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PETITIONER: UNION OF INDIA & ORS.

       Vs.

RESPONDENT: K. G. RADHAKRISHANA PANICKAR & ORS.

DATE OF JUDGMENT:       28/04/1998

BENCH: S.C. AGARWAL, S. SAGHIR AHMAD, M. SRINIVASAN

ACT:

HEADNOTE:

JUDGMENT:                           W I T H CIVIL  APPEAL   NOS.  3973/94,  5531/94,  9241/94,  4569/97, 570/97, 4571/97,  4572/97, 4573/97,  4574/97,  CIVIL  APPEAL NOS. .............................................  OF  1998 {arising out  of SPECIAL  LEAVE PETITIONS  (C) NOS. 2595/94, 13416/94, 4335/94,  8053/95, 17197/95,  17198/95,  22691/95, 2790/95, 27483/95, 3423/95, 12061/97 379/98} Civil Appeal  Nos. 2  47 9/98,  2480/98,  2473/98,  2474/98, 475/98, 2478/98, 2476/98, 2472/98, 2477/98, 2481/98, 882/98, and 2483/98.                       J U D G M E N T S. C. AGRAWAL,      Special leave granted in the Special Leave Petitions.      These appeals  rais the  question whether employees who were initially  engaged as  project  Casual  Labour  by  the hilway Administration  and were  subsequently absorbed  on a regular temporary/permanent  post are  entitled to  have the services rendered as Project Casual Labour prior to 1.1.1981 counted as  part of  qualifying service  for the  purpose of pension and other retiral benefits.      In sub-para  (a) of  Para 2501  of the  Indian  Railway Establishment  Manual   [hereinafter  referred  to  as  ’the Manual’], as  it stood  at the relevant time, the expression ’Casual Labour’ was defined in these terms :-      " Casual  labour refers  to  labour      whose   employment   is   seasonal,      intermittent, sporadic  or  extends      over short  periods. Labour of this      kind is normally recruited from the      nearest available source. It is not      liable   to   transfer,   and   the      conditions applicable  to permanent      and temporary staff do not apply to      such labour."      In sub-para  (b) of  Para 2501  of  the  Manual  casual labour wad  divided into three categories, namely, (i) staff paid from  contingencies except those retained for more than six months  continuously, known  as Open Casual Labour; (ii) labour on  projects,  irrespective  of  duration,  known  as Project Casual  Labour; and  (iii) seasonal  labour who  are

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sanctioned for  specific  works  of  less  than  six  months duration. Persons  falling in  category (i) who continued to do the  same work  or other  work of  the same type for more than six  months without  a break  were  to  be  treated  as temporary after  the expiry  of the  period of six months of continuous employment.  The said  period of  six months  was subsequently reduced  to  120  days.  Since  the  period  of service  of   such  casual   about,  after  their  attaining temporary status  on completion  of 120  days of  continuous service, was not counted a qualifying service for pensionary benefits and  there was a demand for counting of that period of service  for that  purpose, the  Railway Board,  by order dated October 14, 1980, took the following decision :-      Is a result of representations from      the recognised  labour  unions  and      certain   other    quarters,    the      Ministry  of   Railways  had   been      considering  the  demand  that  the      period of  service in  the case  of      casual  labour   (i.e.  other  than      casual labour employed on projects)      after their attainment of temporary      status on  completion of  120  days      continuous   service,   should   be      counted as  qualifying service  for      pensionary benefits  if the same is      followed  by  their  absorption  in      service    as    regular    railway      employees.  The   matter  has  been      considered     in     detail     in      consultation with  the Ministry  of      Home. Affairs  (Deptt. of personnel      and Administrative Reforms) and the      Ministry  of  Finance.  Keeping  in      view the  fact that  the  aforesaid      category  of   employees  on  their      containment of  temporary status in      practice enjoy  more privileges  as      admissible  to  temporary  employes      such as  they are  paid in  regular      scales  of   pay  and   also   earn      erements, contribite  to P.F.  etc.      the  Ministry   of   Railway   have      decided, with  the coroval  of  the      president, that the benefit of such      service   rendered   by   them   as      temporary employee; before they are      regularly   appointed   should   be      conceded to them as provided in the      Ministry of  Finance O.M.  No.  F12      (1) -  EV/768 dated 14th May, 1968.      (copy    enclosed     for     ready      reference).      The concession  of counting half of      the above service as qualifying for      pensionary  benefits,  as  per  the      O.M. of  14th May,  1968  would  be      made applicable to casual labour on      the  railways   who  have  attained      temporary status. The weightage for      the past  service would  be limited      from   1.1.1961    in   terms    of      conditions of  the O.M.  ibid, past      cases  of  retirements  before  the      date of this letter will not be re-

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    opened.      2. Daily  rated  casual  labour  or      labour employed  on  projects  will      not however,  be brought  under the      purview of the aforesaid orders."      Project Casual  Labour were  left out from the ambit of this order  because there  was no  provision  for  grant  of temporary status  to project  Casual Labour.  Project Casual labour had grievance that, though very large in number, they had no security of service and no protection whatsoever. The said grievance  of the  project  Casual  labour  was  raised before this  Court  in  Writ  Petitions  No.s  147,  320-69, 459,4335  of  1985  etc.  filed  under  Article  32  of  the Constitution. During the pendency of the said writ petitions before this  Court, the  Railway Ministry  framed  a  scheme making provision  for grant  of temporary  status to project Casual Labour  on  completion  of  360  days  of  continuous service. The said scheme provided as follows:-      "  1.1   As  a   result   of   such      deliberations,  the   Ministry   of      Railways  have   now   decided   in      principle   that    casual   labour      employed on  projects (also know as      ’project casual  labour  )  may  be      treated as  temporary on completion      of   360    days   of    continuous      employment.   The   Ministry   have      decided further as under:      a) These orders will cover :      ) Casual labour on projects who are      in service as on 1.1.87; and      ) Casual  labour on  projects  who,      thought not  in service  on 1.1.84,      had been  in  service  on  Railways      ealier and  had  already  completed      the above  prescribed  period  (360      days) of  continuous employment  or      will complete  the said  prescribed      period of  continuous employment on      reangament in  future. ( A detailed      letter   regarding    this    group      follows).      b)   The    decision   should    be      implemented in  phases according to      the schedule given below :- ------------------------------------------------------------ Lenght of  service              Date from which      Date by which ie. continous                  may be treated       decision should employment).                         as temporary         be implemented ------------------------------------------------------------ i) Those who have completed  1.1.1984             31.12.1984 five years of service as on 1.1.84 (ii) Those who have comple-  1.1.1985             31.12.1985 ted three years but less than years of service as on 1.1.1984 (iii) Those who have compl-  1.1.1986             31.12.1986 ted 360 days but less than three years of service on 1.1.1984 (iv) Those who have compl-   1.1.1987 or          31.12.1987

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360 days after 1.1.1984      or the date                              on which 360 days                              are completed                              whichever is later. ------------------------------------------------------------      By the judgment dated April 18, 1995 in Inder Pal Yadav & Ors. Etc. v. Union of India & Ors. Etc., 1985 (3) SCR 837, this Court  approved the  said scheme  but modified the date 1.1.1984 in  para 5.1  (a) (i)  to 1.1.1981  and as a result there was  consequent re-scheduling  in absorption from that date onwards. The Court, while accepting the scheme with the modification gave  direction that  it must be implemented by re-casting the stages consistent with the change in the date is directed.  As per  the aforesaid  scheme temporary status was conferred  on Project Casual labour with effect from the dates specified  therein and  on the basis of such temporary status they  were also  extended the  benefit of  the  order dated October  14, 1980  and  the  temporary  service  after attaining the  temporary status  was counted for pension and other retiral benefits.      In Civil  Appeal No. 4643 of 1992, which has arisen out of O.A.  No. 485  of 1989  filed before the Madras Bench the Central Administrative  Tribunal [hereinafter referred to as ’the Tribunal’],  the respondents  joins as  project  Casual Labour in  the Southern  Railway, madras  on different dates during the  period 1954  to 1973.  They were all employed in construction works and were project Casual labour. They were regularly absorbed in Class IV service on various dates from 1962 to  1982. They  had put  in 9 to 14 years of service as casual labour  before they  were so  absorbed. Most  of them were absorbed  in 1981. Their plea was that after six months of continuous  service as caused labour they were atentitled to be  treated as  ’temporary  railway  employees’  and  the entire perior  of their  service a  casual labour  should be counted for  the purpose of retiral benefits. The said claim of  the   respondents  was   not  accepted  by  the  Railway Administration which  held that  service  as  casual  labour prior to  1.1.1981  could  not  be  counted  for  penslonary benefits. Feeling  aggrieved by  the said  decision  of  the Railway Administration,  they filed  O.A. No.  485  of  1989 which was allowed by the Tribunal by judgment dated February 8, 1991.  Before the  Tribunal it  was  contended  that  the respondents having  continuously  worked  as  casual  labour without any  break followed  by regularisation  their entire service as  casual labour  should be counted for the purpose of retiral  benefits and  that in any event at least half of their service  as casual  labour after the initial period of six months  should  be  taken  into  account  as  qualifying service for  retiral benefits.  It was also urged that while granting retiral  benefits not  only the  open  Line  Casual Labour but  also project  Casual Labour who had joined later than the respondents and had acquired temporary status after 1.1.1981 have been given pensionary benefit bu the denial of similar benefit  to  the  respondents  amounted  to  illegal discrimination  and  was  violative  of  the  provisions  of Article 14  of  the  Constitution.  By  its  judgment  dated February  8,   1991  the  Tribunal  has  accepted  the  said contention of  the respondents  and  has  held  that  unfair treatment would  be meted  out to  the  respondents  if  the entire period  of their  continuous service as casual labour is ignored  for the purpose of retiral benefits whereas such service is  taken into  account  in  respect  of  the  later entrants. Reliance  was placed on the decision of this Court in D.  S. Nakara v. Union of India, 1983 (2) SCR 165. It was observed that  even on  the basis of the instructions issued

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in 1984  and 1986  persons who had acquired temporary status in  the   past  in   1981  could  be  given  such  a  status retrospectively and  there was no reason why same conceptual benefits could  not be  given such  a status retrospectively and there  was no  reason why same conceptual benefits could not be given to the respondents also provided they satisfied the same  condition of continuous service. The said judgment of the  Tribunal has  been followed  by other Benches of the Tribunal  in   subsequent  Judgments.   Civil  Appeals  Nos. 4643/92, 3974/94,  5531/94, 9241/94,  4569-74/97  and  Civil appeals arising  out of  Special Leave  Petitions  (C)  No.s 2595/94, 13416/94,  14335/94, 8053/94,  17197/95,  17198/95, 27483/95, 12001/97  and 379/97    have  been  filed  by  the Railway Administration  against the  said judgments  of  the Tribunal.      In its judgment dated November 30, 1994 in O.A. No. 456 of 1993  the Madras  Bench of  the Tribunal has taken a view different from  that taken in the judgment dated February 8, 1991 in  O.A. No.  485 of 1989. In that case the petitioners were employed  as Casual  Labourers in  construction work in Southern Railway  on different  dates during the period from 1955 to 1974 and were absorbed on regular posts on different dates between  1962 and  1983 and  their service  as  casual labour was not taken into account for the purpose of retiral benefits.  The   Tribunal,   while   dismissing   the   said application, held  that in  view of  the  scheme  which  was approved by  this Court  in Inder Pal Yadav temporary status could be granted to Project Casual labour only from 1.1.1981 or from  the date  on which  360 days  of service as project Casual Labour  was completed  after 1.1.1981  whichever  was later  and  project  Casual  labour  who  had  already  been regularised prior  to 1.1.1981  could  not  be  granted  any deemed date  for grant  of  temporary  status.  The  earlier judgment of  the Tribunal dated February 8, 1991 in O.A. No. 485 of  1989 was held as having been given per incurium. The same view  was taken  by the Madras Bench of the Tribunal in judgment dated  August 22,  1996 in  O.A. No.  885 of  1996. Civil Appeals  arising out  of Special  Leave Petitions  (c) Nos. 26790/95 and 3423/97 have been filed by the petitioners in O.A. Nos. 456/93 and 885/93 against the said judgments of the Tribunal dated November 30, 1994 and August 22, 1996.      At the  out set,  it may  stated that in the railways a distinction has  been made  between ’temporary  status’  and ’temporary employment’.  Open Line  Casual Labours  who were treated  temporary   after  the  expiry  of  six  months  of continuous employment  under para  2501(b) (i) of the Manual were only  entitled to  the rights and privileges admissible to temporary  railway servants as laid down in Chapter XXIII of the Manual. But such temporary status did not entitle the casual labour  to the  benefit of  the period  of of service rendered after  attaining temporary  status being treated as qualifying service  for the purpose of retiral benefits. For the purpose  of computing the qualifying service for retiral benefits  the   service  after   absorption  on   a  regular temporary/permanent  post  after  requisite  selection  only could be  taken into consideration. Provision in this regard was contained  in para  2511 of the Manual which provided as follows:-      2511.   Rights    and    Privileges      admissible to Casual Labour who are      treated    as    temporary    after      completion    of     six    months’      continuous service :-      (a)  Casual   labour   treated   as      temporary are  entitled to  all the

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    rights and privileges admissible to      temporary railways servants as laid      down in Chapter XXIII of the Indian      Railways Establishment  manual. the      rights and privileges admissible to      such  labour   also   include   the      benefits  of   the  Discipline  and      Appeal Rules.  Their service, prior      to the  date of  completion of  six      months’  continuous   service  will      not,   however,   count   for   any      purposes    like    reckoning    of      retirement benefits, seniority etc.      such casual  labourers will,  also,      be allowed  to  carry  forward  the      leave at  their credit  to the  new      post  on   absorption  in   regular      service.      (b) Such  casual labour who acquire      temporary   status,    will    not,      however,  be   brought  on  to  the      permanent establishment unless they      are   selected    through   regular      Selection  Boards   for  Class   IV      staff. They will have a prior claim      over    others     to     permanent      recruitment  and   they   will   be      considered for  regular  employment      without  having   to   go   through      employment exchanges.  Such of them      who join as Casual Labourers before      attaining the  age of  25 years may      be allowed relaxation of he maximum      age limit  prescribed for  Class IV      posts to  the extent of their total      service   which   may   be   either      continuous or in broken periods.      (c) It  is not  necessary to create      temporary  posts   to   accommodate      casual   labourers    who   acquire      temporary status for the conferment      of attendant  benefits like regular      scales  of   pay,  increments  etc.      Service prior to absorption against      a regular  temporary/permanent post      after  requisite   selection  will,      however,    not    constitute    as      qualifying service  for  pensionary      benefits.      NOTE: - In case where casual labour      had actually  been brought  over to      the  regular  prescribed/authorised      scales of pay prior to 22nd August,      1962 on  fulfilling  the  requisite      conditions,  the   periods   during      which they  drew pay in the regular      scales be taken into account of the      purpose  of   granting  increments,      even  if   they  cannot   be  shown      against regular posts prior to 22nd      August, 1962.: [emphasis supplied]      The period  of service  rendered  after  attainment  of temporary  status   but   before   absorption   on   regular temporary/permanent post  was taken  into  account  for  the purpose of  pensionary benefits  for the first time by order

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dated October 14, 1980 whereby half of the period of service after attaining  of temporary  status was  to be counted for the purpose  of qualifying  service for pensionary benefits. Under  Para  2501  (b)(i)  of  the  Manual  the  benefit  of temporary status  was available  to Open  Line Casual labour only and  it was not available to Project Casual Labour till the decision  of this  Court in  Inder Pal Yadav whereby the scheme for  grant of  temporary  status  to  Project  Casual Labour was  approved under  the scheme  temporary status was given from  1.1.1981 to  those who  had completed five years service as  Project Casual  labour as on 1.1.1981, those who had completed  three years  service as Project Casual Labour as  on   1.1.1981  were  given  the  temporary  status  from 1.1.1982, those  who had  completed 360  days but  less than three years  of service  as  Project  Casual  Labour  as  on 1.1.1981 were given temporary status from 1.1.1983 and those who completed  360  days  as  Project  Casual  Labour  after 1.1.1981 were given the temporary status from 1.1.1984 or on the date on which 360 days are completed whichever is later. Project Casual  Labour could  claim the benefit of the order dated October  14, 1980  only after they could be treated as temporary as  per the  scheme accepted by this Court in case Inder Pal Yadav. The respondents in the appeals filed by the Railway Administration  and the  appellants in the other two appeals were  employed as  Project Casual Labour. They never obtained temporary  status  prior  to  their  absorption  on regular temporary/permanent  post on the basis of the scheme that was approved in Inder Pal Yadav and, therefore, no part of their  service as  project Casual Labour has been counted as  qualifying   service  for   the  purpose  of  pensionary benefits. Their  service as  Project Casual  Labour Prior to 1.1.1981 could  not be treated as qualifying service for the purpose of  retiral benefits  because under  the scheme they could not be treated to have attained temporary status prior to 1.1.1981.      If Ram  Kumar &  Ors. v. Union of India & Ors. 1988 (2) SCR 138,  the petitioners  were engaged  on terms  of casual labour for  periods varying  between 10  to 16  years in the Construction Department  of the  Signal Unit in the Northern Railway. They had not been treated as temporary servants and they approached  this Court  by filling writ petitions under Article 32  of the  Constitution wherein their grievance was that the  Railway Administration  had applied discriminatory rates of wiges and they prayed for a direction to treat them at par  with maintenance  workers and also sought absorption in the  regular cadre in the permanent category. This Court, while  rejecting  the  submission  urge  on  behalf  of  the petitioners that  they should  be treated  at par  with Open Line Casual Labours, observed:-      " Admittedly  the petitioners  have      put  in   more  than  360  days  of      service.  Though   munsel  for  the      petitioners had  pointed  out  that      the  Administration  was  requiring      continuous service  for purpose  of      eligibility,   learned   Additional      Solicitor General  on constructions      obtained from  the Railway Officers      present in  Court during  arguments      had clarified  that  continuity  is      not insisted  upon and though there      is break  in  such  continuity  the      previous service is also taken into      account. learned Additional licitor      General  has   made  a  categorical

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    statement  before   us  that   once      temporary   status   is   acquired,      casual employees of both categories      stand at par. Keeping the pevailing      practice in the Railway in view, it      is difficult  for us  to obliterate      the  function   between   the   two      categories   of    employees   till      temporary status  is acquired." [p.      141]      It was further stated:-      "  It   is  stand  of  the  learned      Additional Solicitor  General  that      no    pensionary    benefits    are      admissible   even    to   temporary      railway  servants  and,  therefore,      that  retiral   advantage  is   not      available    to    casual    labour      acquiring temporary status. We have      been shown the different orders and      directions    issued     by     the      Administration. We  agree with  the      learned    Additional     solicitor      General  that  retiral  benefit  of      pension is not admissible to either      category of employees." [ p. 144]      Ms. Chandan  Ramamurthi, the  learned counsel  for  the appellants in  Civil Appeal  arising out  of  special  Leave Petition (c) No. 2679 of 1995, has submitted that before the decision for  this Court  in Inder  Pal Yadav project Casual Labour were  treated as  temporary after  completion of  120 days but after the approval of the scheme in Inder Pal Yadav they became  entitled to  be treated  as  temporary  on  the completion of  360 days  continuous employment  and she  has invited our  attention  to  the  following  passage  in  Ram Kumar:-      earned Additional Solicitor General      states that petitioners are project      employees and  do not belong to the      open   line.   According   to   him      employees in  the open line acquire      temporary status  on completion  of      120 days  of service as against 180      days   which   was   the   previous      requirement.   That    status    is      acquired on  completion of 360 days      by casual  labour in  project works      as   provided    in   the    scheme      formulated  under  orders  of  this      Court,  though   such  status  were      acquirable   by    project   casual      labourers &  completion of 180 days      of      continuous       employment      previously." [ p. 141]      In our opinion , this submission of the learned counsel is not  based on  a correct  reading of  the judgment if Ram Kumar. In  the aforequoted  passage the Court has taken into of the  distinction  between  open  the  Casual  Labour  and Project Casual  labour in  the matter  of grant of temporary status and  has pointed  out that  Open Line  Casual Labours acquire  temporary   status  on   completion  of   120  days continuous service  and earlier the said requirement was 180 days, but  such status is acquired on completion of 360 days by casual labour in project works. The submission that prior to the  acceptance of  the Scheme by this Court in Inder Pal

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Yadav project  Casual  Labour  were  entitled  to  grant  of temporary status  on completion  of 180  days of  continuous service is neither become out by para 2501 of the Manual nor by the  decision of  this Court  in  Inder  Pal  Yadav.  The acceptance of  the contention of Ms. Ramamurthi that earlier Project Casual  Labour could  be treated  as temporary after completion of 180 days of continuous service would mean that as a result of the scheme that was accepted by this Court in Inder Pal Yadav the position of project Casual Labour became worse than what it was prior to the acceptance of the scheme because under  the Scheme they could be treated as temporary only on  completion of  360 days  of continuous service. the decision in Inder Pal Yadav does not support such a view. It mus, therefore,  be held  that prior to the Scheme which was accepted by  this Court  in the  case  of  Inder  Pal  Yadav project Casual  Labour could  not claim temporary status and such temporary  status could only be acquired by them on the basis of the scheme as accepted in Inder Pal Yadav.      In its judgment dated February 8, 1991 the Tribunal had held that exclusion of period of service rendered as Project Casual labour  before they  were regularly absorbed prior to 1.1.1981 results  in such  employees being  discriminated as compared  to   project  casual   labour  who  were  employed subsequently and  whose service  as  project  Casual  labour prior  to   absorption  is   counted  for  the  purposes  of qualifying service.  The said  finding of  the  Tribunal  is based on  the decision of this Court in D.S. Nakara. In this regard, it  may be  stated that the Tribunal was in error in invoking the  principle laid  down in  D.S.  Nakara  in  the present  case.  The  decision  in    D.S.  Nakara  has  been considered by  this court in subsequent decisions and it has been laid  down that  the principle laid down in D.S. Nakara can have  application only  in those  cases where  there  is discrimination in  the matter  of existing  benefit  between similar set  of employees  and the  said  principle  has  no application where  a new  benefit is  being  conferred  with effect form a particular date. In such a case the conferment of the benefit with effect from a particular dated cannot be held to  be violative  of Article  14 of the Constitution on the basis  that such a benefit has been conferred of certain categories of  employees on  the basis  of particular  date. [See: Krishena  Kumar v. Union of India & Ors., 1990 (4) SCC 207; State  of West Bengal v. Ratan Behari Dev, 1993 (4) SCC 62, and State of Rajasthan v. Sevanivatra Karamchari Hitkari Samiti, 1995(2)  SCC 117].  In the present case, the benefit of counting  of service  prior  to  regular  empowerment  as qualifying service  was not  available to casual labour. The said benefit  was granted to Open Line Casual Labour for the first time  under order  dated October  14, 1980  since open Line  Casual   Labour  could  be  treated  as  temporary  on completion of  six months period of continuous service which period was  subsequently reduced to 120 days under Para 2501 (b) (i) of the Manual. As regards Project Casual Labour this benefit of  being treated as temporary became available only with  effect  from  1.1.1981  under  the  scheme  which  was accepted by  this court  in  Inder  Pal  Yadav.  Before  the acceptance of  that scheme  the benefit  of temporary status was not  available to  project Casual  Labour. It was thus a new benefit  which was  conferred on  project Casual  Labour under the  scheme as  approved by  this court  in Inder  Pal Yadav and  on the  basis of  this new benefit project casual Labour became entitled to count half of the Service rendered as Project  Casual Labour  on the  basis of  the order dated October 14,  1980 after  being treated  as temporary  on the basis of  the scheme as accepted in Inder Pal Yadav. We are,

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therefore, unable  to uphold  the judgment  of the  Tribunal dated February  8, 1991  when it holds that service rendered as Project  Casual Labour  by employees who were absorbed on regular permanent/temporary  posts prior to 1.1. 1981 should be counted  for the purpose of retiral benefits and the said judgment as  well as the judgment in which the said judgment has been  followed have  to be  set aside. The judgements in which the  Tribunal has  taken a  countrary view  have to be affirmed.      In  the  result,  the  appeals  filed  by  the  Railway Administration are allowed and the judgments of the Tribunal impugned in these appeals are set aside. The Appeals arising out of  Special Leave  Petitions (c)  Nos. 26790 of 1995 and 3423 of  1997 filed by the employees are dismissed. No order as to costs.