2006 (12) TMI 519 - SC - Indian Laws

Appointment on a contractual basis - Applicability of a policy decision of the State - Scheme of regularization of services of the employees - legal right - policy decision adopted in terms of Article 162 of the Constitution of India - irregular and illegal appointments - HELD THAT - In the instant case, the High Court did not issue a writ of mandamus on arriving at a finding that the respondents had a legal right in relation to their claim for regularization, which it was obligated to do. It proceeded to issue the directions only on the basis of the purported policy decision adopted by the State. It failed to notice that a policy decision cannot be adopted by means of a circular letter and, as noticed hereinbefore, even a policy decision adopted in terms of Article 162 of the Constitution of India in that behalf would be void. Any departmental letter or executive instruction cannot prevail over statutory rule and constitutional provisions. Any appointment, thus, made without following the procedure would be ultra vires. This Court, recently in Indian Drugs Pharmaceuticals Ltd. v. Workman, Indian Drugs Pharmaceuticals Ltd. 2006 (11) TMI 655 - SUPREME COURT , opined that rules of recruitment cannot be relaxed and the Courts/Tribunals cannot direct regularization of temporary appointees de hors the rules, nor can it direct continuation of service of a temporary employee (whether called a casual, ad hoc or daily rate employee) or payment of regular salaries to them. It was faintly suggested that as the respondents are qualified to hold the posts and they had been continuously working for a long time, this Court may not interfere with the impugned judgment. On the face of a catena of decisions of this Court, we cannot accept the said submission. An endeavor was made also to submit that the respondents were employed on daily rated basis and their services were transferred to the Corporation. No such case was made out and in any event, as and when the respondents themselves agreed to be appointed on a contractual basis by the appellant-Board, at this juncture they cannot be heard to say that the purported transfer of their services by the State of Punjab to the appellant- Board was illegal. Even no such case has been made out in the special leave petition. Thus, the impugned judgment cannot be sustained. They are set aside accordingly. Appeals are allowed.

Summary

Issues Involved:
1. Applicability of the State's policy decision regarding regularization of services.
2. Legal status of the employees' appointments.
3. Authority of the State's directives over statutory bodies.
4. Validity of the High Court's judgment.

Detailed Analysis:

1. Applicability of the State's Policy Decision Regarding Regularization of Services:
The appeals questioned the applicability of a purported policy decision by the State of Punjab regarding the regularization of services of employees engaged on a contract basis by the Appellant-Board. The respondents were engaged in schemes for maintenance of water supply and sewerage lines, and their services were terminated. They sought regularization based on the State's schemes dated 23.1.2001 and 28.3.2003, which were rejected by the appellant.

2. Legal Status of the Employees' Appointments:
The Court noted that the statutory board is an autonomous body, and no evidence was presented to show that any directive from the State would be binding on it under the statute. The statutory bodies must adhere to recruitment rules laid down under statutory rules and implement the constitutional scheme of equality as per Articles 14 and 16 of the Constitution of India. The Court emphasized that appointments made without following the prescribed procedure are illegal, and no right to regularization can be claimed based on such erroneous appointments.

3. Authority of the State's Directives Over Statutory Bodies:
The Court observed that the State's control over the recruitment of employees of local authorities must be exercised strictly according to the provisions of the Act. The purported directions from the State, communicated through circular letters, were not statutory instruments and could not supersede statutory rules. Even a scheme issued under Article 162 of the Constitution of India would not prevail over statutory rules.

4. Validity of the High Court's Judgment:
The High Court directed the appellant to reinstate the respondents and regularize their services based on the State's policy decision. However, the Supreme Court found that the High Court did not address whether the respondents had a legal right to regularization. The High Court's reliance on the State's policy decision was flawed as such decisions cannot be adopted by circular letters or executive instructions that contradict statutory rules and constitutional provisions. The Supreme Court cited several precedents, including the Constitution Bench's decision in Secretary, State of Karnataka v. Umadevi and Ors., which held that no person employed temporarily or casually could be directed to be continued permanently, thereby creating another mode of public employment not permissible under the Constitution.

The Supreme Court concluded that the High Court's judgment could not be sustained and set it aside, emphasizing that any appointment made without following the proper procedure would be ultra vires. The appeals were allowed, and no costs were awarded.