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

4. The facts of the case are that the appellant is a Public Sector Undertaking which has a plant in Rishikesh where it was manufacturing pharmaceuticals. The present dispute relates to the ten concerned employees who were appointed as casual workers on daily rate basis for the reason that they were dependants of employees dying in harness. Such appointments were made by the appellant due to the persistent and prolonged agitation by the trade union since the appellant wanted to maintain industrial harmony, although there was no rule/policy for such compassionate appointment in the service of the appellant company, which was already over-staffed. As against 1049 sanctioned posts, there were already 1299 employees working in the company at the relevant time.5. The aforesaid ten persons were paid wages according to the rates of daily wages, declared by the State Government from time to time, as agreed with the union. Since the appellant was already over-staffed in all its departments, the said persons were given work in the nature of cleaning window panes, sweeping floors and such sundry jobs on contract basis which work was not the work of the regular employees of the appellant-company.6. From the year 1986 the financial position of the appellant-company became critical as it was running on huge losses and hence its corporate office issued stop/ban order, banning any fresh recruitment/appointments. The company also applied to the BIFR as it had become sick. The BIFR had also issued directions to the company to reduce its manpower in order to try to revive the company, but despite this situation the union started pressing and agitating for regularization of the aforesaid ten concerned daily rated employees. The failure of talks between the company and the union led to the reference of a dispute under the Industrial Disputes Act before the Labour Court in the year 1992 in the following termsthe action of the employer in not regularizing 22 workmen and not granting them wage scales and other benefits given to the regular employees is unjustified and/orBefore the Labour Court, only 10 out of the 22 workmen appeared and filed written statement and therefore the award was passed only in respect of the said ten persons. The Labour Court held that although the said persons were employed as "casual daily rated employees" by the company, yet in view of their having continued for a long time, they were entitled to regularization and the action of the management in not regularizing them was unjustified and consequentially they should be paid the wages and benefits as given to other regular employees from the date of the award i.e. 25.7.1996. In the writ petition filed by the appellant challenging the said award, the High Court upheld the contention of the appellant that the respondents were not entitled to regularization in view of the well settled law laid down by this Honble Court in the case of Madhyamik Shiksha Parishad, U.P. vs. Anil Kumar Mishra & Ors. reported in 2005(5) SCC 122 wherein it has been categorically held that completion of 240 days or more does not entitle/import the right of regularization. The High Court therefore, held that the impugned award, to the extent it directed for regularization of the respondents, could not be sustained.

Court's reasoning:
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.