TMI Blog2008 (11) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... neither their services were regularized nor they were paid at par with similar employees of other departments/offices and they were retired at the age of 58 years without any financial benefit. HELD THAT:- We consider it necessary to remove the misgivings entertained by the respondents and the High Courts that while dismissing the appeals filed by the appellants in the earlier round of litigation, this Court had endorsed the directions given by Calcutta and Kerala High Courts for absorption of company paid staff without any rider. However, the fact of the matter is that Government of India not only framed and notified the 1999 Scheme within six months from the date of judgment, but also issued guidelines for implementation of the same. Therefore, the orders passed by Calcutta and Kerala High Courts and the direction given by this Court in Writ Petition will be deemed to have become ineffective and inoperative and the respondents cannot derive any benefit from those orders and direction. Now on merits. Rules 308 and 309 of 1959 Rules, which were framed by this Court u/s 643 of the Companies Act, 1956 to facilitate employment of special or additional staff in any liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odied in Article 39(d) was first considered in Kishori Mohanlal Bakshi vs. Union of India [ 1961 (4) TMI 3 - SUPREME COURT] and it was held that the said principle is not capable of being enforced in a Court of law. After 36 years, the issue was again considered in Randhir Singh vs. Union of India [ 1982 (2) TMI 314 - SUPREME COURT] , and it was unequivocally ruled that the principle of equal pay for equal work is not an abstract doctrine and can be enforced by reading it into the doctrine of equality enshrined in Articles 14 and 16 of the Constitution of India. In Halsbury's laws of England (Fourth Edition), the doctrine of legitimate expectation has been described in the following words: A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. On the basis of our discussions, we hold that- (i) the respondents are not entitled to absorption against the sanctioned posts in Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the wake of huge escalation of living cost. We direct the Official Liquidators attached to various High Courts to move the concerned Court for increasing the emoluments of the company paid staff. In the result, the appeals are allowed. The impugned judgments and orders are set aside subject to the direction for framing of scheme for absorption of eligible and suitable employees against Group D posts and implementation thereof and increase in the salaries and emoluments payable to the company paid staff. - B. N. Agrawal, Harjit Singh Bedi And G. S. Singhvi, JJ. JUDGMENT G. S. Singhvi, J. 1. Leave granted in S.L.P. (C) Nos. 12798/2005 and 13838/2006. 2. These appeals are directed against the orders of Calcutta and Delhi High Courts, whereby directions have been issued to the appellants herein to absorb the persons employed by the Official Liquidators attached to those High Courts under Rule 308 of the Companies (Court) Rules, 1959 (for short the 1959 Rules') against the posts sanctioned by the Government of India, Department of Company Affairs. Facts 3. For the sake of convenience, we have culled out the facts from the pleadings of Writ Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for grant of the status of permanent Central Government employee with effect from the date of completion of 360 days of service besides regular pay scales with avenues for promotion apart from pension, provident fund and other service benefits on the basis of their length of service. 5. The learned Single Judge of Calcutta High Court allowed the writ petition in terms of the prayer made. The appeal preferred by the appellants herein was dismissed by the Division Bench, which noted that even though the writ petitioners had been working for last 20 to 25 years, neither their services were regularized nor they were paid at par with similar employees of other departments/offices and they were retired at the age of 58 years without any financial benefit. The Division Bench held that the appellants have failed to substantiate their plea that the employees appointed by the Court Liquidator were not engaged for doing work of perennial nature and that there was no reasonable basis for discriminating the Court Liquidator's staff vis--vis the regular employees of the office of Official Liquidator. 6. The company paid staff (Estate Clerks) engaged by the Official Liquidator attached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferred to this Court. After hearing the arguments, the Court passed an interim order on 14.1.1998, which reads as under: In all these cases, the common question that arises for consideration is whether the persons appointed by the Official Liquidator/Court Liquidator under the orders of respective High Courts under Rules 308/309 of the Companies (Court) Rules, 1959 are entitled to equal pay and regularisation as the employees appointed by the Central Government in the office of the Official Liquidator. Learned Senior Counsel appearing for the appointees brought to our notice the findings of the High Courts rendered on the basis of the materials placed before them. They are broadly stated that the appointees were discharging identical duties and functions as that of regular employees in the office of the Official Liquidator; that they have been continuously without break working for a period ranging from 10 to 25 years; that they have been paid only a fixed salary without any benefit of pension, gratuity; that such employees appointed up to 1-7-1978 had been regularised by the Government; that though the Central Government appreciated the human problem involved in these matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... problems in following this course of action. As per the 1978 Scheme such absorption is possible to the extent of 50% only under the direct recruitment quota in the appropriate grade. As the position obtains in the Department of Company Affairs, there is lack of adequate number of vacancies in the aforesaid category (direct recruitment) for the purpose of facilitating absorption of all these company-paid staff in the Department of Company Affairs; (ii) the second alternative that was discussed was to continue the present arrangement without absorption of these company-paid staff. In such a situation, their salaries and service conditions could suitably be revised by the Hon'ble Company Judges with reference to funds available with the OLs in the various High Courts. According to information gathered, most of the OLs attached to various High Courts have annual surpluses. The balances in the funds maintained by many OLs are substantial; and (iii) the third option that was discussed was to grant them age relaxation and ask them to sit in the open competitive examination as a one-time measure. This would give them a general opening not restricted to jobs in these two departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants to frame new scheme and implement the same. This is evident from paragraph 25 of the judgment which is reproduced below: 25. However, we want to give an opportunity to the appellants in the interest of justice and to balance the equities between the parties to come forward to accept and act on the first option given in the additional affidavit, as extracted above, and absorb the company-paid staff working both under the Court Liquidator in the Calcutta High Court and the Official Liquidator in other High Courts by framing a scheme modelled on the 1978 Scheme within six months. In other words, we stay the operation of the judgment of the High Courts under appeal and the order in WP (C) No. 473 of 1988 for a period of six months to enable the appellants to frame the Scheme as suggested above and to give effect to it, failing which the judgments under appeal and the order in WP (C) No. 473 of 1988 will stand confirmed. 11. Within the time limit of six months fixed by the Court, the Government of India framed and notified new Scheme (hereinafter referred to as the 1999 Scheme') for absorption of the company paid staff against 50% vacancies in direct recruitment q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Paid Staff, who were in position on 27.08.99, will be screened by a Selection Committee consisting of the following:- 1) Regional Director - Chairman 2) Representative of the Staff Selection Commission - Member 3) Official Liquidator of the office the company paid staff of which is to be screened - Member. The Staff Selection Commission is also being requested to nominate different representatives for the different regions. The place, date and time of holding meeting(s) of the Selection Committee may be finalized in consultation with them. (iv) As in the scheme of 1978, there will be no test or examination for the purpose of assessing the suitability of the Company Paid Staff. The Selection Committee will make its recommendations on the basis of the qualification, experience etc. and personal interview of the candidates. 2. Immediate steps may please be taken for selection of eligible members of Company Paid Staff for absorption against the existing vacancies in different grades and also the anticipated vacancies upto 31.12.2000 next. Applications may be invited indicating separately the existing vacancies and the vacancies which may occur by 31.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that their pay has not been fixed in the regular scale and they are required to retire at the age of 58 year without any financial benefit; that on or around 30th November, 1999, the respondents asked them to appear in an interview for absorption against the post of Lower Division Clerk or Junior Technical Assistant in terms of letter dated 1.10.1999; that they were not party to the proceedings before the Supreme Court; that the scheme, if any, prepared by the respondents is arbitrary and implementation thereof is afflicted by favoritism and that the respondents cannot take recourse to the order passed by the Supreme Court on 27.8.1999 and deprive them of their legal right to get absorption on completion of 240 days of continuous service. For better appreciation of the case projected by the writ petitioners, paragraphs 5, 6, 7, 18 and 26 and Clauses a(ii) and (iii) of the prayer clause are reproduced below: 5. The very common thing amongst the petitioners herein is that all of them are continuing their service in the office of the Official Liquidator for more than 240 days in each and every year of their service in the office of the Official Liquidator. 6. Although your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, in each continuous period of service. 15. During the pendency of the writ petition, an application was filed on behalf of the petitioners for deleting the names of some of them and for adding additional grounds to challenge the 1999 Scheme. The respondents in the writ petition objected to the amendment to the writ petition, but the learned Single Judge overruled their objection and granted the prayer of the writ petitioners. Delhi High Court 16. Smt. Daya Dua and others, who belong to the category of company paid staff employed/engaged by the Official Liquidator of Delhi High Court filed Writ Petition No. 2728 of 2001 for issue of a mandamus to the respondents (appellants herein) to regularize their services against Group C' post from the date of initial appointment. An alternative prayer made by the writ petitioners was to direct the respondents to frame a scheme for absorption of all of them against Group C' posts and give them other benefits like pay and allowances at par with regular Group C' employees working in the office of the Official Liquidator. They pleaded that their work is of perennial nature and their duties and functions are identical t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) The company paid staff cannot be equated with regular employees because the source and mode of recruitment of the two categories and their status are entirely different. Moreover, while the regular employees are paid from the budget sanctioned by the Government of India, the salaries and allowances of the company paid staff are drawn from the company fund in terms of the order passed by the Court under Rule 308 read with Rule 309 of 1959 Rules. (iv) The 1999 Scheme was framed strictly in accordance with the judgment of the Supreme Court in Govt. of India and others vs. Court Liquidator's Employees Association and others (supra). The same was modeled on the 1978 Scheme and 50% of direct recruitment quota posts have been filled by absorbing the company paid staff. 18. In the counter filed in Delhi High Court, it was also pleaded that members of the company paid staff cannot claim absorption in Group D' post because the 1978 and 1999 Schemes do not provide for such absorption. Findings of the High Courts W.P. No. 13871/2001 (Calcutta High Court) 19. The learned Single Judge briefly referred to the pleadings of the parties and held that relief deserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared within a period of three months from date hereof, the seniority in the cadre of Group-C shall be maintained ever with respect to the company paid staff respondents 5 to 26 who have already been absorbed. As regards Group-D staff, State respondents shall take steps for regularizing such of the petitioners as may be eligible and qualified according to the rules to be absorbed as Group D staff within a period of three months from date hereof. Such regularization shall be made strictly in the order of seniority (length of service in the organization). Upon absorption/regularization such company paid staff shall be placed immediately below the last regularly appointed employees in that category, class and service, as the case may be. Until the above directions as carried out there shall be a direction upon the respondents not to fill up any post by direct recruitment. It is clarified that such of the petitioners who did not participate in the interview conducted by the selection committee for the purpose of absorption, their cases shall not be considered. 20. The Division Bench dismissed the appeal preferred by the appellants herein by recording the following ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court. I do not find any substance in the arguments of counsel for the respondents that the Supreme Court has not given a direction for giving seniority to the petitioners after their absorption. If I agree with the interpretation of the respondent that would mean a person who has worked for twenty or more years in the office of Official Liquidator and now he gets absorption his past services of twenty years or more will not be counted. The very proposition of the respondent is preposterous. The Supreme Court in its judgment has not used the words new appointment' but has used the word absorption'. The Supreme Court had categorically given a mandate to absorb all the company paid employees and not to give fresh appointment. Therefore, the incident of seniority by implication is implicit in the judgment of the Supreme Court and respondents have to absorb the petitioners giving them fitment in the their appropriate scales as well as other promotions, if any, which has to be given as per law. I issue a writ of mandamus to the respondents to absorb the petitioners in their appropriate scales with all benefits such as fitment and promotions, if any, even if posts have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utta, Cuttack, Guwahati, Patna and Ranchi asking them to send comprehensive proposal for requirement of staff along with justification for the same. (v) Letter No. OL/24/Staff/Part VII/1875/G dated 30th June, 2008 sent by the Official Liquidator of Calcutta High Court to the Regional Director, Eastern Region, Kolkata reiterating the need for additional staff to meet with the increased workload. 24. Learned senior counsel also produced two charts containing the details of Group C' and Group D' posts lying vacant in four regions as on 1.1.2008 and the number of Group C' posts abolished during 2001-2002, 2003-2004. He produced two more charts containing the details of the company paid staff as on 31.3.2008 in all the regions and particulars of 119 company paid staff employed/engaged by the Official Liquidator of Calcutta High Court. 25. Ms. Jyoti Mendiratta, learned counsel appearing for the respondents in the appeals arising out of the orders passed by Delhi High Court filed I.A. (unnumbered) in S.L.P. (C) No. 12798/2005 for placing on record the following documents:- (i) Copy of the details of posts with office of Official Liquidator of High Court of Bombay f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucing direct recruitment to civilian posts in the Ministry of Company Affairs along with background note. 27. During the course of arguments, Shri Malhotra placed before the Court xerox copy of Writ Petition No. 1387/2001 filed in Calcutta High Court along with annexed papers and the following documents:- (i) Letter No. dated 22nd August, 2008 sent by Official Liquidator, High Court of Bombay to the Regional Director, Western Region, Mumbai on the issue of additional requirement of posts, and (ii) Copy of additional affidavit of Shri D.P. Saini, Under Secretary to the Government of India, Ministry of Finance, Department of Company Affairs filed in C.A. No. 5677/1994. Arguments 28. Shri P.P. Malhotra, learned Addl. Solicitor General placed reliance on paragraph 25 of the judgment in Govt. of India and others vs. Court Liquidator's Employees Association and others (supra) and submitted that even though this Court approved the reasoning and conclusions of Calcutta and Kerala High Courts, orders passed by those Courts were rendered ineffective because operation and implementation thereof was stayed for six months and in terms of opportunity given to it, the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid staff who have completed more than 10 to 20 years of service. Learned counsel pointed out that after the promulgation of 1978 Scheme, there has been multifold increase in the petitions instituted for liquidation of the companies and submitted that in order to meet the imperatives of the work relating to the companies in liquidation, the Official Liquidator was compelled to engage/employ additional staff and continue them after obtaining sanction from the Court under Rule 308 of the 1959 Rules. He then submitted that the respondents joined service as company paid staff with the fond hope that their services will be regularized and they may get opportunity of career advancement and retrial benefits but on account of unsympathetic attitude of the Government of India, their legal and constitutional rights have been violated. Learned counsel referred to letters dated 13.6.2005, 3.6.2008 (Annexures A-D) and 30.6.2008 written by the Official Liquidator and Assistant Director (Inspection), Kolkata as also letter dated 2.9.2005 written by the Under Secretary to the Government of India, Ministry of Company Affairs to the Regional Directors, NOIDA/Kolkata/Mumbai/Chennai on the subject of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation of service and payment of salary in the regular pay scales on the pretext of non-availability of posts. 30. Ms. Jyoti Mendiratta referred to the pleadings of Writ Petition No. 2728/2001 filed in Delhi High Court to show that as per the appellants' own case, the 1999 Scheme was a replica of the 1978 Scheme and argued that the same is liable to be quashed because while framing the new scheme, the Central Government altogether ignored the factum of employment of a number of persons by the Official Liquidator from 1985 who are eligible for absorption against Group D posts. She further argued that the lackadaisical manner in which the Central Government implemented the 1999 Scheme shattered the hopes of majority of the company paid staff and, therefore, the High Court did not commit any error by removing the discrimination practiced by the Central Government against the company paid staff who have not been absorbed even after 20 years service. She pointed out that the Official Liquidator of Delhi High Court employed/engaged company paid staff after due advertisement and selection and argued that non-availability of sanctioned posts cannot justify wholesale denial of the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and implement the same but also stayed the operation of the orders impugned in the appeals and the one passed in Writ Petition (C) No. 473 of 1988. The use of the words failing which the judgments under appeal and the order in WP (C) No. 473 of 1988 will stand confirmed in paragraph 25 leaves no manner of doubt that the orders passed by the High Court and the one passed by this Court in WP (C) No. 473 of 1988 were to become effective only if the Government of India had not framed new scheme modeled on the 1978 Scheme. However, the fact of the matter is that Government of India not only framed and notified the 1999 Scheme within six months from the date of judgment, but also issued guidelines for implementation of the same. Therefore, the orders passed by Calcutta and Kerala High Courts and the direction given by this Court in Writ Petition (C) No. 473 of 1988 will be deemed to have become ineffective and inoperative and the respondents cannot derive any benefit from those orders and direction. 33. Now on merits. Rules 308 and 309 of 1959 Rules, which were framed by this Court under Section 643 of the Companies Act, 1956 to facilitate employment of special or additional staff i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the reason why the directions given by Calcutta and Kerala High Courts for absorption of all company paid staff were stayed for six months and an opportunity was given to the Central Government to frame a new scheme within that period. 35. Although neither of the parties to the appeals nor the intervenors have placed before the Court advertisements issued by the Official Liquidators of Bombay, Calcutta, Delhi and Madhya Pradesh or any other High Court for employment of special or additional staff in accordance with the sanction accorded by the concerned Court and we have not been apprised of the specific terms and conditions, subject to which the respondents were employed/engaged by the Official Liquidators but from the tenor of the pleadings and other records, it can be safely inferred that the respondents were appointed on purely temporary basis for fixed period with a stipulation that they shall not be entitled to seek regularization or absorption in the regular cadre against the sanctioned post. Those who applied in response to the advertisements issued by the Official Liquidators must have been aware of the fact that they were being engaged/employed pursuant to the sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rising sanctioned posts is regulated by the rules framed under proviso to Article 309 of the Constitution of India. The mode of recruitment and methodology of selection are prescribed under the rules. The absorption of the company paid staff employed under Rule 308 of the 1959 Rules is not one of the prescribed modes of recruitment. Therefore, it is extremely doubtful whether the Government of India could, without amending the statutory rules, frame the 1978 Scheme for absorption of the company paid staff in the regular cadres. However, as this Court has not only indirectly approved the 1978 Scheme, but also directed the Government of India to frame new scheme, we do not consider it necessary to dilate further on the subject. 37. As mentioned above, while approving the reasons and conclusions recorded by the two High Courts and dismissing the appeals, this Court not only permitted the Government of India to frame a scheme modeled on the 1978 Scheme but also stayed implementation of the orders impugned in the appeal and the one passed by itself in the transferred writ petition. If the Court intended that all members of the company paid staff working on the date of judgment i.e. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished by the senior counsel appearing for Tapas Chakraborty and others, only 54 had completed tenure of 10 years on 27.8.1999 i.e. the date specified in the 1999 Scheme. of them, 21 were Lower Division Clerks, 16 were Upper Division Clerks (there is no provision for appointment to the post of Upper Division Clerk by direct recruitment), 1 was Assistant, 1 was Superintendent, 1 was Assistant Commander, 1 was Commander, 2 were Technical Assistants and the rest were Record Arrangers, Peons and Security Guards. of the remaining 65 employees, 3 were appointed in the year 2000 and others had worked for periods ranging from 13 months to 8 years 3= months as on 27.8.1999. This means that not even 50% of the writ petitioners had completed 10 years tenure which was considered by the Courts as benchmark for issuing direction for regularization of the services of temporary/ad hoc/daily wagers employed in Government departments. The position of the company paid staff of Delhi High Court is different. The details furnished by Ms. Jyoti Mendiratta show that 27 of the company paid staff have been absorbed under the 1999 Scheme. of the remaining 26 company paid staff, all except 1 had worked for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecruitment vacancies arising in the year subject to a further ceiling that this does not exceed 1% of the total sanctioned strength of the Department. While examining the vacancies to be filled up, the functional needs of the organization would be critically examined so that there is flexibility in filling up vacancies in various cadres depending upon their relative functional need. To amplify, in case an organization needs certain posts to be filled up for safety/security/operational considerations, a corresponding reduction in direct recruitment in other cadres of the organization may be done with a view to restricting the overall direct recruitment to one-third of vacancies meant for direct recruitment subject to the condition that the total vacancies proposed for filling up should be within the 1% ceiling. The remaining vacancies meant for direct recruitment which are not cleared by the Screening Committee will not be filled up by promotion or otherwise and these posts will stand abolished. 40. For implementation of the aforementioned decision, the Screening Committee met sometime in March, 2005 and decided to reduce the number of posts in the regular cadres of the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lafides. 42. In State of Haryana vs. Navneet Verma [2008 (2) SCC 65], a Division Bench of two-Judges referred to M. Ramanatha Pillai vs. State of Kerala [1973 (2) SCC 650], Kedar Nath Bahi vs. State of Punjab [1974 (3) SCC 21], State of Haryana vs. Des Raj Sangar [1976 (2) SCC 844], Dr. N.C. Singhal vs. Union of India [1980 (3) SCC 29) and Avas Vikas Sanghathan vs. Engineers Association [2006 (4) SCC 132) and culled out the following principles: (a) the power to create or abolish a post rests with the Government; (b) whether a particular post is necessary is a matter depending upon the exigencies of the situation and administrative necessity; (c) creation and abolition of posts is a matter of government policy and every sovereign government has this power in the interest and necessity of internal administration; (d) creation, continuance and abolition of posts are all decided by the Government in the interest of administration and general public; (e) the court would be the least competent in the face of scanty material to decide whether the Government acted honestly in creating a post or refusing to create a post or its decision suffers from mala fides, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly for 10 years or more as company paid staff as on 27.8.1999, some of the respondents acquired a right to be absorbed in the regular cadre or regularized in service and they are entitled to the benefit of the principle of equal pay for equal work and have their pay fixed in the regular pay scales prescribed for the particular posts. 48. The questions whether in exercise of the power vested in it under Article 226 of the Constitution of India, the High Court can issue a mandamus and compel the State and its instrumentalities/agencies to regularize the services of temporary/ad-hoc/daily wager/casual/contract employees and whether direction can be issued to the public employer to prescribe or give similar pay scales to employees appointed through different modes, with different condition of service and different sources of payment have become subject matter of debate and adjudication in several cases. 49. The judgments of 1980s and early 1990s - Dhirendra Chamoli vs. State of U.P. [1986 (1) SCC 637], Surinder Singh and Another vs. Engineer-in-Chief, CPWD and Others [1986 (1) SCC 639], Daily Rated Casual Labour vs. Union of India [1988 (1) SCC 122], Dharwad District P.W.D. Lit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up and bureaucracy to violate the soul of Article 14 and 16 as also the provisions contained in the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 with impunity and the spoil system which prevailed in the United Stats of America in sixteenth and seventeenth century got firm foothold in this country. Thousands of persons were employed/engaged throughout the length and breadth of the country by backdoor methods. Those who could pull strings in the power corridors at the higher and lower levels managed to get the cake of public employment by trampling over the rights of other eligible and more meritorious persons registered with the employment exchanges. A huge illegal employment market developed in different parts of the country and rampant corruption afflicted the whole system. This was recognized by the Court in Delhi Development Horticulture Employees Union vs. Delhi Administration, Delhi and others [1992 (4) SCC 99] in the following words: 23. Apart from the fact that the petitioners cannot be directed to be regularised for the reasons given above, we may take note of the pernicious consequences to which the direction for regularisation of workmen on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Tribunals - Director, Institute of Management Development, U.P. vs. Pushpa Srivastava [1992 (4) SCC 33], Dr. M.A. Haque and Others vs. Union of India and Others [1993 (2) SCC 213], J and K Public Service Commission vs. Dr. Narinder Mohan [1994 (2) SCC 630], Dr. Arundhati Ajit Pargaonkar vs. State of Maharashtra [1994 Suppl. (3) SCC 380], Union of India vs. Kishan Gopal Vyas [1996 (7) SCC 134], Union of India vs. Moti Lal [1996 (7) SCC 481], Hindustan Shipyard Ltd. vs. Dr. P. Sambasiva Rao [1996 (7) SCC 499], State of H.P. vs. Suresh Kumar Verma [1996 (7) SCC 562], Dr. Surinder Singh Jamwal vs. State of JandK [1996 (9) SCC 619], E. Ramakrishnan vs. State of Kerala [1996 (10) SCC 565], Union of India and Others vs. Bishambar Dutt [1996 (11) SCC 341], Union of India vs. Mahender Singh [1997 (1) SCC 247], P. Ravindran and Others vs. Union Territory of Pondicherry and Others [1997 (1) SCC 350], Ashwani Kumar and Others vs. State of Bihar and Others [1997 (2) SCC 1], Santosh Kumar Verma and Others vs. State of Bihar and Others [1997 (2) SCC 713], State of U.P. and Others vs. Ajay [1997 (4) SCC 88], Patna University vs. Dr. Amita Tiwari [1997 (7) SCC 198] and Madhyamik Shiksha Parishad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post. 48. It was then contended that the rights of the employees thus appointed, under Articles 14 and 16 of the Constitution, are violated. It is stated that the State has treated the employees unfairly by employing them on less than minimum wages and extracting work from them for a pretty long period in comparison with those directly recruited who are getting more wages or salaries for doing similar work. The employees before us were engaged on daily wages in the department concerned on a wage that was made known to them. There is no case that the wage agreed upon was not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of the very clear constitutional scheme, it cannot be said that the employees have been able to establish a legal right to be made permanent even though they have never been appointed in terms of the relevant rules or in adherence of Articles 14 and 16 of the Constitution. 53. In paragraph 25, the Constitution Bench specifically referred to the conclusions recorded in paragraphs 45 to 50 of the judgment in State of Haryana vs. Piara Singh (supra) and observed: 26. With respect, why should the State be allowed to depart from the normal rule and indulge in temporary employment in permanent posts? This Court, in our view, is bound to insist on the State making regular and proper recruitments and is bound not to encourage or shut its eyes to the persistent transgression of the rules of regular recruitment. The direction to make permanent--the distinction between regularisation and making permanent, was not emphasized here--can only encourage the State, the model employer, to flout its own rules and would confer undue benefits on a few at the cost of many waiting to compete. With respect, the direction made in para 50 (of SCC) of Piara Singh is to some extent inconsist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State is involved in managing it, that too, in a limited sense? The answer could only be in the negative. When the State Government or its instrumentalities have not created the posts on their own and do not bear any part of the financial burden, the question of getting the clearance from the Finance and Planning Department of the Government for the purpose of regularization or absorption does not arise. Viewed from any angle, GO No. 212 would be wholly out of place for those working in the nodal centre which is created and nurtured by the Central Government. It is not within the domain of the State Government or even the University to regulate the staff pattern or the monetary benefits of the staff working therein, without the approval of the Central Government. Therefore, no directions should have been issued to the State Government or to the University to regularize the services of Respondents 1 to 5, if necessary, by creating additional posts. 56. After rejecting the plea of the respondents for regularization of service, this Court adverted to the issue of increase in their salary and held: 9. Though the plea of regularization in respect of any of the fifth responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regularization of service made by ad hoc/temporary/ daily wage/casual employees or for reversing the orders of the High Court granting relief to such employees - Indian Drugs and Pharamaceuticals Ltd. vs. Workmen [2007 (1) SCC 408], Gangadhar Pillai vs. Siemens Ltd. [2007 (1) SCC 533], Kendriya Vidyalaya Sangathan vs. L.V. Subramanyeswara [2007 (5) SCC 326], Hindustan Aeronautics Ltd. vs. Dan Bahadur Singh [2007 (6) SCC 207]. However, in U.P. SEB vs. Pooran Chand Pandey [2007 (11) SCC 92] on which reliance has been placed by Shri Gupta, a two-Judges Bench has attempted to dilute the Constitution Bench judgment by suggesting that the said decision cannot be applied to a case where regularization has been sought for in pursuance of Article 14 of the Constitution and that the same is in conflict with the judgment of the seven-Judges Bench in Maneka Gandhi vs. Union of India [1978 (1) SCC 248]. 58. The facts of U.P. SEB vs. Pooran Chand Pandey (supra) were that the respondents (34 in number) were employed as daily wage employees by the Cooperative Electricity Supply Society in 1985. The Society was taken over by Uttar Pradesh Electricity Supply Board in 1997 along with daily wage e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-Judge Bench of this Court. It is well settled that a smaller Bench decision cannot override a larger Bench decision of the Court. No doubt, Maneka Gandhi case does not specifically deal with the question of regularisation of government employees, but the principle of reasonableness in executive action and the law which it has laid down, in our opinion, is of general application. [Emphasis supplied] 59. We have carefully analyzed the judgment of the two-Judges Bench and are of the considered view that the above reproduced observations were not called for. The only issue which fell for consideration by two-Judges Bench was whether the daily wage employees of the society, the establishment of which was taken over by the Electricity Board along with the employees, were entitled to be regularized in terms of the policy decision taken by the Board and whether the High Court committed an error by invoking Article 14 of the Constitution for granting relief to the writ petitioners. The question whether the Electricity Board could frame such a policy was neither raised nor considered by the High Court and this Court. The High Court simply adverted to the facts of the case and held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench or of a Single Judge, need to be reconsidered, he should not embark upon that enquiry sitting as a Single Judge, but should refer the matter to a Division Bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger bench to examine the question. That is the proper and traditional way to deal with such mattes and it is founded on healthy principles of judicial decorum and propriety. It is to be regretted that the learned Single Judge departed from this traditional way in the present case and chose to examine the question himself. 62. In Union of India vs. Raghubir Singh [1989 (2) SCC 754], R.S. Pathak, C.J. while recognizing need for constant development of law and jurisprudence emphasized the necessity of abiding by the earlier precedents in following words: The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of law, besides providing assurance to the individual as to the consequence of transaction forming part of his daily affairs. and, therefore, the need for a clear and consistent enunciation of legal princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the earlier verdict and observed: 3. We may point out, at the outset, that in Bharat Petroleum Corpn. Ltd. v. Mumbai Shramik Sangha(2001 (4) SCC 448) a Bench of five Judges considered a somewhat similar question. Two learned Judges in that case doubted the correctness of the scope attributed to a certain provision in an earlier Constitution Bench judgment and, accordingly, referred the matter before them directly to a Constitution Bench. The Constitution Bench that then heard the matter took the view that the decision of a Constitution Bench binds a Bench of two learned Judges and that judicial discipline obliges them to follow it, regardless of their doubts about its correctness. At the most, the Bench of two learned Judges could have ordered that the matter be heard by a Bench of three learned Judges. 5. The learned Attorney-General submitted that a Constitution Bench judgment of this Court was binding on smaller Benches and a judgment of three learned Judges was binding on Benches of two learned Judges - a proposition that learned counsel for the appellants did not dispute. The learned Attorney-General drew our attention to the judgment of a Constitution Bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 73], the Constitution Bench interpreted Article 141, referred to various earlier judgments including Bharat Petroleum Corpn. Ltd. vs. Mumbai Shramik Sangha (supra), Pradip Chandra Parija and others vs. Pramod Chandra Patnaik and others (supra) and held that the law laid down in a decision delivered by a Bench of larger strength is binding on any subsequent Bench of lesser or co-equal strength and it would be inappropriate if a Division Bench of two Judges starts overruling the decisions of Division Benches of three Judges. The Court further held that such a practice would be detrimental not only to the rule of discipline and the doctrine of binding precedents but it will also lead to inconsistency in decisions on the point of law; consistency and certainty in the development of law and its contemporary status - both would be immediate casualty 67. In State of U.P. and others vs. Jeet S. Bisht and another [2007 (6) SCC 586], when one of the Hon'ble Judges (Katju, J.) constituting the Bench criticized the orders passed by various Benches in the same case, the other Hon'ble Judge (Sinha, J.) expressed himself in the following words: 100. For the views been taken here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving violation of the basics of judicial discipline. The learned Single Judges and Benches of the High Courts refuse to follow and accept the verdict and law laid down by coordinate and even larger Benches by citing minor difference in the facts as the ground for doing so. Therefore, it has become necessary to reiterate that disrespect to constitutional ethos and breach of discipline have grave impact on the credibility of judicial institution and encourages chance litigation. It must be remembered that predictability and certainty is an important hallmark of judicial jurisprudence developed in this country in last six decades and increase in the frequency of conflicting judgments of the superior judiciary will do incalculable harm to the system inasmuch as the courts at the grass root will not be able to decide as to which of the judgment lay down the correct law and which one should be followed. We may add that in our constitutional set up every citizen is under a duty to abide by the Constitution and respect its ideals and institutions. Those who have been entrusted with the task of administering the system and operating various constituents of the State and who take oath to act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal pay for equal work is not an abstract doctrine and can be enforced by reading it into the doctrine of equality enshrined in Articles 14 and 16 of the Constitution of India. The ratio of Randhir Singh vs. Union of India (supra) was reiterated and applied in several cases - Dhirendra Chamoli vs. State of U.P. (supra), Surinder Singh and Another vs. Engineer-in-Chief, CPWD and Others (supra), Daily Rated Casual Labour vs. Union of India (supra), Dharwad District P.W.D. Literate Daily Wage Employees' Association vs. State of Karnataka (supra) and Jaipal vs. State of Haryana [1988 (3) SCC 354] and it was held that even a daily wage employee who is performing duties similar to regular employees is entitled to the same pay. However, in Federation of All India Customs and Central Excise Stenographers (Recognized) Union vs. Union of India [1988 (3) SCC 91], Mewa Ram Kanojia vs. A.I.I.M.S. [1989 (2) SCC 235], V. Markandeya vs. State of A.P. [1989 (3) SCC 191], Harbans Lal and others vs. State of Himachal Pradesh and others [1989 (4) SCC 459], State of U.P. and others vs. J.P. Chaurasia and others [1989 (1) SCC 121], Griha Kalyan Workers' Union vs. Union of India [1991 (1) SCC 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f pay scale must be left to expert bodies and, unless there are any mala fides, its evaluation should be accepted. 74. In Harbans Lal and others vs. State of Himachal Pradesh and others (supra), the Court held that the claim of carpenters employed by an incorporated company for party in wages payable to their counterparts in Government service is unsustainable. In Jawaharlal Nehru Technological University vs. T. Sumalatha (Smt.) and others (supra), it was held that the respondents who were employed under a scheme known as National Technical Manpower Information System, which was sponsored by the then Ministry of Education and Culture, cannot claim parity with the regular Government employees in the matter of pay scale. 75. In Canteen Mazdoor Sabha vs. Metallurgical and Engineering Consultants (India) Ltd. (supra), another two-Judges Bench held that simply because some employees of a contractor of the alleged head employer are performing the task or duties similar to the employees of the head employer, it will not entitle such employees to claim parity. 76. As mentioned earlier, the respondents were employed/engaged by the Official Liquidators pursuant to the sanction acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority of the Government of India had ever given any assurance much less made a promise to the respondents that they will get absorbed against the sanctioned posts or that there will be no abolition of posts meant to be filled by direct recruitment. As a matter of fact, the respondents joined as company paid staff knowing fully well that they were being employed as additional staff in connection with the liquidation proceedings and on the basis of sanction accorded by the concerned Court and further that they will have no right to seek absorption. They also knew that their employment will come to an end on the expiry of the tenure specified in the letter/order of appointment or on cessation of the liquidation proceedings. In this scenario, the doctrine of legitimate expectation cannot be invoked for sustaining the directions given by the High Courts for absorption of all company paid staff with consequential benefits or for nullifying the policy decision taken by the Government to gradually reduce the direct recruitment quota. 78. The concept of due process of law has played a major role in the development of administrative law. It ensures fairness in public administration. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are expected to honour the policy statements and treat the citizens without any discrimination. The theory of legitimate expectation first found its mention in Navjyoti Coop. Group Housing Society vs. Union of India [1992 (4) SCC 477]. In that case the right of a housing society for right to priority in the matter of registration was recognized in the following words: ... In the aforesaid facts, the Group Housing Societies were entitled to legitimate expectation' of following consistent past practice in the matter of allotment, even though they may not have any legal right in private law to receive such treatment. The existence of legitimate expectation' may have a number of different consequences and one of such consequences is that the authority ought not to act to defeat the legitimate expectation' without some overriding reason of public policy to justify its doing so. In a case of legitimate expectation' if the authority proposes to defeat a person's legitimate expectation' it should afford him an opportunity to make representations in the matter. In this connection reference may be made to the discussions on legitimate expectation' at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. The rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise of by judicial review. The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non-arbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an go into the question whether the decision-maker has properly balanced the legitimate expectation as against the need for a change. ... In sum, this means that the judgment whether public interest overrides the substantive legitimate expectation of individuals will be for the decision-maker who has made the change in the policy. The choice of the policy is for the decision-maker and not for the court. The legitimate substantive expectation merely permits the court to find out if the change in policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. (emphasis in original) 85. In J.P. Bansal vs. State of Rajasthan [2003 (5) SCC 134], this Court refused to invoke the doctrine of legitimate expectation in favour of the appellant who claimed compensation of pre-mature termination of the contractual appointment as Judicial Member of the Rajasthan Taxation Appellate Tribunal. 86. In Dr. Chanchal Goyal (Mrs.) vs. State of Rajasthan [2003 (3) SCC 485], the appellants claim for absorption in the regular cadre/regularization of service was rejected by the High Court. While approving the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectrification Scheme meant for better distribution of electricity to rural areas, but the license of the society was revoked in the year 1995 and the Board refused to absorb the employees of the society. The learned Single Judge and Division Bench of the High Court declined to interfere with the decision of the Board. This Court dismissed the appeal of the employees and observed: What is legitimate expectation? Obviously, it is not a legal right. It is an expectation of a benefit, relief or remedy, that may ordinarily flow from a promise or established practice. The term established practice refers to a regular, consistent, predictable and certain conduct, process or activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. Not being a right, it is not enforceable as such. It is a concept fashioned by the courts, for judicial review of administrative action. It is procedural in character based on the requirement of a higher degree of fairness in administrative ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement was extended from time to time and they continued in service for many years in the same capacity. However, no material has been placed before this Court to show that any promise was made or any assurance was held out to the respondents by any competent authori9ty of the Government of India for their absorption in the regular cadres. There is nothing in the language of Rule 308 of the 1959 Rules from which it can be inferred that those employed as additional staff in connection with the liquidation proceedings will, in future, be absorbed in the regular cadres. The 1978 as also the 1999 Schemes are merely illustrative of compassionate approach adopted by the Government of India for facilitating absorption of the company paid staff against the sanctioned posts to the extent of 50% vacancies in the direct recruitment quota. These schemes cannot be read as a charter for legitimating the claim of company paid staff to be absorbed in the Government service de hors availability of vacancies, more so when the Government has taken a rational policy decision to reduce direct recruitment to various services in a phased manner. In our opinion, any direction by the Court for absorption o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme for absorption of Group D posts has resulted in invidious discrimination qua one section of the company paid staff. The appellants have not placed any material before this Court to show that the finding recorded by the learned Single Judge of Delhi High Curt that a number of persons were employed by the Official Liquidator in 1985 and thereafter who could be considered for absorption against Group D posts. This means that at the time of framing of the 1978 Scheme the existing company paid staff did not include the employees who could be absorbed on Group D posts and this appears to be the reason why the said scheme was confined to absorption of company paid staff against Group C posts. Since the employees who could be eligible for absorption on Group D posts were appointed in 1985 and thereafter, the Government of India should have, while framing the 1999 Scheme, taken cognizance of their presence and made appropriate provision for their absorption. Its failure to do so has certainly resulted in unintended discrimination qua one section of the company paid staff. It is, therefore, appropriate to direct that the Government of India should frame a scheme for absorption of eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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