Case: M/S. Indian Drugs &amp; Pharmaceuticals Ltd Vs. Devki Devi

Background facts in a nutshell are as follows:M/s Indian Drugs & Pharmaceuticals Limited (for short IDPL), the appellant, is a public undertaking fully owned and controlled by the Government of India. It has one of its units at Virbhadra, Rishikesh, District Dehradun. Several workers of the unit died in harness leaving behind the widows and families. The IDPL Workers Union took up their cause and other disputes in a meeting held on 12.8.1988. In the said meeting as item No.3 the Union demanded that the widows/dependants of deceased employees should be given employment in the plant. Till such time the decision for their employment is received from the corporate office, the management should employ them as contract labour. The management agreed to consider the Unions suggestion sympatheticallyHowever, appellant decided to give work to them on contract basis by appointing them as contractor for maintenance of office records, cleaning and mopping of floors etc. on a consolidated amount. As contractors they were liable to pay provident fund and other statutory liabilities for the labourers engaged by them to carry out the contracts. The respondents were appointed as contractors from time to time. After the meeting which was held on 12.8.1988 the Head Office vide letter dated 27.5.1998 took a decision that contract labour arrangement should cease. It was also decided that in view of financial stringencies it has been decided to dispense with system forthwith and existing contractual agreements were to be reviewedWith effect from 1.8.1998 contracts with the respondents were terminated. Respondents raised industrial dispute which was referred to the Labour Court U.P. Dehradun who gave the award against they on the ground that the said respondents were the workmen and they were entitled to be regularized. It applied the principle of lifting the veil of contract to find out the correct positionAgainst the said order, they filed Writ Petitions which were dismissed on the ground that the minutes of the meeting dated 12.8.1988 was a settlement between the parties in terms of Section 2(p) of the Industrial Disputes Act, 1947 (in short the ID Act) read with Rule 58 of the Industrial Disputes (Central) Rules, 1957 (in short the Central Rules). High Court recorded a finding that the settlement between the employer and employees acquired a statutory status, as a result of which the job contractors cannot be said to be contract labourers. In fact they are workmen in view of their engagement. Therefore, the respondents cannot be said to be contract labourers but were in reality workmen.

Court's reasoning:
As was observed in State of Haryana and Ors. v. Rani Devi & Anr. (AIR 1996 SC 2445 ), it need not be pointed out that the claim of person concerned for appointment on compassionate ground is based on the premise that he was dependant on the. Strictly this claim cannot be upheld on the touchstone of Article 14 or 16 of the Constitution of India. However, such claim is considered as reasonable and permissible on the basis of sudden crisis occurring in the family of such employee who has served the State and dies while in service. That is why it is necessary for the authorities to frame rules, regulations or to issue such administrative orders which can stand the test of Articles 14 and 16. Appointment on compassionate ground cannot be claimed as a matter of right.n harness Scheme cannot be made applicable to all types of posts irrespective of the nature of service rendered by the. In Rani Devis case (supra) it was held that scheme regarding appointment on compassionate ground if extended to all types of casual or ad hoc employees including those who worked as apprentices cannot be justified on constitutional grounds. In Life Insurance Corporation of India v. Asha Ramchandra Ambekar (Mrs.) and Anr. (1994 (2) SCC 718) , it was pointed out that High Courts and Administrative Tribunals cannot confer benediction impelled by sympathetic considerations to make appointments on compassionate grounds when the regulations framed in respect thereof do not cover and contemplate such appointments. It was noted in Umesh Kumar Nagpal v. State of Haryana and Ors. (1994 (4) SCC 138) , that as a rule in public service appointment should be made strictly on the basis of open invitation of applications and merit. The appointment on compassionate ground is not another source of recruitment but merely an exception to the aforesaid requirement taking into consideration the fact of the death of employee while in service leaving his family without any means of livelihood. In such cases the object is to enable the family to get over sudden financial crisis. But such appointments on compassionate ground have to be made in accordance with the rules, regulations or administrative instructions taking into consideration the financial condition of the family of the deceasedAs was observed in State of Haryana and Ors. v. Rani Devi & Anr. (AIR 1996 SC 2445 ), it need not be pointed out that the claim of person concerned for appointment on compassionate ground is based on the premise that he was dependant on the. Strictly this claim cannot be upheld on the touchstone of Article 14 or 16 of the Constitution of India. However, such claim is considered as reasonable and permissible on the basis of sudden crisis occurring in the family of such employee who has served the State and dies while in service. That is why it is necessary for the authorities to frame rules, regulations or to issue such administrative orders which can stand the test of Articles 14 and 16. Appointment on compassionate ground cannot be claimed as a matter of right.n harness Scheme cannot be made applicable to all types of posts irrespective of the nature of service rendered by the. In Rani Devis case (supra) it was held that scheme regarding appointment on compassionate ground if extended to all types of casual or ad hoc employees including those who worked as apprentices cannot be justified on constitutional grounds. In Life Insurance Corporation of India v. Asha Ramchandra Ambekar (Mrs.) and Anr. (1994 (2) SCC 718) , it was pointed out that High Courts and Administrative Tribunals cannot confer benediction impelled by sympathetic considerations to make appointments on compassionate grounds when the regulations framed in respect thereof do not cover and contemplate such appointments. It was noted in Umesh Kumar Nagpal v. State of Haryana and Ors. (1994 (4) SCC 138) , that as a rule in public service appointment should be made strictly on the basis of open invitation of applications and merit. The appointment on compassionate ground is not another source of recruitment but merely an exception to the aforesaid requirement taking into consideration the fact of the death of employee while in service leaving his family without any means of livelihood. In such cases the object is to enable the family to get over sudden financial crisis. But such appointments on compassionate ground have to be made in accordance with the rules, regulations or administrative instructions taking into consideration the financial condition of the family of the