Case: Indian Drugs &amp; Pharmaceuticals Ltd Vs. Workman,Indian Drugs &amp;Pharmaceutical Ltd

October 1, 1984. It is a direction under Article 142 on the particular facts and circumstances therein. Therefore, 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. Jains 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 Honble 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. Therefore, 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". 44. In 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. 45. It is well settled that regularization cannot be a mode of appointment vide Manager, RBI, Bangalore vs S. Mani & others, AIR 2005 SC 2179 (para 54). 46. In the 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: " If 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." 47. The 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". 48. We are 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.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. It has 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 time.10. It has 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. The 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. The 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 uncalled for.11. In the 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.The 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.We are 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 and sympathies.No 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.33. A 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. Thus, 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. The 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.The 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.The 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.No 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.We are 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.Before 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 countrys economy the number of jobs are limited. Hence, everybody cannot be given a job, despite our earnest desire.51. It may 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.52. One 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 people.53. No 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.