1. Dispute over absorption of temporary, badli, and part-time workers in a statutory corporation — claims based on industrial awards and subsequent court judgments — conflict between absorption and recruitment schemes. (Para 1 , 3 , 4 , 6 , 7 , 11 , 12 , 13 , 15 , 16 , 17 , 19 , 20 )
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2022 Supreme(SC) 402
SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, Surya Kant, Vikram Nath, JJ.
Ranbir Singh – Appellant
Versus
SK Roy, Chairman, Life Insurance Corp. of India & Anr. – Respondents
Miscellaneous Application No. 1150 of 2019 in Contempt Petition (Civil) No. 1921 of 2017 in Civil Appeal No. 6950 of 2009; with MA 1151 of 2019 in C.A. No. 6950 of 2009; with MA 1868 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1862 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1861 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1874 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1873 of 2019 in Conmt.Pet.(C) No. 1660 of 2018 in C.A. No. 6950 of 2009; with MA 1940 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1882 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1883 of 2019 in Conmt.Pet.(C) Nos. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1876 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1888 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1866 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1860 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1860 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1875 of 2019 in Conmt.Pet.(C) No. 1660 of 2018 in C.A. No. 6950 of 2009; with MA 1765 of 2019 in Conmt.Pet.(C) No. 1944 of 2017 in C.A. No. 6956 of 2009; with MA 1402 of 2019 in Conmt.Pet.(C) No. 1965-1967 of 2017 in C.A. No. 6953 of 2009; with MA 1859 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1869 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1870 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1864 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1872 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009 with W.P.(C) No. 43 of 2020; with MA 1867 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1889 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1878 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1884 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1887 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1891 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1880 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1886 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1893 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1894 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1892 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1895 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1987 of 2019 in Conmt.Pet.(C) Nos. 1968-1969 of 2017 in C.A. No. 6953 of 2009 with W.P.(C) No. 110 of 2020; with MA 2085 of 2019 in Conmt.Pet.(C) No. 1965-1967 of 2017 in C.A. No. 6953 of 2009; with MA 2339 of 2019 in C.A. No. 6951 of 2009; with MA 557 of 2020 in Conmt.Pet.(C) No. 1965-1967 of 2017 in C.A. No. 6953 of 2009; with MA 858 of 2020 in Conmt.Pet.(C) No. 1965-1967 of 2017 in C.A. No. 6953 of 2009; with MA 412 of 2021 in Conmt.Pet.(C) No. 1968-1969 of 2017 in C.A. No. 6953 of 2009; with MA 1865 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1879 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1881 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1890 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009; with MA 1885 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009 and with MA 1877 of 2019 in Conmt.Pet.(C) No. 1921 of 2017 in C.A. No. 6950 of 2009
Decided On : 27-04-2022
Important Points
The Court held that mass absorption of temporary workers without a transparent recruitment process violates Articles 14 and 16. Exercising Article 142, it resolved conflicting precedents by granting monetary compensation instead of absorption to eligible workers engaged between May 20, 1985, and March 4, 1991, to prevent illegal back-door entries.
Subject
Employment Law - Labor Disputes
Act Referred
CONSTITUTION OF INDIA: Art.136, Art.142, Art.14, Art.16
INDUSTRIAL DISPUTES ACT: S.36, S.10, S.2, S.25, S.18, S.19
LIFE INSURANCE CORPORATION ACT: S.48, S.23, S.49, S.84
Life Insurance Corporation of India Class III and Class IV Employees Bonus and Dearness Allowance Rules: R.3
STAFF REGULATIONS: Reg.18, Reg.4
INDUSTRIAL DISPUTES ACT: S.36, S.10, S.2, S.25, S.18, S.19
LIFE INSURANCE CORPORATION ACT: S.48, S.23, S.49, S.84
Life Insurance Corporation of India Class III and Class IV Employees Bonus and Dearness Allowance Rules: R.3
STAFF REGULATIONS: Reg.18, Reg.4
Headnote
(A) Life Insurance Corporation Act, 1956 - Section 23(1) - Industrial Disputes Act, 1947 - Absorption of temporary/badli workers - The dispute centers on the criteria for absorption of workers employed temporarily and their rights under various awards and the need for a fair recruitment process by LIC. The Supreme Court found a direct conflict between the Dogra Report and existing awards which dictate the criteria for worker absorption, emphasizing LIC's duty as a public employer to adhere to constitutional standards. (Paras 1, 88, 94, 76)
(B) Industrial Disputes Act, 1947 - Section 18(3)(d) - Applicability to subsequent workers - The Court held that workers engaged post-4 March 1991 are not entitled to absorption under the Srivastav Award due to the overriding effect of LIC regulations. (Paras 65, 72, 18)
(C) Enforcement of rights - The Court directed a fresh verification of claims related to worker absorption, providing monetary compensation instead of reinstatement to workers found eligible based on established criteria. (Paras 73, 76)
(B) Industrial Disputes Act, 1947 - Section 18(3)(d) - Applicability to subsequent workers - The Court held that workers engaged post-4 March 1991 are not entitled to absorption under the Srivastav Award due to the overriding effect of LIC regulations. (Paras 65, 72, 18)
(C) Enforcement of rights - The Court directed a fresh verification of claims related to worker absorption, providing monetary compensation instead of reinstatement to workers found eligible based on established criteria. (Paras 73, 76)
Legal Category Hierarchy
- constitutional law
- administrative law
- labour and industrial law
- statutory interpretation
Advocate Appeared:
For the Appellant :Bankey Bihari Sharma, Mahesh Srivastava, Vaibhav Manu Srivastava, Yadav Narender Singh, M.A. Chinnasamy, C. Rubavathi, M. Veeraragavan, C. Raghavendren, V. Senthil Kumar, Anjani Aiyagari, Ram Lal Roy, B.K. Pal, Manish Singhvi, D.K. Devesh, Upendra Pratap Singh, Harsh Singh Rawat, Abhinav S. Raghuvanshi, Suprabh Kumar Roshan, Nishant Kumar, Rajiv Kumar, Advocate, Mr. Krishna M. Singh, Sanjeev Gupta, Advocates
For the Respondent:A.N.S. Nadkarni, Ashok Panigrahi, Geetanjali Das Krishnan, Nikita Jaydevan, Adhiraj Bali, Deepti Arya, Salvador Santosh Rebello, Arzu Paul, Varnalee Mishra, Nabab Singh, Varnalee Mishra, V.N. Subramaniam, Anzu. K. Varkey, Randhir Kumar Ojha, S. Nandakumar, Deepika Nandakumar, Anand Murthi Rao, Naresh Kumar, R. Singaravelan, G. Ananda Selvam, P. Vasu, Sanchit Mageshwari, Lakshmi Ramamurthy, Salman Khurshid, Lubna Naaz, Sommya Chaturvedi, Mayilsamy K., Payventham, Santhakumaran, P. Soma Sundaram, Vivek Sharma, Resmitha R. Chandran, Anand Dilip Landge, Sumita Hazarika, Karunakar Mahalik, K.P. Kylasanatha Pillay, A. Venayagam Balan, V.S. Lakshmi, V.N. Raghupathy, Vishnu Shankar Jain, Manish Singhvi, D.K. Devesh, Upendra Pratap Singh, Harsh Singh Rawat, Abhinav S. Raghuvanshi, Suprabh Kumar Roshan, Nishant Kumar, Advocates
For the Appellant :Bankey Bihari Sharma, Mahesh Srivastava, Vaibhav Manu Srivastava, Yadav Narender Singh, M.A. Chinnasamy, C. Rubavathi, M. Veeraragavan, C. Raghavendren, V. Senthil Kumar, Anjani Aiyagari, Ram Lal Roy, B.K. Pal, Manish Singhvi, D.K. Devesh, Upendra Pratap Singh, Harsh Singh Rawat, Abhinav S. Raghuvanshi, Suprabh Kumar Roshan, Nishant Kumar, Rajiv Kumar, Advocate, Mr. Krishna M. Singh, Sanjeev Gupta, Advocates
For the Respondent:A.N.S. Nadkarni, Ashok Panigrahi, Geetanjali Das Krishnan, Nikita Jaydevan, Adhiraj Bali, Deepti Arya, Salvador Santosh Rebello, Arzu Paul, Varnalee Mishra, Nabab Singh, Varnalee Mishra, V.N. Subramaniam, Anzu. K. Varkey, Randhir Kumar Ojha, S. Nandakumar, Deepika Nandakumar, Anand Murthi Rao, Naresh Kumar, R. Singaravelan, G. Ananda Selvam, P. Vasu, Sanchit Mageshwari, Lakshmi Ramamurthy, Salman Khurshid, Lubna Naaz, Sommya Chaturvedi, Mayilsamy K., Payventham, Santhakumaran, P. Soma Sundaram, Vivek Sharma, Resmitha R. Chandran, Anand Dilip Landge, Sumita Hazarika, Karunakar Mahalik, K.P. Kylasanatha Pillay, A. Venayagam Balan, V.S. Lakshmi, V.N. Raghupathy, Vishnu Shankar Jain, Manish Singhvi, D.K. Devesh, Upendra Pratap Singh, Harsh Singh Rawat, Abhinav S. Raghuvanshi, Suprabh Kumar Roshan, Nishant Kumar, Advocates
Table of Contents
2. Workers seek absorption based on an industrial award and Section 18(3)(d), ID Act — Corporation argues against backdoor entry and asserts the overriding effect of the LIC Act. (Para 26 , 35 , 36 )
3. The restoration of an industrial award ignored a final order substituting previous awards with a compromise — mass absorption without open recruitment violates Articles 14 and 16. (Para 53 , 54 , 56 , 57 , 60 , 69 , 74 )
4. Statutory rules framed under Section 48 of the LIC Act override the Industrial Disputes Act — public employment requires open recruitment to satisfy Articles 14 and 16. (Para 63 , 66 , 67 , 68 , 71 , 72 )
5. Verification report set aside — fresh verification for workers engaged between 20 May 1985 and 4 March 1991 — monetary compensation awarded in lieu of absorption. (Para 75 )
6. Does the Life Insurance Corporation Act override the Industrial Disputes Act regarding service conditions?
Yes. Section 48(2C) of the LIC Act provides that rules made under Section 48(2)(cc) have effect notwithstanding anything contained in the Industrial Disputes Act, 1947, or any other law, agreement, settlement, or award. (Para 62 , 63 , 66 , 67 )
7. Can workers engaged after a reference date claim absorption under Section 18(3)(d) of the ID Act if overriding statutory rules exist?
No. Where statutory rules stipulate that temporary appointment does not entitle one to absorption, the overriding provision of Section 48(2C) of the LIC Act precludes claims for absorption under Section 18(3)(d) of the ID Act. (Para 69 , 70 , 71 )
8. Is mass absorption of temporary workers without a competitive recruitment process constitutionally permissible?
No. Public employment must follow a fair and open recruitment process to ensure equality of opportunity under Articles 14 and 16 of the Constitution; backdoor entries are anathema to public service. (Para 57 , 72 , 74 )
9. What is the legal effect of a court decision that fails to consider a binding final order or a larger bench's decision?
Such a decision is considered per incuriam. The court may exercise its jurisdiction to correct a manifest miscarriage of justice when the decision creates a conflict with binding precedents of larger or coordinate benches. (Para 54 , 56 )
JUDGMENT :
Dhananjaya Y. Chandrachud, J.
This judgment has been divided into sections to facilitate analysis. They are:
A Introduction
B Dogra Report
C LIC’s objections to the Dogra Report
D The E Prabavathy Group
E Sequel to E Prabavathy
F Submissions
G Prelude – Tulpule and Jamdar Awards, and their Aftermath
H Srivastav Award and the Judgement of this Court
I Validity of the verification in the Dogra Report
J The Interplay between the Industrial Disputes Act 1947 and Section 48 of the LIC Act 1956
K Structuring the Relief
A Introduction
1. This litigation has a long and chequered history. The dispute, a familiar terrain in service jurisprudence, pertains to the claim for absorption of persons who were engaged by the Life Insurance Corporation of India1[LIC] as temporary/badli/part-time workers. Section 2 3(1) of the Life Insurance Corporation Act 19562[LIC Act] enables LIC to employ such number of persons as it thinks fit to discharge its functions. Pursuant to clauses (b) and (d) of Section 49 (2), LIC has framed the Life Insurance Corporation of India ( STAFF REGULATIONS ) 19603[ STAFF REGULATIONS ]. Regulation 8 empowers LIC to appoint persons on a temporary basis in Class III and Class IV posts. After an amendment which was notified on 7 August 1971, Regulation 8 provides as follows:
"8. Temporary Staff: -
(1) Notwithstanding anything contained in these Regulations the Managing Director or Executive Director (Personnel), a Zonal Manager or a Divisional Manager may employ staff in classes III and IV on a temporary basis, subject to such general or special directions as may be issued by the Chairman from time to time.
(2) No person appointed under sub-regulation (1) shall only by reason of such appointment be entitled to absorption in the services of the Corporation or claim preference for recruitment to any post."
2. On 31 January 1981, Sections 48 and 49 were amended to impart statutory force to the STAFF REGULATIONS . According to LIC, its staff and employees are governed by the parent enactment and fall outside the purview of the Industrial Disputes Act 19474[ID Act]. The validity of the amendment to Sections 48 and 49 has been upheld by this Court in A V Nachane v. Union of India ,5[(1982) 1 SCC 205 (A V Nachane). See also: M. Venugopal v. Divisional Manager, LIC, Machilipatnam , (1994) 2 SCC 323; and Life Insurance Corporation of India v. Raghavendra Seshagirirao Kulkarni , (1997) 8 SCC 461].
3. On 13 August 1982, an industrial dispute was raised by the Western Zonal Insurance Employees Association alleging that LIC had been engaging in unfair labour practices by employing temporary, badli and part-time workers and was restricting their employment to short tenures to deprive them of the claim for permanency.
4. On 20 May 1985, the dispute was referred for adjudication by the Central Government to the National Industrial Tribunal6[NIT], Bombay presided over by Justice R D Tulpule7[Tulpule Tribunal], a former Judge of the Bombay High Court. The terms of reference were as follows:
"What should be the wages and other conditions of service of badli, temporary and part-time workmen of the Life Insurance Corporation of India as well as the conditions of their absorption into regular cadre?"
5. On 15 January 1986, the Tulpule Tribunal issued an interim order restraining LIC from recruiting regular employees and from terminating the services of the ad hoc workers working with LIC.
6. On 18 April 1986, the Tulpule Tribunal passed an award8[Tulpule Award] which was gazetted on 7 June 1986 stipulating that those ad hoc workers who were in employment between 1 January 1982 and 20 May 1985 will be entitled for absorption. The award, inter alia, stipulated that:
(i) Workers claiming absorption in Class III posts should have worked for 85 days in a period of two years; and
(ii) Workers in Class IV posts should have worked for 70 days in a period of three years.
The calculation of the number of days worked was to be up to the date of the refe
