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TMI Blog2005 (12) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... r Pradesh enacted The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (for short "the Act"). The Board has been established under Section 26-A of the Act. Section 26-B provides for the constitution of the Board. In exercise of its power conferred upon it by Section 25-A and 26-X of the Act, regulations have also been framed by the Board laying down the terms and conditions of the service of the employees of the Market Committees known as the Uttar Pradesh Agricultural Produce Market Committees (Centralised) Services Regulations, 1984 (for short "Services Regulations"). Similar regulations have also been framed by the Board in respect of its own employees being the Uttar Pradesh Agricultural Produce Markets Board (Officers and Staff Establishment) Regulations, 1984 (for short "Establishment Regulations"). BACKGROUND FACT 3. In the State of Uttar Pradesh, there are 244 Market Committees. 3395 posts were sanctioned but indisputably 5600 appointments have been made. We are herein concerned with the orders of appointments and orders of terminations issued in respect of about 1021 employees who were appointed between the period 1.4.1996 and 30.10.1997. A resolution was passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tments made in the Mandi Parishad and Mandi Samities before 1.4.96, kindly furnish clear report alongwith detailed statement by 20.2.99. (3) Kindly make available in each case by 18.2.99 your proposal with clear recommendation to the Govt. for action against the officers responsible for the said irregular appointments." Further directions were issued on 17.3.1999 in the following terms: "In regard to the appointed subject and Semi Govt. Letter No. Dire-Camp/99-468 dt. 8.3.99, I have been directed to say that keeping in view, the decision taken by Govt. in regard to irregular appointments made on the post of various categories in U.P. State Agricultural Production Marketing Board, there has been no requirement of prescribed procedure rules. In such circumstances, the proposal sent to Govt. vide letter 1418/Camp dt. 18.10.96 of Marketing Board Office is rejected by the Govt. after due consideration." Pursuant thereto or in furtherance of such directions, the services of a large number of employees were terminated on or about 20th March, 1999. 4. On 27.1.1998, the Director of the Board informed the Secretary, Department of Agriculture that all appointments are unauthorized/ irr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgments of the High Court cannot be sustained. (iv) Indisputably the provisions of U.P. Industrial Disputes Act and the rules framed thereunder relating to retrenchment of workmen were complied with and in that view of the mater it cannot be said that the orders of termination passed against the employees were illegal. (v) In any view of the matter, the remedy of the employees, if any, was to approach the industrial courts. (vi) It is not a case, it was urged, where principles of natural justice were required to be complied with. On behalf of the State 9. Mr. Uday Umesh Lalit, learned senior counsel appearing on behalf of the State of Uttar Pradesh submitted that from the records it would appear that the State adopted a known criterion for cancellation of appointment of such employees who were in the last slots, namely, 1.4.1996 to 30.10.1997. Such orders of termination ensured that the principles of last-come-first-go basis are followed and the employees are paid one month's salary in lieu of notice as also 15 days wages for each completed year of service by way of compensation. No appointment having been made after 30.10.1997, the impugned judgment of the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices of its employees, there was no need to obtain any approval from the State. (x) As admittedly no appointment whatsoever was made in terms of the statutory regulations since the inception of constitution of the Market Committees and Boards, the State could not have ignored the past practice particularly in a case of this nature where the employees concerned have requisite educational qualifications. (xi) The court in such a situation can be said to have the requisite jurisdiction in directing a State within the meaning of Article 12 of the Constitution of India to make a scheme of regularisation. 11. Mr. G.L. Sanghi, learned senior counsel appearing on behalf of another writ applicant submitted that institutions of the market committees and the Board having their activities principally in rural areas, the human problem should not be ignored as without such daily wagers or adhoc employees functions of the statutory body may have to be stopped. 12. The learned counsel submitted that the appointments being not void ab initio and of no effect, the State could not have issued directions for termination of their services. As the appointments were made having regard to the necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he services of such employees and, thus, the orders terminating the services of the writ petitioners were bad in law. It was directed: "Having regard to the discussions made above, I am inclined to hold that written and verbal termination orders of the petitioners issued by the authorities at the direction of the Government as contained in letter dated 12.2.99 are arbitrary, unreasonable and discriminatory and, therefore, all such termination orders along with the irrational impugned letter of source dated 12.2.99 are hereby quashed. A writ of certiorari is issued accordingly. Further, a writ of mandamus is also issued commanding the opposite parties to allow the petitioners to resume their duty with immediate effect. They shall be deemed to have continued in service and as such, they shall be relegated to their original position. However, they will not get their back wages. The U.P. Agricultural Produce Market Board shall within six months resolve and formulate a policy to deal with the terms of their service by giving due consideration to its earlier resolution regarding regularization of their services. The Board will also take stern step to ensure that such an odd situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 20. Chapter V of the Act deals with external control. Establishment and constitution of the Board are envisaged under Sections 26-A and 26-B. Section 26-A empowers the Board to appoint such officers and servants as it considers necessary for efficient performance of its functions on such terms and conditions, as may be provided for in the regulations made by the Board. Section 26-L provides for the powers and functions of the Board. Functions of the Board are provided for in Sub-section (1) thereof stating: "(i) superintendence and control over the working of the Market Committees and other affairs thereof including programmes undertaken by such Committees for the construction of New Market Yards and development of existing Markets and Market Areas; (ii) giving such direction to Committees in general or any Committee in particular with a view to ensure efficiency thereof; (iii) any other function entrusted to it by this Act; (iv) such other functions as may be entrusted to the Board by the State Government by notification in the Gazette." 21. The powers of the Board have been enumerated under Sub-section (2) of Section 26-L of the Act which includes: "(x) to do such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that no bye- law other than a bye-law made by adopting draft or model bye-law suggested by the Board shall be valid unless approved by it. Section 40 of the Act provides for rule making power. 25. The State Government framed rules known as "The U.P. Krishi Utpadan Mandi Niyamavali, 1965 (for short "the Rules") in terms of Section 40 of the Act. The functions, duties and powers of the Committees in terms of Sections 16 and 17 of the Act have been laid down in Rule 46. Rule 60 states that the qualification, designations, grades, salaries and allowance of the posts of officers and servants whose appointing authority is the Committee shall be approved by the Director. Such appointment made by the Committee under sub-section (1) of Section 23 of the Act for those posts wherefor the Committee is the appointing authority shall be intimated within 30 days of the date of such appointments to the Directors or to such officer as may be authorised by the Director in this behalf. Sub-rule (3) of Rule 60 mandates that the Market Committee shall maintain service records and character rolls in such forms as are prescribed for government servants and those records shall be kept in the custody ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the appointment, probation, confirmation and seniority would be made. LEGALITY OF THE APPOINTMENTS 28. The Board is a 'State' within the meaning of Article 12 of the Constitution of India. It was constituted in terms of the provisions of the said Act. The powers and functions of the Board as also the State in terms of the provisions of the statute having been delineated, they must act strictly in terms thereof. It is a statutory authority. Its powers, duties and functions are governed by the statute. It is responsible for constitution of the Market Committees for the purpose of overseeing that the agriculturists while selling their agricultural produce receive the just price therefor. It not only regulates sale and purchase of the agricultural produce but also controls the markets where such agricultural produces are bought and sold. The Board is entitled to levy market fee and recover the same from the buyers and sellers through Market Committees. Indisputably, Market Committees and the Board have power to appoint officers and servants. Although, the power of the Board in this respect is not circumscribed, that of the Market Committees is. Market Committees can appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 23 shall be intimated within 30 days of such appointment to the Director or to such other officer as may be authorised by the Director in this behalf. It implies that although the Market Committee may have power to make appointments, such appointments can be made in relation to the posts created therefor by the Board wherefor requisite intimation has to be given to the Director or the officer authorised in this behalf. We may assume that for meeting the exigencies of situations it may be possible for the Committee or the Board to appoint a person on adhoc basis. Such adhoc employees, however, being not employee within the meaning of the provisions of the Act and the Regulations, a legal relationship between the employer and the employee would not come into being. As no legal relationship of employer and employee comes into being, evidently, such persons do not derive any status. They a fortiori derive no legal right to continue in service subject, of course, to the compliance of the provisions of any other Act or the rules conferring certain benefits to them. [See State of M.P. and Another v. Dharam Bir (1998) 6 SCC 165] 32. Sections 23 and 26-F of the Act categorically mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Constitution of India. It is trite that a circular letter being an administrative instruction is not a law within the meaning of Article 13 of the Constitution of India. (See Dwarka Nath Tewari v. State of Bihar)" 38. However, it is not correct that the power of the State to issue directions must be confined to the matters enumerated in Sub-section (1) of Section 26-L of the Act. Section 26-L is subject to the provisions of the Act. The functions of the Board enumerated in Section 26-L of the Act are, therefore, not exhaustive. Appointment of servants and officers are also one of the functions of the Board. The Board also has right to supervise and control the activities of the officers and Market Committees. In that view of the matter, if a policy decision is taken by the Board in regard to the appointment or terms and conditions of the servants, in the event, regulations made in this behalf do not contain any provisions, such policy decision must conform to the directions of the State issued in that behalf, if any. The Board further is empowered to do such other things as are specified in clause (x) of Section 26-L of the Act. 39. The Board, however, in law could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle of estoppel will apply. [See Gurjeewan Garewal (Dr.) v. Dr. Sumitra Dash] The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case." 44. The High Court, therefore, must be held to have erred in law in holding that the principles of natural justice were required to be complied with. DIRECTIONS OF THE HIGH COURT 45. The directions of the High Court, in our opinion, were not justified. It may be that in implementing the advice of the State, some of the officers of the Board became overzealous in terminating services of the employees who were appointed prior to 1.4.1996. The learned Single Judge of the High Court was not, therefore, correct in describing a decision of the Board an arbitrary or a discriminatory one. No sufficient or cogent reason has been assigned by the learned Single Judge to arrive at a finding that such period has been picked up out of the hat. With a view to judge the correctness or otherwise of such a decision, it was necessary to consider th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to see that the Executive acts fairly and gives a fair deal to its employees consistent with the requirements of Articles 14 and 16" 50. A 3-Judge Bench of this Court upon taking into consideration a large number of decision in A. Umarani v. Registrar, Cooperative Societies and Others [(2004) 7 SCC 112] held that illegal appointments cannot be regularised. It was further held: "No regularisation is, thus, permissible in exercise of the statutory power conferred under Article 162 of the Constitution if the appointments have been made in contravention of the statutory rules." 51. The power to frame regulations is expressly conferred on the Board in terms of Section 26 of the Act. Such regulations are to be made with the previous approval of the State Government. Indisputably, the State Government by its letter dated 17.3.1999 refused to accord permission in relation thereto. 52. If no appointment could be made by the State in exercise of its power under Article 162 of the Constitution of India as the same would be in contravention of the statutory rules, there cannot be any doubt whatsoever that the Board or for that matter the Market Committees cannot make an appointment in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Board the appointments of such persons have been described to be irregular, the same would not mean that they are not illegal. 57. In any event, no temporary or permanent status can be granted to an employee by way of regularisation. [See Union of India v. Gagan Kumar (2005) 5 SCC 70 and State of Maharashtra and Another v. R.S. Bhonde and Others (2005) 5 SCC 751]. PRECEDENTS 58. Mr. Chaudhary has relied upon a large number of decisions to contend that this Court has directed framing of such schemes. 59. In Surya Narain Yadav and Others v. Bihar State Electricity Board and Others [(1985) 3 SCC 38], the writ petitioners were appointed as trainee engineers pursuant to an advertisement issued therein. Representations have been made to them that after their training was completed, they would be absorbed in regular employment of the Board. Some employees who were getting age-barred for government employment and had left the Board were told to come back under the temptation of getting permanently employed under the Board. When the Board was reeling under a strike of its employees, these trainee engineers stood by the Board to keep up the generation and distribution of electri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the power of the State to make rules under Article 309 of the nature impeached here. Secondly when the Government acted under Article 309 the Government cannot be said to have acted also under Article 162 in the same breath. The two articles operate in different areas. Regularisation cannot be said to be a form of appointment. Counsel on behalf of the respondent contended that regularisation would mean conferring the quality of permanence on the appointment whereas counsel on behalf of the State contended that regularisation did dot mean permanence but that it was a case of regularisation of the rules under Article 309. Both the contentions are fallacious. If the appointment itself is in infraction of the rules or if it is in violation of the provisions of the Constitution illegality cannot be regularised. Ratification or regularisation is possible of an act which is within the power and province of the authority but there has been some non-compliance with procedure or manner which does not go to the root of the appointment. Regularisation cannot be said to be a mode of recruitment. To accede to such a proposition would be to introduce a new head of appointment in defiance of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular appointment as the time of such ad hoc appointment; and (iii) has completed or, as the case may be, after he has completed three years service shall be considered for regular appointments in permanent or temporary vacancy, as may be available, on the basis of his record and suitability before any regular appointment is made in such vacancy in accordance with the relevant rules or orders. (2) In making regular appointments under these rules reservations for the candidates belonging to the Scheduled Castes, Scheduled Tribes, Backward Classes and other categories shall be made in accordance with the orders of the Government in force at the time of recruitment. (3) For the purpose of sub-rule (1) the appointing authority shall constitute a Selection Committee. (4) The appointing authority shall prepare an eligibility list of the candidates, arranged in order of seniority, as determined from the date of order of appointment and if two or more persons are appointed together from the order in which their names are arranged in the said appointment order, the list shall be placed before the Selection Committee along with the character rolls and such other records of the candid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity can be claimed in illegality is now well- settled. [See State of A.P. v. S.B.P.V. Chalapathi Rao and Others,(1995) 1 SCC 724, para 8, Jalandhar Improvement Trust v. Sampuran Singh (1999) 3 SCC 494, para 13 and State of Bihar and Others v. Kameshwar Prasad Singh and Another (2000) 9 SCC 94, para 30]. 72. In the instant case, furthermore, no post was sanctioned. It is now well-settled when a post is not sanctioned, normally, directions for reinstatement should not be issued. Even if some posts were available, it is for the Board or the Market Committee to fill-up the same in terms of the existing rules. They, having regard to the provisions of the regulations, may not fill up all the posts. 73. It may be that from the very inception the provisions of the Act and the Regulations framed thereunder had been given a complete go-by. It, furthermore, may be that the Board had adopted resolution for purported regularization of the services of its employees and employees of Market Committees appointed prior to 1.10.1988. We have, however, noticed hereinbefore that such a resolution on the part of the Board was beyond its domain. It is also true, as has been contended by Mr. Chaudhary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard and the Market Committees were bound by the Act, the Rules and Regulations framed thereunder in making appointments. Statutory provisions as also the constitutional requirements were required to be complied with. (ii) The Board had no jurisdiction to frame any scheme for regularization in the pith of the statutory regulations operating in the field. Any legislation involving appointment or laying down the conditions of service of the employees would require prior sanction of the State. (iii) The State of Uttar Pradesh in exercise of its purported power under Section 26-M of the Act could not have issued the directions as it has been done but such a direction cannot be said to be wholly unreasonable. (iv) The State although could not exercise a statutory power beyond the provisions of the statute but the same although might have been done under a misconception of law but was not otherwise arbitrary or mala fide. (v) Availability of vacancies and/ or the fund by themselves would not allow the Market Committees or the Board to make appointments in flagrant violation of the statutory provisions. Although the direction of the State of U.P. which had been acted upon by the Bo ..... 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