature where the employees  concerned have requisite educational qualifications.   (xi)    The court in such a situation can be said to have the requisite  jurisdiction in directing a State within the meaning of Article 12 of the  Constitution of India to make a scheme of regularisation.

       Mr. G.L. Sanghi, learned senior counsel appearing on behalf of  another writ applicant submitted that institutions of the market committees  and the Board having their activities principally in rural areas, the human  problem should not be ignored as without such daily wagers or adhoc  employees functions of the statutory body may have to be stopped.  

       The learned counsel submitted that the appointments being not void  ab initio and of no effect, the State could not have issued directions for

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termination of their services.  As the appointments were made having regard  to the necessity felt by the Market Committees and the Board, this Court  should not exercise its discretionary jurisdiction under Article 136 of the  Constitution of India.

       Mrs. Shobha Dixit, learned senior counsel appearing on behalf of  Rajnish Varshney supplemented the arguments of Mr. Chaudhary and Mr.  Sanghi contending that there was no material before the government for  issuing the impugned instructions.  It was submitted that the Market  Committees having regard to Section 19 of the Act had their own funds, the  case of each Committee should have been considered separately.

HIGH COURT

       A learned Single Judge of the High Court in his order dated  11.8.2000, which has been approved by the Division Bench of the Allahabad  High Court in its judgment dated 5.9.2000, held that: (i)     the normal functions of the Board pertain to establishment or  construction of new Market yards; control over Market Committees,  direction to the Committees to ensure efficiency, etc., it could not  have interfered in the functioning of the Market Committees.  (ii)    The procedures prescribed were to be applied in relation to selection  of regular employees and not adhoc employees or daily wagers.   (iii)   No principle has been laid down as to why adhoc employees engaged  before 1.4.1996 and after 30.10.1997 should be retained in service  and, thus, the action of the State was discriminatory in nature.   (iv)    The Government instead of formulating any policy resorted to an  arbitrary method of issuing a ’Tugalaki’ order in terminating the  services of the employees recruited between 1.4.1996 and 30.10.1997  were also terminated.   (v)     Although such irregular appointments have been made by several  directors but only those made by two of them, namely, Shri P.N.  Misra and Dr. Raja Ram, having been picked up for being cancelled,  the same being discriminatory and mala fide, the order impugned in  the writ application were unsustainable. (vi)    An employee should not be continued to be kept as adhoc employee  for more than 240 days.   (vii)   The resolution of the Board to regularise services of such employees  who have completed one thousand days of service was valid.  As the  writ petitioners have been working in various Committees for a long  period ranging from six to nine years, termination of their services  was arbitrary.   (viii)  The principles of natural justice have been ignored in terminating the  services of such employees and, thus, the orders terminating the  services of the writ petitioners were bad in law.

       It was directed:

"Having regard to the discussions made above, I  am inclined to hold that written and verbal  termination orders of the petitioners issued by the  authorities at the direction of the Government as  contained in letter dated 12.2.99 are arbitrary,  unreasonable and discriminatory and, therefore, all  such termination orders along with the irrational  impugned letter of source dated 12.2.99 are hereby  quashed.  A writ of certiorari is issued accordingly.   Further, a writ of mandamus is also issued  commanding the opposite parties to allow the  petitioners to resume their duty with immediate  effect.  They shall be deemed to have continued in  service and as such, they shall be relegated to their  original position.  However, they will not get their  back wages.  The U.P. Agricultural Produce  Market Board shall within six months resolve and

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formulate a policy to deal with the terms of their  service by giving due consideration to its earlier  resolution regarding regularization of their  services.  The Board will also take stern step to  ensure that such an odd situation to the  embarrassment of the competent authorities does  not arise in future."

       However, as noticed supra, another Division Bench of the same Court  in its judgment dated 13.11.2000 opined that the appointments having been  made in violation of the statutory regulations, the appointees must be held to  have entered into service through backdoor and in that view of the matter,  the State has the requisite jurisdiction to issue a direction in terms of   Section 26-M of the Act.

       The judgment of the Division Bench dated 5.9.2000 passed in Rajnish  Varshney v. State of U.P. was made in ignorance of an earlier division bench  decision in Raja Ram Maurya v. U.P. Rajya Krishi Utpadan Mandi Parishad,  Lucknow and, thus, was rendered per incuriam.

RELEVANT PROVISIONS OF THE STATUTES

       Before adverting to the rival contentions, we may briefly notice the  provisions of the said Act.

       Market Committees are incorporated and constituted in terms of  Sections 12 and 13.  Section 19 of the said Act provides for establishment of  a Market Committee Fund.  Sub-section (2) of Section 19 mandates that all  expenditure incurred by the committee shall be defrayed out of the said fund  and the surplus, if any, shall be invested in such a manner as may be  prescribed.  Sub-section (3) of Section 19 inter alia illustrates as to how such  funds are to be utilised including salaries, pensions and allowances, etc. and  other expenses, as may be prescribed, as specified in clause (ii).  The proviso  appended thereto mandates that annual expenditure in respect of matters  specified in clause (ii) shall not exceed 10% of the total annual receipts of  the Committee excluding loans raised by it and advances or grants made to it  except with the prior approval of the Board.   

       Section 23 of the Act occurring in Chapter IV provides for  appointments of officers and servants of the Market Committee and their  conditions of services.  The appointments of such officers who may be  appointed for carrying out the purpose of the Act must be done in terms of  the bye-laws framed by it.  Sub-section (2) of Section 23 envisages that  every Committee shall have such number of Secretaries and such other  officers as may be considered necessary by the Board for the effective  discharge of the functions of the Committee, appointed by the Board on such  terms and conditions as may be provided for in the regulations made by it.

       Chapter V of the Act deals with external control.  Establishment and  constitution of the Board are envisaged under Sections 26-A and 26-B.   Section 26-A empowers the Board to appoint such officers and servants as it  considers necessary for efficient performance of its functions on such terms  and conditions, as may be provided for in the regulations made by the Board.   Section 26-L provides for the powers and functions of the Board.  Functions  of the Board are provided for in Sub-section (1) thereof stating:

"(i) superintendence and control over the working  of the Market Committees and other affairs thereof  including programmes undertaken by such  Committees for the construction of New Market  Yards and development of existing Markets and  Market Areas; (ii) giving such direction to Committees in general  or any Committee in particular with a view to  ensure efficiency thereof;

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(iii) any other function entrusted to it by this Act; (iv) such other functions as may be entrusted to the  Board by the State Government by notification in  the Gazette."

       The powers of the Board have been enumerated under Sub-section (2)  of Section 26-L of the Act which includes:

"(x) to do such other things as may be of general  interest to Market Committees or considered  necessary for the efficient functioning of the Board  as may be specified from time to time by the State  Government."

       Section 26-M of the Act empowers the State Government to issue  directions in the following terms:

"(1) In the discharge of its functions, the Board  shall be guided by such directions on question of  policy, as may be given to it by the State  Government. (2) If any question arises whether any matter is or  is not a matter as respects which the State  Government may issue a direction under sub- section (1), the decision of the State Government  shall be final."

       Section 26-V of the Act provides for accounts and audit.  Section 26- X thereof empowers the Board to make regulations with the previous  approval of the State Government which shall be subject to the said Act and  the rules made thereunder.  Section 32 of the Act confers power upon the  Board to call for the proceedings of a Committee for the purpose of  satisfying itself as regard legality or propriety of a decision or an order or  orders and pass order thereon as it may deem fit if it is of the opinion that the  decision or order of the Committee should be modified, annulled or  reversed.  Section 33-B of the Act reads as under:

"Powers of the State Government.-(1) The State  Government with a view to satisfying itself that the  powers, functions and duties of the Board or a  Committee by or under this Act are exercised or  performed by it properly, may require the  Commissioner or the Collector or any other person  or persons to inspect or cause to be inspected any  property, office, document or any work, of the  Board or the Committee or to make inquiries into  all or any of the activities of the Board or the  Committee in such manner as may be prescribed  and to report to it the result of such inquiry within  such period as may be specified. (2) The Board or the Committee, as the case may  be, shall give to the Commissioner or the  Collector, or other person or persons, all facilities  during inspection and for the proper conduct of the  inquiry and shall produce any document or  information in its possession, when so demanded  for the purpose of such inspections or inquiry, as  the case may be."

       Section 39 of the Act provides for the bye-laws making power in the  Market Committee.  Proviso appended to Section 33 provides that no bye-

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law other than a bye-law made by adopting draft or model bye-law  suggested by the Board shall be valid unless approved by it.  Section 40 of  the Act provides for rule making power.

       The State Government framed rules known as "The U.P. Krishi  Utpadan Mandi Niyamavali, 1965 (for short "the Rules") in terms of Section  40 of the Act.  The functions, duties and powers of the Committees in terms  of Sections 16 and 17 of the Act have been laid down in Rule 46.  Rule 60  states that the qualification, designations, grades, salaries and allowance of  the posts of officers and servants whose appointing authority is the  Committee shall be approved by the Director.  Such appointment made by  the Committee under sub-section (1) of Section 23 of the Act for those posts  wherefor the Committee is the appointing authority shall be intimated within  30 days of the date of such appointments to the Directors or to such officer  as may be authorised by the Director in this behalf.  Sub-rule (3) of Rule 60  mandates that the Market Committee shall maintain service records and  character rolls in such forms as are prescribed for government servants and  those records shall be kept in the custody of the Market Secretary.  Rule 63  provides for the functions, powers and duties of the Secretary.   

       In exercise of its regulation making power, as noticed hereinbefore,  Services Regulations and the Establishment Regulations have been made.

       Regulation 2(e) defines "Employee" to mean ’every person appointed  on whole time basis in Classes A, B, C and D mentioned in Regulation 5,  whether on contract basis, on deputation or otherwise but does not include  persons employed on daily wages, work charged and on part-time basis.   Chapter IV of the Establishment Regulations provides for recruitment and  appointment.  Regulation 9 specifies the appointing authority in respect of  the posts shown in Column 1 of the table.  Regulation 10 provides for the  source of recruitment inter alia providing that 85 per cent posts in lowest  grade in Class C shall be filled by direct recruitment and 15 per cent by  promotion from Class D and all the posts in Class D shall be filled by direct  recruitment.  Regulation 11(1) provides for constitution of a Selection  Committee for the purpose of recruitment to Class A and B posts whereas  Regulation 11(2) provides for constitution of a Selection Committee for  recruitment to Class C and D posts.  Regulation 12 empowers the appointing  authority to determine the number of vacancies in all the classes to be filled  during the course of the year as also the number of vacancies to be reserved  for candidates belonging to Schedules Castes and Scheduled Tribes and  other categories under Regulation 8.  The other sub-regulations contained in  Regulation 12 provides for the mode and manner in which such vacancies  shall be filled up.  Chapter V lays down the conditions of service by way of  appointment, probation, confirmation and seniority.  Chapter VI provides for  superannuation, pay, allowances and other service conditions.   

       The Services Regulations contain similar provisions.  Part III of the  said Regulations deal with recruitment and procedure.  Regulation 10 lays  down that recruitment may be made either from the open market or from  promotion.  Regulation 11 provides for reservation.  Constitution of  Selection Committee is contained in Regulation 12.  Regulation 14 provides  for determination of vacancies whereas Regulation 16 provides for the  procedure of selection by direct recruitment.  Chapter V of the said  Regulations lays down the mode and manner in which the appointment,  probation, confirmation and seniority would be made.

LEGALITY OF THE APPOINTMENTS

       The Board is a ’State’ within the meaning of Article 12 of the  Constitution of India.  It was constituted in terms of the provisions of the  said Act.  The powers and functions of the Board as also the State in terms  of the provisions of the statute having been delineated, they must act strictly  in terms thereof.  It is a statutory authority.  Its powers, duties and functions  are governed by the statute.  It is responsible for constitution of the Market  Committees for the purpose of overseeing that the agriculturists while

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selling their agricultural produce receive the just price therefor.  It not only  regulates sale and purchase of the agricultural produce but also controls the  markets where such agricultural produces are bought and sold.  The Board is  entitled to levy market fee and recover the same from the buyers and sellers  through Market Committees.  Indisputably, Market Committees and the  Board have power to appoint officers and servants.  Although, the power of  the Board in this respect is not circumscribed, that of the Market Committees  is.  Market Committees can appoint only such number of secretaries and  other officers as may be necessary for efficient discharge of its functions.   Terms and conditions of such services are to be provided by it.  Section 19  of the Act, however, imposes further restriction on the power of the Market  Committee by limiting the annual expenditure made in this regard not  exceeding 10% of the total annual receipt of the Committee.  

       The appointments for different classes of employees are to be made  by the Board and the officers, as the case may be, in terms of the provisions  of the regulations.

       Both the Services Regulations and the Establishment Regulations, as  noticed hereinbefore, are applicable respectively to the employees of the  Board as also the Market Committees.  The said regulations provide for  detailed procedure for appointment and the terms and conditions therefor.   No appointment, thus, can be made in violation of the provisions of statute  and statutory rules.  

       Submission of the learned counsel appearing on behalf of the  employees is that the procedures prescribed by reason of the Regulations are  applicable to the regular employees.  It is so.  The question which, however,  falls for consideration is as to whether any appointment can be made de’hors  the provisions of the Act and the rules.  Our attention has been drawn to the  definition of ’employee’ which does not include persons employed on daily  wages, work charged and/ or part-time basis.  If the expression "employee"  does not bring within its fold any person employed on daily wages, work  charged or on part- time basis, the same would mean that the persons so  appointed would not be the employees within the meaning of the said  regulation.  It would, therefore, not be correct to contend that the Market  Committee or the Board have the jurisdiction to appoint anybody on daily  wages, work charged or on part-time basis de’hors the rules.  The power to  make appointments by the committee or the board whether contained in  Section 23 or Section 26-F of the Act are statutory in nature.  In absence of  any provisions conferred upon them to appoint any employee de’hors the  provisions of Sections 23 and 26-F and the regulations framed thereunder,  indisputably would mean that such appointments are de’hors the Act and the  rules.  The Rules also provide that any appointment made by the Committee  under Sub-section (1) of Section 23 shall be intimated within 30 days of  such appointment to the Director or to such other officer as may be  authorised by the Director in this behalf.  It implies that although the Market  Committee may have power to make appointments, such appointments can  be made in relation to the posts created therefor by the Board wherefor  requisite intimation has to be given to the Director or the officer authorised  in this behalf.  We may assume that for meeting the exigencies of situations  it may be possible for the Committee or the Board to appoint a person on  adhoc basis.  Such adhoc employees, however, being not employee within  the meaning of the provisions of the Act and the Regulations, a legal  relationship between the employer and the employee would not come into  being.  As no legal relationship of employer and employee comes into being,  evidently, such persons do not derive any status.  They a fortiori derive no  legal right to continue in service subject, of course, to the compliance of the  provisions of any other Act or the rules conferring certain benefits to them.  [See State of M.P. and Another v. Dharam Bir (1998) 6 SCC 165]

       Sections 23 and 26-F of the Act categorically mandate that all  appointments must be made in terms of the provisions of the regulations.   The terms and conditions of such services are also required to be prescribed  by the regulations, the logical corollary whereof would be that permanent

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status is required to be given to a person who is not otherwise an employee  of the Board or the Market committee, as the case may be.  It is required to  be done in terms of the regulation only.

       The Board is entitled to take a decision which is within its powers and  functions delineated by the Act.  A decision by way of resolution or  otherwise cannot be taken by the Board which is beyond the scope and  purview of the Act and the regulations framed thereunder.

       The Board, therefore, was bound to make a regulation if it intended to  put the respondents on its rolls.  The High Court, as noticed hereinbefore,  however, was of the opinion that it was not necessary so to do.  For the  reasons aforementioned, we do not agree.

POWER OF STATE TO ISSUE DIRECTIONS

       The State in exercise of its power conferred upon it could issue  directions.  The power of the State Government is confined to issue  directions on question of policy.  It cannot, however, interfere in the day to  day functionings of the Board.  Such policy decision, however, must be in  relation to the activities of the Board under the Act and not de’hors the same.  [See Rakesh Ranjan Verma (supra), Ram Autar (supra) and Bangalore  Development Authority & Others v. R. Hanumaiah & Others 2005 (8)  SCALE 80]   

       Such a decision on the part of the State Government must be taken in  terms of the constitutional scheme, i.e., upon compliance of the requirement  of Article 162 read with Article 166 of the Constitution of India.  In the  instant case, the directions were purported to have been issued by an officer  of the State.  Such directions were not shown to have been issued pursuant to  any decision taken by a competent authority in terms of the Rules of  Executive Business of the State framed under Article 166 of the Constitution  of India.

       In Punit Rai v. Dinesh Chaudhary, [(2003) 8 SCC 204], this Court  held:

"The said circular letter has not been issued by the  State in exercise of its power under Article 162 of  the Constitution of India. It is not stated therein  that the decision has been taken by the Cabinet or  any authority authorized in this behalf in terms of  Article 166(3) of the Constitution of India. It is  trite that a circular letter being an administrative  instruction is not a law within the meaning of  Article 13 of the Constitution of India. (See  Dwarka Nath Tewari v. State of Bihar)"

       However, it is not correct that the power of the State to issue  directions must be confined to the matters enumerated in Sub-section (1) of  Section 26-L of the Act.  Section 26-L is subject to the provisions of the Act.   The functions of the Board enumerated in Section 26-L of the Act are,  therefore, not exhaustive.  Appointment of servants and officers are also one  of the functions of the Board.  The Board also has right to supervise and  control the activities of the officers and Market Committees.  In that view of  the matter, if a policy decision is taken by the Board in regard to the  appointment or terms and conditions of the servants, in the event, regulations  made in this behalf do not contain any provisions, such policy decision must  conform to the directions of the State issued in that behalf, if any.  The  Board further is empowered to do such other things as are specified in clause  (x) of Section 26-L of the Act.

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       The Board, however, in law could not have abdicated its power in  favour of the State Government.

       We are, therefore, of the opinion that the direction by the State was  strictly not in accordance with law.

       The directions of the State were, therefore, although not binding on  the Board, the same cannot be said to be wholly irrational.  In his report  dated 7.1.1998, the Chairman of the Board sought for advice of the  Government.  The State had the power of supervision over the activities of  the officers of the Board and the Board itself.  While granting such advice,  the State had taken into consideration the last segment of employment.  The  State was not expected to direct the Board and the Board in turn could not   have directed the Market Committees to dismiss all the employees who have  been illegally appointed.   If such directions had been confined to the period  1.4.1996 to 30.10.1997 on following certain basic principles like last-come- first-go-basis, we do not see any reason as to why the same would be termed  to be arbitrary or discriminatory.

NATURAL JUSTICE

       If the employees are workmen within the purview of the U.P.  Industrial Disputes Act, they are protected thereunder.  Rules 42 and 43 of  the U.P. Industrial Disputes Rules provide that before effecting any  retrenchment in terms of the provisions of Section 6-N of the U.P. Industrial  Disputes Act, the employees concerned would be entitled to a notice of one  month or in lieu thereof pay for one month and 15 days wages for each  completed year service by way of compensation.  If such a retrenchment is  effected under the Industrial Disputes Act, the question of complying with  the principles of natural justice would not arise.  The principle of natural  justice would be attracted only when the services of some persons are  terminated by way of a punitive measure or thereby a stigma is attached.  [See Dr. Suresh Chandra Verma and Others v. The Chancellor, Nagpur  University and Others (1990) 4 SCC 55, para 16, Karnataka Public Service  Commission and Others v. B.M. Vijaya Shankar and Others, (1992) 2 SCC  206, paras 4 and 5 and State of M.P. and Others v. Shyama Pardhi and  Others (1996) 7 SCC 118, paras 4 and 5]

       In Viveka Nand Sethi v. Chairman, J&K Bank Ltd. and Others  [(2005) 5 SCC 337], it was held:

"The principle of natural justice, it is trite, is no  unruly horse. When facts are admitted, an enquiry  would be an empty formality. Even the principle of  estoppel will apply. [See Gurjeewan Garewal (Dr.)  v. Dr. Sumitra Dash] The principles of natural  justice are required to be complied with having  regard to the fact situation obtaining therein. It  cannot be put in a straitjacket formula. It cannot be  applied in a vacuum without reference to the  relevant facts and circumstances of the case."

       The High Court, therefore, must be held to have erred in law in  holding that the principles of natural justice were required to be complied  with.

DIRECTIONS OF THE HIGH COURT

       The directions of the High Court, in our opinion, were not justified.  It  may be that in implementing the advice of the State, some of the officers of  the Board became overzealous in terminating services of the employees who  were appointed prior to 1.4.1996.  The learned Single Judge of the High  Court was not, therefore, correct in describing a decision of the Board an  arbitrary or a discriminatory one.  No sufficient or cogent reason has been

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assigned by the learned Single Judge to arrive at a finding that such period  has been picked up out of the hat.  With a view to judge the correctness or  otherwise of such a decision, it was necessary to consider the backdrop  thereof.  We have noticed hereinbefore the contents of the correspondences  passed between the parties.  When the advice of the Chief Minister and/ or  the State was sought for, the Chief Minister wanted the details of such  appointment made within the last six months.  However, at a later stage, the  validity or otherwise of the appointments made by the Directors of the Board  on different periods had been taken into consideration.  It is only upon  application of mind on the facts and circumstances of this case that a  direction was issued on 17.3.1999 by the State.

REGULARISATION

       The direction of the High Court to frame scheme for regularisation of  the employees as also the resolution of the Board to regularise the services  of the employees who had completed one thousand days of service must be  considered having regard to the aforementioned legal position in mind.

       When questioned, Mr. Chaudhari and Mr. Sanghi submitted that  regularisation would mean permanence.  Regularisation of the services of an  employee would, therefore, mean that the concerned persons who had no  status within the purview of the definition of ’employee’ would become  employee.  Thus, a change in the status would be effected.

       An attempt to induct an employee without following the procedure  would be a backdoor appointment.  Such backdoor appointments have been  deprecated by this Court times without number. [See for example Delhi  Development Horticulture Employees’ Union v. Delhi Admn. (1992) 4 SCC  99, para 23]

       Even in State of Haryana v. Piara Singh [(1992) 4 SCC 118],  whereupon the learned counsel for the parties relied upon, it is stated:

"Ordinarily speaking, the creation and abolition of  a post is the prerogative of the Executive. It is the  Executive again that lays down the conditions of  service subject, of course, to a law made by the  appropriate legislature. This power to prescribe the  conditions of service can be exercised either by  making rules under the proviso to Article 309 of  the Constitution or (in the absence of such rules)  by issuing rules/instruct-ions in exercise of its  executive power. The court comes into the picture  only to ensure observance of fundamental rights,  statutory provisions, rules and other instructions, if  any, governing the conditions of service. The main  concern of the court in such matters is to ensure  the rule of law and to see that the Executive acts  fairly and gives a fair deal to its employees  consistent with the requirements of Articles 14 and  16\005"

       A 3-Judge Bench of this Court upon taking into consideration a large  number of decision in A. Umarani v. Registrar, Cooperative Societies and  Others [(2004) 7 SCC 112] held that illegal appointments cannot be  regularised.  It was further held:

"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."

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       The power to frame regulations is expressly conferred on the Board in  terms of Section 26 of the Act.  Such regulations are to be made with the  previous approval of the State Government.  Indisputably, the State  Government by its letter dated 17.3.1999 refused to accord permission in  relation thereto.

       If no appointment could be made by the State in exercise of its power  under Article 162 of the Constitution of India as the same would be in  contravention of the statutory rules, there cannot be any doubt whatsoever  that the Board or for that matter the Market Committees cannot make an  appointment in violation of the Act and the Regulations framed thereunder.

       In Executive Engineer, ZP Engg. Divn. And Another v. Digambara  Rao and Others [(2004) 8 SCC 262], it was held:

"It may not be out of place to mention that  completion of 240 days of continuous service in a  year may not by itself be a ground for directing an  order of regularisation. It is also not the case of the  respondents that they were appointed in  accordance with the extant rules. No direction for  regularisation of their services, therefore, could be  issued. (See A. Umarani v. Registrar,  Coop. Societies and Pankaj Gupta v. State of J&K)  Submission of Mr Maruthi Rao to the effect that  keeping in view the fact that the respondents are  diploma-holders and they have crossed the age of  40 by now, this Court should not interfere with the  impugned judgment is stated to be rejected."

       [See also Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra  and Others, (2005) 5 SCC 122]

       In Mahendra L. Jain and Others v. Indore Development Authority and  Others [(2005) 1 SCC 639], it was categorically held:

"The question, therefore, which arises for  consideration is as to whether they could lay a  valid claim for regularisation of their services. The  answer thereto must be rendered in the negative.  Regularisation cannot be claimed as a matter of  right. An illegal appointment cannot be legalised  by taking recourse to regularisation. What can be  regularised is an irregularity and not an illegality.  The constitutional scheme which the country has  adopted does not contemplate any back-door  appointment. A State before offering public  service to a person must comply with the  constitutional requirements of Articles 14 and 16  of the Constitution. All actions of the State must  conform to the constitutional requirements. A  daily-wager in the absence of a statutory provision  in this behalf would not be entitled to  regularisation. (See State of U.P. v. Ajay Kumar  and Jawaharlal Nehru Krishi Vishwa Vidyalaya v.  Bal Kishan Soni.)"

       In Manager, Reserve Bank of India, Bangalore v. S. Mani and Others  [(2005) 5 SCC 100], Umarani (supra) was followed holding that in law 240  days of continuous service by itself give rise to permanence which reason  has weight with the opinion of learned Single Judge of the High Court.

       It is, therefore, not correct to contend that only because in the  correspondences between the State and the Board the appointments of such

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persons have been described to be irregular, the same would not mean that  they are not illegal.

       In any event, no temporary or permanent status can be granted to an  employee by way of regularisation.  [See Union of India v. Gagan Kumar  (2005) 5 SCC 70 and State of Maharashtra and Another v. R.S. Bhonde and  Others (2005) 5 SCC 751].

PRECEDENTS

       Mr. Chaudhary has relied upon a large number of decisions to contend  that this Court has directed framing of such schemes.

       In Surya Narain Yadav and Others v. Bihar State Electricity Board  and Others [(1985) 3 SCC 38], the writ petitioners were appointed as trainee  engineers pursuant to an advertisement issued therein.  Representations have  been made to them that after their training was completed, they would be  absorbed in regular employment of the Board.  Some employees who were  getting age-barred for government employment and had left the Board were  told to come back under the temptation of getting permanently employed  under the Board.  When the Board was reeling under a strike of its  employees, these trainee engineers stood by the Board to keep up the  generation and distribution of electricity and had been assured of absorption.   The Board had decided to absorb them on permanent basis but initially on a  probation of two years without conducting any further examination.  It was  in aforementioned situation, this Court applied the principles of promissory  estoppel and observed that the Board should have regularized the services of  the trainee engineers.  The Court did not lay down any law that  regularization would be directed despite the fact appointments had been  made in violation of the rules.

       In Piara Singh (supra), this Court was beset with the scheme framed  by the State to regularize the services of its employees.  The Bench did not  go into the question of validity or otherwise of such a scheme.  We have,  however, noticed hereinbefore that even such a scheme would be  impermissible in law.

       In Madan Singh and Others etc. v. State of Haryana and Others [AIR  1988 SC 2133], this Court was dealing with a matter where the State  Government had come forward with orders from time to time for absorption  of work charged employees.  The Court was of the opinion that the benefits  conferred thereunder were available to them.

       In Raj Narain Prasad and Others v. State of U.P. and Others [(1998) 8  SCC 473] yet again no law has been laid down.  No decision other than  Piara Singh (supra) has been referred to.  Before this Court, a scheme was  submitted in terms whereof the scheme had undertaken to regularize work- charged employees employed prior to 19.9.1985.  This Court besides the  proposals made therein issued certain other directions.

       Strong reliance has been placed by Mr. Chaudhary on R.N.  Nanjundappa v. T. Thimmiah & Anr. [(1972) 2 SCR 799] for the proposition  that irregular employees can be regularized.  Therein it was held:

"The contention on behalf of the State that a rule  under Article 309 for regularisation of the  appointment of a person would be a form of  recruitment read with reference to power under  Article 162 is unsound and unacceptable. The  executive has the power to appoint. That power  may have its source in Article 162. In the present  case the rule which regularised the appointment of  the respondent with effect from February 15, 1958,  notwithstanding any rules cannot be said to be in  exercise of power under Article 162. First, Article

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162 does not speak of rules whereas Article 309  speaks of rules. Therefore, the present case touches  the power of the State to make rules under Article  309 of the nature impeached here. Secondly when  the Government acted under Article 309 the  Government cannot be said to have acted also  under Article 162 in the same breath. The two  articles operate in different areas. Regularisation  cannot be said to be a form of appointment.  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."

       The said decision has been noticed in various judgments referred to  hereinbefore.  It instead of helping the Respondents goes directly against  them.

       In All Manipur Regular Posts Vacancies Substitute Teachers’  Association v. State of Manipur [1991 Supp (2) SCC 643], this Court was  confronted with various interim orders passed by the High Court from time  to time in several writ petitions.  It was observed that if the direct  recruitment takes place on one hand and substituted teachers are also  directed to be regularized subsequently, it would create an enormous  problem for the department to accommodate both the categories of persons  and in the aforementioned situation, in exercise of its power under Article  142 of the Constitution of India, this Court with a view to avoid further  litigation and also to avoid seemingly conflicting interim orders issued by  the High Court gave certain directions.  Such directions having evidently  been issued by this Court in exercise of its power under Article 142 of the  Constitution of India do not constitute a binding precedent.  Even therein,  the scope and ambit of this Court’s jurisdiction under Article 142 vis-‘-vis  existence of the statue and statutory rules and the constitutional mandate  contained in Articles 14 and 16 of the Constitution of India had not been  taken into consideration.   

       On the other hand, in a series of decisions, which we have noticed  hereinbefore, this Court has now firmly laid down the law that regularization  cannot be a mode of appointment.   

OTHER CONTENTIONS

       Mr. Chaudhari has placed strong reliance upon the provisions of the  U.P. Regularisation of Adhoc Appointments (on Posts Outside the Purview  of the Public Service Commission) Rules, 1979 purported to have been  framed by the State in pursuance of the provisions of Clause (3) of Article  348 of the Constitution of India.  Rule 4 of the said Rules reads, thus:

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"4. Regularisation of ad hoc appointments \026 (1)  Any person who \026  (i) was directly appointed on ad hoc basis on or  before June 30, 1998 and is continuing in service  as such on the date of commencement of the Uttar  Pradesh Regularisation of Ad hoc Appointments  (On Posts Outside the Purview of the Public  Service Commission) (Third Amendment) Rules,  2001. (ii) possessed requisite qualifications prescribed  for regular appointment as the time of such ad hoc  appointment; and (iii) has completed or, as the case may be, after he  has completed three years service shall be  considered for regular appointments in permanent  or temporary vacancy, as may be available, on the  basis of his record and suitability before any  regular appointment is made in such vacancy in  accordance with the relevant rules or orders. (2) In making regular appointments under these  rules reservations for the candidates belonging to  the Scheduled Castes, Scheduled Tribes, Backward  Classes and other categories shall be made in  accordance with the orders of the Government in  force at the time of recruitment. (3) For the purpose of sub-rule (1) the appointing  authority shall constitute a Selection Committee. (4) The appointing authority shall prepare an  eligibility list of the candidates, arranged in order  of seniority, as determined from the date of order  of appointment and if two or more persons are  appointed together from the order in which their  names are arranged in the said appointment order,  the list shall be placed before the Selection  Committee along with the character rolls and such  other records of the candidates as may be  considered necessary to assess their suitability. (5) The Selection Committee shall consider the  cases of the candidates on the basis of their records  referred to in sub-rule (4). (6) The Selection Committee shall prepare a list of  the selected candidates, the names in the list being  arranged in order of seniority, and forward it to the  appointing authority."

       Apart from the fact that such contention has not been raised before the  High Court as also in the counter-affidavit filed before us, the provisions of  the said rules by no stretch of imagination can be said to be applicable in the  instant case.

       Submission of Mr. Chaudhary to take recourse to Regulation 29 of the  Establishment Regulations providing that in regard to the matters not  specifically covered by the rules persons appointed to the services of the  Board shall be governed by the regulations applicable generally to the State  Government employees is misconceived.

       The said submission of Mr. Chaudhary is furthermore inconsistent  with his submissions, as noticed supra, that even in terms of Section 26-M of  the Act, the State Government had no power to issue any direction  governing appointment in respect of terms and conditions of the services of  the employees.  Persons who may be appointed to the services of the Board,  furthermore, even according to the learned Counsel appearing on behalf of  the Respondents, are those who are regular employees having been  appointed in terms of the provisions of the Act and the Regulations framed

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thereunder.  We have, therefore, no doubt in our mind that Regulation 29 of  the Establishment Regulations which is in Chapter VII of the Act refers to  only such regulations and orders which would be applicable to the regular  employees.

       The fact that all appointments have been made without following the  procedure or services of some persons appointed have been regularised in  past, in our opinion, cannot be said to be a normal mode which must receive  the seal of the court.  Past practice is not always the best practice.  If  illegality has been committed in the past, it is beyond comprehension as to  how such illegality can be allowed to perpetrate.  The State and the Board  were bound to take steps in accordance with law.  Even in this behalf Article  14 of the Constitution of India will have no application.  Article 14 has a  positive concept.  No equality can be claimed in illegality is now well- settled. [See State of A.P. v. S.B.P.V. Chalapathi Rao and Others,(1995) 1  SCC 724, para 8, Jalandhar Improvement Trust v. Sampuran Singh (1999) 3  SCC 494, para 13 and State of Bihar and Others v. Kameshwar Prasad Singh  and Another (2000) 9 SCC 94, para 30].

       In the instant case, furthermore, no post was sanctioned.  It is now  well-settled when a post is not sanctioned, normally, directions for  reinstatement should not be issued.  Even if some posts were available, it is  for the Board or the Market Committee to fill-up the same in terms of the  existing rules.  They, having regard to the provisions of the regulations, may  not fill up all the posts.

       It may be that from the very inception the provisions of the Act and  the Regulations framed thereunder had been given a complete go-by.  It,  furthermore, may be that the Board had adopted resolution for purported  regularization of the services of its employees and employees of Market  Committees appointed prior to 1.10.1988.  We have, however, noticed  hereinbefore that such a resolution on the part of the Board was beyond its  domain.  It is also true, as has been contended by Mr. Chaudhary and Mr.  Sanghi, that the power to create posts was with the Board but the Board did  not exercise its power nor the competent authorities of the Market  Committees proceeded to appoint employees on the sweet will of the  concerned authorities without in any way bothering for the provisions of the  Act and the Rules framed thereunder.  It is interesting to note that the Market  Committees claimed themselves to be local authorities for the purpose of  obtaining exemption from payment of income tax.  The officers of the local  authorities had a bounden duty not only to act within the four-corners of the  statute but having regard to the constitutional scheme in mind.  They failed  and/ or neglected to do so.  As appointments had been made de’hors the  rules and without following the procedures known in law and in flagrant  violation of constitutional scheme as laid down in Articles 14 and 16 of the  Constitution of India, the appointments although might have been made in  exigencies of services, they must be held to be wholly illegal and without  jurisdiction.  An attempt has been made by the Respondents to show that the  income of the Market Committees has increased from Rs. 1.92 crore to Rs.  210.88 crores and the quantum of construction work has also increased from  Rs. 65.8 crores to Rs. 128.4 crores.  It has also been suggested that in  November, 2005, the income has increased in the year 2004-05 to Rs. 400  crores and the annual budget of the Market Committees which has been  sanctioned is approximately Rs. 350 crores.  The availability of funds is not  and cannot be a valid ground to make the appointments of persons without  proper sanction and creation of posts and cannot be taken to be an excuse to  perpetuate illegalities.

       A contention has been raised by Mrs. Dixit that there was no material  before the Government for issuing the impugned instructions insofar as the  financial position vis-‘-vis the strength of the employees had been taken into  consideration.  It is not necessary for us to go into the aforementioned  question inasmuch as we are herein concerned with the legality and/ or  validity of the impugned orders of termination of services and the same  having not been done, the appointment of the concerned employees were

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wholly illegal and without jurisdiction and, thus, void and of no effect.

CONCLUSION

       The upshot of our aforementioned discussions is:

(i)     The Board and the Market Committees were bound by the Act, the  Rules and Regulations framed thereunder in making appointments.   Statutory provisions as also the constitutional requirements were  required to be complied with. (ii)    The Board had no jurisdiction to frame any scheme for regularization  in the pith of the statutory regulations operating in the field.  Any  legislation involving appointment or laying down the conditions of  service of the employees would require prior sanction of the State. (iii)  The State of Uttar Pradesh in exercise of its purported power under  Section 26-M of the Act could not have issued the directions as it has  been done but such a direction cannot be said to be wholly  unreasonable.   (iv)    The State although could not exercise a statutory power beyond the  provisions of the statute but the same although might have been done  under a misconception of law but was not otherwise arbitrary or mala  fide. (v)     Availability of vacancies and/ or the fund by themselves would not  allow the Market Committees or the Board to make appointments in  flagrant violation of the statutory provisions.  Although the direction  of the State of U.P. which had been acted upon by the Board did not  have a statutory backing, the High Court could not have issued a writ  of or in the nature of mandamus as the writ petitioners \026 Respondents  did not have any legal right.   (vi)    We are not oblivious of the fact that there may be some employees  whose services have been terminated without any rhyme or reason.   Mr. Verma appearing on behalf of the Board has assured us that the  Board shall look into cases of such employees whose termination has  been effected beyond the policy decision taken by the State although  we do not intend to express any opinion as regards such employees.

       We, however, direct the Board and the Market Committees to fill up  all existing vacancies strictly in accordance with law as expeditiously as  possible and preferably within six months from date.  While doing so,  amongst other eligible candidates, the candidature of the employees whose  services have been terminated should also be taken into consideration and in  the event, the appropriate authority of the Market Committees or the Board  can relax the age-bar, the same would be done.  The respective Market  Committees, however, in the meanwhile, if for exigencies of the work,  intend to appoint any person, it may do so.  However, post facto approval  therefor should be obtained from the Board.  In the offers of appointment  which may be issued to such temporary or ad hoc employees it shall be  made clear that their appointments would be ad hoc in nature and the same  shall be co-terminus with the appointment of regular employees.

       In view of our findings aforementioned, we are of the opinion that the  judgment and order dated 11.8.2000 passed by the learned Single Judge  which has been upheld by the Division Bench by its order dated 5.9.2000  does not lay down the law correctly and the judgment and order dated  13.11.2000 passed by a Division Bench of the Lucknow Bench of the  Allahabad High Court in Writ Petition No. 1093 (S/B) of 1999 lays down  the law correctly.  In the result, Civil Appeal arising out of SLP(C) No.  15797 of 2001 is dismissed and other civil appeals filed by the Board and  the State of Uttar Pradesh as also civil appeal arising out of SLP(C) No.  15677 of 2003 filed by the Board are allowed.  However, there shall be no  order as to costs.