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CASE NO.: Appeal (civil)  933 of 2006

PETITIONER: Union Public Service Commission

RESPONDENT: Girish Jayanti Lal Vaghela & others

DATE OF JUDGMENT: 02/02/2006

BENCH: K.G. BALAKRISHNAN & G.P. MATHUR

JUDGMENT: J U D G M E N T (Arising out of S.L.P. (Civil) No. 15714 of 2003)

G.P. Mathur, J.

       Leave granted. 2.      This appeal, by special leave, has been filed challenging the  judgment and order dated 13.12.2002 of the Bombay High Court by  which the writ petition filed by respondent no.1, Girish Jayanti Lal  Vaghela was allowed.

3.      Respondent no.1, Girish Jayanti Lal Vaghela was appointed as  Drugs Inspector on 11.3.1996 on short term contract basis on a fixed  salary for a period of six months from the date of joining or till the  date the candidate selected by Union Public Service Commission  (UPSC) joined duty on regular basis, whichever was earlier.  The  appointment of respondent no.1 was renewed after every six months  with short breaks and it continued for over five years.  An  advertisement was issued by the UPSC on 24.3.2001 for making  regular selection on the post of Drugs Inspector.  Under the relevant  recruitment rules made in exercise of powers conferred by proviso to  Article 309 of the Constitution, the upper age limit for making direct  recruitment is 30 years, which is relaxable for Government servants  upto five years in accordance with the instructions or orders issued by  the Central Government. Respondent No.1 had become over-age by  two years at the time when the advertisement was issued and  consequently he submitted an application to the Administrator, Union  Territory of Daman and Diu (for short "Administrator") for issuing  him an age relaxation certificate.  Since there was no response,  respondent no.1 filed an Original Application on 16.7.2001 before the  Central Administrative Tribunal, Bombay (for short "Tribunal")  praying that a direction be issued to the Administrator to issue him an  age relaxation certificate.   The Tribunal vide its order dated  17.7.2001 directed the Administrator to decide the representation  made by respondent no.1.  Meanwhile, respondent no.1 was  provisionally allowed to appear in the interview.  On account of  refusal of the Administrator to grant age relaxation certificate,  respondent no.1 filed  second  Original Application before the  Tribunal which passed an interim order to the effect that any  appointment made on the post of Drugs Inspector would be subject to  the outcome of the Original Application.   Nearly 5 months after the  interview, the UPSC cancelled the candidature of respondent no.1 and  recommended the name of respondent no.4, Naresh Sharma for the  post of Drugs Inspector.   The contract appointment given to  respondent no.1 came to an end on 30.9.2002 and it was not extended  any further. The second Original Application was dismissed by the  Tribunal vide order dated 21.6.2002 on the finding that the  appointment of respondent no.1 was made only on short term contract

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basis and he had not been appointed by following the recruitment  rules and further that the intention of the Government was to provide  relaxation in age only to regular Government servants and not to those  who have been appointed on ad hoc basis de hors the rules.   Feeling  aggrieved by the aforesaid decision of the Tribunal, respondent no.1  filed a writ petition before the Bombay High Court which was  allowed by the order dated 13.12.2002 and the Administrator was  directed to issue an age relaxation certificate to respondent no.1.  A  further direction was issued to the appellant U.P.S.C. to consider the  claim of respondent no.1 and for making a recommendation to the  Administrator for issuing him an offer of appointment as Drugs  Inspector.

4.      Before examining the contention raised by learned counsel for  the parties, it will be convenient to set out the order dated 11.3.1996,  by which respondent no.1 was initially appointed on short term  contract basis.    "ORDER         The Administrator of Daman and Diu and Dadra and  Nagar Haveli is pleased to appoint Shri Vaghela Girish Jantilal  to the post of Drugs Inspector on short term contract basis at a  fixed monthly rate of Rs.4,720/- (Rupees four thousand seven  hundred and twenty only) and to post him in the Primary Health  Centre, Daman for a period of six months only from the date of  joining or till the date the Union Public Service Commission  selected candidate joins his duties on regular basis, whichever  is earlier.         Shri Vaghela Girish Jantilal shall stand relieved on  expiry of six months from the date of joining or on the date the  Union Public Service Commission selected candidate joins his  duties on regular basis whichever is earlier.         By order and in the name of the Administrator of Daman  & Diu & Dadra & Nagar Haveli."

       The aforesaid appointment order was renewed from time to  time with short breaks of few days.   At the time when the UPSC  issued the advertisement on 24.3.2001 for making regular selection on  the post of Drugs Inspector, respondent no.1 was working on the said  post on contract basis. As already stated, under the relevant  recruitment rules for the post of Drugs Inspectors, the upper age limit  for direct recruitment is 30 years, which is relaxable for Government  servants upto 5 years in accordance with the instructions or orders  issued by the Central Government. If respondent no.1 was a  Government servant, he would be eligible for relaxation of upper age  limit.  The Tribunal has held that respondent no.1 was not a  Government servant and was, therefore, not eligible for relaxation in  upper age limit.   This view of the Tribunal has been reversed by the  High Court. The crucial question which requires consideration is  whether a person working on a short term contract basis can be said to  be a Government servant.  5.      The problem of defining what is an employer and employee  relationship and what is an independent entrepreneurial dealing  frequently arises before the courts.   Difficulty arises in defining what  is a "contract of service" and what is "contract for service".   In  Cassidy v. Ministry of Health (1951) 1 All ER 574, after referring to  some earlier decisions, it was held that in a "contract for services" the  master can order or require what is to be done, while in the other case  (a contract of service) he can not only order or require what is to be  done but direct how it shall be done.  The House of Lords in Short v.  J. & W. Henderson, Limited (1946) 174 Law Times 417, laid down  the attributes of employer-employee relationship which have been  followed in later decisions.  In this case the appellant, who was a dock  labourer, sustained injuries by accident and claimed compensation  against the respondents under the Workmen’s Compensation Act,  1925.   The respondents contended that the appellant was not a

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workman within the meaning of Section 3(1) of the said Act but was a  member of a joint stevedoring adventure.   The House laid down the  following four indicia of contract of service, namely, (a) the master’s  power of selection of his servant; (b) the master’s responsibility of  payment of wages or other remuneration; (c) the master’s right of  suspension or dismissal; and (d) the master’s right to control the  method of doing the work.  It was also observed that a contract of  service may still exist if some of these elements are absent altogether,  or, present only in an unusual form and that the principal requirement  of a contract of service is the right of the master in some reasonable  sense to control the method of doing the work, and that this factor of  superintendence and control has always been treated as critical and  decisive of the legal quality of the relationship.    6.      Though in many cases the importance of the factor of  superintendence and control has been emphasized but that is not the  determining test.   In Morren v. Swinton and Pendlebury Borough  Council (1965) 2 All ER 349, Lord Parker, C.J. held that  superintendence and control cannot be the decisive test when one is  dealing with a professional man or a man of some particular skill and  experience.   Instances of that have been given in the form of the  master of a ship, an engine driver, a professional architect or a  consulting engineer.   In such cases there can be no question of the  employer telling him how to do work; therefore, the absence of  control and direction in that sense can be of little, if any, use as a test.   In Argent v. Minister of Social Security (1968) 3 All ER 208, it was  observed that though in earlier cases it seems to have been suggested  that the most important test, if not the all important test, was the  extent of control exercised by the employer over the servant but as the  development of law in recent times in this field indicates, the  emphasis has shifted and no longer rests so strongly on the question of  control.  Control is obviously an important factor.   In some cases it  may still be the decisive factor, but it is wrong to say that in every  case it is the decisive factor.   7.      Rule 2(h) of Central Civil Service (Classification, Control and  Appeal) Rules, define a Government servant and it reads as under : "2(h)   "Government servant" means a person who \026 (i)     is a member of a Service or holds a civil post under the  Union, and includes any such person on foreign service  or whose services are temporarily placed at the disposal  of a State Government, or a local or other authority; (ii)    is a member of a Service or holds a civil post under a  State Government and whose services are temporarily  placed at the disposal of the Central Government; (iii)   is in the service of a local or other authority and whose  services are temporarily placed at the disposal of the  Central Government."

It will be noticed that under sub-rule (i), a person who is a  member of service or holds a civil post under the Union is a  Government servant.   Similarly, under sub-rule (ii), a person who is a  member of a service or holds a civil post under the State Government  is a Government servant.   Therefore, it is a holder of a civil post  whether under the Union or State Government, who will be a  Government servant for the purposes of the Central Civil Services  (Classification, Control and Appeal) Rules.   We are not concerned  here with sub rule (iii) whereunder a person in the service of a local or  other authority and whose services are temporarily placed at the  disposal of the Central Government gets the status of a Government  Servant. 8.      There are several decisions of this Court wherein the concept of  civil post has been explained and the first decision on the point is  State of Assam v. Kanak Chandra Dutta AIR 1967 SC 884.  In this  case the respondent who was a Mauzadar in the Assam Valley was  dismissed from service in disregard of the provisions of Article  311(2). It was held that "having regard to the existing system of his

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recruitment, employment and functions", he was "a servant and a  holder of a civil post under the State", and therefore entitled to the  protection of Article 311(2). This Court observed :  "............  A post is a service or employment.   A person  holding a post under a State is a person serving or  employed under the State, see the marginal notes to  Articles 309, 310 and 311.   The heading and the sub- heading of Part XIV and Chapter I emphasize the  element of service.  There is a relationship of master and  servant between the State and a person said to be holding  a post under it. The existence of this relationship is  indicated by the State’s right to select and appoint the  holder of the post, its right to suspend and dismiss him,  its right to control the manner and method of his doing  the work and the payment by it of his wages or  remuneration.  A relationship of master and servant may  be established by the presence of all or some of these  indicia, in conjunction with other circumstances and it is  a question of fact in each case whether there is such a  relation between the State and the alleged holder of a  post."

9.      The question as to who can be said to be holder of civil post  under the Government was examined by a Constitution Bench in State  of Gujarat v. Raman Lal Keshav Lal AIR 1984 SC 161 and after  review of several earlier decisions the Bench recorded its conclusions  as under : ".....We do not propose and indeed it is neither politic nor  possible to lay down any definitive test to determine  when a person may be said to hold a civil post under the  Government. Several factors may indicate the  relationship of master and servant. None may be  conclusive. On the other hand, no single factor may be  considered absolutely essential. The presence of all or  some of the factors, such as, the right to select for  appointment, the right to appoint, the right to terminate  the employment, the right to take other disciplinary  action, the right to prescribe the conditions of service, the  nature of the duties performed by the employee, the right  to control the employee’s manner and method of the  work, the right to issue directions and the right to  determine and the source from which wages or salary are  paid and a host of such circumstances, may have to be  considered to determine the existence of the relationship  of master and servant. In each case, it is a question of fact  whether a person is a servant of the State or not."

10.     Article 16 which finds place in Part III of the Constitution  relating to fundamental rights provides that there shall be equality of  opportunity for all citizens in matters relating to employment or  appointment to any office under the State.  The main object of Article  16 is to create a constitutional right to equality of opportunity and  employment in public offices.  The words "employment" or  "appointment" cover not merely the initial appointment but also other  attributes of service like promotion and age of superannuation etc.    The appointment to any post under the State can only be made after a  proper advertisement has been made inviting applications from  eligible candidates and holding of selection by a body of experts or a  specially constituted committee whose members are fair and impartial  through a written examination or interview or some other rational  criteria for judging the inter se merit of candidates who have applied  in response to the advertisement made.   A regular appointment to a  post under the State or Union cannot be made without issuing  advertisement in the prescribed manner which may in some cases  include inviting applications from the employment exchange where

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eligible candidates get their names registered.   Any regular  appointment made on a post under the State or Union without issuing  advertisement inviting applications from eligible candidates and  without holding a proper selection where all eligible candidates get a  fair chance to compete would violate the guarantee enshrined under  Article 16 of the Constitution. (See B.S. Minhas vs. Indian Statistical  Institute and others AIR 1984 SC 363). 11.     Article 309 lays down that subject to the provisions of the  Constitution, Acts of the appropriate Legislature may regulate the  recruitment, and conditions of service of persons appointed, to public  services and posts in connection with the affairs of the Union or of  any State. The proviso to this Article confers power upon the  President or the Governor, as the case may be, to make rules  regulating the recruitment and the conditions of service of persons  appointed to services and posts in connection with the affairs of the  Union or the State.   Article 311 affords several protections to persons  employed in civil capacities under the Union or a State.   In view of  clause (2) of this Article, holder of a civil post under the Union or a  State cannot be dismissed or removed or reduced in rank except after  an inquiry in which he has been informed of the charges against him  and he is given a reasonable opportunity of being heard in respect of  those charges.   12.     A private employer in India enjoys almost a complete freedom  to select and appoint anyone he likes and there is no statutory  provision mandating advertisement of the post or selection being  made strictly on merit, even where some kind of competitive  examination is held.  A private employer has absolute liberty to  appoint a less meritorious person.   Except those who are covered by  the definition of "workman" and are governed by the provisions of  Industrial Disputes Act or any such allied enactment, an employee  working in a private establishment normally does not enjoy any  statutory protection regarding his tenure of service.    13.     Though in State of Assam v. Kanak Chandra Dutta (supra) and  in the Constitution Bench decision in State of Gujarat v. Raman Lal  Keshav Lal (supra) the decision of House of Lords in Short vs. J & W  Henderson and other English cases were not referred to but it appears  that this Court adopted almost the same test for ascertaining whether a  person holds a civil post under the Union or a State.   But in England  these tests were adopted in order to find out whether there was a  relationship of master and servant and particularly in the context of  private employment.   In our country there is a substantial difference  between an employee working in a private establishment and a  Government servant on account of the aforesaid constitutional  provisions.  Therefore, the indicia laid down in State of Assam v.  Kanak Chandra Dutta (supra) and State of Gujarat v. Raman Lal  Keshav Lal (supra) cannot be the only tests for determining whether a  person is holder of a civil post under the Union or the State.  In the  case of a regular Government servant there is undoubtedly a  relationship of master and servant but on account of constitutional  provisions like Articles 16, 309 and 311 his position is quite different  from a private employment.  14.     The nature of right possessed by a Government servant and also  his status after his appointment to a post under the Government was  considered by a Constitution Bench in Roshan Lal Tandon v. Union of  India AIR 1967 SC 1889 and it was held as under in para 6 of the  reports : "6.  .......... It is true that the origin of Government service is  contractual.   There is an offer and acceptance in every case.  But once appointed to his post or office the Government servant  acquires a status and his rights and obligations are no longer  determined by consent of both parties, but by statute or  statutory rules which may be framed and altered unilaterally by  the Government.  In other words, the legal position of a  Government servant is more one of status than of contract.  The  hall-mark of status is the attachment to a legal relationship of

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rights and duties imposed by the public law and not by mere  agreement of the parties.  The emolument of the Government  servant and his terms of service are governed by statute or  statutory rules which may be unilaterally altered by the  Government without the consent of the employee.  It is true that  Article 311 imposes constitutional restrictions upon the power  of removal granted to the President and the Governor under  Article 310.  But it is obvious that the relationship between the  Government and its servant is not like an ordinary contract of  service between a master and servant.  The legal relationship is  something entirely different, something in the nature of status.    It is much more than a purely contractual relationship  voluntarily entered into between the parties.   The duties of  status are fixed by the law and in the enforcement of these  duties society has an interest.  In the language of jurisprudence  status is a condition of membership of a group of which powers  and duties are exclusively determined by law and not by  agreement between the parties concerned.  The matter is clearly  stated by Salmond and Williams on Contracts as follows :         "So we may find both contractual and  status-obligations produced by the same  transaction.  The one transaction may result in the  creation not only of obligations defined by the  parties and so pertaining to the sphere of contract  but also and concurrently of obligation defined by  the law itself, and so pertaining to the sphere of  status. A contract of service between employer and  employee, while for the most part pertaining  exclusively to the sphere of contract, pertains also  to that of status so far as the law itself has seen fit  to attach to this relation compulsory incidents,  such as liability to pay compensation for accidents.    The extent to which the law is content to leave  matters within the domain of contract to be  determined by the exercise of the autonomous  authority of the parties themselves, or thinks fit to  bring the matter within the sphere of status by  authoritatively determining for itself the contents  of the relationship, is a matter depending on  considerations of public policy.   In such contracts  as those of service the tendency in modern times is  to withdraw the matter more and more from the  domain of contract into that of status."  (Salmond  and Williams on Contracts, 2nd edition, p.12)"

15.     In Dinesh Chandra v. State of Assam AIR 1978 SC 17 the  contention that the relationship between the Government servant and  the Government is contractual in nature was not accepted and was  specifically repelled.  It will be useful to reproduce para 11 of the  reports where the conclusions were recorded :   "11.    Mr. Niren De submits that Article 310(2) supports  his submission that the relationship between the  Government servant and the Government is contractual.  Sub-article (2) of Article 310 provides that  "notwithstanding that a person holding a civil post under  the Union or a State holds office during the pleasure of  the President or, as the case may be, of the Governor of  the State, any contract under which a person, not being a  member of a defence service or of an all-India service or  of a civil service of the Union or a State, is appointed  under this Constitution to hold such a post may, if the  President or the Governor, as the case may be, deems it  necessary in order to secure the services of a person  having special qualifications, provide for the payment to  him of compensation, if before the expiration of an

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agreed period that post is abolished or he is, for reasons  not connected with any misconduct on his part, required  to vacate that post".  The above is a special provision  which deals with a special situation where a contract is  entered into between the Government and a person  appointed under the Constitution to hold a civil post. But  simply because there may be, in a given case, a  contractual employment, as envisaged under Article  310(2) of the Constitution, the relationship of all other  Government servants, as a class, and the Government,  cannot be said to be contractual. It is well-settled that  except in the case of a person who has been appointed  under a written contract, employment under the  Government is a matter of status and not of contract even  though it may be said to have started, initially, by a  contract in the sense that the offer of appointment is  accepted by the employee." Again in para 12 the Court said as under : "12.    ................... It goes without saying that in many  employments, whether of private limited companies or  public companies, contracts of employment are executed  containing a term for termination of employment by  notice. Such cases of contractual employment are  different from those of Government employees whose  employment is a matter of status and not of ordinary  contract. The conditions of service of a Government  servant are regulated by statute or statutory rules made  under Article 309 of the Constitution. ............."

       It, therefore, follows that employment under the Government is  a matter of status and not a contract even though the acquisition of  such a status may be preceded by a contract, namely, an offer of  appointment is accepted by the employee. The rights and obligations  are not determined by the contract of the two parties but by statutory  rules which are framed by the Government in exercise of power  conferred by Article 309 of the Constitution and the service rules can  be unilaterally altered by the rule making authority, namely, the  Government.     16.     There is no dispute that respondent no.1 was engaged or hired  on contract to work as Drugs Inspector for a period of six months  from the date of joining or till a candidate selected by UPSC joined on  regular basis, whichever was earlier.  The contract further stipulated  that even if a regularly selected candidate did not join, respondent  no.1 shall stand relieved on the expiry of six months.  In Director,  Institute of Management Development v. Pushpa Srivastava AIR 1992  SC 2070 it was held that where the appointment is purely on ad hoc  basis and is contractual and by efflux of time the appointment comes  to an end, the person holding such post can have no right to continue  in the post.   It was further held that this is so even if the person is  continued from time to time on ad hoc basis for more than a year.   In  State of Haryana v. Surinder Kumar 1997(3) SCC 633 the respondents  were appointed as clerks on contract basis.   They filed a writ petition  in the High Court for their regularisation which was allowed and a  direction was issued for payment of wages on the principle of ’equal  pay for equal work’ and also regularisation of their services.  In  appeal this Court reversed the judgment of the High Court holding  that as the respondents’ recruitment was not made in accordance with  the rules and they were appointed on contract basis on daily wages,  they cannot have any right to the post as such until they are duly  selected and appointed.   This decision was followed by a three-Judge  Bench in State of Haryana v. Charanjit Singh & Ors. JT 2005 (12) 475  and it was held that where a person is employed under a contract, it is  the contract which will govern the terms of contract of service and not  the rules framed under Article 309 of the Constitution governing the  conditions of service to the post on which he is employed.  It is,

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therefore, clear that respondent No. 1 did not have any right to  continue as Drugs Inspector after expiry of the six months period for  which he had been appointed. 17.     It is neither pleaded nor there is any material to show that the  appointment of respondent no.1 had been made after issuing public  advertisement or the body authorized under the relevant rules  governing the conditions of service of Drugs Inspectors in the Union  Territory of Daman and Diu had selected him.  His contractual  appointment for six months was de hors the rules.   The appointment  was not made in a manner which could even remotely be said to be  compliant of Article 16 of the Constitution.  The appointment being  purely contractual, the stage of acquiring the status of a Government  servant had not arrived.  While working as a contractual employee  respondent no.1 was not governed by the relevant service rules  applicable to Drugs Inspector.   He did not enjoy the privilege of  availing casual or earned leave.  He was not entitled to avail the  benefit of general provident fund nor was entitled to any pension  which are normal incidents of a Government service.  Similarly he  could neither be placed under suspension entitling him to a suspension  allowance nor he could be transferred.   Some of the minor penalties  which can be inflicted on a Government servant while they continue  to be in Government service could not be imposed upon him nor he  was entitled to any protection under Article 311 of the Constitution.   In view of these features it is not possible to hold that respondent no.1  was a Government servant. 18.     The situation here is somewhat similar to that considered by  this Court in Phool Badan Tiwari v. Union of India 2003(9) SCC 304.   In this case the appellants who were appointed by railway authorities  as supervisors in Handicap Centres filed an Original Application  before Central Administrative Tribunal for claiming regularisation of  their services and for declaring them as railway servants and further  for payment of regular pay scales.   The claim of the appellants was  repelled by the Tribunal and also by the High Court in the writ  petition and the appeal filed by them was dismissed by this Court  mainly on the ground that the appellants had not been appointed in  pursuant to or under any recruitment rules but were appointed under a  beneficial scheme intended to help the wives and daughters of the  railway servants, where they were given an opportunity to work as  Supervisors.    19.     Shri K. Ramamurthy, learned counsel for the contesting  respondent has contended that in view of the principle laid down in  State of Assam v. Kanak Chand Dutta AIR 1967 SC 884 the  respondent No. 1 should be held to be a Government servant.   As  mentioned earlier the question in this case was whether a Mauzadar in  Assam Valley holds a civil post under the State of Assam and is  entitled to the protection of Article 311(2) of the Constitution. This  decision was considered and referred to in State of Gujarat v. Raman  Lal Keshav Lal Soni AIR 1984 SC 161 to which we have already  referred to earlier and also in Supdt. of Post Offices v. P.K. Rajamma  1977 (3) SCC 94.  The principle laid down therein do not advance the  case of respondent no.1 in any manner as certain other factors like the  process of recruitment in accordance with relevant service rules was  not followed and certain other incidents of service like transfer,  disciplinary action, pension and the facility of general provident fund  are absent in his case.   The other case relied upon by the learned  counsel is Purshottam Dhingra v. Union of India AIR 1958 SC 36  which again is of no assistance to respondent no.1 as the main  controversy here was whether a temporary Government servant was  entitled to the protection of Article 311 of the Constitution.  Shri  Ramamurthy has also referred State of UP v. Chandra Prakash Pandey  2001(4) SCC 78 where the question was whether the Kurk Amins  appointed on commission basis by Collectors for realization of  outstanding dues of various cooperative societies as arrears of land  revenue can be treated to be employees of the State Government  holding civil post within the meaning of Article 311 of the

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Constitution.  The Kurk Amins had not been appointed on contract  basis as is the case of respondent no.1 whereunder his appointment  came to an automatic end after expiry of the period of contract.  Thus,  there being a fundamental difference between the nature of  employment of respondent no.1, the principle laid down in the  aforesaid authority cited by the learned counsel can have no  application here.  20.     For the reasons discussed above, we are clearly of the opinion  that respondent no.1 cannot be said to be a Government servant as he  was working on contract basis and, therefore, he was not eligible for  any relaxation in upper age limit.   The view taken by the High Court  is clearly erroneous in law and is liable to be set aside. 21.     The appeal is accordingly allowed and the judgment and order  dated 13.12.2002 of the High Court is set aside and the writ petition  filed by respondent no.1 is dismissed.   No costs.