Drugs & Pharmaceuticals Ltd. Vs. Workman, Indian Drugs & Pharmaceuticals
Ltd  Insc 813 (16
B. Sinha & Markandey Katju
out of Special Leave Petition (Civil) No.3862 of 2006) MARKANDEY KATJU, J.
has been filed against the impugned judgment and order dated 30.9.2005 passed
by the Uttaranchal High Court in W.P. No.3360 of 2001. By that Judgment the
High Court has modified the award of the Labour Court, U.P., Dehradun, to the
extent that the workmen, in whose favour the award had been made, were allowed
to be continued in the service of the appellant employer till their
superannuation, and if their services were not required they should not be
terminated except in accordance with Industrial Law. The High Court further
directed that the workmen in question should be paid wages like the regular
employees performing the work and duties in the appellant-company.
have heard the learned counsel for the parties and perused the record.
facts of the case are that the appellant is a Public Sector Undertaking which
has a plant in Rishikesh where it was manufacturing pharmaceuticals. The
present dispute relates to the ten concerned employees who were appointed as
casual workers on daily rate basis for the reason that they were dependants of
employees dying in harness. Such appointments were made by the appellant due to
the persistent and prolonged agitation by the trade union since the appellant
wanted to maintain industrial harmony, although there was no rule/policy for
such compassionate appointment in the service of the appellant company, which
was already over-staffed. As against 1049 sanctioned posts, there were already
1299 employees working in the company at the relevant time.
aforesaid ten persons were paid wages according to the rates of daily wages,
declared by the State Government from time to time, as agreed with the union.
Since the appellant was already over-staffed in all its departments, the said
persons were given work in the nature of cleaning window panes, sweeping floors
and such sundry jobs on contract basis which work was not the work of the
regular employees of the appellant-company.
the year 1986 the financial position of the appellant- company became critical
as it was running on huge losses and hence its corporate office issued stop/ban
order, banning any fresh recruitment/appointments. The company also applied to
the BIFR as it had become sick. The BIFR had also issued directions to the
company to reduce its manpower in order to try to revive the company, but
despite this situation the union started pressing and agitating for
regularization of the aforesaid ten concerned daily rated employees.
failure of talks between the company and the union led to the reference of a
dispute under the Industrial Disputes Act before the Labour Court in the year 1992 in the following terms
the action of the employer in not regularizing 22 workmen and not granting them
wage scales and other benefits given to the regular employees is unjustified
and/or illegal" Before the Labour Court, only 10 out of the 22 workmen
appeared and filed written statement and therefore the award was passed only in
respect of the said ten persons. The Labour Court held that although the said persons
were employed as "casual daily rated employees" by the company, yet
in view of their having continued for a long time, they were entitled to
regularization and the action of the management in not regularizing them was
unjustified and consequentially they should be paid the wages and benefits as
given to other regular employees from the date of the award i.e. 25.7.1996.
writ petition filed by the appellant challenging the said award, the High Court
upheld the contention of the appellant that the respondents were not entitled
to regularization in view of the well settled law laid down by this Hon'ble Court in the case of Madhyamik Shiksha Parishad,
U.P. vs. Anil Kumar Mishra & Ors. reported in 2005(5) SCC 122 wherein it
has been categorically held that completion of 240 days or more does not
entitle/import the right of regularization. The High Court therefore, held that
the impugned award, to the extent it directed for regularization of the
respondents, could not be sustained.
contended before by the learned counsel for the appellant that the High Court
has committed a serious error, in as much as, while holding that the
respondents were not entitled to regularization, it directed that company shall
continue such employees in its services till their superannuation and they
shall be paid wages like the regular employees of the company. We are inclined
to agree with this submission of the learned counsel for the appellant.
come in the evidence that the number of sanctioned posts in the company were
only 1049, but there were already 1299 employees working in the company at the
relevant time. We fail to understand how could 1299 employees be appointed when
there were only 1049 sanctioned posts? Moreover, the ten concerned employees
were over and above the 1299 already working in the company at the relevant
come on record that the financial position of the appellant- company was going
from bad to worse and all the measures taken by them during the critical years
from 1988 onwards including a ban on recruitment and other austerity measures
did not bear any fruitful result.
company incurred heavy losses and as against the meagre capital of Rs.21 crores
for the Rishikesh Unit, the petitioner had incurred an accumulated loss to the
tune of Rs.233 crores upto the year 1992-93.
annual accounts for the said year were produced as Exhibit E-11 before the
courts below. Subsequently the appellant was declared a sick company by the
BIFR. A revival proposal was prepared before the BIFR where the union agreed
not to raise any demand which entailed any liability. Hence, in our opinion
there could be no justification for grant of parity in wages. The BIFR
appointed the IDBI as the operating agency in the year 1986 when the accumulated
losses of the company reached an astonishing figure of Rs.624 crores in the
year 1995. In our opinion the High Court failed to appreciate that when the
appellant is still before the BIFR, and where the Government is making an
effort to again present a revival proposal, there was no justification to
saddle the appellant with liabilities on the basis of compassion when no legal
right exists in favour of the concerned respondents. When there was no vacancy
and the company was in poor financial condition, the impugned order was wholly
present case it is relevant to state that the Government in effort to revive
the company drastically reduced the manpower of the appellant-company from 1991
onwards and the petitioner which at one point of time had a total of about
13000 employees in all its units in India, have at present, in total, only
about 9 employees at the Hyderabad plant i.e. supervisors and managers, 29 at Gurgaon
in which there are only 4 in the workers category, 15 employees at the Bihar
plant i.e. only supervisors and managers, 30 employees at the Tamil Nadu plant
i.e. supervisors and managers and about 200 odd employees at the Rishikesh
plant including only about 39 regular workers. It is relevant to state the
Government is still pursuing the plans of reduction in manpower under a VRS
Scheme. Thus, in the scenario as stated above, the impugned directions of the
courts below were, in our opinion, wholly uncalled for and in violation of
settled legal principles.
be mentioned that a daily rated or casual worker is only a temporary employee,
and it is well settled that a temporary employee has no right to the post vide
State of Uttar Pradesh & Anr. vs. Kaushal Kishore Shukla 1991(1) SCC 691.
The term 'temporary employee' is a general category which has under it several
sub-categories e.g. casual employee, daily rated employee, ad hoc employee,
distinction between a temporary employee and a permanent employee is well
settled. Whereas a permanent employee has a right to the post, a temporary
employee has no right to the post. It is only a permanent employee who has a
right to continue in service till the age of superannuation (unless he is
dismissed or removed after an inquiry, or his service is terminated due to some
other valid reason earlier). As regards a temporary employee, there is no age
of superannuation because he has no right to the post at all. Hence, it follows
that no direction can be passed in the case of any temporary employee that he
should be continued till the age of superannuation.
no direction can be given that a daily wage employee should be paid salary of a
regular employee vide State of Haryana vs. Tilak
Raj 2003 (6) SCC 123.
afraid that the Labour
Court and High Court
have passed their orders on the basis of emotions and sympathies, but cases in
Court have to be decided on legal principles and not on the basis of emotions
the employees in question in Court had not been appointed by following the
regular procedure, and instead they had been appointed only due to the pressure
and agitation of the union and on compassionate ground. There were not even
vacancies on which they could be appointed. As held in A. Umarani vs.
Registrar, Cooperative Societies & Ors. 2004(7) SCC 112, such employees
cannot be regularized as regularization is not a mode of recruitment. In Umarani's
case the Supreme Court observed that the compassionate appointment of a woman
whose husband deserted her would be illegal in view of the absence of any
scheme providing for such appointment of deserted women.
State of M.P. and others vs. Yogesh Chandra Dubey
and others 2006 (8) SCC 67, this Court held that a post must be created and/or
sanctioned before filling it up. If an employee is not appointed against a
sanctioned post he is not entitled to any scale of pay. In our opinion, the
ratio of the aforesaid decision squarely applies to the facts of the present
M/s. Indian Drugs and Pharmaceuticals Ltd. vs. Devki Devi & Ors. AIR 2006
SC 2691, which is a case relating to the appellant's Rishikesh unit, it has
been held in paragraph 10 that "The undisputed position is that appellant
company does not have any rule for compassionate appointment". In that
decision it has also been noted that the appellant is a sick company which is
before the BIFR and the bleak financial position of the company has been
considered by this Court in Officers & Supervisors of IDPL vs. Chairman
& M.D., IDPL and Ors. 2003(6) SCC 490. Originally more than 6500 employees
were employed by the appellant but out of them 6171 have taken retirement and
only 421 employees are now working throughout the country. The appellant
company is not functional and is trying to further reduce the number of
employees. In paragraph 15 of the said judgment it has also been noted that no
production is going on in the company since 1994. These facts have been
completely lost sight of by the Labour Court and the High Court.
it appears that in the present case the appellant is trying to reagitate the
issues which have been already decided by this Court in M/s. Indian Drugs and
Pharmaceuticals Ltd. vs. Devki Devi & Ors. AIR 2006 SC 2691.
recent Constitution Bench decision of this Court in Secretary, State of
Karnataka and others vs. Umadevi & others 2006 (4) SCC 1, this Court has
exhaustively dealt with a matter similar to that under consideration in the
present case, and we may refer to some of the observations made therein.
paragraphs 4 and 5 of the said judgment, the Constitution Bench this Court observed
Union, the States, their departments and instrumentalities have resorted to
irregular appoints, especially in the lower rungs of the service, without
reference to the duty to ensure a proper appointment procedure through the
Public Service Commissions or otherwise as per the rules adopted and to permit
these irregular appointees or those appointed on contract or on daily wages, to
continue year after year, thus, keeping out those who are qualified to apply for
the post concerned and depriving them of an opportunity to compete for the
also led to persons who get employed, without the following of a regular
procedure or even through the backdoor or on daily wages, approaching the
courts, seeking directions to make them permanent in their posts and to prevent
regular recruitment to the posts concerned.
courts have not always kept the legal aspects in mind and have occasionally
even stayed the regular process of employment being set in motion and in some
cases, even directed that these illegal, irregular or improper entrants be
absorbed into service. A class of employment which can only be called
"litigious employment", has risen like a phoenix seriously impairing
the constitutional scheme.
orders are passed apparently in exercise of the wide powers under Article 226
of the Constitution. Whether the wide powers under Article 226 of the
Constitution are intended to be used for a purpose certain to defeat the
concept of social justice and equal opportunity for all, subject to affirmative
action in the matter of public employment as recognized by our Constitution,
has to be seriously pondered over. It is time, that the courts desist from
issuing orders preventing regular selection or recruitment at the instance of
such persons and from issuing directions for continuance of those who have not
secured regular appointments as per procedure established.
passing of orders for continuance tends to defeat the very constitutional
scheme of public employment. It has to be emphasized that this is not the role
envisaged for the High Courts in the scheme of things and their wide powers
under Article 226 of the Constitution are not intended to be used for the
purpose of perpetuating illegalities, irregularities or improprieties or for
scuttling the whole scheme of public employment. Its role as the sentinel and
as the guardian of equal rights protection should not be forgotten.
Court has also on occasions issued directions which could not be said to be consistent
with the constitutional scheme of public employment. Such directions are issued
presumably on the basis of equitable considerations or individualization of
justice. The question arises, equity to whom ? Equity for the handful of people
who have approached the court with a claim, or equity for the teeming millions
of this country seeking employment and seeking a fair opportunity for competing
for employment? When one side of the coin is considered, the other side of the
coin has also to be considered and the way open to any court of law or justice,
is to adhere to the law as laid down by the Constitution and not the make
directions, which at times, even if do not run counter to the constitutional
scheme, certainly tend to water down the constitutional requirements. It is
this conflict that is reflected in these cases referred to the Constitution
have underlined the observations made above to emphasize that the Court cannot
direct continuation in service of a non-regular appointee. The High Court's
direction is hence contrary to the said decision.
in paragraph 33 it was observed:
is not necessary to notice all the decisions of this Court on this aspect. By
and large what emerges is that regular recruitment should be insisted upon,
only in a contingency can an ad hoc appointment be made in a permanent vacancy,
but the same should soon be followed by a regular recruitment and that
appointments to non- available posts should not be taken note of for
regularization. The cases directing regularization have mainly proceeded on the
basis that having permitted the employee to work for some period, he should be
absorbed, without really laying down any law to that effect, after discussing
the constitutional scheme for public employment".
underlined observation in the above passage makes it clear that even if an ad
hoc or casual appointment is made in some contingency the same should not be
continued for long, as was done in the present case.
paragraph 43, the Court observed:
it is clear that adherence to the rule of equality in public employment is a
basic feature of our Constitution and since the rule of law is the core of our
Constitution, a court would certainly be disabled from passing an order
upholding a violation of Article 14 or in ordering the overlooking of the need
to comply with the requirements of Article 14 read with Article 16 of the
Constitution. Therefore, consistent with the scheme for public employment, this
Court while laying down the law, has necessarily to hold that unless the
appointment is in terms of the relevant rules and after a proper competition
among qualified persons, the same would not confer any right on the appointee.
If it is a contractual appointment, the appointment comes to an end at the end
of the contract, if it were an engagement or appointment on daily wages or
casual basis, the same would come to an end when it is discontinued. Similarly,
a temporary employee could not claim to be made permanent on the expiry of his
term of appointment. It has also to be clarified that merely because a
temporary employee or a casual wage worker is continued for a time beyond the
term of his appointment, he would not be entitled to be absorbed in regular
service or made permanent, merely on the strength of such continuance, if the
original appointment was not made by following a due process of selection as
envisaged by the relevant rules. It is not open to the court to prevent regular
recruitment at the instance of temporary employees whose period of employment
has come to an end or of ad hoc employees who by the very nature of their appointment,
do not acquire any right. The High Courts acting under Article 226 of the
Constitution, should not ordinarily issue directions for absorption,
regularization, or permanent continuance unless the recruitment itself was made
regularly and in terms of the constitutional scheme".
underlined observations above clearly indicate that the casual, daily rated, or
ad hoc employees, like the respondents in the present appeal, have no right to
be continued in service, far less of being regularized and get regular pay.
paragraph 45 this Court observed :
directing that appointments, temporary or casual, be regularized or made
permanent, the courts are swayed by the fact that the person concerned has
worked for some time and in some cases for a considerable length of time. It is
not as if the person who accepts an engagement either temporary or casual in
nature, is not aware of the nature of his employment. He accepts the employment
with open eyes. It may be true that he is not in a position to bargain not at
arm's length since he might have been searching for some employment so as to
eke out his livelihood and accepts whatever he gets. But on that ground alone,
it would not be appropriate to jettison the constitutional scheme of
appointment and to take the view that a person who has temporarily or casually
got employed should be directed to be continued permanently. By doing so, it
will be creating another mode of public appointment which is not permissible.
If the court were to void a contractual employment of this nature on the ground
that the parties were not having equal bargaining power, that too would not
enable the court to grant any relief to that employee. A total embargo on such
casual or temporary employment is not possible, given the exigencies of
administration and if imposed, would only mean that some people who at least
get employment temporarily, contractually or casually, would not be getting
even that employment when securing of such employment brings at least some succour
to them. After all, innumerable citizens of our vast country are in search of
employment and one is not compelled to accept a casual or temporary employment
if one is not inclined to go in for such an employment. It is in that context
that one has to proceed on the basis that the employment was accepted fully
knowing the nature of it and the consequences flowing from it. In other words,
even while accepting the employment, the person concerned knows the nature of
his employment. It is not an appointment to a post in the real sense of the
term. The claim acquired by him in the post in which he is temporarily employed
or the interest in that post cannot be considered to be of such magnitude as to
enable the giving up of the procedure established, for making regular
appointments to available posts in the services of the State.
argument that since one has been working for some time in the post, it will not
be just to discontinue him, even though he was aware of the nature of the
employment when he first took it up, is not (sic) one that would enable the
jettisoning of the procedure established by law for public employment and would
have to fail when tested on the touchstone of constitutionality and equality of
opportunity enshrined in Article 14 of the Constitution".
underlined part of the above passage clearly negates the claim of the
regards the claim of the workmen concerned for being paid salary or regular
employment, this claim has been definitely rejected in paragraph 48 of the
aforesaid judgment which states as under:
was then contended that the rights of the employees thus appointed, under
Article 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 being paid. Those who are working on daily wages formed a
class by themselves, they cannot claim that they are discriminated as against
those who have been regularly recruited on the basis of the relevant rules.
right can be founded on an employment on daily wages to claim that such
employee should be treated on a par with a regularly recruited candidate, and
made permanent in employment, even assuming that the principle could be invoked
for claiming equal wages for equal work. There is no fundamental right in those
who have been employed on daily wages or temporarily or on contractual basis,
to claim that they have a right to be absorbed in service. As has been held by
this Court, they cannot be said to be holders of a post, since, a regular
appointment could be made only by making appointments consistent with the
requirements of Articles 14 and 16 of the Constitution. The right to be treated
equally with the other employees employed on daily wages, cannot be extended to
a claim for equal treatment with those who were regularly employed. That would
be treating unequals as equals. It cannot also be relied on to claim a right to
be absorbed in service even though they have never been selected in terms of
the relevant recruitment rules. The arguments based on Articles 14 of the
Constitution are therefore overruled".
supplied) In paragraph 19 of the aforesaid judgment of the Constitution Bench,
an important observation has been made about whether the Court can impose
financial burden on the State in this manner.
19 states as under:
aspect arises. Obviously, the State is also controlled by economic
considerations and financial implications of any public employment. The
viability of the department or the instrumentality of the project is also of
equal concern for the State. The State works out the scheme taking into
consideration the financial implications and economic aspects. Can the court
impose on the State a financial burden of this nature by insisting on
regularization or permanence in employment, when those employed temporarily are
not needed permanently or regularly? As an example, we can envisage a direction
to give permanent employment to all those who are being temporarily or casually
employed in a public sector undertaking. The burden may become so heavy by such
a direction that the undertaking itself may collapse under its own weight. It
is not as if this had not happened. So, the court ought not to impose a
financial burden on the State by such directions, as such directions may turn
comment is necessary on the above passage as it is explicit enough.
paragraphs 46 to 48 of the judgment, this Court also observed that temporary,
contractual, casual or daily wage ad hoc employees appointed de hors the
constitutional scheme to public employment have no legitimate expectation to be
absorbed or, regularized for granted permanent continuation in service on the
ground that they have continued for a long time in service. It was observed by
this Court that non grant of permanent continuation in service of such
employees does not violate Article 21 of the Constitution and such employees do
not have any enforceable legal right to be permanently absorbed, nor to be paid
salary of regular employees. A regular process of recruitment or employment has
to be resorted to when regular vacancies and posts are to be filled up. This
Court further observed that public employment must comply with Articles 14 and
16 of the Constitution as the rule of equality in public employment is a basic
feature of the Constitution.
doubt, there can be occasions when the State or its instrumentalities employ
persons on temporary or daily wage basis in a contingency as additional hands
without following the required procedure, but this does not confer any right on
such persons to continue in service or get regular pay. Unless the appointments
are made by following the rules, such appointees do not have any right to claim
permanent absorption in the establishment.
perusal of the record of the present case shows that the respondents were
appointed on purely casual and daily rate basis without following the relevant
service rules. Thus they had no right to the post at all, vide State of U.P. vs. Kaushal Kishore 1991 (1) SCC 691.
In Delhi Development Horticulture Employees'
Union vs. Administration, Delhi and others AIR 1992 SC 789 while deprecating
the tendency of engaging daily wagers without advertisement this Court held the
same to be back door entries in violation of Article 16 of the Constitution. As
such this Court refused to give any direction to regularize the petitioners.
it is well settled that there is no right vested in any daily wager to seek
regularization. Regularization can only be done in accordance with the rules
and not de hors the rules. In the case of E. Ramakrishnan & others vs.
State of Kerala & others 1996 (10) SCC 565 this
Court held that there can be no regularization de hors the rules.
same view was taken in Dr. Kishore vs. State of Maharashtra 1997(3) SCC 209,
Union of India & others vs. Bishambar Dutt 1996 (11) SCC 341. The direction
issued by the services tribunal for regularizing the services of persons who
had not been appointed on regular basis in accordance with the rules was set
aside although the petitioner had been working regularly for a long time.
Surinder Singh Jamwal & another vs. State of Jammu & Kashmir &
others AIR 1996 SC 2775, it was held that ad hoc appointment does not give any
right for regularization as regularization is governed by the statutory rules.
Kumar & others etc. vs. State of Bihar & others etc. AIR 1996 SC 2833, the appointment made without
following the appropriate procedure under the rules/Government circulars and
without advertisement or inviting application from the open market was held to
be in flagrant breach of Articles 14 and 16 of the Constitution.
and abolition of posts and regularization are a purely executive function vide
P.U. Joshi vs. Accountant General, Ahmedabad & others 2003(2) SCC 632.
Hence, the court cannot create a post where none exists. Also, we cannot issue
any direction to absorb the respondents or continue them in service, or pay
them salaries of regular employees, as these are purely executive functions.
Court cannot arrogate to itself the powers of the executive or legislature.
There is broad separation of powers under the Constitution, and the judiciary,
too, must know its limits.
respondents have not been able to point out any statutory rule on the basis of
which their claim of continuation in service or payment of regular salary can
be granted. It is well settled that unless there exists some rule no direction
can be issued by the court for continuation in service or payment of regular
salary to a casual, ad hoc, or daily rate employee. Such directions are
executive functions, and it is not appropriate for the court to encroach into
the functions of another organ of the State. The courts must exercise judicial
restraint in this connection. The tendency in some courts/tribunals to
legislate or perform executive functions cannot be appreciated. Judicial
activism in some extreme and exceptional situation can be justified, but
resorting to it readily and frequently, as has lately been happening, is not
only unconstitutional, it is also fraught with grave peril for the judiciary.
Hameed vs. State of Jammu & Kashmir AIR 1989 SC 1899, this Court observed:
adverting to the controversy directly involved in these appeals we may have a
fresh look on the inter se functioning of the three organs of democracy under
our Constitution. Although the doctrine of separation of powers has not been
recognized under the Constitution in its absolute rigidity but the Constitution
makers have meticulously defined the functions of various organs of the State.
Legislature, Executive and Judiciary have to function within their own spheres
demarcated under the Constitution. No organ can usurp the functions assigned to
another. The Constitution trusts to the judgment of these organs to function
and exercise their discretion by strictly following the procedure prescribed
therein. The functioning of democracy depends upon the strength and
independence of each of its organs. The legislature and executive, the two
facets of people's will, have all the powers including that of finance. The
judiciary has no power over the sword or the purse, nonetheless it has power to
ensure that the aforesaid two main organs of the State function within the
constitutional limits. It is the sentinel of democracy. Judicial review is a
powerful weapon to restrain unconstitutional exercise of power by the
legislature and executive. The expanding horizon of judicial review has taken
in its fold the concept of social and economic justice. While exercise of
powers by the legislature and executive is subject to judicial restraint, the
only check on our own exercise of power is the self imposed discipline of
the State action is challenged, the function of the court is to examine the
action in accordance with law and to determine whether the legislature or the
executive has acted within the powers and functions assigned under the
constitution and if not, the court must strike down the action. While doing so
the court must remain within its self imposed limits. The court sits in
judgment on the action of a coordinate branch of the Government. While
exercising power of judicial review of administrative action, the court is not
an appellate authority. The constitution does not permit the court to direct or
advise the executive in matters of policy or to sermonize quo any matter which
under the constitution lies within the sphere of the legislature or executive,
provided these authorities do not transgress their constitutional limits or
courts must, therefore, exercise judicial restraint, and not encroach into the
executive or legislative domain. Orders for creation of posts, appointment on
these posts, regularization, fixing pay scales, continuation in service,
promotions, etc. are all executive or legislative functions, and it is highly
improper for Judges to step into this sphere, except in a rare and exceptional
case. The relevant case law and philosophy of judicial restraint has been laid
down by the Madras High Court in great detail in Rama Muthuramalingam vs. Dy.
S.P. AIR 2005 Mad 1, and we fully agree with the views expressed therein.
doubt, in some decisions the Supreme Court has directed regularization of
temporary or ad hoc employees but it is well settled that a mere direction of
the Supreme Court without laying down any principle of law is not a precedent.
It is only where the Supreme Court lays down a principle of law that it will
amount to a precedent. Often the Supreme Court issues directions without laying
down any principle of law, in which case, it is not a precedent. For instance,
the Supreme Court often directs appointment of someone or regularization of a
temporary employee or payment of salary, etc. without laying down any principle
of law. This is often done on humanitarian considerations, but this will not
operate as a precedent binding on the High Court. For instance, if the Supreme
Court directs regularization of service of an employee who had put in 3 years'
service, this does not mean that all employees who had put in 3 years' service
must be regularized. Hence, such a direction is not a precedent. In Municipal
Committee, Amritsar vs. Hazara Singh, AIR 1975 SC 1087,
the Supreme Court observed that only a statement of law in a decision is
binding. In State of Punjab vs. Baldev Singh, 1999 (6) SCC 172,
this Court observed that everything in a decision is not a precedent. In Delhi
Administration vs. Manoharlal, AIR 2002 SC 3088, the Supreme Court observed
that a mere direction without laying down any principle of law is not a
precedent. In Divisional Controller, KSRTC vs. Mahadeva Shetty 2003 (7) SCC
197, this Court observed as follows:
decision ordinarily is a decision on the case before the Court, while the
principle underlying the decision would be binding as a precedent in a case
which comes up for decision subsequently. The scope and authority of a
precedent should never be expanded unnecessarily beyond the needs of a given
situation. The only thing binding as an authority upon a subsequent Judge is
the principle, upon which the case was decided" In Jammu & Kashmir
Public Service Commission vs. Dr. Narinder Mohan AIR 1994 SC 1808, this Court
held that the directions issued by the court from time to time for
regularization of ad hoc appointments are not a ratio of this decision, rather
the aforesaid directions were to be treated under Article 142 of the
Constitution of India. This Court ultimately held that the High Court was not
right in placing reliance on the judgment as a ratio to give the direction to
the Public Service Commission to consider the cases of the respondents for
regularization. In that decision this Court observed:
This Court in Dr. A.K. Jain vs. Union of India 1988 (1) SCR 335, gave
directions under Article 142 to regularize the services of the ad hoc doctors
appointed on or before October 1, 1984. It is a direction under Article 142 on
the particular facts and circumstances therein.
the High Court is not right in placing reliance on the judgment as a ratio to
give the direction to the PSC to consider the cases of the respondents. Article
142 power is confided only to this Court. The ratio in Dr. P.C.C Rawani vs.
Union of India 1992 (1) SCC 331, is also not an authority under Article 141.
Therein the orders issued by this Court under Article 32 of the Constitution to
regularize the ad hoc appointments had become final. When contempt petition was
filed for non implementation, the Union
had come forward with an application expressing its difficulty to give effect
to the orders of this Court. In that behalf, while appreciating the
difficulties expressed by the Union in
implementation, this Court gave further direction to implement the order issued
under Article 32 of the Constitution. Therefore, it is more in the nature of an
execution and not a ratio under Article 141. In Union of India v Gian Prakash
Singh, 1993(5) JT (SC) 681 this Court by a Bench of three Judges considered the
effect of the order in A.K. Jain's case and held that the doctors appointed on
ad hoc basis and taken charge after October 1, 1984 have no automatic right for
confirmation and they have to take their chance by appearing before the PSC for
recruitment. In H.C. Puttaswamy v Hon'ble Chief Justice of Karnataka, AIR 1991
SC 295: (1991 Lab 1 C 235), this Court while holding that the appointment to
the post of clerk etc. in the subordinate courts in Karnataka State without
consultation of the PSC are not valid appointments, exercising the power under
the Article 142, directed that their appointments as regular, on humanitarian
grounds, since they have put in more than 10 years' service. It is to be noted
that the recruitment was only for clerical grade (Class-III post) and it is not
a ratio under Article 141. In State of Haryana v Piara Singh, (1992 AIR SC
2130), this Court noted that the normal rule is recruitment through the
prescribed agency but due to administrative exigencies, an ad hoc or temporary
appointment may be made. In such a situation, this Court held that efforts
should always be made to replace such ad hoc or temporary employees by
regularly selected employees, as early as possible.
this Court did not appear to have intended to lay down as a general rule that
in every category of ad hoc appointment, if the ad hoc appointee continued for
long period, the rules of recruitment should be relaxed and the appointment by
regularization be made. Thus considered, we have no hesitation to hold that the
direction of the Division Bench is clearly illegal and the learned single Judge
is right in directing the State Government to notify the vacancies to the PSC
and the PSC should advertise and make recruitment of the candidates in
accordance with the rules".
view of the above observations of this Court it has to be held that the rules
of recruitment cannot be relaxed and the court/Tribunal cannot direct
regularization of temporary appointees de hors the rules, nor can it direct
continuation of service of a temporary employee (whether called a casual, ad
hoc or daily rate employee) or payment of regular salaries to them.
well settled that regularization cannot be a mode of appointment vide Manager,
RBI, Bangalore vs S. Mani & others, AIR 2005 SC 2179 (para 54).
aforesaid decision the Supreme Court referred to its own earlier decision in A Umarani
vs. Registrar, Cooperative Societies & others, AIR 2004 SC 4504 wherein it
was observed: "Regularization, in our considered opinion, is not and
cannot be a mode of recruitment by any "State" within the meaning of
Article 12 of the Constitution of India or any body or authority governed by a
Statutory Act or the Rules framed thereunder. It is also now well-settled that
an appointment made in violation of the mandatory provisions of the Statute and
in particular ignoring the minimum educational qualification and other
essential qualifications would be wholly illegal. Such illegality cannot be
cured by taking recourse to regularization. (See State of H.P. vs. Suresh Kumar Verma and
another 1996(7) SCC 562"). This Court in R.N. Nanjundappa vs. T. Thimmiah,
1972 (1) SCC 409 held:
the appointment itself is in infraction of the rules or if it is in violation
of the provisions of the Constitution the illegality cannot be regularized.
Ratification or regularization is possible of an act which is within the power
and province of the authority but there has been some noncompliance with
procedure or manner which does not go to the root of the appointment.
Regularization cannot be said to be a mode of recruitment. To accede to such a
proposition would be to introduce a new head of appointment in defiance of the
rules or it may have the effect of setting at naught the rules.
decision in the case of R.N. Nanjundappa (supra) has been followed by the
Supreme Court in several decisions viz. Ramendra Singh vs. Jagdish Prasad, 1984
Supp SCC 142; K. Narayanan vs. State of Karnataka, 1994 Supp(1) SCC 44, and V. Sreenivasa
Reddy vs. Government of A.P., 1995 Supp (1) SCC 572. These decisions have also
been noticed by the Supreme Court in Sultan Sadik vs. Sanjay Raj Subba, 2004
(2) SCC 377 and A. Umarani vs. Registrar, Cooperative Societies and others,
2004 (7) SCC 112".
of the opinion that if the court/tribunal directs that a daily rate or ad hoc
or casual employee should be continued in service till the date of
superannuation, it is impliedly regularizing such an employee, which cannot be
done as held by this Court in Secretary, State of Karnataka vs. Umadevi
(supra), and other decisions of this Court.
view of the above discussion, we are of the opinion that the orders of the Labour Court as well as the High Court were
wholly unjustified and cannot be sustained for the reasons already mentioned
above. The appeal is, therefore, allowed. The impugned judgment of the High
Court and the Labour
Court are set aside
and the Reference made to the Labour Court
is answered in the negative. There shall be no order as to costs.
parting with this case, we would like to state that although this Court would
be very happy if everybody in the country is given a suitable job, the fact
remains that in the present state of our country's economy the number of jobs
are limited. Hence, everybody cannot be given a job, despite our earnest
be mentioned that jobs cannot be created by judicial orders, nor even by
legislative or executive decisions. Jobs are created when the economy is
rapidly expanding, which means when there is rapid industrialization. At
present, the state of affairs in our country is that although the economy has
progressed a little in some directions, but the truth is that this has only benefited
a handful of persons while the plight of the masses has worsened. Unemployment
in our country is increasing, and has become massive and chronic. To give an
example, for each post of a Peon which is advertised in some establishments
there are over a thousand applicants, many of whom have MA, M.SC., M.Com or MBA
degrees. Recently, about 140 posts of Primary School Teachers were advertised
in a District in Western Madhya Pradesh, and there were about 13000 applicants
i.e. almost 100 applicants for each post. Large scale suicides by farmers in
several parts of the country also shows the level of unemployment. These are
the social and economic realities of the country which cannot be ignored.
may be very large hearted but then economic realities have also to be seen.
Giving appointments means adding extra financial burden to the national
exchequer. Money for paying salaries to such appointees does not fall from the
sky, and it can only be realized by imposing additional taxes on the public or
taking fresh loans, both of which will only lead to additional burden on the
doubt, Article 41 provides for the right to work, but this has been
deliberately kept by the founding fathers of our Constitution in the Directive
Principles and hence made unenforceable in view of Article 37, because the
founding fathers in their wisdom realized that while it was their wish that
everyone should be given employment, but the ground realities of our country
cannot be overlooked. In our opinion, Article 21 of the Constitution cannot be
stretched so far as to mean that everyone must be given a job. The number of
available jobs are limited, and hence Courts must take a realistic view of the
matter and must exercise self-restraint.
vs. State of Rajasthan AIR 1999 SC 923 this Court following its own decision in
Delhi Development Horticulture Employees Union vs. Delhi Administration, Delhi,
AIR 1992 SC 789 held that the right to livelihood was found not feasible to be
incorporated as a fundamental right in the Constitution and therefore
employment was also not guaranteed under the Constitutional scheme.
Kumar vs. State of U.P.
AIR 1992 SC 713 this
Court observed that where there was no work in the project the employees cannot
be regularized. In State of Himachal Pradesh vs. Ashwani Kumar, 1996(1) J.T.
214 this Court held that where a project has to be closed down for
non-availability of funds a direction to regularize the displaced employees of
the project could not be given because such direction would amount to creating
posts and continuing them in spite of non-availability of work. The same view
was taken in State of U.P. vs. U.P. Madhyamik Shiksha Parished
Shramik Sangh AIR 1996 SC 708. It follows from these decisions that there is no
legal right in temporary employees (whether called casual, ad hoc, or daily
rated workers) to get absorption, or to be continued in service or get regular
present case, the appellant is a sick company which has been running on huge
losses for many years, and is practically closed down. There are no vacancies
on which the respondents could have been appointed. While we may have sympathy
with them, we cannot ignore the hard economic realities, nor the settled legal
principles. The appeal is allowed.