2006 (12) TMI 446 - SC - Indian Laws

Status of transferred employees - whether their service conditions were well protected under the Rules governing them in the Parent Department and whether they were permanently transferred to GPVAs or on deputation has been set at rest and it has become final. Whether it is deputation simpliciter or transfer? Held thaat - the expression Transfer is used in Section 25 loosely. They were actually sent on deputation keeping their lien with their Parent Departments. Once we hold that the respondents were on deputation to Gram Panchayats, the position of deputation in service is well settledthe expression Transfer is used in Section 25 loosely. They were actually sent on deputation keeping their lien with their Parent Departments. Once we hold that the respondents were on deputation to Gram Panchayats, the position of deputation in service is well settled. The judgment and order of the Division Bench quashing G.O. dated 19.7.2005, 25.1.2006 and 8.9.2005 the direction that the Tube-well Operators and part-time Tube-well Operators are inextricably connected with the cadre of Gram Panchayat Vikas Adhikari; the direction that the Part-time Tube-well Operators shall be treated as permanent employees are all hereby, set aside.

Issues Involved:
1. Constitutionality of the Government Orders transferring employees to Gram Panchayats.
2. Status of employees transferred to Gram Panchayats.
3. Judicial discipline and adherence to previous judgments.
4. Validity of the Government Orders repatriating employees to their parent departments.
5. Legitimate expectation of the employees.
6. Interpretation of Section 25 of the U.P. Panchayat Raj Act, 1947.
7. Whether the transfer was deputation or permanent transfer.

Detailed Analysis:

1. Constitutionality of the Government Orders Transferring Employees to Gram Panchayats:
The Constitution (Seventy-third Amendment) Act, 1992, aimed to give effect to Article 40 of the Constitution, directing the State to organize village panchayats as units of self-government. Article 243G was introduced, allowing the State Legislature to endow Panchayats with powers necessary for functioning as self-governments. To implement this, the Uttar Pradesh Panchayat Raj Act, 1947, was amended, and Government Orders (GOs) were issued transferring employees from various departments to Gram Panchayats. The employees challenged these orders on grounds of arbitrariness and interference with their statutory rights under Service Rules made under Article 309 of the Constitution.

2. Status of Employees Transferred to Gram Panchayats:
The High Court upheld the validity of the new Section 25 and the G.O. dated 1.7.1999, stating that the transferred employees remained Government Servants governed by their original Service Rules and were on deputation to Gram Panchayats. This status was further confirmed by subsequent Government Orders repatriating employees to their parent departments, which were upheld by the High Court.

3. Judicial Discipline and Adherence to Previous Judgments:
The Supreme Court emphasized the importance of judicial discipline, stating that decisions of a co-ordinate Bench must be respected and are binding. The Division Bench of the High Court erred by deviating from previous judgments without any new facts justifying a different decision. The Court referred to Kalyan Chandra Sarkar v. Rajesh Ranjan @ Pappu Yadav & Anr. (2005) 2 SCC 42, emphasizing that findings of a higher court or a coordinate Bench must receive serious consideration.

4. Validity of the Government Orders Repatriating Employees to Their Parent Departments:
The Supreme Court found that the High Court erred in setting aside the repatriation orders without hearing the affected employees, violating principles of natural justice. The Court cited Ishwar Singh Ajai Kumar & Ors. v. Kuldeep Singh and Ors. 1995 Supp (1) SCC 179, and B. Ramanjini & Ors. v. State of U.P. & Ors. (2002) 5 SCC 533, establishing that orders affecting parties' substantial rights must be made after hearing them.

5. Legitimate Expectation of the Employees:
The High Court's finding on legitimate expectation was criticized as there was no pleading in the original petition about it. The Supreme Court held that the High Court's observations at the appellate stage induced some appellants to urge this ground, which was not permissible. The Court referred to National Building Construction Corporation v. S. Raghunathan & Ors. (1998) 7 SCC 66, emphasizing that legitimate expectation must be based on clear and consistent past practice.

6. Interpretation of Section 25 of the U.P. Panchayat Raj Act, 1947:
Section 25 allowed the State Government to transfer employees to Gram Panchayats, where they would serve under the supervision and control of the Panchayats but retain their original service conditions and rights. The Supreme Court clarified that the term "transfer" in Section 25 was used loosely and meant deputation, as the employees retained their lien in their parent departments and continued to be governed by their original Service Rules.

7. Whether the Transfer was Deputation or Permanent Transfer:
The Supreme Court held that the employees were on deputation to Gram Panchayats, retaining their lien with their parent departments. The Court cited Kunal Nanda v. Union of India and another (2005) 5 SCC 362, stating that a person on deputation can be repatriated to their parent department at any time. The Court also dismissed the contention that the State Government could only transfer employees within the Panchayat system, affirming its power to repatriate them to their parent departments.

Conclusion:
The Supreme Court set aside the High Court's judgment quashing the repatriation orders and restored the Single Judge's order. The employees were directed to resume duties in their parent departments within two weeks. The appeals were allowed, and the writ petitions challenging the repatriation orders were dismissed.

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