Case: A. Manjula Bhashini and Ors Vs. The Managing Director, A.P. Women's Cooperative Finance Corporation Ltd. and Anr

2. In 1970s, 80s and early 90s, the country witnessed an unusual phenomena in the field of public employment. Lakhs of persons were engaged/employed under the Central and State Governments in violation of the doctrine of equality enshrined in Articles 14 and 16 of the Constitution, Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (for short `the 1959 Act) and the rules framed under proviso to Article 309 of the Constitution. The officers who were entrusted with the task of making appointments on Class III and Class IV posts misused their power and employed their favourites or all those who enjoyed political power without considering the claims of other similarly situated persons. For avoiding compliance of the mandate of the equality clause enshrined in the Constitution and other statutory provisions, the empowered authorities resorted to the mechanism of employing the persons of their choice on daily wages or nominal muster roll or contract or part time basis with the hope that on some future date the Government will frame policy for regularisation of such employees. In this manner, nepotism, favoritism and even corruption became hallmark of the appointments and a huge illegal employment market developed in the country, a fact of which cognizance was taken by this Court in Delhi Development Horticulture Employees Union v. Delhi Administration [(1992) 4 SCC 99] .3. State of Andhra Pradesh was no exception to the aforementioned malady. Thousands of persons were employed in different departments of the Government and agencies/instrumentalities of the State on daily wages or nominal muster roll or consolidated pay or part time basis. In some cases, employment was given despite the fact that sanctioned posts were not available. Even if the posts existed, the concerned authorities neither issued advertisement nor sent requisition to the employment exchange(s) and made appointments in complete disregard of Articles 14 and 16 of the Constitution and the relevant statutory provisions including the 1959 Act depriving thousands of unemployed persons of their right to be considered for appointment to public posts/offices.4. In order to check the menace of irregular appointments, which was creating unwarranted financial burden on the State, and, thereby adversely affecting the welfare schemes and development programmes and also causing dissatisfaction among the members of younger generation who were denied the right of consideration for appointment, the Government of Andhra Pradesh decided to bring a legislation for totally banning appointment on daily wages, regulating appointment on temporary basis and for rationalisation of staff pattern and pay structure. In furtherance of that decision, the Governor of Andhra Pradesh promulgated the Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Ordinance, 1993. The same was published in the State Gazette dated 25.11.1993. The Ordinance was replaced by the 1994 Act, which was enforced with effect from 25.11.1993. The State Governments determination to curb irregular appointments and reduce burden on the State exchequer is clearly reflected in the statement of objects and reasons contained in the bill presented before the legislative assembly, the relevant portions of which are extractednumber of employees has been increasing at an enormous rate. The census of Government employee conducted by the State Government in 1976, 1981 and 1988 as projected in 1993 shows that the number of employees of the Government, Universities, Institutions receiving Grant-in-Aid and Public Sector Undertakings, Local Bodies has increased from 6.78 lakhs in 1976 to 12.34 lakhs in 1993 which constituted an increase of 82%. Out of this, the employees of the Departments of the State alone increased from 2.85 lakhs to 5.56 lakhs representing an increase of 95%. The Public Sector Undertakings grew at 128% from 1.44 lakhs to 3.28 lakhs. Among the Government employees and Local Body employees, the class IV and other categories constitute about 41%.The expenditure particulars show that the amount spent on the salaries, allowances and pension of Government employees, Panchayat Raj employees, employees paid out of the Grant-in-Aid, amounts to a figure of Rs.4277 crores in 1993-94 salaries on the due dates. Government considers that it is not fair that peoples interest should be neglected and even sacrificed by not taking up schemes just to pay salaries to its employees.In addition to the salary and pension commitment there is a heavy debt servicing burden on the Government. The debt also has been increasing from year to year. In 1983 the total outstanding debt was Rs.2543 crores. It has now reached Rs.10970 crores during 1993-94. At present, the Government are paying as much as Rs.1012 crores for payment of interest and Rs.330 crores for repayment of principal amount every year. The total amount of non-plan items of expenditure in 1993-94 is amounting to Rs.6222 crores, which cannot be avoided. The Government are not able to complete a number of Irrigation Projects and Power Projects because of lack of funds. For the same reason productive assets like completed irrigation projects and roads are not being properly maintained resulting in wastage of assets whose replacement will cost several hundreds of crores of rupees. At present, the Government are spending 81% of the debt they receive from the Government of India, Market borrowings and all other categories of loans for repayment; which means only 19% of the total debt is being added to our resources. But it is estimated that from next year onwards the repayment will be more than the debt receipts. If the Government are caught in such a debt trap the amount available to the State Government will be limited to its own tax and non-tax revenues and the devolutions from the Government of India. The devolutions expected from the Government of India is about Rs.1698 crores in 1993-94. Since the expenditure on establishment is already 105% of the own tax and non-tax revenues of the state, it can be seen that between this expenditure and other non-plan expenditure the Government would have exhausted the most of the resources leaving very little for welfare schemes and developmental programmes. Since no Government can allow such total neglect of welfare and developmental activities the employees of the State will not be getting salaries on time and eventually they will not be getting their full salary also.The irregular appointments are adversely affecting the interest of several thousands of unemployed persons who have registered in the employment exchange and awaiting their turn for orders. It is also adversely affecting the interests of Scheduled Castes, Scheduled Tribes and backward Classes who have reservation in employment since the N.M.R. appointments are not taking care of the reservation for these categories. Government have constituted District Selection Committees and some ad hoc Selection Committees besides the Andhra Pradesh Public Service Commission to take up recruitment in accordance with law in Government Departments. Irregular appointments are depriving these legitimate recruiting bodies from performing their functions. Irregular appointments in excess of sanctioned strength will also result in industrial undertakings becoming unviable and eventually sick. When a unit goes sick, it results in retrenchment and even winding-up, thus, adversely affecting the interests of the existing employees who are recruited against sanctioned strength and through authorised process of selection. Similarly unauthorised appointments over and above the sanctioned strength in Government Departments would also increase the number of employees and to that extent militate against the Government looking after the existing employees who have been recruited through proper channel. The Act will, therefore, protect the interests of candidates in Employment Exchanges, reserved categories, the existing employees who were recruited through proper channel and the legitimate functions of the recruiting agencies.From the above, it can be seen that the financial position of the State arising out of excessive expenditure on staff is so alarming that it cannot be tackled by ordinary administrative actions and instructions. It is, therefore, thought that a time has come when we have to provide for deterrent action for illegal and irregular appointments by enacting a law. It has accordingly been decided to enact a law to achieve the following objects, namely:-(a) totally banning such appointments in the institutions covered by legislation;(b) imposing stringent penalties for making appointments by public servants on violation of the law;(c) to protect public servants from being held for contempt for non-compliance of the orders of Tribunal or High Court and also for abatement of pending cases claiming regularization of services which are already filed before the courts of law by making a suitable provisions therefor; and(d) to protect the interests of candidates registered with Employment Exchange, the reservation rights of Scheduled Castes, Scheduled Tribes and Backward Classes, the rights of the existing employees who are recruited through proper channel and the functions of Andhra Pradesh Public Service Commission, District Selection Committees and other Selection Committees constituted by the Government.The legislation will prevent further deterioration of finances of the State and at the same time conserve the resources for the welfare and developmental

Court's reasoning:
27. The distinction between legislative and judicial functions is well known. Within the scope of its legislative competence and subject to other constitutional limitations, the power of legislature to enact laws is plenary. In exercise of that power, the legislature can enact law prospectively as well retrospectively. The adjudication of the rights of the parties according to law enacted by the legislature is a judicial function. In the performance of that function, the court interprets and gives effect to the intent and mandate of the legislature as embodied in the statute. If the court finds that the particular statute is ultra vires the power of legislature or any provision of the Constitution, then the same can be struck down. It is also well settled that the legislature cannot by bare declaration, without anything more, directly overrule, reverse or override a judicial decision. However it can, in exercise of the plenary powers conferred upon it by Articles 245 and 246 of the Constitution, render a judicial decision ineffective by enacting a valid law fundamentally altering or changing the conditions on which such a decision is based. Such law can also be given retrospective effect with a deeming date or with effect from a particular date.28. The question whether the legislature possesses the power to enact law apparently affectingjudgment or amend the existing law which has already been interpreted by the Court in a particular manner, has been considered in several cases. In Government of A.P. v. H.M.T. Ltd. [1975 (2) SCC 274 ], this Court considered whether the amendment made in definition of a `house contained in the Andhra Pradesh (Gram Panchayat) Act, by amending Act No.16 of 1974 was intended to undo the judgment of the High Court which had interpreted the unamended definition and held that buildings other than factory premises were not a `house.The judgment in S.S. Bola v. B.D. Sardana (supra) calls for a detailed reference because the main issue considered in that case is similar to the one raised in these appeals. The facts of that case show that in A.N. Sehgal v. Raje Ram Sheoran [1992 Supp (1) SCC 304] and S.L. Chopra v. State of Haryana [1992 Supp (1) SCC 391] , this Court interpreted the rules framed under proviso to Article 309 of the Constitution and gave certain directions for fixation of seniority of the members of engineering services. After about three years, the State legislature enacted the Haryana Service of Engineers, Class I, Public Works Department (Buildings and Roads Branch), (Public Health Branch) and (Irrigation Branch) Act, 1995 and repeal the existing rules. The Act was given retrospective effect from 1.11.1966 that is the date on which the State of Haryana was formed. The Punjab and Haryana High Court struck down various provisions of the Act on the ground that the same were enacted with the sole object of nullifying the earlier judgments of this Court in A.N. Sehgal v. Raje Ram Sheoran (supra) and S.L. Chopra v. State of Haryana (supra). By majority of 2:1, this Court held that the 1995 Act is a valid piece of legislation and set aside the order of the High Court. G.B. Pattanaik, J. (as he then was), who rendered leading judgment of the majority noted that in Sehgals case and Chopras case, the Court had not invalidated the recruitment rules but merely interpreted some provisions relating to determination of the inter se seniority of the direct recruits and promotees and held that the Act cannot be invalidated on the ground that it was an encroachment on judicial function.Before parting with this aspect of the case, we consider it proper to notice the ratio of the judgments on which reliance has been placed by the learned counsel for the employees. In Madan Mohan Pathak v. Union of India (supra), aBench considered the constitutional validity of the Life Insurance Corporation (Modification of Settlement) Act, 1976 by which an attempt was made to nullify the mandamus issued by the Calcutta High Court for payment of bonus to the employees in terms of the settlements. This Court declared that the 1976 Act is violative of Article 31(2) of the Constitution and also held that by simply bringing new legislation, the Parliament could not nullify the mandamus issued by the High Court for payment of cash bonus to the employees in terms of the settlement.In none of the above noted cases, this Court considered an issue akin to the one examined by us. Therefore, the proposition of law laid down in those cases cannot be relied upon for entertaining the claim of daily wage employees for regularisation irrespective of the fact that they may not have completed 5 years continuous service on or before 25.11.1993.37. In view of the above discussion, we hold that the amendments made in the 1994 Act by Act Nos.3 of 1998 and 27 of 1998 do not have the effect of nullifying or overriding the judgment in District Collector v. M.L. Singh (supra). We further hold that the policy of regularisation contained in first proviso to Section 7 of Act No.27 of 1998 is one time measure intended to benefit only those daily wage employees, etc. who completed 5 years continuous service on or before 25.11.1993 and the employees who completed 5 years service after 25.11.1993 cannot claim regularisation.38. The question whether Section 7A of Act No. 27 of 1998 amounts to an encroachment on the courts power on judicial review is answered in negative in view of theBench judgment in Mylapore Club v. State of Tamil Nadu (supra) and we respectfully follow the ratio of that judgment. Even otherwise, in view of the interpretation placed by us on the policy of regularisation contained in first proviso to Section 7 of the 1994 Act, the question of abatement of claims etc. has become purely academic.39. We shall now consider whether the cut off date, i.e., 25.11.1993 specified in the first proviso to Section 7 of the 1994 Act (as amended by Act No. 27 of 1998) for determination of the eligibility of daily wage employees to be considered for regularisation is arbitrary, irrational and violative of Articles 14 and 16 of the Constitution. Undisputedly, the Ordinance issued in 1993 was the first exercise of legislative power by the State to prohibit employment on daily wages and to restrict appointments on temporary basis and, at the same time, streamline the recruitment in public services by adopting a procedure consistent with the doctrine of equality embodied in Articles 14 and 16 of the Constitution. The 1994 Act was enforced with effect from 25.11.1993, i.e., the date on which the Ordinance was published in the official Gazette. Therefore, that date had direct bearing on the policy of regularisation circulated vide G.O. dated 22.4.1994, which was issued by the State Government in exercise of its executive power under Article 162 of the Constitution. When that policy was engrafted in the 1994 Act in the form of proviso to Section 7, the legislature could not have fixed any date other than 25.11.1993 for determining the eligibility of daily wage employees who fulfilled the requirement of 5 years continuous service. If any other date had been fixed for counting 5 years service of daily wage employees for the purpose of proviso to Section 7, the object sought to be achieved by enacting the 1994 Act would have been defeated, inasmuch as the regular recruitment could not have been made for appointment against the sanctioned posts and back door entrants would have occupied all the posts. Therefore, the cut off date i.e. 25.11.1993 prescribed by the legislature for determining the eligibility of daily wage employees and others covered by Section 7 of the 1994 Act cannot be dubbed as arbitrary, unreasonable, irrational or discriminatory. This view of ours is in tune with judicial precedents on the subject. In Union of India v. Parameswaran Match Works [(1975) 1 SCC 305] , aBench was called upon to decide whether the date for making the declaration, i.e., September 4, 1967 fixed for grant of the benefit of concessional rate of duty was irrational and arbitrary. The High Court declared that the cut off date fixed for grant of the concessional rate of duty violated Article 14 of the Constitution. This Court disapproved the view taken by the High Court and held that the choice of a date as the basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the same, unless it is shown to be capricious or whimsical. It was further held that there is no mathematical or logical way for fixing a particular date and the decision of the legislature or its delegate must be accepted unless the fixation of date is found to be very wide off the reasonable mark.40. In Sushma Sharma v. State of Rajasthan [(1985) Supp. SCC 45] , fixation of 25th June, 1975 as the cut off date for the determination of eligibility of temporary teachers for the purpose of absorption in terms of the Rajasthan Universities Teachers (Absorption of Temporary Lecturers) Act, 1973 was challenged on the ground of discrimination and violation of Articles 14 and 16. A learned Single Judge of the High Court declared that the cut off date was arbitrary and violative of the equality clause enshrined in the Constitution. The Division Bench reversed the order of the learned Single Judge and held that the cut off date did not offend the doctrine ofCourt approved the view taken by the Division Bench andobject of this legislation was to provide for absorption of temporary lecturers of long standing. So therefore experience and continuous employment were necessary ingredients. The Hindi version of the Ordinance used the expression "ke prarambh ke samaya is roop me karya kar rahe hein" is capable of meaning "and are continuing" to work as such at the time of the commencement of the Ordinance. Keeping the background of the purpose of the Act in view that would be the proper construction and if that is the proper construction which is in consonance with the English version of the Ordinance and the Act as well as with the object of the Act then in our opinion the Act and the Ordinance should be construed to mean that only those would be eligible for screening who were appointed prior to June 25, 1975 and were continuing at the time of the commencement of the Ordinance i.e. June 12, 1978 i.e. approximately about three years. If that is the correct reading, then we are unable to accept the criticism that those who were for a short period appointed prior to June 25, 1975 then again with interruption were working only at the time of the commencement of the Ordinance i.e. June 12, 1978 would also be eligible. In other words people with very short experience would be eligible for absorption. That cannot be the purpose of the Act. It cannot be so read reasonably. Therefore on a proper construction it means that all temporary lecturers who were appointed as such on or before June 25, 1975 and were continuing as such at the commencement of the Ordinance shall be considered by the University for screening for absorption. The expression "were continuing" is significant. This is in consonance with the object of the Act to ensure continuity of experience and service as one of the factors for regularising the appointment of the temporary lecturers. For regularising the appointment of temporary lecturers, certain continuous experience is necessary. If a Legislature considers a particular period of experience to be necessary, the wisdom of such a decision is not subject to judicial review. Keeping the aforesaid reasonable meaning of clause 3 of the Ordinance and Section 3 of the Act in view, we are of the opinion that the criterion fixed for screening for absorption was not an irrational criterion not having any nexus with the purpose of the Act. Therefore, the criticism that a teacher who was working even for two or three months only before June 25, 1975 and then with long interruptions was in employment of the University at the time of the commencement of the Ordinance would be eligible but a teacher who had worked continuously from June 26, 1975 i.e. after the date fixed i.e. June 25, 1975 for three years would be ineligible and as such that will be discrimination against long experience, cannot be accepted. Such a construction would be an unreasonable construction unwarranted by the language used in the provisions concerned. It is wellsettled that if a particular period of experience is fixed for screening or for absorption, it is within the wisdom of the Legislature, and what period should be sufficient for a particular job or a particular employment is not subject to judicialadded)41. In Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212] , it was held that fixing of 1st August as the cut off date for determining the eligibility in the matter of age of the candidates appearing in the examination held for recruitment to the Indian Administrative Service/Indian Foreign Service etc. cannot be termed as arbitrary merely because the preliminary examination was held prior to that date. The court accepted the explanation given by the Union of India that 1 st of August of the year is normally fixed for determination of the eligibility of the candidates and the same was not modified before holding the preliminary examination because it was only a screening test and marks obtained at such examination were not taken into consideration at the time of preparing the final result. In Union of India v. K.G. Radhakrishana Panickar [(1998) 5 SCC 111] , it was held that the decision of the railway administration to fix 1.1.1961 as the cut off date for the purpose of counting of past service of Project Casual Labourers for the purpose of retrial benefits was not arbitrary or unreasonable because two separate schemes were framed for regularisation of casual labourers.42. The question which remains to be considered is whether the Division Bench was justified in holding that all daily wage employees who completed 5 years service on the date of enforcement of Act No. 27 of 1998, i.e., 19.8.1998 would be entitled to be considered for regularisation of their services. A reading of paragraphs 54, 67, 68 and 72 of the impugned judgment shows that even though the Division Bench did not find the cut off date i.e. 25.11.1993 specified in first proviso to Section 7 for determining the eligibility of daily wage employees for regularisation to be arbitrary, irrational or discriminatory, yet it changed the said date from 25.11.1993 to 19.8.1998 solely on the premise that Act No. 27 of 1998 was enforced with effect from that date. In our view, once the Division Bench negatived the challenge to the validity of Act Nos.3 of 1998 and 27 of 1998, there was no warrant for altering the date of eligibility specified in first proviso to Section 7 of the 1994 Act and thereby extend the zone of eligibility of daily wage employees who could be considered for regularisation. As a corollary, we hold that the declaration made by the Division Bench that all persons who completed 5 years service as on the date of coming into force of Act No.27 of 1998 would be entitled to be considered for regularisation of their services is legally unsustainable and is liable to be set aside.