SCA/4355/2006 1/46 JUDGMENT THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 4355 of 2006 with SPECIAL CIVIL APPLICATIONS No. 295 of 2001 & C.As No. 4187/06 , 5200/06 with SCAs 4012, 4013, 4014, 4023, 4025, 4356 to 4362, 4691, 4706, 4779, 4780, 4867, 4933, 5097, 5110 to 5127, 5237, 5238, 5240, 5243, 5378, 5380, 5381, 5384, 5391, 5546 to 5558, 5597, 5598, 5603 to 5605, 5617 to 5636, 5726 with CA 3892 of 2006, with SCAs 5798 to 5800, 5812, 5885 to 5890, 5903, 5906, 5908 to 5910, 6032, 6036, 6098 to 6105, 6125 to 6136, 6037 to 6039, 6078, 6093, 6094, 6119, 6123, 6152, 6155, 6272, 6354 to 6356, 6419, 6843, 6898 to 6905, 7536, 7539, 7565, 7610, 7626, 7627, 7650, 7684, 7730, 7746, 7760, 7763, 7764, 7804 to 7807, 7820, 7821, 7863, 7864, 7866 to 7869, 7873 to 7875, 7975 to 7977, 7979, 7992, 8025, 8221 to 8226, 8232, 8252, 8270, 8277, 8422, 8482 to 8492, 8522, 8532, 8554, 8557, 8692, 8693, 9589, 9590, 9610 to 9612, 9773, 10920, 11680 to 11682, 11814, 11884, 11904 to 11908, 12067, 12424, 13177 to 13184, 13337 to 13348, 13350 to 13355, 13365,13911, 14515, 14661 to 14677 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE D.H.WAGHELA Sd/- ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? 1 & 2 YES; 3 to 5 NO ========================================================= JADAV NIKESHKUMAR MAFATLAL - Petitioner(s) Versus STATE OF GUJARAT & 4 - Respondent(s) ========================================================= SCA/4355/2006 2/46 JUDGMENT Appearance : MR YN OZA, Ms SADANA SAGAR, PH PATHAK, MR KALPESH SHASTRI, GIRISH K PATEL, Mr Pinakin Raval, Ms.Tejal Doshi, M/s. J V Bhairavia, A M Parekh, Ms.Femina Chhapatwala, Ms. Roma Fidelis, MR Asim J Pandya, A M Raval, K Raj, I S Supehia, RK Mishra, J V Mehta, V H Desai, R C Jani, S K Gadhvi, Dhaval N Vakil, B S Brahmbhatt, A V Prajapati, V D Parghi, Haresh J Trivedi, MB Farooqui, Jayant P Bhatt, Devang D Trivedi, Paresh Upadhyay, Virendra Baheti, YV Shah, BA Vaishnav, BB Oza with Ms EE Shailaja, Kishore Paul, NR Tandel, MR Rathod, for Petitioners. MR Mihir Joshi Advocate Genereal with Mr.KP Rawal, AGP for Respondents in the matters filed against the Sales Tax Department. Mr Sunit Shah, G.P. and Mr K.P. Rawal, AGP and Ms Archana Raval AGP for Respondents in the remaining matters. ========================================================= CORAM : HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 18/09/2006 CAV JUDGMENT 1. The petitioners, numbering about 250, have approached this Court under Article 226 of the Constitution with prayers for regularization and/or reinstatement in service. They are in the grey area of government employment insofar as, though regularly employed since 2 to 28 years for manual work of the lowest grade as sweeper, water-bearer, safai kamdar, cook, driver, gardner, watchman, peon, or even typist at the higher end, they are appointed and treated as ad- hoc or temporary part-time employees having no status and no protection of any service rules. They have been employed in various offices under the State Government with fixed hours of work ranging from 2 to 6 hours, at fixed wages ranging from Rs.450/- to Rs.1350/-. While they were clamouring for regularization in service, the SCA/4355/2006 3/46 JUDGMENT government has decided to dispense with their services; which has thrown up several important issues for decision by this court. While some of the petitioners were only apprehending termination, some were protected by orders of interim relief and many are already discharged from service. 2. It is the case of the petitioners, generally, that, in absence of any recruitment rules or service rules for the appointees like the petitioners, they have been appointed and employed on part-time and ad-hoc basis on exploitative conditions of service without the usual benefits of minimum wages, allowances, leave of absence, weekly holidays, or any terminal benefits; and that they continued to work under such conditions in the hope of achieving the status of regular employees in terms of the policy and resolutions of the government itself. Many similarly situated part- time ad-hoc employees were regularized in their service pursuant to such government resolutions or by virtue of orders of this court, but in the process of waiting, most of the petitioners have crossed upper age-limits for any other employment under the government. On the other hand, the government suspended its policy of regularization of such employees, then revoked it and now it was SCA/4355/2006 4/46 JUDGMENT decided to terminate their services without following any procedure and without so much as a notice or written order. 3. As against the above grievances, the case of the respondents, as broadly articulated in the few counter-affidavits, is that the Government in its Finance Department had issued the circular dated 26.12.1980 to provide for absorption of part-time employees who had completed three years of service in the respective department; but it was discretionary, subject to the employee fulfilling the prescribed requirements for appointment in class-IV service and only as and when vacancies were available. By the subsequent circular dated 21.8.1995, the aforesaid circular dated 26.12.1980 was kept in abeyance. It was noticed by the State Government that such part- timers continued in service for a number of years, then moved the Courts for regularization of service and were required to be absorbed by virtue of the court's orders even though they did not qualify as per the recruitment rules. The subordinate offices were used to appointing a large number of part-timers leading to back-door entry in service and the government was saddled with the responsibility of pay and allowances and retiral benefits of such employees. Therefore, the government issued circulars dated 7.1.2006 to SCA/4355/2006 5/46 JUDGMENT cancel the aforesaid circulars dated 26.12.1980 and 21.8.1995; and, “with a view to obtain better service with lesser financial burden, the government decided to bring the help of outsource agency by virtue of G.R. Dated 10.2.2006”. That G.R. withdrew the power of the concerned departments to appoint part-timers as also the power of making payment from contingency funds to such part-timers. 3.1 It is further stated that there were no sanctioned posts for the work which was done by the petitioners, namely, cleaning of washrooms/ toilets etc. and such work, being fixed tasks which took very little time, was not of continuous nature requiring full-time attendance. It is also stated that, in absence of any rules, regulations or standards for appointment of part- timers, the departments were appointing persons on part-time basis as per their own perceptions and discretion. It was observed that a number of persons thus employed in the departments was rising even as, mostly, such persons were not appointed by any regular procedure, nor were there any prescribed criteria. On there being no further requirement of such persons, they were relieved from employment. It was observed that, in most such cases, the persons concerned moved appropriate courts and were granted reinstatement SCA/4355/2006 6/46 JUDGMENT and regularization. It was found by the government that that resulted in undue financial burden to the State, over-staffing and also created an opening for back-door entry into government employment, all of which were against public interest, according to the averments. 4. It is also stated on oath on behalf of the respondents that the retirement age for Class-IV employees is 60 years and the pay-scale is Rs.2550-3200. It is obvious that there would not be enough number of vacant posts for absorbing the part-timers. Simultaneously, it would also be necessary to give regular pay and allowances and retirement benefits if the government authorities have to regularize the part-timers. That caused huge additional financial burden on the State Government. With the passing of time, efficiency and quality of service rendered by part-timers was not keeping pace with the standards demanded for such work in the changing scenario and work-ethic. In these facts, the government took a policy decision to withdraw the powers of the heads of departments as well as heads of offices, in respect of appointment of part-timers and making payment to the existing part-timers. The government has also decided to outsource the services to ensure efficiency and quality with reduced financial SCA/4355/2006 7/46 JUDGMENT burden on the state exchequer. It is submitted that, in the era of resource crunch, it was the endeavour of the State Government to curtail unnecessary expenditure and towards that end it has been decided to review and abolish even the sanctioned posts in various departments. Under that policy, the State Government has abolished total 32,170 posts which included 20,016 posts in Class-III and 8,394 posts in Class-IV cadres, according to the affidavit. 5. While recounting the version of the respondents, it may be pertinent to note the recent Government Resolution dated 15.7.2006 which is issued during pendency of the present proceedings. It is stated therein that, in view of withdrawal of the powers by G.R. dated 10.2.2006, the question of sanitation and supply of water in the government offices by outsourcing the service was under consideration of the government. Since putting in place the alternative system of outsourcing may take some time, it was decided to make temporary arrangement for six months and, therefore, as an exception to the G.R. dated 10.2.2006, the heads of various offices, sections and departments are allowed to pay remuneration to part-time employees after taking their services. However, such exceptional provision will not apply to SCA/4355/2006 8/46 JUDGMENT watchman, peon-cum-driver, clerk, computer operator, xerox operator etc. and the number of employees that could be employed for cleaning or supplying water in the offices at particular level are also prescribed. It is further resolved that the surplus employees employed over and above the prescribed number of part-time employees as on 30.1.2006 were to be discharged in order of their juniority after giving them notice or wages in lieu of notice and retrenchment compensation in accordance with the provisions of the Industrial Disputes Act, 1947 (“I.D.Act” for short). This G.R. is made applicable to the employees discharged after the G.R. dated 10.2.2006 and who are continued or reinstated in service under the orders of the High Court. The employees against whom no formal orders to discharge are issued and who have not taken any legal proceedings are excluded from the benefit and procedure prescribed under the I.D.Act. Thus, the government has, pending these petitions, made some provisions for retaining or re-employing some of the part-time employees on temporary basis and for payment of notice pay and compensation in terms of the provisions of the I.D.Act, regardless of the respective departments or offices being or not being an “industry” within the meaning and definition of the I.D.Act. SCA/4355/2006 9/46 JUDGMENT 6. Against the backdrop of the above broad facts and the rival pleadings, the issues arising for decision are: (a) whether the petitioners are entitled to regularisation in service, and (b) whether the petitioners are entitled to reinstatement or any protection from termination of their services. Although the above two main issues are distinct, they are inter-connected at some level. The learned counsel on both sides have made detailed submissions and relied upon a number of judgments, the most important of which is the recent Constitution Bench judgment of the Supreme Court in Secretary, State of Karnataka and others v. Umadevi and others [(2006) 4 SCC 1]. It may be useful and appropriate to extract, as under, the important and relevant observations made therein: “2. .....Equality of opportunity is the hallmark, and the Constitution has provided also for affirmative action to ensure that unequals are not treated equals. Thus, any public employment has to be in terms of the constitutional scheme.” SCA/4355/2006 10/46 JUDGMENT “3. .....Regular appointment must be the rule.” “4. .....The 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. .....It is time, that 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. The passing of orders for continuance, tends to defeat the very constitutional scheme of public employment. ......wide powers under Article 226 of the Constitution of India are not intended to be used for the purpose of perpetuating illegalities, irregularities or improprieties or for scuttling the whole scheme of public employment.....” “6. The power of a State as an employer is more limited than that of a private employer inasmuch as it is subjected to constitutional limitations and cannot be exercised arbitrarily.........It is recognized that no Government order, SCA/4355/2006 11/46 JUDGMENT notification or circular can be substituted for the statutory rules framed under the authority of law. This is because, following any other course could be disastrous inasmuch as it will deprive the security of tenure and the right of equality conferred on civil servants under the constitutional scheme. ......Therefore, when statutory rules are framed under Article 309 of the Constitution which are exhaustive, the only fair means to adopt is to make appointments based on the rules so framed.” “12. .....This right of the Union or of the State Government cannot but be recognized and there is nothing in the Constitution which prohibits such engaging of persons temporarily or on daily wages, to meet the needs of the situation. But the fact that such engagements are resorted to, cannot be used to defeat the very scheme of public employment. .....It is ordinarily not proper for courts whether acting under Article 226 of the Constitution or under Article 32 of the Constitution, to direct absorption in permanent employment of those who have been engaged without following a due process of selection as envisaged by the constitutional scheme”. “13. .....In this context, we have also to bear SCA/4355/2006 12/46 JUDGMENT in mind the exposition of law by a Constitution Bench in State of Punjab v. Jagdip Singh & Ors. [1964 (4) SCR 964]. It was held therein, “In our opinion, where a government servant has no right to a post or to a particular status, though an authority under the Government acting beyond its competence had purported to give that person a status which it was not entitled to give, he will not in law be deemed to have been validly appointed to the post or given the particular status.” “14. .......The very divergence in approach in this court, the so-called equitable approach made in some, as against those decision which have insisted on the rules being followed, also justifies a firm decision by this court one way or the other. It is necessary to put an end to uncertainty and clarify the legal position emerging from the constitutional scheme, leaving the High Courts to follow necessarily, the law thus laid down.” “15. ......If the appointment itself is in violation of the provisions of the Constitution, illegality cannot be regularized. Ratification or regularization is possible of an act which is within the power and province of the authority, but SCA/4355/2006 13/46 JUDGMENT there has been some non-compliance with procedure or manner which does not go to the root of the appointment. Regularization cannot be said to be a mode of recruitment.” “19. ......Obviously, the State is also controlled by economic considerations and financial implications of any public employment. ....So, the court ought not to impose a financial burden on the State by such directions, as such directions may turn counter-productive.” “33. .....By and large what emerges is that regular recruitment should be insisted upon, only in a contingency an ad-hoc appointment can 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.” “38. In Union Public Service Commission v. Girish Jayanti Vaghela & Others [(2006)2 SCC 482] this court answered the question, who was a government servant, and stated:- “....A regular appointment to a post under the State or Union cannot be made without issuing advertisement in the SCA/4355/2006 14/46 JUDGMENT prescribed manner which may in some cases include inviting applications from the employment exchange where eligible candidates get their names registered. Any regular appointment made on a post under the State or Union without issuing advertisement, inviting applications from eligible candidates and without holding a proper selection where all eligible candidates get a fair chance to compete would vitiate the guarantee enshrined under Article 16 of the Constitution (See B.S.Minhas v. Indian Statistical Institute and others AIR 1984 SC 363).” “39. .....But on survey of authorities, the predominant view is seen to be that such appointments did not confer any right on the appointees and that the court cannot direct their absorption or regularization or re-engagement or making them permanent.” “43. ....Thus, it is clear that adherence to the rule of equality in public employment is a basic feature of our 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 SCA/4355/2006 15/46 JUDGMENT 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 courts must be careful in ensuring that they do not interfere unduly with the economic arrangement of its affairs by the State or its instrumentalities or lend themselves the instruments to facilitate the bypassing of SCA/4355/2006 16/46 JUDGMENT the constitutional and statutory mandates.” “46. ......Moreover, the invocation of the doctrine of legitimate expectation cannot enable the employees to claim that they must be made permanent or they must be regularized in the service though they had not been selected in terms of the rules for appointment.” “48. ......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. ......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....” “49. ..........When the court is approached for relief by way of a writ, the court has necessarily to ask itself whether the person before it had any legal right to be SCA/4355/2006 17/46 JUDGMENT enforced.....” “50. .........In the guise of upholding rights under Article 21 of the Constitution of India, a set of persons cannot be preferred over a vast majority of people waiting for an opportunity to compete for State employment. .....The argument that Article 23 of the Constitution is breached because the employment on daily wages amounts to forced labour, cannot be accepted. ......It also appears to us that importing of these theories to defeat the basic requirement of public employment would defeat the constitutional scheme and the constitutional goal of equality.” “51. The argument that the right to life protected by Article 21 of the Constitution of India would include the right to employment cannot also be accepted at this juncture. .....The Directive Principles of State Policy have also to be reconciled with the rights available to the citizen under Part III of the Constitution and the obligation of the State to one and all and not to a particular group of citizens. We, therefore, overrule the argument based on Article 21 of the Constitution.” “52. .....This classical position continues and a SCA/4355/2006 18/46 JUDGMENT mandamus could not be issued in favour of the employees directing the government to make them permanent since the employees cannot show that they have an enforceable legal right to be permanently absorbed or that the State has a legal duty to make them permanent.” “53. .......There may be cases where irregular appointments (not illegal appointments) as explained in S.V.Narayanappa (supra), R.N.Nanjundappa (supra) and B.N.Nagarjan (supra) and referred to in paragraph 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of courts or of tribunals. The question of regularization of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases above referred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularize as a one time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of SCA/4355/2006 19/46 JUDGMENT orders of courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularization, if any already made, but not subjudice, need not be reopened based on this judgment, but there should be no further by-passing of the constitutional requirement and regularizing or making permanent, those not duly appointed as per the constitutional scheme.” “54. It is also clarified that those decisions which run counter to the principle settled in this decision, or in which directions running counter to what we have held herein, will stand denuded of their status as precedents.” (emphasis added) 7. In view of the law on several aspects of the subject having been settled in the aforesaid terms by the Constitution Bench of the Apex Court, it would be unnecessary and improper to refer to and discuss any judgment of this Court or other judgments of the Supreme Court to entertain a different view. Even the resolutions SCA/4355/2006 20/46 JUDGMENT or notifications of the government suggesting a course of action inconsistent with the above observations could not be relied or enforced. 8. However, the following submissions made for the petitioners may be mentioned for the sake of record. It was submitted for the petitioners that the earlier resolution dated 20.12.1980 and the policy contained therein of making efforts to absorb the part-time employees after three years of continuous service was not fully implemented in favour of many petitioners who had been in