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2008(7) Supreme 671
SUPREME COURT OF INDIA
(From Calcutta and Delhi High Courts)
B.N. Agrawal, Harjit Singh Bedi and G.S.Sanghvi, JJ.
Official Liquidator — Appellants
versus
Dayanand and Others — Respondents
Civil Appeal No. 2985 of 2007
With
Civil Appeal Nos.2986 to 2990 of 2007
Civil Appeal No.6455/2008 @ S.L.P.(C) No.12798 of 2005 and Civil Appeal No.6456/2008 @ S.L.P. No.13838 of 2006
Decided on : 04-11-2008
(b) Service Law – Regularisation/Absorption – When a person accepts employment knowing fully well that the employment is purely temporary and terminable at any time/ for fixed time, he is estopped from claiming absorption/ regularisation invoking Articles 14/16 of the Constitution. (Para 35)
(c) Judicial Review – Creation or abolition of posts or prescribing the source or mode of recruitment are matters within executive domain – Therefore, although decisions in such matters are not immune from judicial scrutiny, Courts should always be extremely cautious and circumspect in tinkering with the employer’s discretion – Courts cannot sit in appeal and ordain creation and filling of posts in a particular manner – Principles culled. (Paras 41 and 42)
(2008) 2 SCC 65; (1973) 2 SCC 650; (1974) 3 SCC 21; (1976) 2 SCC 844; (1980) 3 SCC 29; (2006) 4 SCC 132; (2008) 1 SCC 683 – Relied upon.
(d) Service Law – Regularisation – In 1980s and early 1990s Supreme Court ordaining regularization of staff having served for long periods irrespective of mode of employment – This encouraged the political set up and bureaucracy to violate the soul of Article 14 and 16 as also the provisions contained in the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 with impunity and the spoil system got firm foothold in this country. (Paras 49 and 50)
(1992) 4 SCC 99, (1986) 1 SCC 637, (1986) 1 SCC 639; (1988) 1 SCC 122; (1990) 2 SCC 396; (1990) 1 SCC 361; (1992) 4 SCC 118 – Relied upon.
(e) Service Law – Regularisation – State cannot invoke Article 162 of the Constitution for regularization of the appointments made in violation of the mandatory statutory provisions. (Para 52)
(1992) 4 SCC 33; (1993) 2 SCC 213; (1994) 2 SCC 630; 1994 Suppl.(3) SCC 380; (1996) 7 SCC 134; (1996) 7 SCC 481; (1996) 7 SCC 499; (1996) 7 SCC 562; (1996) 9 SCC 619; (1996) 10 SCC 565; (1996) 11 SCC 341; (1997) 1 SCC 247; (1997) 1 SCC 350; (1997) 2 SCC 1; (1997) 2 SCC 713; (1997) 4 SCC 88; (1997) 7 SCC 198; (2005) 5 SCC 122; (2004) 7 SCC 112; (1972) 1 SCC 409; (1972) 1 SCC 409; (2003) 10 SCC 405; (2007) 1 SCC 408; (2007) 1 SCC 533; (2007) 5 SCC 326; (2007) 6 SCC 207 – Relied upon.
(1986) 2 SCC 157; 1991 Supp. (2) SCC 421; (1999) 8 SCC 560 – Referred.
(f) Constitution of India, 1950 – Article 141 – Judgment of a Constitution Bench is binding on all Courts until and unless overruled by a larger Bench – Judicial discipline is sine qua non for sustaining the system – Growing attempts to violate binding precedents deprecated. (Paras 57 and 70)
(1960) 3 SCR 578; AIR 1965 SC 1767; (1989) 2 SCC 754; (2002) 1 SCC 1; (2001)4 SCC 448; (2003) 5 SCC 448; (2007) 6 SCC 586; (2007) 2 SCC 138; (2000) 1 SCC 224 – Relied upon.
(1978) 1 SCC 248; AIR 1968 SC 647; (1987) 1 SCC 213; (2003) 2 SCC 111; (2004) 8 SCC 579; (1998) 3 SCC 259; (1978) 2 SCC 213 – Referred.
(2007) 11 SCC 92 – Distinguished.
(g) Service Law – Equal pay for equal work – Even a daily wage employee who is performing duties similar to regular employees is entitled to the same pay – However, similarity in the designation or quantum of work are not determinative of equality in the matter of pay scales, many other aspects have to be considered. (Paras 73 to 75)
AIR 1962 SC 1139; (1988) 3 SCC 354; (1988) 3 SCC 91; (1989) 2 SCC 235; (1989) 3 SCC 191; (1989) 4 SCC 459; (1989) 1 SCC 121; (1991) 1 SCC 619; (1995) 5 SCC 210; (1996) 11 SCC 77; (1997) 3 SCC 633; (1998) 9 SCC 252; (2003) 1 SCC 250; (2003) 4 SCC 760; (2003) 6 SCC 123; (2003) 11 SCC 658; (2004) 1 SCC 119; (2006) 9 SCC 321; (2007) 7 SCC 710; (1986) 1 SCC 637; (1986) 1 SCC 639; (1988) 1 SCC 122; (1990) 2 SCC 396; (2007) 6 SCC 207; (2007) 5 SCC 326 – Relied upon.
(h) Legitimate expectation – There is nothing to show that any competent authority of the Government of India had ever given any assurance much less made a promise to the respondents that they will get absorbed against the sanctioned posts or that there will be no abolition of posts meant to be filled by direct recruitment – Respondents joined as company paid staff knowing fully well the terms of appointment – Therefore the doctrine of legitimate expectation cannot be invoked. (Para 77)
1985 AC 374 (HL); (1992) 4 SCC 477; (1993) 1 SCC 71; (1993) 3 SCC 499; (1999) 4 SCC 727; (2003) 5 SCC 134; (2003) 3 SCC 485; (2006) 5 SCC 702; (2006) 8 SCC 381; (2006) 4 SCC 1 – Relied upon.
Facts of the case :
1. For Calcutta High Court, the Central Government had appointed a Court Liquidator under Section 38A of the Banking Regulation Act, 1949, as amended in 1953. He used to employ staff under Rule 308 of the 1959 Rules in connection with liquidation of banking companies. The salaries of such staff were paid from the assets of the banking companies under liquidation.
2. Sixty-three employees working under the Court Liquidator attached to Calcutta High Court filed writ petition for grant of the status of permanent Central Government employee with effect from the date of completion of 360 days of service besides regular pay scales with avenues for promotion apart from pension, provident fund and other service benefits on the basis of their length of service.
3. The learned Single Judge of Calcutta High Court allowed the writ petition in terms of the prayer made. The appeal preferred by the appellants herein was dismissed by the Division Bench,
4. The company paid staff (Estate Clerks) engaged by the Official Liquidator attached to the High Court of Kerala also filed writ petition claiming parity with the government employees appointed in the office of the Official Liquidator. The Division Bench held that the petitioners are entitled to be absorbed as regular Lower Division Clerks in the office of the Official Liquidator from the date of their initial appointment.
5. Accordingly, a direction was issued to the respondents in the writ petition to absorb the Estate Clerks against the regular posts of Lower Division Clerks and pay them salary in the regular pay scale with consequential benefits.
Findings of the Court :
(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 mala fides.
(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 regular cadres.
(v) The respondents are not entitled to have their pay fixed in the regular scales and other monetary benefits at par with regular employees working under the Official Liquidators.
Result : Appeals allowed.
The Supreme Court emphasized that mere similarity in the duties or work performed by two groups of employees does not automatically entitle them to equal pay or parity in service benefits. The Court cautioned that factors such as the source of recruitment and the cadre controlling authority are crucial in determining entitlement to parity. If the source of recruitment is different or the cadre is managed by a different authority, then employees cannot claim parity as a matter of right solely based on the nature of their work. The decision underscores the importance of examining the recruitment process and administrative control when assessing claims for equality in pay or status, rather than relying solely on the similarity of duties performed.
JUDGMENT
G.S. Singhvi, J. —
1. Leave granted in S.L.P. (C) Nos.12798/2005 and 13838/2006.
2. These appeals are directed against the orders of Calcutta and Delhi High Courts, whereby directions have been issued to the appellants herein to absorb the persons employed by the Official Liquidators attached to those High Courts under Rule 308 of the Companies (Court) Rules, 1959 (for short ‘the 1959 Rules’) against the posts sanctioned by the Government of India, Department of Company Affairs.
FACTS
3.For the sake of convenience, we have culled out the facts from the pleadings of Writ Petition No.1387 of 2001 filed by Tapas Chakraborty and 109 others in Calcutta High Court, Writ Petition 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 appointed a Court Liquidator under Section 38A of the Banking Regulation Act, 1949, as amended in 1953. He used to employ staff under Rule 308 of the 1959 Rules in connection with liquidation of banking companies. The salaries of such staff were paid from the assets of the banking companies under liquidation.
(iii) In the year 1978, the Government of India, Ministry of Law, Justice and Company Affairs vide its letter dated 27.11.1978 circulated a scheme (hereinafter described as ‘the 1978 Scheme’) for absorption of company paid staff against Group C posts in the subordinate offices of the Department of Company Affairs. That scheme envisaged consideration of the cases of company paid staff, who were in position on 31.3.1978 and who possessed the educational qualifications prescribed for the post against which they were to be absorbed. It was also provided that absorption of the company paid staff will be limited to 50% vacancies in direct recruitment quota of Group C posts.
4. Sixty-three employees working under the Court Liquidator attached to Calcutta High Court filed writ petition for grant of the status of permanent Central Government employee with effect from the date of completion of 360 days of service besides regular pay scales with avenues for promotion apart from pension, provident fund and other service benefits on the basis of their length of service.
5. The learned Single Judge of Calcutta High Court allowed the writ petition in terms of the prayer made. The appeal preferred by the appellants herein was dismissed by the Division Bench, which noted that even though the writ petitioners had been working for last 20 to 25 years, neither their services were regularized nor they were paid at par with similar employees of other departments/offices and they were retired at the age of 58 years without any financial benefit. The Division Bench held that the appellants have failed to substantiate their plea that the employees appointed by the Court Liquidator were not engaged for doing work of perennial nature and that there was no reasonable basis for discriminating the Court Liquidator’s staf
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