vil Appeal Nos 9 15 of 1986 etc
From the Judgment and Order dated 491985 of the Andhra Pradesh High Court in WP Nos
8120 8121 7932 8095 8032 8107 and 8 109 of 1984
B Datta Additional Solicitor General PP Rao CV Subba Rao RP Srivastava B Parthasarthi KV Sreekumar D Vidyanandam MKD Namboodary TVSN Chaff Ms V Grover Ms Anita WA Qadri A Subba Rao ATM Sampath R Venkataramani RA Perumal SM Garg and section Markandeya for the appearing parties
The Judgment of the Court was delivered by CHINNAPPA REDDY J
The question raised in these appeals is whether an establishment in the public sector  or an establishment in the private sector  as defined in the may make appointments to posts to which the Act applies of persons not sponsored by the Employment Ex changes A further question is whether the Act covers Gov ernment establishments also A Division Bench of the High Court of Andhra Pradesh has held that the Act has no appli cation to Government establishments that the Act casts no obligation either on the public sector establishment or on the private sector establishment to make the appointments from among candidates sponsored by the 913 Employment Exchanges only and that any insistence that candidates sponsored by the Employment Exchanges alone should be appointed would be contrary to the right guaran teed by articles 14 and 16 of the Constitution
The learned Additional Solicitor General appearing for the Union of India argued that the object and the scheme of the Employ ment Exchanges Compulsory Notification of Vacancies Act and the instructions issued by the Government of India from time to time left no option to the employers but to confine their field of choice to candidates sponsored by the Employ ment Exchanges
It was argued that such insistence that appointments should be made from candidates sponsored by the Employment Exchanges only did not offend articles 14 and 16 of the Constitution
He also argued that the Act was applicable to Government Establishments also
We may refer to the provisions of the Employment Ex changes Compulsory Notification of Vacancies Act 1959 without further ado
The title of the Act itself suggests that the compulsion is in regard to notifying of vacancies only and nothing more
The preamble to the Act like the title of the Act also does not suggest any compulsion in the making of appointments but only in the notifying of vacancies
The preamble says An Act to provide for the compulsory notification of vacancies to employment ex changes Section 2e f and g defines establishment establishment in public sector and establishment in private sector as follows e establishment means a any office or b any place where any industry trade business or occupation is carried on f establishment in public sector means an establishment owned controlled or managed by 1 the government or a department of the Government 2 A Government company as defined in section 617 of the  3 A corporation including a cooperative society established by or under a Central Provincial or State 914 Act which is owned controlled or managed by the Government 4 A local authority g establishment in private sector means an establishment which is not an estab lishment in public sector and where ordinarily twenty five or more persons are employed to work for remuneration The High Court thought that the definition of establishment in public sector as meaning an establishment owned con trolled or managed by the Government or a Department of the Government indicated that an establishment in public sector was something different from the Government or a Department of Government and did not include the Government or Depart ment of the Government
It had to be something which could be owned controlled or managed by the Government or a department of the Government
The High Court also thought that the expression public sector  was used in contradic tion to private sector  and that it could not include offices of the Government
The expression would only take in an agency or instrumentality of the State but not the State itself
We are unable to agree with the conclusion of the High Court on this part of the case
If the definition of establishment  which includes an office  is read alongside the definition of establishment in public sector  it will be clear that Government offices are also included in the expression establishment in public sector 
That is the interpretation which the Government itself is advancing before us and that is how the Government has always under stood the provision during these three decades as will be evident from the instructions issued by the Government from time to time to which we shall be referring later in the course of our judgment
We are unable to agree with the view of the High Court that the Act is not applicable to Govern ment establishments
Section 3 of the Act specifies posts vacancies to which the Act does not apply
Section 4 provides for the notifica tion of vacancies to employment exchanges
It is desirable to extract the whole of sec
4 which is as follows 4
1 After the commencement of this Act in any State or area thereof the employer in every establishment in public sector in that State or area shall before filling up any vacancy in any employment in that establish ment 915 notify that vacancy to such employment ex changes as may be prescribed
2 The appropriate Government may by notification in the Official Gazette require that from such date as may be speci fied in the notification the employer in every establishment in private sector or every establishment pertaining to any class or category of establishments in private sector shall before filling up any vacancy in any employment in that establishment notify that vacancy to such employment exchanges as may be prescribed and the employer shall thereupon comply with such requisition
3 The manner in which the vacancies referred to in subsection 1 or sub section 2 shall be notified to the employment exchanges and the particulars of employments in which such vacancies have occurred or are about to occur shall be such as may be prescribed
4 Nothing in sub sections 1 and 2 shall be deemed to impose any obligation upon any employer to recruit any person through the employment exchanges to fill any vacancy merely because that vacancy has been notified under any of the sub sections
 Section 5 deals with the duty of the employers to furnish information and returns in prescribed forms
Section 6 provides for official access to records and documents
Section 7 provides for penalties
Section 8 deals with cognizance of offences
Section 9 provides for protection of action taken is good faith
Section 10 vests the rule making power in the Central Government
It is evident that there is no provision in the Act which obliges an employer to make appointments through the agency of the Employment Exchanges
Far from it sec
44 of the Act on the other hand makes it explicitly clear that the employer is under no obligation to recruit any person through the Employment Exchanges to fill in a vacancy merely because that vacancy has been notified under sec
41 or sec
In the face of sec
44 we consider it utterly futile for the learned Additional Solicitor General to argue that the Act imposes any obligation on the employ ers apart from notifying the vacancies to the Employment Exchanges
The learned Additional Solicitor General invited our attention to the speech of the Minister of Labour and 916 Employment and Planning Shri Nanda made at the time of the introduction of the Employment Exchanges Compulsory Notifi cation of Vacancies Bill
Far from being of any assistance to the learned Addititional Solicitor General the speech appears to be against his submission
In his speech the Minister quoted from the report of the Training and Employ ment Services Organisation Committee and observed that the recommendation of the Committee offered a full explanation of the provisions of the Bill
The recommendation of the Committee which he quoted was Though we have not for the present recommended compulsion on private employers to recruit through the employment exchanges we recommend that they be required on a compulsory basis to notify to the Exchanges all vacancies other than vacancies for unskilled categories vacancies of very temporary duration and vacan cies proposed to be filled through promotion
 The Minister further said The main thing is that an obligation is being placed that after this legislation becomes operative from that date the employer in every establishment in the public sector shall before filling up any vacancy in any employ ment in that establishment notify that vacancy to such Employment Exchanges as may be prescribed
And so far as the private sector is concerned there is this further qualifi cation that the Government concern may specify by notifica tion that the employer in every establishment in private sector or every establishment pertaining to any class or category of establishments in private sectors shall before filling up any vacancy in any employment in that establish ment notify that vacancy to such Employment Exchanges as may be prescribed
This is the kernel of this provision
This is the main object that is an obligation placed on the employer to notify the vacancies that may occur in their establishment before filling these vacancies
 The Minister was conscious that there was a likelihood of the Bill being misunderstood as compelling the employers to make appoint ments through the Employment Exchanges only
He clarified the position saying The misunderstanding is as if this Bill gives power to the Government to compel the employers to recruit only such persons as are submitted by the employ ment exchanges
That is not so
This compulsion extends only to notification of vacancies
Naturally the employer has to consider the names which are submitted by the employment exchanges but there is no compulsion that they must restrict to the choice only to the least that is submitted to them
Of course there is also the objection from the other side that it may not go far enough
We believe that even this will make things very much better
In any case when the Committee reported they also suggested this much advance
At present they said we should have only compulsory noti fication but not compel the emp 917 loyers to recruit only out of the least that is sent by the employment exchanges
 As we said the speech of the Minister at the time of the introduction of the Bill is totally destructive of the contention of the learned Additional Solicitor General that the employers arc under an obligation to recruit persons for appointment through the Employment Exchanges only
The learned Additional Solicitor General requested us to give a purposive interpretation to the provisions of the Act and insist that employers in making appointments should re strict their field of choice to candidates sponsored by the employment exchanges
We are unable to appreciate the argu ment since there is no provision of the Act which requires interpretation by us and which we may reasonably interpret as compelling the employer to appoint persons sponsored by the employment exchanges
On the other hand we have already referred to sec
44 which is explicit that there is no such obligation on the part of the employer
We also notice that the object of the Act is not to restrict the field of choice in any particular manner but to enlarge the field of choice
That is why in his introductory speech the Minister said   a large number of employers particularly in similar industrial establishments and in construction works do not employ any scientific method but depend for their supply of labour on agents or recruit in a haphazard manner from amongst these assembled at factory gates or at works sites
The methods adopted are not always dictated by a consideration of efficient service but as more a matter of bestowing patronage and favour
This applies in varying degrees to a large number of employers
 The Minister dis cussed the existing position and anticipated position in the following words The Act of notification of vacancies has important consequences
In the first place so far as the employer is concerned he will be placed in a position to have a much wider choice for the purpose of selection
Now what is the present position Any person knocks at the gate of the factory or the mill or other establishment and from those few who are there they choose
Now it would be possible for them to have a wider area of selection
The names of so many others who may not be able to go and knock at every gate can be submitted and out of them the best can be selected
So far as the quoting of selection is concerned it should improve because of the wider range of choice
On the side of the worker certainly it means a more equitable distribu 918 tion of employment opportunities
It should not be necessary for a person to be all the day moving from place to place
It should be sufficient for him to register at a place give all the particulars about his qualifica tions and then he should be sure that at any rate his name will be considered along with other names and there will be some regard for fitness in the choice of people who enter these new places for employment
 It is therefore clear that the object of the Act is not to restrict but to enlarge the field of choice so that the employer may choose the best and the most efficient and to provide an opportunity to the worker to have his claim for appointment considered without the worker having to knock at every door for employment
We are therefore firmly of the view that the Act does not oblige any employer to employ those persons only who have been sponsored by the employment exchanges
The next question for consideration is whether the instructions issued by the Government from time to time have the effect of compelling the employers to restrict their field of choice to candidates sponsored by the employment exchanges
We may straightaway rarer to some of the instruc tions on which reliance was placed by the learned Additional Solicitor General
In OM No 141164 Estt
D dated March 21 1964 the Ministry of Home Affairs addressed all the Ministries regarding recruitment of staff through the agency of the National Employment Service and the utilisa tion of Employment Exchanges by quasi government institu tions and statutory organisations
It is enough if we ex tract paragraphs 1 4 and 5 of this communication which are as follows 1
The undersigned is directed to say that in paragraph 6 of this Ministry s office Memoran dum No 7140 DGS Apptts dated the 11th December 1949 copy enclosed it was laid down that all vacancies in Central Government Establishments other than those filled through the Union Public Service Commission should be notified to the nearest Employment Exchange and that no Department or office should fill any vacancy by direct recruitment unless the Employment Exchanges certified that they were unable to supply suitable candi dates
Subsequently in this Ministry s Office Memorandum Nos
7149 DGS Apptts dated 30th January 1951 and 7122256 CSC dated the 919 14th December 1956 copy enclosed
The Ministry of Finance etc were requested to issue immediate instructions to all quasi Government institutions and statutory Organi sations with which they were concerned asking them to fall in line as far as possible with the Central Government establishments in the matter of recruitments by suitably amending their recruitment rules or adopting Resolu tions to achieve this object if necessary
The Ministries were also requested to impress upon these institutions that it was in their own interest as well as in the interest of the country as a whole that recruitment should be made through the Employment Exchanges as a large number of experienced and trained hands were available on their registers and the need for tapping other sources of recruitment should arise only if the Employment Exchange has certified that they were unable to nomi nate suitable recruits from their registers
                 4
Under the EE CNV Act recruitment of staff through the Employment Service is volun tary so far as the private sector is con cerned
Even so efforts are made by the Employment Service to persuade the private sector to accept candidates sponsored by the Employment Exchanges
The Directorate General of Employment and Training are placed in a very embarrassing situation when they have to approach the State Governments and establish ments in the private sector to utilise the Employment Service in filling up the vacan cies when some establishments in the public sector do not recognise the Employment Service as the normal channel of recruitment
It is accordingly requested that the Minis try of Finance etc may issue instructions to all quasi Government institutions and Statuto ry Organisations with which they are concerned requiring them to notify vacancies in the manner and form prescribed in Rule 4 of the EECNV Rules 1960 to the prescribed Employ ment Exchange and to fall in line with the Central Government Departments in the recruit ment of staff through the agency of the Em ployment 920 service
The need for issuing advertisements for inviting applications or tapping other sources of recruitment should be considered only if the Employment Exchanges issue non availability certificates
A copy of the instructions issued by the Ministry of Finance etc may kindly be endorsed to the Ministry of Home Affairs and the Directorate General of Employment and Training
 It will be noticed that in order to give effect to such instructions in the case of quasi Government institutions and statutory organisations it would be necessary to suit ably amend the recruitment rules or adopt resolutions to achieve that object
This is so mentioned in para 1
In Office Memorandum No 142265 Estt
H dated June 12 1968 the Ministry of Home Affairs informed all the other Ministries The undersigned is directed to say that in paragraph 6 of this Ministry s OM No 7149DGS Apptt dated the 11th December 1949 it was laid down that all vacancies in Central Government Establishments other than those filled through the Union Public Service Commission should be notified to the nearest Employment Exchange and that no Department or Office should fill any vacancy by direct recruitment unless the Employment Exchange certified that they were unable to supply candidates In office Memorandum No 14024277 EsttD dated April 12 1977 the Department of Personnel addressed all the Minis triesDepartments and said As the Ministry of Agriculture and Irrigation etc are aware in accordance with the instructions issued by the Central Govern ment vide marginally noted communications all vacancies arising under Central Government Officesestablishments including quasi Gov ernment institutions and statutory organisa tions irrespective of the nature and dura tion other than those filled through the Union Public Service Commission are not only to be notified to but also to be filled through the Employment Exchange alone and other permissible sources of recruitment can be tapped only if the Employment Exchange concerned issued a non availability  certifi cate
There can be no departure from this recruitment procedure unless a different arrangement in this regard has been previously 921 agreed to in consultation with this Department and the Ministry of Labour Directorate Gener al of Employment and Training
Similar in structions are also in force requiring vacan cies against posts carrying a basic salary of less than Rs500 pm in Central Public Employment Exchanges
 It is clear that it is the desire of the Government of India that all Government Departments Government Organisa tion and statutory bodies should adhere to the rule that not merely vacancies should be notified to the Employment Exchanges but the vacancies should also be filled by candi dates sponsored by the Employment Exchanges
It was only when no suitable candidates were available then other sources of recruitment were to be considered
While the Government is at perfect liberty to issue instructions to its own departments and organisations provided the instruc tions do not contravene any constitutional provision or any statute these instructions cannot bind other bodies which are created by statute and which function under the authori ty of statute
In the observation of any statutory prescrip tion the statutory authority may however adopt and follow such instructions if it thinks fit
Otherwise the Govern ment may not compel statutory bodies to make appointments of person from among candidates sponsored by employment ex changes only
The question of course does not arise in the case of private employers which cannot be so compelled by any instructions issued by the Government
The further question is whether the instruction issued by the Government that in the case of Government Departments the field of choice should in the first instance be re stricted to candidates sponsored by the employment exchanges offend articles 14 and 16 of the Constitution
Shri P Parmesh wara Rao learned counsel appearing for some of the respond ents strenuously urged that such a restriction would offend the equality clauses of the Constitution namely articles 14 and 16
He urged that when Parliament had gone into the question and decided that there should be no compulsion in the matter of appointment by way of restriction of the field of choice it was not open to the Government to impose such compulsion
He argued that it would be unreasonable to restrict the field of choice to these sponsored by the employment exchanges
In a country so vast as India in a country where there was so much poverty illiteracy and ignorance it was not fight that employment opportunities should necessarily be channelled through the employment exchanges when it is not shown that the network of employ ment exchanges is so wide that it reaches all the 922 corners of this vast country
He argued that it is futile to expect that persons living in distant places could get themselves registered with employment exchanges situated far away
The submission of Shri Parmeshwara Rao is indeed appealing and attractive
Nonetheless we are afraid we cannot uphold it
The object of recruitment to any service or post is to secure the most suitable person who answers the demands of the requirements of the job
In the case of public employment it is necessary to eliminate arbitrari ness and favouritism and introduce uniformity of standards and orderliness in the matter of employment
There has to be an element of procedural fairness in recruitment
If a public employer chooses to receive applications for employ ment where and when he pleases and chooses to make appoint ments as he likes a grave element of arbitrariness is certainly introduced
This must necessarily be avoided if articles 14 and 16 have to be given any meaning
We therefore consider that insistence of recruitment through employment exchanges advances rather than restricts the rights guaran teed by articles 14 and 16 of the Constitution
The submission that employment exchanges do not reach every where applies equally to whatever method of advertising vacancies is adopted
Advertisement in the daily Press for example is also equally ineffective as it does not reach everyone desiring employment
In the absence of a better method of recruitment we think that any restriction that employment in Government Departments should be through the medium of employment exchanges does not offend articles 14 and 16 of the Constitution
With this modification of the judgment of the High Court the appeals and the special leave petitions are disposed of
No orders are necessary in the writ petition
PS S Appeals dis posed of


Summary:
Sub section 1 of section 4 of the requires every establishment in public sector to notify vacancy in any employment to the employment exchange
Sub section 2 lays down similar requirement in respect of every establish ment in private sector while sub section
4 lays down that nothing in sub sections
1 and 2 shall be deemed to impose any obligation upon any employer to recruit any person through the employment exchanges to fill any vacancy merely because that vacancy has been notified
An establishment  is de fined in section 2e of the Act to mean any office or any place where any industry trade business or occupation is carried on an establishment in public sector in section 2f as an establishment owned controlled or managed by the Government or a Department of the Government and an establishment in private sector  in section 2g as an establishment which is not an establishment in public sector
Instructions issued by the Government of India from time to time enjoined upon employers Central Government offices quasiGovernment institutions and statutory organi sations and establishments in the private sector to restrict their field of choice for vacancies to which the Act applied in the first instance to candidates sponsored by employment exchanges
A question arose as to whether an establishment in the public sector  or an establishment in the private sector  as defined in the Act could make appointments to posts to which the Act applies of 911 persons not sponsored by the employment exchanges and whether the Act covers Government establishments also
The High Court held that the Act had no application to Government establishments that it casts no obligation either on the public sector establishments or on the private sector establishments to make the appointment from among candidates sponsored by the employment exchange only and that any insistence that candidates sponsored by the employ ment exchanges alone should be appointed would be contrary to the right guaranteed by articles 14 and 16 of the Constitu tion
Disposing of the Appeal of the Union of India the Court HELD 1
The High Court was wrong in holding that the Act was not applicable to Government establishments
If the definition of establishment  in section 2e
which includes an office  is read alongside the section 21  it will be clear that Government offices are also included in the expression establishment in public sector 
914E 21 There is no provision in the Act which obliges an employer to employ those persons only who have been spon sored by the employment exchanges
Section 44 of the Act makes it explicitly clear that the employer is under no obligation to recruit any person through the employment exchanges to fill in a vacancy merely because that vacancy has been notified under sections 41 and 42
The compulsion extends only to notification of vacancies that may occur in the establishment before filling them up
915G H 916G 22 The object of the Act is not to restrict but to enlarge the field of choice so that the employer may choose the best and the most efficient and to provide an opportuni ty to the worker to have his claim for appointment consid ered without having to knock at every door for employment
918B C 3
The Government is at perfect liberty to issue in structions to its own departments and organisations to adhere to the rule that not merely vacancies should be notified to the employment exchanges but the vacancies should also be filled by candidates sponsored by the employ ment exchanges provided the instructions do not contravene any constitutional provision or any statute
But these instructions cannot bind other bodies which are created by statute and which function under the authority of statute
In the absence of any statutory presumption the statutory authority may adopt and follow such instructions if it thinks 912 fit
Otherwise the Government may not compel statutory bodies appointment of persons from among candidates spon sored by employment exchanges only
Private employers cannot be so compelled by any instructions issued by the Govern ment
921C E 4
Any restriction that employment in Government Depart ments should be through the medium of employment exchanges does not offend articles 14 and 16 of the Constitution
In public employment it is necessary to eliminate arbitrari ness and favouritism and introduce uniformity of standards and orderliness
There has to be an element of procedural fairness in the recruitment
A public employer cannot choose to receive applications for employment where and when he pleases and to make appointments as he likes
The insistence on recruitment through employment exchanges therefore advances rather than restricts the rights guaranteed by articles 14 and 16
922E B D