Supreme Court of India

Punjab State Electricity Board & Ors vs Jagjiwan Ram And Ors on 12 February, 2009

Equivalent citations: 2009 AIR SCW 1884, 2009 (3) SCC 661, 2009 LAB. I. C. 1598, AIR 2009 SC (SUPP) 246, (2009) 2 LAB LN 744, (2009) 2 SCALE 511, (2009) 122 FACLR 774, (2010) 1 SERVLJ 22, (2009) 5 SERVLR 499, (2009) 3 SCT 92

Author:
G.S. Singhvi

Bench:
G.S. Singhvi
,
B.N. Agrawal

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.890 OF 2009
(Arising out of S.L.P. (C) No.22843 of 2005)

Punjab State Electricity Board and others ... Appellants

Versus

Jagjiwan Ram and others ... Respondents

WITH

Civil Appeal No.891 of 2009
(Arising out of S.L.P. (C) No.22989 of 2005)

JUDGMENT

G.S. Singhvi, J.

1. Leave granted.

2. With a view to give relief to the employees who were stagnating in
particular positions for a long period of time, the Punjab State Electricity Board
[for short, "the Board"] introduced a scheme for giving time bound promotional
scales/increments on completion of 9/16/23 years of regular service. The same was
circulated vide office order dated 23rd April, 1990, the relevant portions of which
are extracted below:-

"In continuation consolidation and supersession of instructions contained
in this office order No.174/PRC/Fin-1988 dated 17.07.1989, Memo
No.11163/11863/PRC/Fin-I/1988/L-VI/(Prop) dated 19.1.1990 and O/o
No.194/PRC/Fin-1988, dated 30.03.1990.

The Punjab State Electricity Board have been seized of the problems of
stagnation prevailing amongst the various cadres of regular employees and
its consequent effect on their efficiency, is felt that an employee should,
under ideal service conditions get normally two promotions from his initial
recruitment level during his service. However, this is not always possible
owing to non-availability of promotional posts. The aspiration of the
employees, can, however be met to a great extent by allowing time bound
higher scales to the employees at two stages in their service career. The
Punjab State Electricity Board has therefore, decided to introduce a
scheme to allow time bound benefit of promotional scales after the
completion of 9/16 years of regular service in the PSEB, provided the
maximum benefit on being placed in the time bound promotional scale
does not exceed five increments including promotional increment(s) to the
subordinate employee having a maximum scale upto Rs.3500/- except the
categories where the benefit of time bound placement to higher scale is
applicable on the Punjab Govt. pattern as in the case of teachers etc.
When the benefit so exceeds five increments, the time bound promotional
scale will be so revised that the minimum benefit on being placed in the
time bound promotional scale is five increments including promotional
increment(s). It is clarified that in devising the scale, the case of a direct
recruit will be taken, who presumably enters service on minimum of the
scale on 1.1.1986. A promotee employee will be fixed at the minimum of
this promotional revised time bound scale and in case he has already
crossed the minimum of time bound promotional scale or revised higher
time bound scale, as the case may be, his pay will be fixed as if he has
been promoted in the ordinary course i.e., by allowing promotional
increment(s). Likewise a direct recruit on completion of nine years regular
service will draw minimum of the promotional time bound revised scale
irrespective of difference of more than five increments between the pay
drawn by him on completion of 9 years service and the minimum of this
promotional revised time bound scale and in the event of his pay having
already crossed the minimum of this promotional revised time bound scale
or promotional time bound scale, as the case may be, his pay will be fixed
as he has promoted in the ordinary course i.e. by allowing promotional
increment(s).

The scheme to allow `Time Bound benefit of Promotional Scale' will take
effect from 1.1.1986. However, the payment of arrears would be spread
over to two years i.e. arrears from 1.1.1986 to 28.2.89 and 1989-90 would
be paid in 1990-91 and 1991-92, respectively.

Features of the Scheme:-

1. The benefit of first time bound placement into promotional/revised
promotional scale, as determined and notified on the basis of
principles enunciated above, would become available to an employee
on completion of 9 (Nine) years of regular service on a post and the
second time bound Promotional/Revised Promotional Scale would
become available after completion of 16 (sixteen) years of service. If an
employee gets normal promotion to the next higher post before
completion of 9 years service from the date of direct recruitment then
he will not be given first time bound Promotional/Revised Promotional
scale. He will be eligible to get second time bound
Promotional/Revised Promotional Scale after the completion of 16
years of service counted from the date of direct recruitment provided
he does not earn second normal promotion before the completion of
the above said 16 years of service. Further, an employee placed into
the first Promotional/Revised Promotional Scale on account of high
length of service will not be placed into the second
Promotional/Revised Promotional Scale before completion of at least
three years from the date of his placement into the first promotional
revised promotional scale.

For example an employee who has completed 17 years of service in an
induction post and was not promoted upto 1.1.1986, will be allowed 1st
time bound Promotional/Revised Promotional Scale on 1.1.1985 and the
2nd time bound Promotional/Revised Promotional Scale will be admissible
on 1.1.1989 i.e. after completion of three years service in the first time
bound Promotional/Revised Promotional Scale.

2. For granting the time bound Promotional/Revised Promotional Scale
to each employee in any cadre, the prescribed period will be counted
from the date of commencement of service on the lowest post on which
regular appointment has been made through direct recruitment in the
concerned cadre.

3. At the time of placement in the time bound Promotional/Revised
Promotional Scale, the employee will be allowed promotional
increment(s), as are admissible on promotion under the provisions of
Regulation 8 of PSEB (Revised Pay) Regulations, 1988 and as
amended from time to time.

4. If an employee already in the service of the Board is directly appointed
to a higher post through open selection then for the purpose of grant of
time bound Promotional/Revised Promotional Scale in that cadre
counting of the period of service will commence from the date of
joining the above post by direct recruitment.

5. The Board shall draw up schedule(s) indicating the lowest post(s) for
direct recruitment in respect of various cadres for the purpose of this
order, separately.

Xx xx xx xx xx

i) The Punjab State Elecy. Board has further decided to allow

benefit of promotional increment(s) to an employee on
completion of 23 years of regular service provided:-

ii) He has not been benefited by the scheme of 9/16 years time
bound promotional scale.

iii) He has not earned three regular promotions in his career.

iv) He has not earned third promotion in his regular service
between 16th and 23rd years of service.

v) The increments referred to in para-2 above are in the nature of
advance promotional benefit to be absorbed in next regular
promotion.

Sd/-

Deputy Secretary/Finance."

(Emphasis added)

3. The respondents, who were engaged as work charged employees in the
service of the Board between 18.11.1971 and 23.10.1993 and were appointed on
regular basis on different dates between 7.11.1979 and 26.5.1999, filed writ petitions
for issue of a direction to the Board and its officers to count their work charged
service for the purpose of grant of time bound promotional scales/promotional
increments from the date of completion of 9/16/23 years service.

4. The appellants contested the claim of the respondents by asserting that
benefit of time bound promotional scales can be given only from the date of
completion of 9/16 years regular service and promotional increments can be given on
completion of 23 years regular service and that work charged service cannot be
equated with regular service for the said purpose.
In the counter-affidavit filed on
behalf of the appellants, reliance was placed upon the judgments of this Court in

State of Haryana v. Haryana Veterinary & AHTS Association and another
[(
2000) 8
SCC 4] and State of Punjab and others v. Gurdeep Kumar Uppal and others
[(2003)
11 SCC 732] and it was averred that work charged service rendered by the writ-
petitioners (respondents herein) cannot be counted for extending them the benefit of
time bound promotional scales and /or promotional increments.

5. The Division Bench of the High Court did not advert to the rival
pleadings and contentions but granted relief to the writ petitioners by simply relying
upon order dated 31.10.2000 passed in Civil Appeal Nos. 5740-5741/1997, State of
Haryana and ors. v. Ravinder Kumar & ors.

6. Learned counsel for the appellants argued that work charged service
cannot be treated as regular service for the purpose of the scheme framed by the
Board for grant of time bound promotional scales on completion of 9/16 years of
regular service or promotional increments on completion of 23 years of regular
service because the work charged employees are not appointed after following the
procedure prescribed for regular appointment. He further argued that work charged
employees constitute a separate class and they cannot claim parity with regular
employees in the matter of seniority, pay fixation, promotion, etc. Learned counsel
for the respondents argued that even though the work charged service is not
synonymous with regular service, the High Court did not commit any error by
directing grant of benefit of the scheme to respondents because their services were
subsequently regularized. They strongly relied on instructions issued by the State
Government vide circular No.100012/39/2002-5 P-22/9406 dated 17th July, 2002 and
argued that after having implemented the order passed by the High Court in Civil
Writ Petition No.4382 of 2002, Satbir Singh and others v. State of Haryana, the
appellants cannot deny them benefit of time bound promotional scales/ promotional
increments on the spacious ground that work charged service cannot be clubbed with
regular service.

7. We have considered the respective submissions. Generally speaking, a
work charged establishment is an establishment of which the expenses are chargeable
to works. The pay and allowances of the employees who are engaged on a work
charged establishment are usually shown under a specified sub-head of the estimated
cost of works. The work charged employees are engaged for execution of a specified
work or project and their engagement comes to an end on completion of the work or
project. The source and mode of engagement/recruitment of work charged
employees, their pay and conditions of employment are altogether different from the
persons appointed in the regular establishment against sanctioned posts after
following the procedure prescribed under the relevant Act or rules and their duties
and responsibilities are also substantially different than those of regular employees.
The work charged employees can claim protection under the
Industrial Disputes Act

or the rights flowing from any particular statute but they cannot be treated at par
with the employees of regular establishment. They can neither claim regularization of
service as of right nor they can claim pay scales and other financial benefits at par
with regular employees. If the service of a work charged employee is regularized
under any statute or a scheme framed by the employer, then he becomes member of
regular establishment from the date of regularization. His service in the work charged
establishment cannot be clubbed with service in a regular establishment unless a
specific provision to that effect is made either in the relevant statute or the scheme of
regularization. In other words, if the statute or scheme under which service of work
charged employee is regularized does not provide for counting of past service, the
work charged employee cannot claim benefit of such service for the purpose of
fixation of seniority in the regular cadre, promotion to the higher posts, fixation of
pay in the higher scales, grant of increments etc.

8.
In
Jaswant Singh and others vs. Union of India and others
[(1979) 4 SCC
440], this Court considered the issue relating to nature of work charged
establishment, status of work charged employees and held that the employees
appointed on work charged establishment are not entitled to service benefits available
to regular employees.

9.
In
State of Rajasthan v. Kunji Raman
[(1997) 2 SCC 517], the Court
considered the questions whether principle of equal pay for equal work can be
invoked for granting parity to the work charged employees with regular employees
and whether the provisions of the Rajasthan Service (Concessions on Project) Rules,
1962 and Rajasthan Service Rules, 1951 are violative of
Articles 14
and
of the
Constitution of India inasmuch as the same do not treat employees of the work
charged establishment at par with regular employees.

After noticing the earlier
judgment in
Jaswant Singh
's case, the Court held:

"A work-charged establishment thus differs from a regular
establishment which is permanent in nature. Setting up and
continuance of a work-charged establishment is dependent upon the
Government undertaking a project or a scheme or a "work" and
availability of funds for executing it. So far as employees engaged in
work-charged establishments are concerned, not only their
recruitment and service conditions but the nature of work and duties
to be performed by them are not the same as those of the employees
of the regular establishment. A regular establishment and a work-
charged establishment are two separate types of establishments and
the persons employed on those establishments thus form two
separate and distinct classes. For that reason, if a separate set of
rules are framed for the persons engaged in the work-charged
establishment and the general rules applicable to persons working
on the regular establishment are not made applicable to them, it
cannot be said that they are treated in an arbitrary and
discriminatory manner by the Government. It is well settled that the
Government has the power to frame different rules for different
classes of employees. We, therefore, reject the contention raised on
behalf of the appellant in Civil Appeal No. 653 of 1993 that clauses

(g), (h) and (i) of Rule 2 of RSR are violative of
Articles 14
and
of
the Constitution and uphold the view taken by the High Court.

The Project Rules have been framed by the Government in exercise
of the power available to it under Rule 42 of the RSR. They are
subsidiary rules made for the purpose of granting special
concessions and allowances to government servants working on
projects. When non-application of the main rules, namely, RSR to
work-charged employees is not found to be violative of
Articles 14

and
by the High Court it is difficult to appreciate how the
subsidiary rules for that reason only can be held to be violative of
those articles. The High Court failed to consider this aspect and in
our opinion, erroneously struck down Rules 2(b) and (d) of the 1962
Project Rules and Rules 4(2) and (4) of the 1975 Project Rules.

It was also contended on behalf of the State that the High Court
having held that the workmen working on the regular establishment
and the employees working on a work-charged establishment belong
to two separate categories and, therefore, separate classification
made by the Government in that behalf is reasonable, committed a
grave error in striking down Rules 2(b) and (d) of the 1962 Project
Rules and Rules 4(2) and (4) of the 1975 Project Rules by invoking
the principle of equal pay for equal work. The reason given by the
High Court for taking that view is that the project allowance is
compensatory in nature and, therefore, the classification made
between the work-charged employees and the employees of the
regular establishment has no rational nexus with the object sought to
be achieved by those Rules. What the High Court failed to
appreciate is that when an employee working in the regular
establishment is transferred to a project he has to leave his ordinary
place of residence and service and go and reside within the project
area. That is not the position in the case of an employee who is
engaged in the work-charged establishment for executing that work.
Respondent Kunji Raman and other employees on whose behalf he
had filed the petition were all engaged for execution of the Mahi
Project and thus they became a part of the work-charged
establishment of Mahi Project. They were not required to shift from
their regular place of service. The High Court also failed to consider
that for such employees the pay scales under the Pay Scale Rules are
also different. The material produced by the State goes to show that
while fixing the pay scales of employees of the work-charged
establishment of Mahi Project the element of project allowance was
also included therein and for that reason their pay scales were higher
than the pay scales of general category work-charged employees,
some of whom were transferred and posted on the Mahi Project.
Except a general denial in the rejoinder-affidavit by Kunji Raman no
other material has been produced to point out that the said claim of
the Government is not correct. The order dated 30-4-1981 annexed
with the rejoinder-affidavit of Kunji Raman is with respect to those
work-charged employees who were absorbed on 43 regular posts
were newly created. They thus ceased to be work-charged employees
employed on a project and became general category work-charged
employees whose pay scales were different and were, therefore, paid
the project allowance. Thus the claim made by respondent Kunji
Raman and other similarly situated employees for granting them
project allowance was really misconceived. From what is now stated
by them in the counter-affidavit, it appears that what they really
want is parity in all respects with the employees of the regular
establishment. In other words, what they want is that they should be
treated as regular employees of the Public Works Department of the
Rajasthan Government and should be given all benefits which are
made available under the RSR and the Project Rules. Such a claim is
not justified and, therefore, the contention raised in that behalf
cannot be accepted."

10. The ratio of the above mentioned judgments is that work charged
employees constitute a distinct class and they cannot be equated with any other
category or class of employees much less regular employees and further that the work
charged employees are not entitled to the service benefits which are admissible to
regular employees under the relevant rules or policy framed by the employer.

11. What to say of work charged employees even those appointed on ad hoc
basis cannot claim parity with regular employees in the matter of pay fixation, grant of
higher scales of pay, promotion etc.
In
State of Haryana vs. Haryana Veterinary &
AHTS Association and another
(supra), a three-Judge Bench considered the question
whether service of an employee appointed on adhoc basis can be equated with that of
regular employee for the purpose of grant of selection grade in terms of the policy
contained in circulars dated 2nd June, 1989 and 16th May, 1990 issued by the
Government of Haryana and answered the same in negative. The facts of that case
were that one Rakesh Kumar Singla who joined service as Assistant Engineer on adhoc
basis on 4.1.1980 was appointed on regular basis with effect from 29.8.1982 after
selection by the Public Service Commission. He represented to the government for
grant of selection grade on completion of 12 years service commencing from 4.1.1980.
As the government did not accede to his request, Rakesh Kumar Singla filed writ
petition in the High Court. On a reference made by the Division Bench, the matter
was placed before a bench of three-Judges. By majority judgment, the larger bench
held that the service rendered by an employee on the basis of adhoc appointment must
be clubbed with his regular service for the purpose of grant of selection grade in terms
of the policy framed by the State Government. This Court reversed the judgment of
the High Court and held:

"Coming to the circular dated 2-6-1989, issued by the Financial
Commissioner and Secretary to the Government of Haryana,
Finance Department, it appears that the aforesaid circular had
been issued for removal of anomalies in the pay scale of Doctors,
Deputy Superintendents and Engineers, and so far as Engineers are
concerned, which are in Class I and Class II, it was unequivocally
indicated that the revised pay scale of Rs.3000 to Rs.4500 can be
given after completion of 5 years of regular service and Rs.4100 to
Rs.5300 after completion of 12 years of regular service. The said
Financial Commissioner had issued yet another circular dated 16-5-
1990, in view of certain demands made by officers of different
departments. The aforesaid circular was issued after
reconsideration by the Government modifying to some extent the
earlier circular of 2-6-1989, and even in this circular it was
categorically indicated that so far as Engineers are concerned, they
would get Rs.3000 to 4500 after 5 years of regular and satisfactory
service and selection grade in the scale of pay of Rs.4100 to
Rs.5300, which is limited to the extent of 20% of the cadre post
should be given after 12 years of regular and satisfactory service.
The aforesaid two circulars are unambiguous and unequivocally
indicate that a government servant would be entitled to the higher
scale indicated therein only on completion of 5 years or 12 years of
regular service and further the number of persons to be entitled to
get the selection grade is limited to 20% of the cadre post. This
being the position, we fail to understand how services rendered by
Rakesh Kumar from 1980 to 1982, which was purely on ad hoc
basis, and was not in accordance with the statutory rules can be
taken into account for computation of the period of 12 years
indicated in the circular. The majority judgment of the High Court
committed serious error by equating expression "regular service"

with "continuous service". In our considered opinion under the
terms and conditions of the circulars dated 2-6-1989 and 16-5-
1990, the respondent Rakesh Kumar would be entitled for being
considered to have the selection grade on completion of 12 years
from 29-1-1982 on which date he was duly appointed against a
temporary post of Assistant Engineer on being selected by the
Public Service Commission and not from any earlier point of time.
The conclusion of the majority judgment in favour of Rakesh
Kumar, therefore, cannot be sustained."

The Court then referred to the provisions contained in the Haryana Service of
Engineers, Class-II, Public Works Department (Irrigation Branch) Rules, 1970 and
held:-

"A combined reading of the aforesaid provisions of the Recruitment
Rules puts the controversy beyond any doubt and the only
conclusion which could be drawn from the aforesaid Rules is that the
services rendered either on an ad hoc basis or as a stopgap
arrangement, as in the case in hand from 1980 to 1982 cannot be
held to be regular service for getting the benefits of the revised scale
of pay or of the selection grade under the government memorandum
dated 2-6-1989 and 16-5-1990, and therefore, the majority judgment
of the High Court must be held to be contrary to the aforesaid
provisions of the Recruitment Rules, consequently cannot be
sustained. The initial letter of appointment dated 6-12-1979
pursuance to which respondent Rakesh Kumar joined as an
Assistant Engineer on an ad hoc basis in 1980 was also placed before
us. The said appointment letter unequivocally indicates that the offer
of appointment as Assistant Engineer was on ad hoc basis and
clauses 1 to 4 of the said letter further provides that the appointment
will be on an ad hoc basis for a period of 6 months from the date of
joining and the salary was a fixed salary of Rs.400 p.m. in the scale
of Rs.400 to Rs.1100 and the services were liable to be terminated
without any notice and at any time without assigning any reason and
that the appointment will not enable the appointee any seniority or
any other benefit under the Service Rules for the time being in force
and will not count towards increment in the time scale. In view of the
aforesaid stipulations in the offer of appointment itself we really fail
to understand as to how the aforesaid period of service rendered on
ad hoc basis can be held to be service on regular basis. The
conclusion of the High Court is contrary to the very terms and
conditions stipulated in the offer of appointment and, therefore, the
same cannot be sustained. The regular letter of appointment dated
29-1-1982 in favour of Rakesh Kumar was also produced before us
and that letter indicates that the respondent Rakesh Kumar along
with others had applied to the Secretary, Haryana Public Service
Commission for being appointed as an Assistant Engineer and the
Service Commission after selecting the number of persons prepared
a list and appointment letters were issued by the Government from
the said list on the basis of the merit position of different candidates.
Thus the appointment of respondent Rakesh Kumar was a fresh
appointment in accordance with the statutory rules after the Public
Service Commission adjudged their suitability and the regular
service of the respondent Rakesh Kumar must be counted from the
date he joined the post pursuant to the offer of appointment dated
29-1-1982 and the prior service rendered by him on ad hoc basis
cannot be held to be regular service nor can it be tagged on to the
later service for earning the benefit under the government circular
dated 2-6-1989 as well as the clarificatory circular dated 16-5-1990.
The conclusion of the majority judgment of the High Court,
therefore, is wholly erroneous and cannot be sustained."

12.
In
State of Punjab and others v. Ishar Singh and others
[(
2002) 10 SCC
674] and State of Punjab and others v. Gurdeep Kumar Uppal and others
[(2003) 11
SCC 732], the two-Judge Benches referred to the judgment in
State of Haryana v.
Haryana Veterinary & AHTS Association
(supra) and held that adhoc service rendered
by the respondents cannot be clubbed with their regular service for the purpose of
grant of revised pay scales, senior/selection grade, proficiency step-up and for fixation
of seniority.

13. A reading of the scheme framed by the Board makes it clear that the benefit
of time bound promotional scales was to be given to the employees only on their
completing 9/16 years regular service. Likewise, the benefit of promotional increments
could be given only on completion of 23 years regular service. The use of the term
`regular service' in various paragraphs of the scheme shows that service rendered by an
employee after regular appointment could only be counted for computation of 9/16/23
years service and the service of a temporary, adhoc or work charged employee cannot
be counted for extending the benefit of time bound promotional scales or promotional
increments. If the Board intended that total service rendered by the employees
irrespective of their mode of recruitment and status should be counted for the purpose
of grant of time bound promotional scales or promotional increments, then instead of
using the expression `9/16 years regular service' or `23 years regular service', the
concerned authority would have used the expression `9/16 years service' or `23 years
service'. However, the fact of the matter is that the scheme in its plainest term
embodies the requirement of 9/16 years regular service or 23 years regular service as a
condition for grant of time bound promotional scales or promotional increments as the
case may be. For the reasons mentioned above, we hold that the respondents were not
entitled to the benefit of time bound promotional scales / promotional increments on a
date prior to completion of 9/16/23 years regular service and the High Court committed
serious error by directing the appellants to give them benefit of the scheme by counting
their work charged service.

14. The order passed by this Court in
Ravinder Kumar
's case is clearly
distinguishable. In that case, counsel appearing for the State had conceded that period
during which an employee had worked on work charged basis is counted for the
purpose of grant of increment as well as for computation of qualifying service for
pension. In view of his statement, the Court held that there is no reason why such
service should not be counted for the purpose of giving additional increment on
completion of 8/12 years service and higher scale on completion of 10/20 years service.
The order does not contain any discussion on the issue whether the work charged
service can be equated or clubbed with regular service for grant of service benefits
admissible to regular employees. Therefore, the same cannot be treated as laying down
any proposition of law which can be treated as precedent for other cases.

15. The instructions issued by the State Government on 17th July, 2002 for
implementation of the order passed in C.W.P. No.4382 of 2002, Satbir Singh and
others v. State of Haryana are also of no help to the respondents' cause. The order
passed by the High Court was binding and the same had to be given effect to and in
the absence of any stay by this Court, the Government was bound to give effect to the
same. Even if the benefit of that order was extended to some other employees, the
same cannot be relied upon for interpreting the scheme framed by the Board. In any
case, the view expressed by the High Court in Satbir Singh's case (supra) cannot be
made basis for granting relief to the respondents by ignoring the law laid down by this
Court in the judgments referred to herein above.

16. In the result, the appeals are allowed, the impugned orders are set aside and
the writ petitions filed by the respondents are dismissed. However, the parties are left
to bear their own costs.

......................J.
[B.N. AGRAWAL]

......................J.
[G.S. SINGHVI]
New Delhi,
February 12, 2009.