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2007 Supreme(SC) 215
SUPREME COURT OF INDIA
S.B. Sinha & Markandey Katju
Punjab State Warehousing Corp. , ChandigarhPETITIONER:
Versus
Manmohan Singh & Anr RESPONDENT:
Appeal (civil) 857 of 2007
(Arising out of S.L.P. (C) No. 19496 of 2005)
Decided On 20/02/2007
A State Government's policy circular for employee regularization does not apply to statutory corporations unless permitted by statute. Furthermore, only irregular appointments, not illegal ones made in violation of the constitutional scheme (Articles 14 and 16), can be considered for regularization.
Headnote:(A) Constitution of India - Articles 14, 16, 162 and 309 - Regularization of employees - Applicability of State government circular to statutory corporations - A policy made by a State ordinarily applies only to employees working under it - Such policy cannot be extended to a statutory corporation unless permitted by the governing statute - Terms and conditions of employees of a statutory corporation governed by statute and statutory rules can only be altered by amendment of those rules.
(B) Regularization of appointments - Irregular vs Illegal - Appointments made in violation of the Constitutional scheme are nullities - Protective umbrella of one-time regularization schemes applies only to irregular appointments and not to those that are illegal.
Facts of the case:
An employee was appointed on a contract basis without following the constitutional scheme of public advertisement or notification through the employment exchange. The State Government issued a circular for the regularization of employees and subsequently clarified that it applied to employees of a statutory corporation. Upon termination of services, the employee sought regularization. The lower court allowed the claim based on the State Government's policy.
Findings of Court:
The statutory corporation is governed by its own act and rules, and the State Government cannot extend its policy to such a body via a circular letter. Since the appointment was made in violation of Articles 14 and 16 of the Constitution, it was illegal and not merely irregular.
Issues: Whether a state government policy issued via circular is binding on a statutory corporation and whether an illegal appointment can be regularized under a one-time scheme.
Ratio Decidendi: A state policy cannot be extended to a statutory corporation unless permitted by statute. Regularization is not permissible if appointments were made in contravention of statutory rules or the constitutional scheme; a clear distinction exists between irregular appointments, which may be regularized, and illegal appointments, which cannot.
Result: Appeal allowed.
Legal Category Hierarchy
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constitutional law
-
equality
- articles 14 and 16
-
executive power of state
- article 162
-
equality
-
administrative law
-
statutory corporations
- applicability of state policy
-
statutory corporations
-
service law
-
regularisation of employees
- irregular vs illegal appointments
-
recruitment
- rules and procedures
-
regularisation of employees
JUDGMENT:
S.B. Sinha, J.
Leave granted.
The State of Punjab formulated a scheme on 23.01.2001 for regularisation of its employees.
The question which arises for consideration in this appeal arising out of a judgment and order dated 25.04.2005 passed by a Division Bench of the Punjab and Haryana High Court in Civil Writ Petition No. 10307 of 2004 is as to whether the appellant herein was bound to invoke the said scheme in respect of its own employees.
The validity or otherwise of the said Scheme came to be questioned before this Court. This Court passed an interim order. Pursuant thereto or in furtherance thereof, Respondent No. 1 herein was appointed on contract basis as Restorer on a consolidated monthly salary. His services indisputably were extended from time to time.
The contention of the appellant is that the contract of the respondents service was not renewed as the services of Respondent No. 1 were not required any further and, thus, by an order dated 24.12.2001 his services were terminated. Questioning the validity of the said order, a writ petition was filed by the Respondent before the High Court. The said writ petition was disposed of directing the appellant herein to consider the case of Respondent No. 1 in the backdrop of the said Scheme dated 23.01.2001. Inter alia on the premise that in view of a clarification issued by the State Government that the said scheme was not applicable to the case of contract employees, the respondents claim for regularisation was rejected by an order dated 17.06.2004. A fresh Writ Petition was filed which by reason of the impugned judgment has been allowed.
The High Court, however, in its judgment opined that the case of Respondent No. 1 was covered by the said policy decision and as such he was entitled to the benefit thereof. The appellant is, thus, before us.
One of the questions which was raised for its consideration before the High Court was as to whether the workmen engaged on contract basis were covered by the Scheme dated 23.01.2001.
The said purported scheme of the State was not made in terms of Article 162 of the Constitution of India. It was by way of a circular letter dated 23.01.2001. The State, without issuing any notification or without even exercising its statutory power governing the constitution and functioning of the statutory authorities like the appellant, sought to extend the same to public sector undertakings, corporations, boards, local authorities and other autonomous bodies which it could not do in law. Therein, it was stated:
"iv. For accommodating work charged/ daily wage/ other category workers as per the above policy against the existing vacancies the existing instructions requiring permission of the DOP and FD for filling up the vacancies would not apply.
Wherever for the absorption/ regularization of workers as per the above policy any Departments own Recruitment Rules come in the way, such provisions of the Recruitment Rules will stand relaxed."
However, a clarification was sought for from the State Government by the Managing Director of the appellant by a letter dated 29.03.2001 as to whether the staff not being charged against any project or work is to be regularized or not; in response whereto, it was clarified:
" It is clarified that those employees who are working in Corporation for the last more than three years continuously apart from work charge/daily wages, are to be regularized because these categories of workers are covered under the policy instructions No. 11/34/2000-4 P. p.31301 dated 23.01.01. issued by the Government of Punjab."
It is not the case of the parties hereto that Respondent No. 1 was appointed upon compliance of the constitutional scheme as adumbrated in Articles 14 and 16 of the Constitution of India. It is also not the case of the respondent that prior to his appointment either any advertisement was issued or even the Employment Exchange was notified in regard to the then existing vacancies. It is also not known whethe
