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PETITIONER: SYRYA NARAIN YADAV & ORS.

       Vs.

RESPONDENT: BIHAR STATE ELECTRICITY BOARD & ORS.

DATE OF JUDGMENT08/05/1985

BENCH: MISRA RANGNATH BENCH: MISRA RANGNATH FAZALALI, SYED MURTAZA VARADARAJAN, A. (J)

CITATION:  1985 AIR  941            1985 SCR  Supl. (1) 605  1985 SCC  (3)  38        1985 SCALE  (1)1106  CITATOR INFO :  D          1991 SC 818  (18)  RF         1991 SC1173  (5)

ACT:      Service Law-Right to absorption in service on the basis of  representations   made-Applicability  of  the  equitable doctrine of  promissory estoppel  to State   employees  who, relying on  representations and  promises made by the public body have  altered their  position to  their  prejudice  and detriment-Seniority Assignment of, clarified.

HEADNOTE:      Pursuant to  the Respondent  Board’s advertisement  for selection of  electrical  engineers  under  the  "Employment Promotion Programme",  the appellants and many others joined as Apprentice  Engineers with  effect from  April  1,  1977. Though in  March 1977  i.e. before  their appointments,  the Board had  indicated that the training of six months did not guarantee  employment  under  the  Board,  in  view  of  its resolution in  August 1977  to fill  on the  basis of  chain system 200  vacant posts  of Junior Engineers the appellants were  asked   to  continue   as  Junior  Engineers/Assistant Engineers as  the case  may be on existing stipends and were posted  to   Thermal  Power   Stations.  Since   no  regular appointments were  made representations  were  made  to  the Board to  implement the  August 1977 resolution without loss of time  since  some  of  them  would  become  overaged  for employment under Government. On March 8,1979 at a high level meeting it  was decided  that (i)  After completion  of  one year’s  training  (which  is  October  1979)  they  will  be appointed   in    the   post    of   Assistant    Electrical Engineers/Junior Engineers  on  provisional  regular  basis; (ii) that  they will  remain on  probation for two years and (iii) that  during the period of probation, if their conduct is found satisfactory and on availability of permanent posts and on  the basis  of inter  se seniority  in the Cadre they shall be  confirmed. The aforesaid decision was published on March 13,  1979 pointing out further that those trainees who had left  training should  also join  at the places of their respective postings  latest by  March 18,1979  failing which they would not be considered for regular appointments.

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    In the  meantime, some  unemployed Engineers approached the High  Court at  Patna challenging  the continuity of the trainee Engineers  in the employment of the Board. The Board took the  stand before  the  High  Court  that  the  trainee engineers belonged  to a  separate class  and held  ex cadre appointments as  Assistant Engineers  and Junior  Engineers. The High  Court took  the view  that their  continuity on ex cadre basis  was not open to challenge on the ground of non- compliance of  Rules. In May 1980, these writ petitions were dismissed Emboldened by the acceptance of their stand by the High 606 Court, the  Board started  exhibiting a negative approach in its treatment towards the trainee engineers. Ultimately, the appellants moved the High Court for a direction to the Board to encadre  them but  failed. Hence  the appeals  by special leave against the decision of the High Court.      Allowing the appeals, the Court ^      HELD :  1.1 The  Bihar State  Electricity  Board  is  a statutory authority  and is  ’State’ within  the meaning  of Article 12 of the Constitution. [612 E]      2.1 The  principle  of  promissory  estoppel  has  full application to the facts of the case. The Board has tried to seek shelter  under a  set of rules framed by it in exercise of the  powers vested  under section  79 of  the Electricity (Supply) Act  of 1949.  The defence  of the  Board that  the trainee   Engineers   continue   to   serve   as   Assistant Engineers/Junior  Engineers   on  ex   cadre  basis  without seniority and  stability of service is ill placed and cannot hold as  a shield  against the  application of the equitable doctrine of  promissory estoppel.  The records clearly show; (i) the  Board did  represent to  the trainee engineers from time to  time that  after their training was completed, they would be  absorbed in  regular employment  of the Board; (2) when some  of the  engineers  were  getting  age-barred  for Government employment and had left the Board, they were told to come  back under  the temptation  of getting  permanently employed under  the Board;  (3) when the Board was reeling a strike of  its employees,  these trainee engineers had stood by the  Board to  keep up the generation and distribution of electricity and  had been assured of absorption; and (4) the Board had  decided to  absorb them  on permanent  basis  but initially on a probation of two years without conducting any further examination. [612 E-F; 609 E-C]      Union of  India v.  Indo-Afghan Agencies  [1968] 2  SCR 366; Collector  of Bombay  v. Municipal  Corporation, [1952] SCR 43:  Century Spinning  & Manufacturing  Co. Ltd.  v. The Ulhasnagar Municipal  Council  &  Anr.  [1970]  3  SCR  854; Motilal Padampat  Sugar Mill  Co. Ltd.  v.  State  of  Uttar Pradesh & Ors. [1979] 2 SCR 409 followed.      [The Court  directed that  the appellants being already in employment of the Board much prior to 1983 on being taken into regular appointment of the Board have to rank above the recruits of 1983 and in the years thereafter; and rank below the permanent  and temporary  recruits to  regular posts  of engineers held under the Board prior to 1983.] [613E-F]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION : Civil Appeal Nos. 268 & 269-273 of 1984.      From the Judgment and Order dated 1.9.1983 of the Patna High Court  in  C.W.J.C.  Nos.  4472/82,  2562/83,  2558/83,

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4472/82 and 3558/83 respectively. 607      Raju Ramachandran  and Mrs.  S.  Ramachandran  for  the Appellants in  C.A. No.  268/84, 271/84  and 272/84 and B.B. Singh for the Appellants in C.A. No. 269/84.      A, Sharan,  Suleman, Khursid  and Gopal  Singh for  the Appellants in C.A. No. 270/84 and 273/84.      B.P. Singh and Ranjit Kumar for the Intervener.      Parmod Sawup  for the  Respondents in C.A. Nos. 268/84, 269 270, 271 and 272 of 1984.      B.P. Singh and Ranjit Singh for the Respondents in C.A. No. 273 to 1984.      The Judgment of the Court was delivered by      RANGANATH MISRA,  J. These appeals are by special leave and two  of these  are by  Junior Engineers  while the other four  are   by  Assistant   Engineers  working   under   the respondent-Bihar  State  Electricity  Board.  In  September, 1975,  the   Board  advertised   in  local  newspapers  that selection of  Electrical Engineers  would be  made under  an "Employment Promotion  Programme" and  Engineers with 50 per cent marks  in the  degree examination would be eligible for consideration. In  due course, such selection was made and a group of  Apprentice Engineers also called Trainee Engineers came to  serve under the Board. These selected engineers had already  completed   their  training   for  the  purpose  of obtaining the  degree in  engineering. The graduate trainees were called  upon to  report for  a period  of  six  months’ training with  effect from April 1, 1977. In March 1977, the Board had  indicated that  the training  does not  guarantee employment under  the Board  but in  August, 1977, the Board resolved that  200 vacant posts of Junior Engineers would be filled on  the  basis  of  chain  system  and  the  existing trainees  would   be  continued   as  trainees  on  existing stipends. As  time elapsed  and no  appointment were made as represented by the Board, representation was made by some of the trainee  engineers pointing  out that unless the Board’s decision of  August, 1977,  was implemented  without loss of time, some  of them  would become  overaged for  appointment under Government.  Soon after  the said  representation, the Board extended  deputation  of  the  trainee  engineers  and indicated that  the deputation  to  Thermal  Power  Stations under the Board would be of permanent nature. The Board 608 published a  notice on  March 13, 1979, to the effect that a decision regarding  regular employment of degree and diploma trainee engineers  of the  Board for  the post  of Assistant Electrical Engineers  and Junior  Electrical  Engineers  has been taken  by the  State Government  and on  completion  of their training  in October,  1979, regular appointment would be made.  It was  further pointed  out  therein  that  those trainees who  had left training should join at the places of their respective  posting latest  by March 18, 1979, failing which they would not be considered for regular appointments. As the  Board did not give effect to its representations and decisions, the  graduate  engineers  employed  as  Assistant Engineers  or   Junior  Engineers   started  agitating   for implementation of  the Board’s  decisions from time to time. Ultimately, on  March 8, 1979, at a high level meeting where the Speaker  of the Legislative Assembly presided, the Chief Minister was  present and  among others participating in the meeting were the Commissioner of Irrigation and Electricity, the Chairman  of the  Board and  the Secretary of Irrigation and Electricity, it was decided:           "After completion of one years’ training (which is      October 1979)  as decided  by the  Board they  will  be

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    appointed in  the post of Assistant Electrical Engineer      and Junior  Electrical Engineer on ’provisional regular      basis’. After appointment they will remain on probation      for two  years. During  probation the  period if  their      conduct is  found satisfactory  and on the availability      of permanent  posts  and  on  the  basis  of  inter  se      seniority in the cadre they shall be confirmed."           "They will be appointed on regular basis after the      completion  of   training  period  and  examination  as      proposed vide office order No. 1548 dated 26.10.78 will      not be taken." The Board communicated the aforesaid decision to the Project Managers and  Thermal Power  Stations of  the Board, yet the decision was  not implemented  and the  apprentice engineers continued  to   serve  as  Assistant  Engineers  and  Junior Engineers on  ex cadre basis, without security and stability of service.  Some unemployed  Engineers approached  the High Court at  Patna challenging  the continuity  of the  trainee Engineers in the employment of the Board. The Board took the stand before the High Court that the trainee engineers 609 belonged to  a separate class and held ex cadre appointments as Assistant  Engineers and Junior Engineers. The High Court took the  view that  their continuity  on ex cadre basis was not open  to challenge  on the  ground of  non-compliance of Rules. In  May, 1980,  these writ  petitions were dismissed. Emboldened by  the acceptance  of their  stand by  the  High Court, the  Board started  exhibiting a negative approach in its treatment  towards the trainee engineers. Ultimately the appellants moved the High Court for a direction to the Board to encadre  them but  failed. These appeals directed against the decision of the High Court.      A few  important aspects emerge from the record-(1) the Board did  represent to  the trainee  engineers from time to time after  their training  was  completed,  they  would  be absorbed in  regular employment  of the Board; (2) when some of the  engineers were  getting  age-barred  for  Government employment and  had left  the Board,  they were told to come back under  the temptation  of getting  permanently employed under the  Board; (3)  when the  Board was  reeling under  a strike of  its employees,  these trainee engineers had stood by the  Board to  keep up the generation and distribution of electricity and  had been assured of absorption; and (4) the Board had  decided to  absorb them  on permanent  basis  but initially on a probation of two years without conducting any further examination.      On March  13, 1979, a notice was issued by the Board to the following effect:           "A decision regarding regular employment of degree      and diploma  trainees of  Bihar State Electricity Board      in the  posts  of  Assistant  Electrical  Engineer  and      Junior Electrical  Engineer has been taken by the State      Government. On completion of their training in October,      1979,  their   regular  appointments   will  be   made.      Therefore, those  trainees who have left their training      are informed  to join at the places of their respective      postings latest  by 18.3.1979  Those trainees  who will      not present themselves by the said date will be neither      considered  for  being  taken  in  training  nor  their      regular appointments will be considered." On April 26, 1979, the Board approved the proposal contained in the  proceedings of  a meeting  relating to absorption of the appellant 610 engineers in  which the  Speaker of the Legislative Assembly

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presided  and   the  Chief  Minister,  the  Commissioner  of Irrigation and  Electricity, the  Chairman of  the Board and the Secretary  of Irrigation  and Electricity  participated. The proceeding, inter alia, stated:           "(1) It  was decided  that after completion of one      year’s training  (which is October, 1979) as decided by      the Board,  they will  be appointed  in  the  posts  of      Assistant Electrical  Engineers and  Junior  Electrical      Engineers on provisional basis. After appointment, they      will  remain   on  probation   for  two  years.  During      probation period of their conduct is found satisfactory      and the  availability of  permanent posts  and  on  the      basis  of  inter  se  seniority  in  the  cadre,  their      appointments will be confirmed.           (2) They  will be appointed on regular basis after      the  completion   of  the   training  period   and  the      examination proposed  vide office  order No. 1548 dated      26.10.1978 will not be taken.      ...                ...              ...            ...           (9) It is also decided that the benefit of regular      appointment  is  being  given  to  the  trainees  under      special circumstances  which will not be an example for      the future and when either under the Apprenticeship Act      or  under   any  other   scheme  anyone   is  taken  as      apprentice, he will be discontinued after the period of      apprenticeship. In  any circumstance, neither period of      apprenticeship will  be extended nor will they have any      claim for appointment under the Board."      We have  referred to these two documents out of several of them  available on  the record to show that the Board was aware of  the position that these trainee engineers formed a special class  and very  peculiar circumstances  warranted a definitely special  treatment in  regard to  them. Yet it is unfortunate that  a statutory body like the Board has failed to stand up to its representations made from time to time to a group  of engineers  who had spent years of their valuable life  for   qualifying  themselves   as  engineers  and  who believing the  representation of  the Board  and acting upon the same  continued to remain in the employment of the Board as trainee 611 engineers foregoing  opportunities available  to seek  other employments and  in the  process have  become age-barred for any public  employment. This  Court almost  a score of years back in  clear language indicated in Union of India v. Indo- Afghan Agencies:           Under our  jurisprudence, the  Government  is  not      exempt from  liability to  carry out the representation      made by  it as to its future conduct and it cannot some      undefined  and   undisclosed  ground  of  necessity  or      expediency fail  to carry out the promise solemnly made      by it,  nor claim to be the judge of its own obligation      to the  citizen on  an ex  parte  appraisement  of  the      circumstances in which the obligation has arisen." Shah, J. as the learned Judge then was, quoted with approval what Chandrasekhrar  Aiyar, J. had in Collector of Bombay v. Municipal Corporation:           "Whether it  is the equity recognised in Ransden’s      case, or  it is  some other  form of  equity, is not of      much  importance.   Courts  must   do  justice  by  the      promotion of  honesty and good faith, as far as it lies      in their power." The legal  position was  reiterated by this Court in Century Spinning  &   Manufacturing  Co.   Ltd.  v.  The  Ulhasnagar Municipal Council & Anr., where it was said:

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         "Public  bodies  are  as  much  bound  as  private      individuals to  carry out  representations of facts and      promises made  by them,  relying on which other persons      have altered  their position  to their  prejudice.  The      obligation arising  against an  individual out  of  his      representation amounting  to a  promise may be enforced      ex contractu  by a  person who  acts upon  the promise;      when the  law requires that contract enforceable at law      against a  public body  shall be  in certain form or be      executed in  the  manner  prescribed  by  statute,  the      obligation may  be, if  the contract  to be not in that      form, enforced  against  it  in  appropriate  cases  in      equity..." 612 This Court added a pithy observation:           "If our  nascent democracy  is to thrive different      standards of  conduct for  the people  and  the  public      bodies cannot  be permitted.  A public  body is, in our      judgment, not  exempt from  liability to  carry out its      obligations arising  out of  representations made by it      relying upon  which a  citizen has altered his position      to his prejudice." In Motial  Padampat Sugar  Mill Co.  Ltd. v.  State of Uttar Pradesh &  Ors. this  Court went  ahead to  state  that  the doctrine of  promissory estoppel  is not really based on the principle of  estoppel, but  it is  a  doctrine  evolved  by equity in order to prevent injustice and it can be the basis of cause of action.      In our  view, the  principle relied upon in these cases has full  application to the facts before us. The Board is a statutory authority  and is  ’State’ within  the meaning  of Article 12  of the Constitution. The Board has tried to seek shelter under a set of rules framed by it in exercise of the powers vested  under section  79 of the Electricity (Supply) Act of 1948. In the peculiar facts of the case we are of the view that  the defence  is ill-placed  and cannot  hold as a shield against  the application  of the  equitable doctrine. Admittedly,  the   trainee  engineers  before  us  formed  a specific class  and from time to time the Board treated them as members of class and in its resolution of April 26, 1979, recognised this  fact and  swore to  the position  that such treatment  should  never  be  repeated  even  if  apprentice engineers were appointed.      Learned counsel appearing for the Board indicated to us that the  Board was prepared to regularise the employment of the appellants  belonging to  the category  of the Assistant Engineers or Junior Engineers subject to their qualifying in the examination  and being  formally recruited  as  required under the rules. They further emphasised that the appellants would not  be entitled  to seniority  above those  who  have already been regularly employed under the Board.      So far  as the  first  aspect  is  concerned,  we  have sufficiently pointed  out already  that the Board had waived the  requirement   of  examination  and  had,  while  taking advantage of the services of the 613 appellants when  it was  in need, delayed the implementation of  its   representations.  But   it  appears  that  several engineers have  also been  recruited either  on permanent or temporary basis  against regular  vacancies and they are not parties to  these appeals. The appellants, therefore, cannot have seniority  above those  people  and  we  would  not  be justified in  making any  direction  which  would  prejudice their seniority  behind their  back. It  appears that  there have been  requirements even  during the  pendency of  these

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appeals.  While   granting  leave  and  while  disposing  of miscellaneous  petitions  for  directions,  this  Court  has already made  it clear that appointments pendente lite would be subject  to the  result of  the appeals.  Therefore,  the recruits of  1983 are bound to be subject to our directions. We are  inclined to  take the view that the appellants being already in  employment of  the Board  much prior  to 1983 on being taken  into regular  appointment of  the Board have to rank above the recruits of 1983 and in the years thereafter.      The  Board   in  our   view  is,  therefore,  bound  to regularise the  appointments of  the appellants who had been taken as  trainee engineers  initially and have continued to be in  the employment  of the  Board. In  this view  of  the matter after  the hearing  was over  we issued a mandamus to the Board  to offer  regular appointment  to the  appellants within three  months from that day, i.e. May 3, 1985, in the appropriate cadre  of Assistant Engineer or Junior Engineer, as the  case may  be, and  such appointments  were to  be on probation for  a period  of two  years as required under the rules. In  regard to  seniority the  appellants have to rank below permanent  and temporary  recruits to regular posts of engineers held  under the Board prior to 1983 and they shall be assigned  seniority above such recruits pendente lite. We have now  indicated the reasons by our judgment. The appeals are allowed  and the  judgment of the High Court is reversed and the  Board is  directed to give effect to the directions indicated above within the specified time.      We hope  and trust  that the  Board  will  not  conduct itself in such an embarrassing way in future and land itself in difficulty again.      The appellants  shall have  their costs throughout. One set of hearing fee assessed at Rs. 5,000 shall be admissible in this Court. S.R.     Appeal allowed. 614