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TMI Blog2008 (11) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 2728 of 2001 filed by Smt. Daya Dua and others in Delhi High Court, the record of these appeals and documents filed/produced by the learned counsel for the parties during the pendency of the appeals. These are: (i) There are two categories of employees in the offices of the Official Liquidators attached to different High Courts. The first category comprises of the employees who are appointed against the posts sanctioned by the Government of India, Department of Company Affairs. They are recruited in accordance with the procedure prescribed in the rules framed under proviso to Article 309 of the Constitution and the doctrine of equality enshrined in Articles 14 and 16 and are paid salaries and allowances from the Consolidated Fund of India. The second category comprises of the persons employed/engaged by the Official Liquidators pursuant to the sanction accorded by the concerned Court under Rule 308 of the 1959 Rules. The employees falling in this category are described as company paid staff. They are paid salaries and allowances from the fund created by disposal of the assets of the companies in liquidation. (ii) For Calcutta High Court, the Central Government had appointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the office of the Official Liquidator. The Division Bench of that High Court took cognizance of the fact that there were two sets of employees under the Official Liquidator - (1) employees appointed by the Central Government, and (2) employees (14 in number) appointed by the Official Liquidator between 1980 and 1989 under Rule 308 of the 1959 Rules; that all the employees were doing the same work but were being paid different salaries and held that there was no rational basis for according unequal treatment to similarly situated employees. The Division Bench then referred to the 1978 Scheme, judgments of this Court in Narender Chadha vs. Union of India [1986 (2) SCC 157], Dhirendra Chamoli vs. State of U.P. [1986 (1) SCC 637], Surinder Singh and Another vs. Engineer-in-Chief, CPWD and Others [1986 (1) SCC 639], H.C. Puttaswamy vs. Hon'ble Chief Justice of Karnataka High Court, Bangalore [1991 (2) Supp. SCC 421], Bhagwati Prasad vs. Delhi State Mineral Development Corporation [1990 (1) SCC 361], Jacob M. Puthuparambil vs. Kerala Water Authority [1991 (1) SCC 28], Delhi Development Horticulture Employees' Union vs. Delhi Administration, Delhi [1992 (4) SCC 99], State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etic attitude and that in the light of the several judgments of the Supreme Court, the appointees are entitled to regularisation and salaries as paid to the regular employees in the office of the Official Liquidator at least from three years prior to the date of the judgment of the Single Judge of the Calcutta High Court and in the Kerala cases from the date of appointment. On the other hand, Mr. Malhotra, learned Senior Counsel appearing for the Union of India submitted that the appointees were not appointed by the Government and they were not paid salaries from the consolidated fund. On the other hand, they were paid salaries from the companies concerned under liquidation. In certain High Courts, there are Official Liquidators and Court Liquidators appointed under Section 38-A of Banking (Regulation) Act. The banking companies under liquidation originally were 75, now only there are 32 banking companies under liquidation. The appointment under court orders are not for a permanent department like Official Liquidator's office and, therefore, the appointees cannot demand regularization and payment of equal salary as that of salaries paid to regular employees in the office of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them and dismissed the appeals. The transferred writ petition was allowed in similar terms - Govt. of India and others vs. Court Liquidator's Employees Association and others [1999 (8) SCC 560]. Paragraphs 21 to 24 of the judgment which have bearing on these cases read as under: 21. In view of the peculiar facts of these cases and the positive findings of the High Courts with which we concur, we are unable to agree with the contention of the learned Senior Counsel for the appellants that the company-paid staff cannot be absorbed/regularised as they were not employed by the Government in accordance with the rules; that they knew their appointments were only temporary and that their pay was not from the consolidated fund. 22. Undoubtedly, counsel on both sides cited numerous authorities of this Court on earlier occasions sustaining the orders of absorption and setting aside the orders of absorption. We do not consider it necessary to refer to those decisions inasmuch as the facts presented before us and the findings rendered by the High Courts speak for themselves. As a matter of fact, the Government had considered as one of the options to absorb the company-paid staff as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Regional Director Department of Company Affairs Mumbai/Calcutta/Chennai/Kanpur. Sub: Absorption of company paid staff of the offices of Official Liquidators against Group C posts in the subordinate offices of the Department of Company Affairs on the lines of scheme devised in 1978 - Supreme Court's judgment - regarding. I am directed to refer to the Hon'ble Supreme Court's Judgment dated 27.08.99 (copy enclosed) on the subject mentioned above and to say that further action in the matter of absorption of the Company Paid Staff in regular Government service may please be taken on the following lines:- (i) Only such Company Paid Staff of the offices of the Official Liquidators shall be eligible for regular absorption: (a) Who were in position as on 27.08.99 and (b) Who possess the requisite educational qualification laid down in the recruitment rules for the post against which they are to be absorbed. The Regional Directors, in their capacity as Heads of Departments, may consider the relaxation of age limits in deserving cases in accordance with the general instructions existing in this regard. (ii) The Company Paid Staff can be absorbed against onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recommendation of the Selection Committee will not confer any right on any Company Paid Staff for being appointed in Government service. 3. A quarterly report beginning with the quarter ended 31.12.99 may be sent to the Headquarters indicating the extent to which the Company Paid Staff has been absorbed in regular Government service." 12. Thereafter, the concerned authorities undertook exercise for absorption of the company paid staff in the regular cadres of the Department of Company Affairs. As a result of this, 295 out of 399 company paid staff who were in position on 27.8.1999 were adjudged suitable. of them 130 have been absorbed and 141 are awaiting orders. 104 were not recommended for absorption. 23 of the company paid staff either refused absorption or resigned or retired from service. 13. In the meanwhile, the company paid staff working under the Official Liquidators of Calcutta and Delhi High Courts filed writ petitions and prayed for issue of mandamus to the Union of India and others to absorb them in the regular cadres and to treat them at par with Central Government employees working in the office of the Official Liquidators. Pleadings of the parties before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared to a Central Government employee. 7. Although your petitioners have all requisite qualifications, experience, your petitioners were denied their right to work with utmost dignity and compelled to work in the office of respondent No. 3 with a temporary status, without any service benefits as admissible to a Central Government employee in similarly situated conditions. In a society, where unemployment is curse, your petitioners have had no other alternative but to accept the terms of service, as dictated by the respondents from time to time for running their office through your petitioners. 18. Your petitioners state that they were not a party in the said proceedings, before the Hon'ble Supreme Court of India, hence the aforesaid order of the Hon'ble Supreme Court of India, is not applicable to your petitioners. Your petitioners further state that the words other High Courts' as referred by the Hon'ble Apex Court is not meant for all the High Courts all over India, but it referred to those two High Courts, the staffs of the Official Liquidator of the Kerala High Court and/or of the Delhi High Court only. 26. Your petitioners state that purported scheme, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id staff, but the 1999 Scheme is confined to Group C' posts and the employees who are eligible for absorption against Group D' posts are being discriminated. Another plea taken by the petitioners was that only 11 of company paid staff have been absorbed/regularized against Group C' posts and others have been left out in lurch. Clauses (a), (b) and (c) of the prayer clause of Writ Petition No. 2728 of 2001 read as under:- "a) regularize the service of the petitioners in Group C' Central Government posts from the date of their initial appointment; b) without prejudice to prayer (a) above, in the alternate, frame Scheme as directed by the Hon'ble Supreme Court for absorption of all the petitioners in Group C' Central government posts giving therein due regard to their seniority as Group C' company paid staff and providing therein time bound regularization of all the petitioners which is the letter and spirit of the directions of the Hon'ble Supreme Court dated 27.8.1999 in W.P. (C) No. 473/1988; c) pay the petitioners salary and allowances at par with the Central Government appointed regular group C' staff in the office of the Official Liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and others (supra), the learned Single Judge then prepared a comparative table of the two schemes and held that the 1999 Scheme is illusory because all the company paid staff cannot be absorbed against 50% vacancies of the direct recruitment quota. On the issue of absorption of the company paid staff against Group D' posts, the learned Single Judge observed that there is no rational reason to confine the benefit of the 1999 Scheme qua Group C' posts. He also delved into the legality of the absorption of respondent Nos. 5 to 26 and held that the recommendations made by the Selection Committee de hors the seniority of the company paid staff has the effect of vitiating the selection. He, however, declined to nullify the absorption of the private respondents on the ground of delay and laches and proceeded to direct the respondents to prepare fresh merit list strictly in the order of seniority. The learned Single Judge also directed respondents to consider the desirability of increasing the quota of 50% by creating supernumerary posts. The operative part of the order passed by the learned Single Judge reads thus: "The State respondents shall consider their scheme 1999 afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the offices of the different Official Liquidators of the different High Courts. We are in agreement with the sentiments expressed by the learned Single Judge that no a section but all the company paid staff working in the office of the Official Liquidator upto the cut off date as provided in the 1999 Scheme are to be absorbed in the office of the Official Liquidator, High Court at Calcutta, even if it means by creation of supernumerary post as observed by the learned Single Judge. Needless to say, such posts will be personal to those appointed and will cease to be in existence upon the incumbent attaining the age of superannuation." W.P. No. 2728/2001 (Delhi High Court) 21. The learned Single Judge referred to the judgment in Govt. of India and Others vs. Court Liquidator's Employees Association and Others (supra) and negatived the plea of the appellants herein that the company paid staff can be absorbed in the regular cadre only against Group C' posts to the extent of 50% of direct recruitment quota and held that the writ petitioners are entitled to be absorbed against Group C and D' posts and their entire service upto the date of absorption has to be counted for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrears of three years which shall be paid by the respondents to the petitioners within a period of six months." [Emphasis supplied] 22. Letters Patent Appeals preferred by the appellants were dismissed by the different Division Benches of the High Court. While deciding LPA No. 808 and 809/2003, the Division Bench took cognizance of the fact that during the pendency of contempt case filed in Calcutta High Court with the complaint that order dated 26.3.2001 passed by the Single Judge of that High Court in W.P. No. 211/2001 has not been complied with, the Central Government created 51 posts of Group B', C' and D' and absorbed the staff working in the office of the Court Liquidator with effect from the date of expiry of 360 days of their joining service and held that the direction given by the learned Single Judge for absorption of all Group C' and D' company paid staff does not call for interference. Particulars of the additional documents filed/produced during the course of hearing. 23. Learned senior counsel appearing for Tapas Chakraborty and others filed I.A. No. 10/2008 in S.L.P (C) No. 12798/2008 for placing on record the following documents: (i) Letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India, Ministry of Company Affairs to the Regional Directors of Ministry of Company Affairs of Noida, Kolkata, Mumbai and Chennai in the matter of optimization of direct recruitment to civilian posts of Group C' and D' posts in the Ministry for the years 2001-2002, 2002-2003 and 2003-2004 and abolition/filling up of some such posts. (iii) Letter No. OL/24/Staff/Part VII/1875/G dated 30th June, 2008 sent by the Official Liquidator of Calcutta High Court to the Regional Director, Eastern Region, Kolkata reiterating the need for increase of manpower. (iv) Copy of order dated 19.9.2005 passed by the Division Bench of Delhi High Court in LPA Nos. 808/2003 and 809/2003. (v) Copy of order dated 5.5.2003 passed by learned Single Judge of Delhi High Court in CW No. 2728/2001 and CM No. 4774/2001. (vi) Copy of judgment dated 26.3.2001 passed by the learned Single Judge of Calcutta High Court in W.P. No. 211/2001. (vii) Letter No. A-12013/1/99-Ad.II dated 27.12.1999 sent by Shri D.P. Saini, Under Secretary to the Govt. of India to all the Regional Directors of Department of Company Affairs of Kanpur, Kolkata, Mumbai and Chennai regarding clarifications/suggestions to facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts and that too upto 50% vacancies in the direct recruitment quota. Learned counsel emphasized that the 1999 Scheme was modeled on the 1978 Scheme and argued that the same cannot be faulted on the ground that due to abolition of posts in the Department of Company Affairs, large number of company paid staff may not get absorbed in the regular cadres till their retirement. Shri Malhotra pointed out that as early as in 2001, the Government of India had taken a policy decision to substantially reduce direct recruitment to all the cadres and recommendations made by the Screening Committee for abolition of posts in various cadres were accepted by the Government. Learned counsel emphasized that the policy decision taken by the Government of India on the issue of Optimization of Direct Recruitment to Civilian Posts was not challenged by the writ petitioners and argued that in the absence of such challenge, the High Courts were not justified in mandating creation of supernumerary posts for absorption of the company paid staff and for grant of monetary benefits to them by applying the principle of equal pay for equal work with retrospective effect. In the end, he argued that the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of posts in the direct recruitment quota, which became available in 2001-02 to 2003-04 and, in this manner, the 1999 Scheme has been made redundant. Shri Gupta invited our attention to the charts and details produced by him to show that even after being recommended by the Selection Committee as many as 141 of the company paid staff, who were in position on 27.8.1999, have not been absorbed till this day. He submitted that the Government of India cannot sit tight over the matter and frustrate the right of the company paid staff to be absorbed in the regular cadres despite the fact that they were appointed after advertisement and as on date they have continuously worked for 10 to 20 years and fulfill the conditions of eligibility prescribed for direct recruitment. Shri Gupta invoked the doctrine of legitimate expectation and argued that the High Courts did not commit any illegality by recognizing the validity of the claim made by the company paid staff and issuing direction for their absorption in regular cadres with consequential monetary benefits by creation of supernumerary posts. Learned senior counsel lamented that the manner in which the Government of India has acted in last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers vs. Court Liquidator's Employees Association and Ors. (supra), the learned Single Judge of the Delhi High Court had no choice but to issue mandamus for regularization of the services of the respondents herein with consequential benefits. Learned counsel invited the Court's attention to order dated 26.3.2001 passed by the Calcutta High Court in Writ Petition No. 211 of 2001 and submitted that after having sanctioned 51 posts for absorption of the staff working under the Court Liquidator of Calcutta High Court, it is not open to the Central Government to challenge the direction given by Calcutta and Delhi High Courts for regularization of company paid staff employed/engaged by the Official Liquidators on the spacious ground of abolition of posts meant to be filled by direct recruitment. 31. Shri Colin Gonsalves, and Shri Ramesh Kumar, learned counsel for the intervenors, adopted the theme of the arguments of Shri Bhaskar P. Gupta and Ms. Jyoti Mendiratta and submitted that in view of abolition of post meant to be filled by direct recruitment, the 1999 Scheme should be declared as unworkable and redundant and a direction be issued to the appellants to regularize the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aff as it thinks fit on such salaries and allowances as to the Court may seem appropriate. 309. Apportionment of expenses of common staff - Where any staff is employed to attend to the work of more than one liquidation, or any establishment or other charges are incurred for more than one liquidation, the expenses incurred on such staff and the common establishment and other charges, shall be apportioned by the Official Liquidator between the several liquidations concerned in such proportions as he may think fit, subject to the directions of the Judge, if any. The above reproduced rules were framed with a view to ensure that the proceedings of liquidation are not hampered on account of shortage of staff. It was felt that if additional manpower is required for effectively dealing with liquidation cases, the Official Liquidator may apply to the Court and employ such staff after receipt of the sanction. The additional staff is paid from the company fund. If the staff employed under Rule 308 is required to attend the work of more than one liquidation or any establishment or other charges are incurred for more than one liquidation, then the Official Liquidator is required to apportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accepted the appointment/engagement knowing fully well that they will have fixed tenure without any right to continue in service or to seek absorption against the sanctioned posts. It was neither the pleaded case of the respondents before the High Courts nor Shri Bhaskar P. Gupta and other learned counsel appearing on their behalf argued before this Court that their clients were lured into accepting employment as company paid staff by the Official Liquidators by promising absorption in future against the sanctioned posts or that they were coerced by some authority to accept such employment. Therefore, they cannot be heard to complain of the violation of Articles 14 and 16 of the Constitution on the ground that even after having worked for more than one decade, they have not been absorbed in the regular cadres under the Government. In our opinion, after having applied for and accepted employment/engagement as company paid staff with fixed tenure superimposed by a stipulation that they will have no right to continue in service or to be absorbed in the regular cadres, the respondents are estopped from seeking a direction for their absorption against the posts sanctioned by the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a direction shows that the Court was very much conscious of the fact that recruitment to the regular cadres is governed by the rules framed under Article 309 of the Constitution and it would be highly detrimental to public interest to issue direction for wholesale absorption/regularization of the company paid staff and thereby abrogate/stultify opportunity of competition to younger generation comprising more meritorious persons who may be waiting for a chance to apply for direct recruitment. Obviously, the Court did not want to sacrifice the merit by showing undue sympathy with members of the company paid staff who joined service with full knowledge about their status, terms and conditions of their employment and the fact that they were to be paid from the company fund and not Consolidated Fund of India. In this context, we may also mention that though the Official Liquidators appear to have issued advertisements for appointing the company paid staff and made some sort of selection, more qualified and meritorious persons must have shunned from applying because they knew that the employment will be for a fixed term on fixed salary and their engagement will come to an end with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision to reduce the strength of civilian staff in all the cadres. This was reflected in the speech made by the Finance Minister, Government of India, while presenting the budget for 2001-02. He stated that all requirements of recruitment will be scrutinized to ensure that fresh recruitment is limited to 1% of total civilian staff strength and there will be reduction in manpower by 2% per annum, achieving a reduction of 10% in 5 years. Thereafter, OM No. 2/8/2001-PIC dated 16.5.2001 was issued by the Government of India. Paragraphs 2.1 and 2.2 of that OM read as under: "2.1 All Ministries/Departments are accordingly requested to prepare Annual Direct Recruitment Plans covering the requirements of all cadres, whether managed by that Ministry/Department itself, or managed by the Department of Personnel and Training, etc. The task of preparing the Annual Recruitment Plan will be undertaken in each Ministry/Department by a Screening Committee headed by the Secretary of that Ministry/Department with the Financial Advisor as a Member and JS (Admn.) of the Department as Member Secretary. The Committee would also have one senior representative each of the Department of Personnel and Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Division Bench of Delhi High Court and the Government's decision to process the matter for filing SLP against the orders of Calcutta High Court. The Screening Committee which met on 16.3.2005 considered and approved abolition of the direct recruitment quota posts for the years 2001-2002, 2002-2003 and 2003-2004. The decision of the Screening Committee was circulated to various offices of the Ministry of Company Affairs vide letter No. A.12011/3/2003-Admn.II dated 2.9.2005. This exercise was in consonance with the policy decision taken by the Government of India. The respondents have neither assailed the decision of the Government to abolish the posts on the ground of malafides nor the learned counsel could show that the exercise undertaken by the Screening Committee is vitiated by arbitrariness or non-application of mind or the same is influenced by extraneous reasons. Therefore, the view expressed by the Calcutta and Delhi High Courts that the 1999 Scheme is unworkable or impractical or has become redundant, cannot be approved. 41. The creation and abolition of posts, formation and structuring/ restructuring of cadres, prescribing the source and mode of recruitment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rranted burden on the State and its instrumentalities by directing creation of particular number of posts for absorption of employees appointed on ad hoc or temporary basis or as daily wagers. 44. In Divisional Manager, Aravali Golf Club and another vs. Chander Hass and another [(2008) 1 SCC 683] also, a two-Judges Bench considered the issue relating to creation of post and held:- "15. The court cannot direct the creation of posts. Creation and sanction of posts is a prerogative of the executive or legislative authorities and the court cannot arrogate to itself this purely executive or legislative function, and direct creation of posts in any organisation. This Court has time and again pointed out that the creation of a post is an executive or legislative function and it involves economic factors. Hence the courts cannot take upon themselves the power of creation of a post. Therefore, the directions given by the High Court and the first appellate court to create the posts of tractor driver and regularise the services of the respondents against the said posts cannot be sustained and are hereby set aside." 45. Although in paras 20, 26, 27, 28 and 33 of the last mentioned judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wage basis should be treated at par with regular employees in the matter of payment of salaries and allowances and that their services be regularized. In several cases, the schemes framed by the governments and public employer for regularization of temporary/ad-hoc/daily wag/casual employees irrespective of the source and mode of their appointment/ engagement were also approved. In some cases, the courts also directed the State and its instrumentalities/agencies to frame schemes for regularization of the services of such employees. In State of Haryana vs. Piara Singh (supra), this Court while reiterating that appointment to the public posts should ordinarily be made by regular recruitment through the prescribed agency and that even where ad-hoc or temporary employment is necessitated on account of the exigencies of administration, the candidate should be drawn from the employment exchange and that if no candidate is available or sponsored with the employment exchange, some method consistent with the requirements of Article 14 of the Constitution should be followed by publishing notice in appropriate manner for calling for applications and all those who apply in response thereto sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Employment Exchange or who though registered are lower in the long waiting list in the Employment Register. The courts can take judicial notice of the fact that such employment is sought and given directly for various illegal considerations including money. The employment is given first for temporary periods with technical breaks to circumvent the relevant rules, and is continued for 240 or more days with a view to give the benefit of regularization knowing the judicial trend that those who have completed 240 or more days are directed to be automatically regularized. A good deal of illegal employment market has developed resulting in a new source of corruption and frustration of those who are waiting at the Employment Exchanges for years. Not all those who gain such backdoor entry in the employment are in need of the particular jobs. Though already employed elsewhere, they join the jobs for better and secured prospects. That is why most of the cases which come to the courts are of employment in government departments, public undertakings or agencies. Ultimately it is the people who bear the heavy burden of the surplus labour. The other equally injurious effect of indiscriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ataka vs. Uma Devi (supra), the Constitution Bench again considered the question whether the State can frame scheme for regularization of the services of ad-hoc/temporary/daily wager appointed in violation of the doctrine of equality or the one appointed with a clear stipulation that such appointment will not confer any right on the appointee to seek regularization or absorption in the regular cadre and whether the Court can issue mandamus for regularization or absorption of such appointee and answered the same in negative. The Court adverted to the theme of constitutionalism in a system established in rule of law, expanded meaning given to the doctrine of equality in general and equality in the matter of employment in particular, multi-facet problems including the one relating to unwarranted fiscal burden on the public exchequer created on account of the directions given by the High Courts and this Court for regularization of the services of persons appointed on purely temporary or ad hoc basis or engaged on daily wages or as casual labourers, referred to about three dozen judgments including R.N. Nanjundappa vs. T. Thimmiah [1972 (1) SCC 409], Daily Rate Casual Labour vs. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le could be invoked for claiming equal wages for equal work. There is no fundamental right in those who have been employed on daily wages or temporarily or on contractual basis, to claim that they have a right to be absorbed in service. As has been held by this Court, they cannot be said to be holders of a post, since, a regular appointment could be made only by making appointments consistent with the requirements of Articles 14 and 16 of the Constitution. The right to be treated equally with the other employees employed on daily wages, cannot be extended to a claim for equal treatment with those who were regularly employed. That would be treating unequals as equals. It cannot also be relied on to claim a right to be absorbed in service even though they have never been selected in terms of the relevant recruitment rules. The arguments based on Articles 14 and 16 of the Constitution are therefore overruled. 49. It is contended that the State action in not regularising the employees was not fair within the framework of the rule of law. The rule of law compels the State to make appointments as envisaged by the Constitution and in the manner we have indicated earlier. In most of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t." 54. In paragraph 54, the Constitution Bench clarified that the earlier decisions which run counter to the principles settled by it will stand denuded of their status as precedents. 55. In Jawaharlal Nehru Technological University vs. T. Sumalatha (Smt.) and others [2003 (10) SCC 405], a two-Judges Bench considered an issue somewhat similar to the one being considered in these appeals. The facts of that case show that the respondents, who were graduates, were appointed as investigators on consolidated pay between 1985 and 1991 in the Nodal Centre set up in the University under the scheme known as the National Technical Manpower Information System sponsored by the then Ministry of Education and Culture, Government of India. The Nodal Centre was financed entirely by the Ministry of Education and Culture, Government of India. Initially, the term of the Nodal Centre was 1 year and 9 months, but it was continued thereafter. The respondents were appointed for 89 days but their services were extended from time to time on similar terms. Their consolidated pay was also revised twice. They filed writ petition claiming regularization of service in the University. Some directions were iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssly low. The Central Government itself has rightly realized the need to revise the consolidated salary and accordingly enhanced the grant on that account on two occasions. That revision was made more than six years back. It is high time that another revision is made. It is therefore imperative that the Ministry concerned of the Union of India should take expeditious steps to increase the salary of the investigators viz. Respondents 1 to 4 working in the nodal centre in Hyderabad. In the absence of details regarding the nature of work done by the said respondents and the equivalence of the job done by them to the other posts prevailing in the University or the Central Government institutions, we are not in a position to give any direction based on the principle of "equal pay for equal work". However, we consider it just and expedient to direct Respondent 7 or 8, as the case may be, to take an expeditious decision to increase the consolidated salary that is being paid to Respondents 1 to 4 to a reasonable level commensurate with the work done by them and keeping in view the minimum salary that is being paid to the personnel doing a more or less similar job. As far as the fifth respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no valid ground to discriminate them in the matter of regularization of service. The Division Bench approved the order of the Single Bench. A two-Judges Bench of this Court dismissed the appeal of the Electricity Board. In para 11 of its judgment, the two-Judges Bench distinguished Secretary, State of Karnataka vs. Uma Devi (supra) by observing that the ratio of that judgment cannot be applied to a case where regularization has been sought for in pursuance of Article 14 of the Constitution. The two-Judges Bench then referred to State of Orissa vs. Sudhanshu Sekhar Misra [AIR 1968 SC 647], State of Gujarat vs. Ambica Quarry Works [1987 (1) SCC 213], Bhavnagar University vs. Palitana Sugar Mill Pvt. Ltd. [2003 (2) SCC 111], Bharat Petroleum Ltd. vs. N.R. Viramani [2004 (8) SCC 579] and observed: "We are constrained to refer to the above decisions and principles contained therein because we find that often Umadevi (3) case is being applied by courts mechanically as if it were a Euclid's formula without seeing the facts of a particular case. As observed by this Court in Bhavnagar University and Bharat Petroleum Corpn. Ltd. a little difference in facts or even one additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not following the judgments/orders of coordinate and even larger Benches. In some cases, the High Courts have gone to the extent of ignoring the law laid down by this Court without any tangible reason. Likewise, there have been instances in which smaller Benches of this Court have either ignored or bypassed the ratio of the judgments of the larger Benches including the Constitution Benches. These cases are illustrative of non-adherence to the rule of judicial discipline which is sine qua non for sustaining the system. In Mahadeolal Kanodia vs. Administrator General of W.B. [1960 (3) SCR 578], this Court observed: "If one thing is more necessary in law than any other thing, it is the quality of certainty. That quality would totally disappear if Judges of coordinate jurisdiction in a High Court start overruling one another's decisions. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division Bench, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in the High Court is of opinion that the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive as a guide to behaviour. It must be determined with reasons which carry convictions within the courts, profession and public. Otherwise, the lawyers would be in a predicament and would not know how to advise their clients. Sub-ordinate courts would find themselves in an embarrassing position to choose between the conflicting opinion. The general public would be in dilemma to obey or not to obey such law and it ultimately falls into disrepute." 64. In Dr. Vijay Laxmi Sadho vs. Jagdish [2001 (2) SCC 247], this Court considered whether the learned Single Judge of Madhya Pradesh High Court could ignore the judgment of a coordinate Bench on the same issue and held: "33. As the learned Single Judge was not in agreement with the view expressed in Devilal case it would have been proper, to maintain judicial discipline, to refer the matter to a larger Bench rather than to take a different view. We note it with regret and distress that the said course was not followed. It is well-settled that if a Bench of coordinate jurisdiction disagrees with another Bench of coordinate jurisdiction whether on the basis of "different arguments" or otherwise, on a question of law, it is appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nda Kar (1991 Supp. (2) SCC 506) was incorrect, was to make a reference to a Bench of three learned Judges. That Bench of three learned Judges, if it also took the same view of Nityananda Kar, could have referred the case to a Bench of five learned Judges. 6. In the present case the Bench of two learned Judges has, in terms, doubted the correctness of a decision of a Bench of three learned Judges. They have, therefore, referred the matter directly to a Bench of five Judges. In our view, judicial discipline and propriety demands that a Bench of two learned Judges should follow a decision of a Bench of three learned Judges. But if a Bench of two learned Judges concludes that an earlier judgment of three learned Judges is so very incorrect that in no circumstances can it be followed, the proper course for it to adopt is to refer the matter before it to a Bench of three learned Judges setting out, as has been done here, the reasons why it could not agree with the earlier judgment. If, then, the Bench of three learned Judges also comes to the conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, reference to a Bench of five learned Judges is justified. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the larger Bench. Doctrine of judicial restraint, in my opinion, applies even in this realm. We should not forget other doctrines which are equally developed viz. Judicial Discipline and respect for the Brother Judges." 68. In U.P. Gram Panchayat Adhikari Sangh vs. Daya Ram Saroj [2007 (2) SCC 138], the Court noted that by ignoring the earlier decision of a coordinate Bench, a Division Bench of the High Court directed that part-time tube-well operators should be treated as permanent employees with same service conditions as far as possible and observed: "26. Judicial discipline is self-discipline. It is an inbuilt mechanism in the system itself. Judicial discipline demands that when the decision of a coordinate Bench of the same High Court is brought to the notice of the Bench, it is to be respected and is binding, subject of course, to the right to take a different view or to doubt the correctness of the decision and the permissible course then open is to refer the question or the case to a larger Bench. This is the minimum discipline and decorum to be maintained by judicial fraternity." 69. It is interesting to note that in Coir Board, Ernakulam vs. Indira Devi P.S. [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Courts command others to act in accordance with the provisions of the Constitution and rule of law, it is not possible to countenance violation of the constitutional principle by those who are required to lay down the law. 71. In the light of what has been stated above, we deem it proper to clarify that the comments and observations made by the two-Judges Bench in UP State Electricity Board vs. Pooran Chandra Pandey (supra) should be read as obiter and the same should neither be treated as binding by the High Courts, Tribunals and other judicial foras nor they should be relied upon or made basis for bypassing the principles laid down by the Constitution Bench. Equal Pay for Equal Work 72. The respondents' claim for fixation of pay in the regular scale and grant of other monetary benefits at par with those appointed against the sanctioned posts has been accepted by the High Courts on the premise that their duties and functions are similar to those performed by regular employees. In the opinion of the High Courts, similarity in the nature of work of the company paid staff on the one hand and regular employees on the other hand, is by itself sufficient for invoking the pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Lodh vs. State of Tripura [2004 (1) SCC 119], State of Haryana vs. Charanjit Singh [2006 (9) SCC 321], Hindustan Aeronautics Ltd. vs. Dan Bahadur Singh (supra), Kendriya Vidyalaya Sangathan vs. L.V. Subramanyeswara (supra) and Canteen Mazdoor Sabha vs. Metallurgical and Engineering Consultants (India) Ltd. [2007 (7) SCC 710], the Court consciously and repeatedly deviated from the ruling of Randhir Singh vs. Union of India (supra) and held that similarity in the designation or quantum of work are not determinative of equality in the matter of pay scales and that before entertaining and accepting the claim based on the principle of equal pay for equal work, the Court must consider the factors like the source and mode of recruitment/appointment, the qualifications, the nature of work, the value judgment, responsibilities, reliability, experience, confidentiality, functional need etc. In State of Haryana and others vs. Jasmer Singh and others (supra), the two-Judges Bench laid down the following principle: "8. It is, therefore, clear that the quality of work performed by different sets of persons holding different jobs will have to be evaluated. There may be differences in educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he offices of the Official Liquidators so as to facilitate payment of salaries and allowances to the company paid staff in the regular pay scale from the Consolidate Fund of India and in view of our finding that the policy decision taken by the Government of India to reduce the number of posts meant for direct recruitment does not suffer from any legal or constitutional infirmity, it is not possible to entertain the plea of the respondents for payment of salaries and allowances in the regular pay scales and other monetary benefits at par with regular employees by applying the principle of equal pay for equal work. Legitimate Expectation 77. We shall now advert to the question whether the respondents can invoke the doctrine of legitimate expectation for supporting the impugned orders. This part of the respondent's claim is founded on their assertion that notwithstanding the contrary stipulation contained in the orders of appointment, they had expected that in view of the 1978 Scheme the Government will absorb them in the regular cadres on some future date and give benefit of the principle of equal pay for equal work. The argument of Shri Bhaskar P. Gupta and Ms. Jyoti Mendirat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oot of the principle of legitimate expectation is the constitutional principle of rule of law, which requires regularity, predictability and certainty in government's dealings with the public - J. Raz, The Authority of Law [(1979) Ch. 11]. The legal certainty' is also a basic principle of European Community. European law is based upon the concept of "vertrauensschutz" (the honouring of a trust or confidence). It is for these reasons that the existence of a legitimate expectation may even in the absence of a right of private law, justify its recognition in public law. 79. In Halsbury's laws of England (Fourth Edition), the doctrine of legitimate expectation has been described in the following words: "A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice." 80. A formal statement on the doctrine of legitimate expectation can be found in the judgment of House of Lords in Council of Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given reasons for withdrawal and the opportunity to comment on such reasons. It may be indicated here that the doctrine of legitimate expectation' imposes in essence a duty on public authority to act fairly by taking into consideration all relevant factors relating to such legitimate expectation'. Within the conspectus of fair dealing in case of legitimate expectation', the reasonable opportunities to make representation by the parties likely to be affected by any change of consistent past policy, come in. We have not been shown any compelling reasons taken into consideration by the Central Government to make a departure from the existing policy of allotment with reference to seniority in Registration by introducing a new guideline." (emphasis supplied) 82. In Food Corporation of India vs. Kamdhenu Cattle Feed Industries [1993 (1) SCC 71], this Court considered whether rejection of the tender of the respondent was vitiated by arbitrariness. The claim of the respondents was negated in the following words: "In the contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to article 14 of the Constitution of which non-ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplied] 83. In Union of India and others vs. Hindustan Development Corporation and others [1993 (3) SCC 499] this Court considered the doctrine of legitimate expectation and held: "For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense." [Emphasis supplied] 84. In Punjab Communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver which would be against requisite compliances can be countenanced. Whether an expectation exists is, self-evidently, a question of fact. Clear statutory words override any expectation, however founded." 87. In Secretary, State of Karnataka vs. Uma Devi (supra), the Constitution Bench referred to the claim of the employees based on the doctrine of legitimate expectation and observed as under: "The doctrine can be invoked if the decisions of the administrative authority affect the person by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there have been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision-maker that they will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn." 88. In Kuldeep Singh vs. Govt. of NCT of Delhi [2006 (5) SCC 702], the Court refused to invoke the doctrine of legitimate expectation to nullify the revised policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause before the expectation is dashed; or (b) to an explanation as to the cause for denial. In appropriate cases, the courts may grant a direction requiring the authority to follow the promised procedure or established practice. A legitimate expectation, even when made out, does not always entitle the expectant to a relief. Public interest, change in policy, conduct of the expectant or any other valid or bona fide reason given by the decision-maker, may be sufficient to negative the "legitimate expectation". The doctrine of legitimate expectation based on established practice (as contrasted from legitimate expectation based on a promise), can be invoked only by someone who has dealings or transactions or negotiations with an authority, on which such established practice has a bearing, or by someone who has a recognised legal relationship with the authority." After noticing the judicial precedents on the subject, the Court held that employees of the erstwhile society cannot invoke the theory of legitimate expectation for compelling the Board to absorb them despite its precarious financial condition. 90. By applying the ratio of the aforementioned judgment to the facts of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed by the Court Liquidator. However, that cannot be made basis for granting relief to the respondents because creation of those posts was clouded by the threat of contempt, for which proceedings had been initiated by the aggrieved employees. 92. On the basis of above discussion, we hold that- (i) the respondents are not entitled to absorption against the sanctioned posts in Group C of the Department of Company Affairs, Government of India, as of right. (ii) The 1999 Scheme does not suffer from any legal or constitutional infirmity insofar as it provides for absorption of the company paid staff only to the extent of 50% vacancies in direct recruitment quota of Group C posts. (iii) The decision taken by the Government of India to reduce the number of posts in direct recruitment quota and consequential abolition of posts in the Department of Company Affairs is not vitiated by arbitrariness or violation of the doctrine of equality or malafides. (iv) The doctrine of legitimate expectation cannot be invoked for sustaining the directions given by the High Courts of Calcutta and Delhi for creation of supernumerary posts to facilitate absorption of all company paid staff in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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