Gujarat High Court
Amreli Municipality vs Gujarat Pradesh Municipal Employees ... on 9 July, 2004
Equivalent citations: (2004)3GLR1841, (2005)ILLJ592GUJ
Bench: A.R. Dave, K.S. Jhaveri
JUDGMENT K.R. Vyas, J.
1. This group of petitions has been referred to us in view of different observations of two Division Benches on the point as to whether the Labour Court/Industrial Tribunal can order regularisation of services to a local authority which is a public body in which there is no availability of sanctioned set-up as per the provisions of Municipalities Act.
1.1 The learned single Judge, while hearing Special Civil Application No. 5646 of 1999 and Special Civil Application No. 5750 of 1999, was shown two different views expressed by Division Bench in the case of Kalol Municipality v. Shantaben, reported in 1993 (2) GLR 997 and in the case of Halvad Nagarpalika and Ors. v. Jani Dipakbhai Chandravadanbhai and Ors., reported in 2003 (4) GLR 3229 : 2003 (2) GHCJ 397, 1.2 In Special Civil Application No. 5746 of 1999, the petitioner Amreli Municipality has challenged the legality and validity of award dated 12-3-1999 passed by the Industrial Tribunal, Bhavnagar in Reference (IT) Nos. 85, 99, 100 and 101 of 1993. By the impugned award, the Tribunal directed regularisation of concerned workmen. The concerned workmen were ordered to be made permanent on completion of 240 days service which commenced from 1-1-1991 and onwards.
1.3 In Special Civil Application No. 5750 of 1999, the same Municipality has challenged another award dated 15-3-1999 of the Industrial Tribunal, Bhavnagar passed in Reference (IT) No. 56 of 1993 whereby the Industrial Tribunal, Bhavnagar awarded permanency benefit to the concerned workmen from different dates as mentioned in the said award and the continuity of service was directed to be granted on completion of continuous 240 days in a year from the first year.
1.4 In Special Civil Application No. 16277 of 2003, the petitioner Amreli Municipality has challenged the award dated 13-6-2003 passed in Reference (IT) No. 17 of 2001 by the Industrial Tribunal, Bhavnagar whereby the petitioner was directed to regularise the services of the respondent-workman after he completes 240 days in service and to fix his salary accordingly. The petitioner was also directed to pay the salary, perks and other benefits to the workman which were being paid to other regular employees from the date of the award.
1.5 Special Civil Application No. 803 of 2004 is filed by Gujarat Pradesh Municipal Union against Amreli Municipality and the Regional Director of Municipality praying for quashing and setting aside the order passed by the Regional Director of Municipality under Section 260 of the Gujarat Municipalities Act whereby regularisation of employees was suspended. The petitioner-Union also prayed in the petition for direction to comply with the award passed by the Industrial Tribunal, Bhavnagar in Reference (IT) Nos. 85, 100 and 101 of 1993. According to the petitioner-Union, the Industrial Tribunal, Bhavnagar, by common award passed in the said Reference on 12-3-1999, directed regularisation of services of the concerned workmen. The Municipality challenged the said award by filing Special Civil Application No. 5727 of 1999. It appears that the said petition was dismissed for default, however, was subsequently restored. After the said petition was heard, the Municipality came out with a draft amendment stating that the Regional Director of Municipality issued an order purporting to exercise powers under Section 260 of the Gujarat Municipalities Act.
1.6 In Special Civil Application No. 16274 of 2003, the same Municipality has challenged award dated 3-6-2003 passed in Reference (IT) No. 60 of 1996 by the Industrial Tribunal, Bhavnagar whereby the petitioner was directed to regularise services of the respondents workmen on their completion of 240 days in service and to fix their salary accordingly. The petitioner was also directed to pay salary, perks and other benefits to the workmen which are being paid to other regular employees, from the date of the award.
1.7 Bagsara Municipality, in Special Civil Application No. 17310 of 2003, has challenged the legality and validity of the award dated 29-6-2001 passed by the Industrial Tribunal, Bhavnagar in new Reference (IT) No. 149 of 1993 directing the petitioner to appoint the respondent-workman on permanent basis on his completion of 240 days service. The petitioner was also directed to pay arrears with other perks and benefits being paid to permanent employees after five years of service.
1.8 The petitioner Madhupura Gram Panchayat, in Special Civil Application No. 1732 of 2004 has challenged the legality and validity of the award dated 31-3-2003 passed by the Labour Court, Junagadh whereby certain daily-rated employees were ordered to be made permanent with effect from 1-1-2001.
1.9 In Special Civil Application No. 4740 of 2004, Jamnagar Municipal Corporation has challenged the award dated 5-12-2003 passed by the Industrial Tribunal, Rajkot in Reference (IT) No. 197 of 1989 whereby the demand of four workmen has been accepted and the Corporation was directed to make them permanent with effect from 1-1-1995 and also to give 40% of arrears of salary from 1-1-1998.
1.10 In Special Civil Application No. 4394 of 2004, the petitioner Kadi Municipality has challenged the award passed by Industrial Tribunal, Ahmedabad in Reference (IT) No. 189 of 1993 whereby the Tribunal directed the Municipality to regularise services of all the employees with effect from the date of application of award and also directed the petitioner-Municipality to appoint one person on the post of peon out of two persons named in the award and also directed that four other employees shall be regularised if there are permanent vacant posts available.
1.11 The same Municipality also filed Special Civil Application No. 4559 of 2004 challenging the award dated 25-9-2002 passed by the Industrial Tribunal, Ahmedabad in Reference (IT) No. 48 of 1995 whereby the Tribunal directed the petitioner to regularise services of the employees with effect from the date of publication of the award and also directed the petitioner to pay all the benefits such as D.A., H.R.A., C.L.A. at par with the permanent employees.
2. Though, incidentally, the order of Reference is passed in Special Civil Application No. 5746 of 1999 where the petitioner is the Municipality constituted under the provisions of Gujarat Municipalities Act, 1963, the legal conclusions drawn by us would be applicable to all the statutory and local bodies, and therefore, we have considered the question posed to us in a broader perspective. This is particularly in view of the fact that the learned Counsel appearing for the parties have cited various decisions before us. On consideration of the same, the following broad questions emerge for our consideration :
"(i) Whether the Industrial Tribunal or the Labour Court exercising powers under the Industrial Disputes Act is bound by statutory provisions or statutory rules while considering the question of regularisation or otherwise of the workmen?
(ii) Whether in case of public employment as against private employment, the Industrial Tribunal/ Labour Court is empowered to regularise the services of the workmen merely on the basis of long continuance of ad-hoc/temporary employee ignoring the fact that such recruitment was made against the sanctioned set-up statutorily sanctioned and without following any prescribed procedure?
(iii) Whether the law laid down by this Court in the case of Kalol Municipality (supra), which is based upon after considering the judgment of the Division Bench reported in the case of Natvarlal v. Vadnagar Municipality, 1965 GLR 189 and unreported decision dated 27-4-1976 in the case of Savarkundla Municipality in Special Civil Application No. 351 of 1976, is a good law or is impliedly overruled by the subsequent decisions of the Supreme Court?
Submissions for the Petitioners (Employers):
2.1 Mr. Tushar Mehta, learned Counsel appearing for the petitioner Amreli Municipality has taken us through the relevant provisions of Gujarat Municipalities Act and more particularly Sections 47, 50, 260 and 271 (hereinafter referred to as 'the Act').
2.2 Sections 47, 50, 260 and 271, which are relevant for our purpose, are reproduced as under :
"Section 47. Appointment of Chief Officers and Other Officers : (1)(a) For every municipality there shall be a Chief Officer appointed by the State Government.
(b) The Chief Officer of a Municipality shall forthwith be transferred from that Municipality by the State Government if a resolution to that effect is passed by the Municipality with not less than two-thirds of the total number of Councillors of the Municipality voting in favour of such resolution.
(2) A Municipality may, with the previous sanction of the Director, and shall, if so required by the State Government, create all or any of the following posts, namely :
(i) a Municipal Engineer, (ii) a Water Works Engineer, (iii) a Municipal Health Officer, (iv) a Municipal Auditor, (v) a Municipal Education Officer, and (vi) any other officer as may be designated by the State Government in this behalf.
(3) Subject to the provisions of Section 47A, the recruitment and conditions of service of the officers referred to in Sub-sections (1) and (2) shall be such as may be prescribed.
(4) Subject to the provisions of Section 47A, the power to make appointment to the posts referred to in Sub-section (2) shall vest in the Municipality."
"Section 50. Appointment of other Officers and Servants of the Municipalities :-(1) A Municipality may with the previous sanction of the Director, create such post of officers and servants other than those specified in Sub-sections (1) and (2) of Section 47 as it shall deem necessary for the purposes of carrying out the duties under the Act.
(2) The recruitment of such officers and servants and their condition of service shall be such as may be determined in accordance with rules made under Section 271.
(3) The power to make appointment in any post referred to in Sub-section (1) shall vest in the Municipality or in the authority empowered by the Municipality by rules made in this behalf under Section 271."
"Section 260. Power of Director to prevent extravagance in the employment of establishment :- If in the opinion of the Director the number of persons who are employed by a Municipality as officers or servants, or whom a Municipality proposes to employee or the remuneration assigned by the Municipality to those persons or to any particular person is excessive the Municipality, shall on the requirement of the Director reduce the number of the said persons or the remuneration of the said person or persons ;
Provided that the municipality may appeal against any such requirement to the State Government whose decision shall be conclusive.
Section 271. xxx xxx xxx
(d) Establishment :- Determining the staff of officers and servants to be employed by the Municipality and their powers and duties;
(g) Mode of appointment, etc., municipal servants : Determining subject to the limitations imposed by Sections 47 and 50 the mode and conditions of appointing, punishing, or dismissing any officer or servant; and delegating to officers designated in the rules the power to appoint, fine, reduce, suspend or dismiss any officer or servant."
2.3 Learned Counsel submitted that in view of the above referred statutory provisions, before creating a post of Officer or servant of Municipality, previous sanction of the Director of Municipalities is a mandatory requirement. This is known as "sanctioning set-up" of the Municipality. So far as the recruitment procedure is concerned as against the vacancies sanctioned by the Director of Municipalities, such recruitment is required to be made in accordance with the rules framed by a Municipality under Section 271 of the Act. According to the learned Counsel, the Director of Municipalities can issue directions as per the law laid down by this Court even without hearing the local authority or employees in view of the fact that such a direction is not affecting any individual employee. While frankly conceding, the learned Counsel stated that in the case of petitioner-Municipality, there are no such rules. Nevertheless, in view of the statutory provisions, the local authority cannot by-pass the statutory provisions. In view of the provisions of Section 260 of the Act, they cannot spend extravagantly on establishment expenses at the cost of public development work.
2.4 Learned Counsel, by inviting our attention to Chapter IX-A of the Constitution of India whereby new chapter has been introduced for the local authority and more particularly Articles 243W and 243-Y and Sub-clauses (a)(iii) and (b) and 243-Y(2), submitted that even the Finance Commission can direct the local authority to curb their expenses in view of the fact that the State Government is required to give grant to the local authority. Learned Counsel submitted that in view of the constitutional provisions, the local authority is not empowered to appoint any person on any post of the Municipality without prescribed procedure established by law even if there are no rules as far as the petitioner-Municipality is concerned.
2.5 Learned Counsel submitted that in the instant case, recruitment is done by a statutory authority which is governed by the elected member which has a fixed term of five years and the local authority viz., the local self government is mismanaged because of frequent change of administrator. Thus, the principle of labour jurisprudence may not be stricto sensu applicable in the present case inasmuch as it is true that statutory authorities and administrators are not required to spend their funds, but they have to manage the public funds. Therefore, the Court should not follow the same principle applicable in the case of private individual or in case of Government Corporation which are dominated by the paid employees. In the submission of learned Counsel, keeping in mind the prevailing practice in the local authority, the Court's endeavour should not be to protect the interest of the employee at the cost of public money.
2.6 Learned Counsel further submitted that the Division Bench, while deciding the case of Kalol Municipality was not concerned with the question as to whether the regularisation of workmen in that case was with respect to the workmen who were regularly appointed or were appointed de hors the statutory rules or any known method of recruitment. He has also submitted that the judgment in the case of Kalol Municipality is per incuriam inasmuch as it does not take into consideration the provisions of Sections 47 and 50 of the Gujarat Municipalities Act. In the submission of learned Counsel, irrespective of any rules being framed under Section 271 of the Act, there is an independent provision under Section 50 of the Act which requires prior approval and sanction of the Director of Municipalities. In absence of any such sanction being granted by the Director of Municipalities, no Municipality can create a post for being filled up either by regular sanction process or by appointing temporary/ad hoc employees.
2.7 The temporary/ad-hoc appointments should necessarily be against the sanctioned posts and existing vacancies. In absence of the same, appointments can never be regularised. In the submission of learned Counsel, even against the sanctioned post or existing vacancies, when temporary/ad hoc appointment is made, such appointment must be made after following the procedure as per the rules framed under Section 271 of the Act or in any case after following a known method of recruitment i.e. inviting applications from all eligible candidates, inviting names from the Employment Exchange and undertaking some process of selection to select the best available candidates from amongst the applicants.
2.8 To substantiate the above submissions, learned Counsel has placed reliance on the following decisions :
2.8.1 In the case of State of H. P. v. Suresh Kumar Verma, reported in AIR 1996 SC 1565 : 1996 (7) SCC 562 : 1996 (2) Scale 307 : JT 1996 (2) SC 455 : 1996 (2) Supreme 592 : 1996 SCC (L&S) 645 : 1996 LIC 1265 : 1996 (2) SLR 321 and 1996 (72) FLR 804, the Apex Court observed as under :
"4. The vacancies require to be filled up in accordance with the rules and all the candidates who would othervise be eligible are entitled to apply for when recruitment is made and seek consideration of their claims on merit according to the Rules for direct recruitment along with all the eligible candidates. The appointment on daily wages cannot be a conduit pipe for regular appointments which would be a back-door entry, detrimental to the efficiency of service and would be breed seeds of nepotism and corruption. It is equally settled law that even for Class IV employees recruitment according to rules is a pre-condition. Only work-charged employees who perform the duties of transitory nature are appointed not to a post but are required to perform the work of transitory and urgent nature so long as the work exists. One temporary employee cannot be replaced by another temporary employee."
2.8.2 Learned Counsel also relied upon a decision in the case of State of U. P. and Ors. v. V. P. Madhyamik Shiksha Parishad Shramik Sangh and Anr., reported in 1996 SCC (L&S) 371 : AIR 1996 SC 708 : 1996 (7) SCC 34 : JT 1995 (9) SC 132 : 1995 (6) Scale 434 : 1996 (1) SLR 303 to show that as and when regular posts are created and posts fall vacant, daily-wagers, on the basis of seniority, length of service and performance may be considered for regularisation according to rules and rules of reservation in vogue. Until then, their services will be taken as and when exigencies would arise and payment of daily wages made as determined by the District Magistrate from time to time.
2.8.3 Paras 10 and 11 of the decision in the case of Hindustan Shipyard Ltd. and Ors. v. Dr. P. Sambasiva Rao and Ors., reported in 1996 (7) SCC 499 : AIR 1996 SC 3230 : JT 1996 (2) SC 481 : 1996 Lab.IC 1606, was relied upon wherein it is laid down that the process of regularisation involves regular appointment which can be done only in accordance with the prescribed procedure. The Apex Court ultimately in the said decision issued direction that the respondent Medical Officer should be considered by a duly constituted Selection Committee as per rules for the purpose of regular appointment.
2.8.4 The decision in the case of Ahmedabad Municipal Corporation v. Virendra Kumar Jayantibhai Patel, reported in 1998 (1) GLR 17 (SC) : AIR 1997 SC 3002 : 1997 (5) Scale 50 : 1997 (6) SCC 650 : 1997 Lab.IC 2881, was relied on to show that even the Tribunal under the Industrial Disputes Act cannot direct to absorb employees under the guise of sympathy.
2.8.5 The decision in the case of Ashwani Kumar and Ors. v. State of Bihar and Ors., reported in AIR 1997 SC 1628 : 1997 (2) SCC 1 : JT 1997 (1) SC 243 : 1996 (9) Scale 731 : 1997 (6) Supreme 66 : 1997 (2) LLJ 856 : 1997 LIC 578 : 1997 (1) SLJ 178, is heavily relied upon on behalf of the petitioner as the same was decided by Larger Bench of the Apex Court in view of the fact that the Bench deferred on certain material issues. We will deal with the relevant observations of the Larger Bench of Apex Court at an appropriate stage.
2.8.6 In the case of State of U. P. and Ors. v. Ajay Kumar, reported in 1997 (4) SCC 88 : JT 1997 (3) SC .219 : 1997 (2) Scale 340 : 1997 (2) Supreme 756 : 1997 SCC (L&S) 902 : 1997 (1) LLJ 1204 : 1997 (2) SLR 234 : 1998 (1) SLJ 164, it is laid down that there should exist a post and either administrative instructions or statutory rules must be in operation to appoint a person to the post. The daily wage appointment will obviously be in relation to contingent establishment in which there cannot exists any post and it continues so long as the work exists.
2.8.7 The case of Union of India and Ors. v. Bishamber Dutt, reported in 1997 SCC (L&S) 478 : 1996 (11) SCC 341 : JT 1996 (10) SC 329 : 1996 (8) Scale 294 : 1996 (8) Supreme 215 : 1997 (1) SLR 135, was cited by the learned Counsel in order to show that the Supreme Court disapproved regularisation if the appointments were not made on regular basis according to rules.
2.8.8 In Municipal Corporation, Bilaspur and Anr. v. Veer Singh Rajput and Ors., reported in 1998 (9) SCC 258 : JT 1998 (7) SC 390 : 1998 (2) LLJ 627 : 1998 (80) FLR 847, after following the case of State of Haryana v. Piara Singh, the Apex Court has given direction for consideration for the appointment under daily wages in preference to others by waiving age-bar if necessary, provided they were otherwise qualified and eligible for the post. It was emphasized that in spite of long tenure of service, the Supreme Court has issued direction only for consideration and not otherwise and the Labour Court or the Industrial Court cannot issue direction for absorption and at the most they can issue direction for consideration subject to availability of the post in the establishment.
2.8.9 Similar is the view taken in the case of Urmila Devi and Ors. v. State of Bihar and Ors., reported in 1999 SCC (L&S) 642. In view of long tenure of service rendered by the employees, the State Government was directed to consider the case for regularisation.
2.8.10 In the case of State of Haryana v. Haryana V. and A.H.T.S. Assort., reported in AIR 2000 SC 3020 : 2000 (8) SCC 4 : JT 2000 (10) SC 561 : 2000 (6) Scale 415 : 2000 (6) Supreme 282 : 2000 (6) SLT 773 : 2000 (9) SRJ 103 : 2000 Lab.IC 3127 : 2000 (5) SLR 223, the Supreme Court has held that no employee can be regularised de hors the rules or without following the process of law.
2.8.11 In Para 3 of the decision in the case of Subhedarsinh and Ors. v. District Judge, Mirzapur and Anr., AIR 2001 SC 201 : 2001 (1) SCC 37 : JT 2000 (2) SC 628 : 2000 (7) Scale 417 : 2000 (8) Supreme 6 : 2000 (8) SLT 283 : 2001 (1) LLJ 5 : 2000 (5) SLR 792, the Apex Court reiterated its view that against the statutory rules, no order of regularisation can be passed.
2.8.12 In the case of Gujarat Agricultural University v. Rathod Labhu Bechar and Ors., reported in 2001 SCC (L&S) 613 : JT 2001 (2) SC 16 : 2001 (1) Scale 270 : 2001 (2) SRJ 325, the Supreme Court has issued directions to prepare a scheme in view of the fact that the petitioner-University before the Supreme Court was fully funded by the State Government and under the rules there were posts and no regular appointment were made and the employees were in large number viz. 51000 daily-rated employees were exploited by the State agency. Learned Counsel submitted that as an exceptional case the Supreme Court has not regularised, but directed the State authority to frame a scheme and to regularise them as per the rules and looking to the financial burden. Thus, the jurisdiction of the Court is rarely exercised for the regularisation keeping in mind the ratio laid down by the Apex Court in the case of Piara Singh.
2.8.13 In the decision of the Apex Court in the case of Gram Sevak Prashikshan Kendra v. Workmen Employed under them, reported in 2001 SCC (L&S) 1189 it is held that for absorption as regular employees, existence of posts is mandatory.
2.8.14 The recent decision in the case of the Divisional Manager, A.P.S.R.T.C. and Ors. v. P. Lakshmoji Rao and Ors., reported in AIR 2004 SC 1503 and more particularly Para 15 thereof reads as under :
"It is difficult to follow the logic or the reason behind the law laid down by the Division Bench. If the regularisation has to take place in a phased manner subject to availability of vacancies, etc., the question of according regular status to the employment, right from the date of initial appointment on daily wages does not arise. Moreover, if the services of respondents in the writ appeal have already been regularised and they claim regular status from the date of initial appointment, the High Court should have addressed itself to the specific question whether the regularisation after some period of daily wage service was legally correct and recorded a finding thereon. The observations made and the directions given have only added to the dimension of controversy rather than solving the problem. How and in what manner the said judgment in 1998 (2) ALT 447 which is sought to be relied upon by the appellants, was implemented is not known. No details are available in this regard. However, it is difficult to construe the judgment in the aid writ appeal as upholding the contention of the appellants excepting the passing observation that the regularisation could be done in a phased manner."
2.8.15 The Supreme Court in the case of Notified Area Council v. Bishnu C. Bhoi and Ors., reported in 2001 (11) SCC 636 : 2002 SCC (L&S) 1018, held that the High Court exceeded its jurisdiction in issuing the impugned direction and that a misplaced sympathy has been placed on the respondent-employees who appear to have been irregularly recruited without following the process of selection and even in the absence of any sanctioned posts. The Apex Court, accordingly quashed the impugned orders.
2.8.16 The decision in the case of Halvad Nagarpalika and Ors. v. Jani Dipakbhai, reported in 2003 (4) GLR 3229 : 2003 (2) GHCJ 397 was cited to show that when there is no permanent sanctioned post, no direction can be given to the authorities to absorb daily wage employees by creating new posts.
2.8.17 The decision in the case of K.D. Vohra and Ors. v. Kamleshbhai Gobarbhai Patel, reported in 2003 (2) GLR 1343 : 2003 (1) GLH 312 was relied upon wherein this Court observed that when the field is covered by statutory rules laying down the mode of regular appointments, the Courts will not be justified in directing regularisation which may be de hors the rules.
2.8.18 Our attention was invited to the case of Taluka Development Officer v. Rameshchandra M. Bhatt, reported in 2003 (4) GLR 3594 : 2003 (3) GLH 417 wherein this Court held that the direction of the Tribunal to create post for respondents by ignoring statutory provisions relating to recruitment of staff and to accommodate the respondents on permanent basis is without jurisdiction.
2.8.19 Learned Counsel also invited our attention to the decision of Division Bench of Karnataka High Court in the case of State of Karnataka and Ors. v. H. Ganes Rao and Ors., reported in 2002 (1) SLR 68 wherein it was held that the direction to regularise the service can be given in cases where initial appointment on daily wages was against existing vacancies and was neither illegal nor in utter disregard of the procedure and rules and appointment of employees against existing vacancies is legal.
3.1 Learned Counsel Ms. Sejal Mandavia appearing for the petitioner-Jamnagar Municipal Corporation, while adopting the arguments of Mr. Tushar Mehta, invited our attention to the decision in the case of P. Ravindran and Ors. v. Union Territory of Pondicherry, reported in 1997 (1) SCC 350 wherein the Supreme Court held that Public Service Commission having been conferred constitutional duty to select suitable candidates by inviting applications from the open market, every candidate has a fundamental right to seek consideration and for selection through open competition. Therefore, the process of recruitment through Commission as envisaged under the Constitution cannot be by-passed by issuing direction for regularisation of services of ad-hoc persons who had come to the service through back-door entry.
3.1.2 Learned Counsel also relied upon the decision in the case of Madhyamik Siksha Parishad, U. P. v. Anil Kumar Mishra, reported in AIR 1994 SC 1638 wherein the Supreme Court held that workers on temporary assignment only, working on unsanctioned posts, have no right of regularisation. There are specific recruitment rules, and therefore, any appointment made contrary to the statutory provisions cannot be upheld by the Labour Court. She further submitted that in view of the written statement filed by the petitioner-Corporation before the Labour Court, the Labour Court ought to have issued direction to the limited extent that the workmen may be regularised as and when vacancies arise and they may be regularised according to their seniority subject to rules.
4.1 Mr. Gogia, learned Counsel appearing for Madhavpur Gram Panchayat also placed reliance on the decision of the Supreme Court in the case of Dr. Arundhati Ajit Pargaonkar v. State of Maharashtra, reported in AIR 1995 SC 962 : 1994 (69) FLR 695 : 1994 Supp (3) SCC 380 : 1995 (1) LLJ 9?7, and submitted that the requirement of rules of selection through commission cannot be substituted by human consideration.
4.1.2 The decision in the case of Ramakrishna Kamat v. State of Karnataka, reported in 2003 (3) SCC 374 : 2003 SCC (L&S) 284 : AIR 2003 SC 1530 : 2003 (2) SLR 470 : 2003 (1) LLN 822 : 2003 Lab.IC 1196, wherein the Supreme Court gave direction taking into consideration long service rendered by teachers.
4.1.3 The Apex Court in the case of Dr. Chanchal Goyal (Mrs.) v. State of Rajasthan, reported in 2003 (3) SCC 485, has specifically held that the ad hoc appointment cannot be regularised unless the initial recruitment is through a prescribed agency. The Apex Court has also observed that even if there is a selection even for the ad hoc selection, the same will not be considered unless regular procedure is followed.
4.1.4 In the case of Safai Mazdoor Sangh and Ors v. Municipal Corporation, Meerut and Ors., reported in 1995 SCC (L&S) 438 : 1995 Supp (1) SCC 227 : 1995 (3) SLR 784 : 1995 (29) ATC 222, it is held that in view of the difficulty to assess the Corporation's requirement for safai workmen and its financial capacity, the Collector was directed to assess the same and forward his report to the State Government.
4.1.5 Learned Counsel also relied upon a decision in the case of State of U. P. and Ors v. Sheo Nandan and Ors., reported in AIR 1994 SC 1183 : 1994 (2) LLJ 676 : 1995 (29) ATC 658, wherein the Apex Court has held that the order passed by the learned single Judge of High Court that the Seasonal Marketing Inspectors and Clerks in Food and Civil Supplies Department were entitled to be considered for permanent appointment on regular basis by absorbing them in service in accordance with law was liable to be set aside and at the most, such appointments could only be against the available posts of the regular cadre.
5.1 Mr. Deepak Dave, learned Advocate appearing for Kadi Nagarpalika submitted that he adopts the arguments of Mr. Tushar Mehta and Ors., Advocates appearing for Nagarpalika.
Submissions for the Respondents :
6.1 Mr. T.R. Mishra arguing on behalf of the workmen submitted that the judgments which are being relied upon by the petitioners of the Apex Court are mainly under Article 226 of the Constitution of India and the Supreme Court has not dealt with the judgment of Labour Court, and therefore, it may be that under Article 226 of the Constitution of India the High Court has a limited jurisdiction whereas under Industrial Disputes Act, the Labour Court has wider jurisdiction, and therefore, the judgments which have been relied upon by the petitioners may not be applied in the present case.
6.1.2 According to the learned Counsel, the issue which has posed before this Larger Bench is whether the Labour Court can issue direction in case of local authority for regularisation.
6.1.3 By inviting our attention to the decision rendered by this Court in the case of Halvad Municipality, it was submitted that the recruitment rules were approved by the office of the Director of Municipalities in the year 2002. However, no such regulations are framed by the Amreli Nagarpalika. Therefore, the judgment of Halvad Municipality may not be applicable in the present case.
6.1.4 By inviting our attention to the definition of "industry" under Section 2(j)), "industrial dispute" under Section 2(k), "workman" under Section 2(s) and the powers of the Labour Court/Industrial Tribunal under Section 10 read with Schedule II, III and clause 10 of Schedule V of the Industrial Disputes Act which deals with "unfair labour practice", he submitted that non-regularisation is also an "unfair labour practice", and therefore, the Labour Court/Industrial Tribunal has jurisdiction. To make good these submissions, the learned Counsel placed reliance on the following decisions :
6.1.5 In the case of Baroda Borough Municipality v. Its Workmen and Ors., reported in AIR 1957 SC 110 : 1957 SCR 33 : 1957 SCJ 95 : 1957 (1) LLJ 8, the Apex Court held that the demand for bonus as an industrial claim is not dealt with by the Municipal Act; it is dealt with by the Industrial Disputes Act, 1947. Therefore, it is not a relevant consideration whether there are provisions in the Municipal Act with regard to payment of bonus.
6.1.6 In the case of Dhirendra Chamoli and Anr. v. State of U. P., reported in 1986 (1) SCC 637 wherein the Supreme Court deprecated the practice of employing casual workers in organisations which are in existence for long (12 years) on ground of the organisations being temporary and directed and sanction of posts recommended for regularisation of such workers.
6.1.7 Decision in the case of Safai Mazdoor Sangh and Ors. v. Municipal Corporation, Meerut, reported in 1995 SCC (L&S) 438 : 1995 Supp (1) SCC 227 : 1995 (2) LLJ 637, and in the case of Swadeshi Cotton Mills v. Labour Court-I, Kanpur and Ors., reported in 1995 SCC (L&S) 436 : 1995 Supp (1) SCC 223, will be discussed at an appropriate stage.
6.1.8 Learned Counsel relied on a decision in the case of Executive Engineer, U. P. State Electricity Board v. Hydro Electric Employees Union and Ors., reported in 1998 (2) LLJ 1276 wherein the Supreme Court directed orders of appointment to be issued to the respondent workmen with continuity of service but without any back wages.
6.1.9 Similarly, the learned Counsel also placed reliance on a decision in the case of Chief Conservator of Forests v. Jagannath Maruti Kondhare, reported in AIR 1996 SC 2898 : 1996 (2) SCC 295 : 1996 Lab.IC 967, wherein it is held that relief of regularisation with all benefits of permanent worker cannot be refused on grounds of financial strain on the State exchequer.
6.1.10 Another decision relied upon by the learned Counsel is in the case of Lokmat Newspapers Pvt. Ltd. v. Shankarprasad, reported in AIR 1999 SC 2423 : 1999 (2) LLJ 600 : 1999 (6) SCC 275 : JT 1999 (4) SC 547 : 1999 (6) Supreme 104 : 1999 (3) SCJ 340 : 1999 (4) SLR 248 : 1999 Lab.IC 2826, wherein it is held that :
"It becomes obvious that if the proposed scheme of rationalisation has a likelihood of rendering existing workmen surplus and liable to retrenchment, then item No. 10 of Schedule IV would squarely get attracted and would require as a condition precedent to introduction of such a scheme a notice to be issued under Section 9A by the Management proposing such an introduction of the scheme of rationalisation, but if the proposed scheme is not likely to displace any existing workmen then mere rationalisation which has no nexus with the possibility of future retrenchment of workmen would not attract item No. 10 of Schedule IV and would remain a benign scheme of rationalisation having no pernicious effect on the existing working staff."
6.1.11 Learned Counsel cited a decision in the case of Chief General Manager, R.B.I. v. General Secretary, Reserve Bank Workers Orgn., reported in JT 2001 (5) SC 271 to show that the Supreme Court had directed regularisation as per the earlier decision.
6.1.12 Likewise decision in the case of Railway Parcel & Goods Handling Mazdoor Union and Ors. v. Union of India and Ors., reported in 2001 (1) LLJ 1050 was relied upon wherein it is held that all such porters/workers who may have been initially engaged through Co-operative Societies and who had been continuously working in the Railways for the last 10 years or more on different assignments shall be regularised and absorbed by the Railways subject to being found medically fit and being below the age of superannuation (58 years).
6.1.13 Learned Counsel also cited a decision in the case of Gujarat Agricultural University v. Rathod Labhu Eschar and Ors., reported in 2001 (3) SCC 574, and relied upon Paragraphs 17, 18, 19, 21 and 22 thereof. We will discuss the same later on.
6.1.14 In the case of C. E. Tuticorin Thermal Power Station v. Inspector of Labour, Tuticorin and Ors., reported in 2002 AIR SCW 2780 : 2002 (9) SCC 752 : 2002 (1) LLJ 458 : 2002 (1) LLN 651, wherein directions were given to appoint daily wagers as permanent workers.
6.1.15 Similarly, in the case of Radha Raman Samanta v. Bank of India and Ors., reported in 2004 (1) LLN 532, the Apex Court has issued directions for regularisation of employees on vacant post.
6.1.16 In the case of Vikramaditya Pandey v. Industrial Tribunal, Lucknow and Anr., reported in AIR 2001 SC 672 : 2001 (1) CLR 975 : 2001 (2) SCC 423 : 2001 SCC (L&S) 438 : 2001 (1) LLN 852, the Supreme Court directed reinstatement and 50% back wages after observing that the Tribunal as well as High Court were not right and justified on facts and in law in refusing the relief of reinstatement of the appellant in service with back wages.
6.1.17 The decision of this Court in the case of G.S.R.T.C. v. Workmen of S. T. Corporation, reported in 1999 (1) GLH 760, has been relied upon wherein the learned single Judge, after taking into various judgments of the Apex Court has upheld the order of the Tribunal and in Paras 26 and 27, held as under :
"26. The principle fully supports the award under challenge, in the light of findings about nature of work and requirement of permanent hands needed coupled with qualification of the hands employed ostensibly temporarily to discharge that function continuously. It does not call for any interference.
27. The question may be viewed from the point yet another angle. Security of job is of great significance in labour jurisdiction. Courts have zealously looked at protecting the workmen against denial, job security by their employers by engaging them on temporary basis, though there exist permanent nature of work to engage them."
6.1.18 The decision rendered in the case of Junagadh Nagarpatika v. Jethva Dilipbhai Hirabhai and Ors., reported in 2001 (1) GCD 410 (Guj.) was relied upon to show that this Court had not interfered with the award of the Labour Court wherein the Labour Court had directed regularisation and grant of pay-scale.
6.1.19 Learned Counsel also relied on a decision of this Court in the case of Chief Officer, Keshod Municipality v. Chandrakant Harilal Rakholiya, reported in 2003 (2) GLR 1755 : 2003 (3) LLN 1050 wherein the learned single Judge has held that the order passed by the Labour Court reinstating the workmen with full back wages is legal and that the employer is a public body facing financial difficulties is not a matter of any relevance.
6.1.20 Likewise, the learned single Judge of this Court in the case of Morbi Municipality v. Rajesh Narandas, passed in Spl.C.A. Nos. 562 to 564 of 1996, dated 25th March, 2004 issued direction for regularisation.
6.1.21 The decision rendered by this Court in the case of Jetpur Municipality v. Saurashtra Employees Union, reported in 2004 (1) GLH 526 was relied on wherein the learned single Judge observed that the back-door entry had been allowed and recognised for a period of four years and as no steps had been taken by the Municipality to terminate the service of such employees, it was not open for the authority to state that such appointments were not in accordance with law.
6.1.22 Learned Counsel cited a decision of the Allahabad High Court in the case of Praveen Kumar v. State of Uttar Pradesh Nagar Vikas, reported in 2004 (1) LLN 129 wherein the learned single Judge gave certain directions to the State Government for regularisation of services of workers of Nagarpalika.
6.1.23 The decision in the case of Natvarlal Vithaldas Patel v. Municipality of Vadnagar and Anr., reported in 1965 GLR 189 was relied upon to show that this Court has held that whether the industrial claim is resolved by a settlement or an award which arises under the Industrial law, it has to be decided in accordance with the Industrial law. The general municipal law dealing with municipal affairs does not occupy that field.
6.1.24 The decision in the case of Indian Banks Association v. Workmen of Syndicate Bank and Ors., reported in 1988 LLJ 233 is relied on to show that the Division Bench of the Andhra Pradesh High Court issued directions for regularisation.
6.1.25 The decision of Jharkhand High Court in the case of Shiv Shankar Sah v. State of Jharkhand and Ors., reported in 2003 (2) LLN 700 was relied on wherein the learned single Judge has directed regularisation of a daily wager.
6.1.26 The learned Counsel cited a decision of Patna High Court in the case of Ram Chandra Ram and. Ors. v. Stale of Bihar and Ors., reported in 2003 (98) FLR 720 in which, after finding that daily wagers having worked for 14 to 18 years and became overaged, and they being allowed to continue during the pendency of the case, the Division Bench directed to consider their cases considering their length of service, performance etc. 6.1.27 The decision of the Madras High Court in the case of P. Ramakrishnan and Anr. v. Union of India and Anr., reported in 2003 (2) LLN 7 was cited to show that the learned single Judge directed the respondents to forthwith regularise the services of the petitioners and see that the petitioners' services are regularised, if necessary by creating posts or by shifting them to regular establishment with all attendant benefits with effect from the date on which they were initially appointed or engaged. It was further directed that the petitioners would not be entitled to arrears of monetary benefits on this account of the past service, but they should be placed in the appropriate scale while issuing orders of regularisation.
6.1.28 Decision of the Punjab and Haryana High Court in the case of Maninder Kaur W/o. Harvinder Paul Singh and Ors. v. State of Punjab, reported in 2004 (1) LLJ 570 was cited wherein the Division Bench issued direction for regularisation in accordance with rules and particularly in view of the State policy.
7.1 Mr. Girish Patel, learned Counsel appearing for the employees submitted that the question before the Full Bench should be considered in the light of few basic principles which have been evolved and recognised by the Courts in India :
(1) The Industrial Disputes Act, 1947 is a beneficial legislation and the public welfare legislation, meant for the protection and furtherance of the interests and rights of the workmen and strengthening of the national economy. This beneficial legislation, therefore, must be interpreted broadly and liberally and especially whenever possible, in favour of the workmen.
(2) The question has to be answered in the background and light of the two major objects of the legislations viz. (i) industrial peace and harmony, and thereby, promoting industrial development and strengthening national economy, and (ii) social justice viz., fair-play, equity and justice between the two parties including the Fundamental Rights and Directive Principles as guaranteed by the Constitution of India.
(3) The industrial law is always concerned with the substance of the question and not with the form or express designation or labels or explicit language. The Labour Court and Industrial Tribunal are not strictly tied down with the express terms of the contract or the labels used by the contract, but they are concerned with the reality so as to have the power to pierce through the external forms.
(4) One all-pervading principle of industrial law is bona fide exercise of power by the employers. The Court, therefore, will always strike at the mala fide/oblique motive, extraneous considerations, arbitrariness and absolutism, malice, victimisation or unfairness on the part of the employers.
(5) The Labour Court and Industrial Court are always expected to avoid purely technical and legalistic approach to the question of industrial disputes and are directly concerned with substantive justice and fairness. As Justice Krishna lyer in Basty Sugar Mills Company Limited v. State of U. P., 1978 (2) LLJ 412 (719), has observed : "Industrial jurisprudence does not brook nice nuances and torturesome technicalities to stand in the way of just solutions reached in a rough and ready manner. Brim and grimy life situations have no time for the finer manners of elegant jurisprudence".
(6) The question of directing regularisation of workman or conferring permanency upon workmen even in opposition to the appointment order should be considered in the context of the special powers of the Labour Court and Industrial Tribunal under the Industrial Disputes Act, 1947.
7.1.2 Learned Counsel cited the following decisions in support of his case :
(i) Western India Automobile Association v. Tribunal, reported in AIR 1949 FC 111.
(ii) Bharat Bank Limited v. Employees, reported in AIR 1950 SC 188. (iii) Patna Electric Supply case, reported in 1959 (II) LLJ 366 (370).
7.1.3 Learned Counsel then submitted that these principles have been reiterated in all subsequent cases and they clearly point out that even if the original terms of contract are specifically laid down, the Labour Court and Industrial Tribunal are not confined with the sphere of original contract of employment but will try to find out and secure justice and fairness, and accordingly, go beyond the contract or rewrite the contract or alter or modify the terms of contract or impose new obligations or abolish old obligations.
According to the learned Counsel, it is in the light of these wider powers of Labour Court and Industrial Tribunal that the question regarding regularisation of initially irregularly appointed persons or permanency of temporary or ad hoc workmen is to be considered.
(7) In all cases relating to the regularisation or permanency, two aspects have to be distinguished :- (1) Whether the Labour Court or Industrial Tribunal has power to direct regularisation or permanency, and (2) Whether in a given case such power is properly and justly exercised.
7.1.4 The learned Counsel submitted that the question of regularisation or permanency is also directly covered by Schedule V which deals with unfair labour practices. In 5th Schedule, Section I, Clause 10 reads as under :
"To employ workmen as badlis, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen."
7.1.5 It was submitted that if a person is continued to work for years, if the employer extracts work from him and the workman continues to work and gets wages for work, it implies that there is a work of permanent nature. In the circumstances, the contention of the Municipalities or the Panchayats that there was no sanctioned post or set up cannot be entertained. In the submission of learned Counsel, once the Labour Court/Industrial Tribunal, on the basis of evidence, comes to the conclusion that the employer is guilty of 'unfair labour practice' which is an offence under the Industrial Disputes Act and which is the inherent tendency to disturb industrial relations and to deny justice to workmen in the disputes arising from such unfair labour practice, it becomes "industrial dispute" and is amenable to resolution by the Labour Court/Industrial Tribunal and requires to be resolved so that the Labour Court/Industrial Tribunal can remedy the mischief.
7.1.6 The learned Counsel relied upon the decision rendered by this Court in the case of G.S.R.T.C. v. Workmen of S. T. Corporation, reported in 1999 (1) GLH 760. The learned Counsel submitted that in any question involving both, the operation of the Gujarat Municipalities Act or Gujarat Panchayats Act and the Industrial Disputes Act, 1947 regarding the terms and conditions of employment, it is the latter which prevails upon the former as the Industrial Disputes Act, 1947 is a special law while the Gujarat Municipalities Act or the Gujarat Panchayats Act is a general law and such a dispute must be resolved within the framework of the industrial law.
7.1.7 The learned Counsel submitted that in the light of the above principles, the question of back-door entry should not and would not trouble the Labour Court or Industrial Tribunal, as the initial back-door entry loses its importance and relevance when such a person is engaged for years and such engagement amounts to unfair labour practice.
7.1.8 According to learned Counsel, one very important consideration is that the Labour Court or Industrial Tribunal recognises and enforces the right to life under Article 21 including right to livelihood and security of work while directing regularisation or permanency to a person who continues to be in insecure job for years. In such a situation, it cannot be said that the Labour Court is putting approval upon violation of Article 14, but it is really enforcing both prohibition against unfairness and the guarantee of right to life.
7.1.9 The learned Counsel submitted that when irregular appointments are made either by Municipality or Panchayat, it may be that other persons who are left out may have a cause of action and challenge such appointment by resorting to Articles 14 and 16 of the Constitution of India, but if such persons do not come forward for number of years during which such irregularly appointed persons are continued, they cannot challenge the initial irregular appointment after such long unjustified delay and latches. On the other hand, the Municipality or Panchayat which itself has engaged the people in an irregular manner and has taken the benefit of services of such persons, the Municipality or Panchayat being "State" has no right to complain after long period that there is no sanctioned post or that the initial appointment is irregular, and therefore, the person must go. It is absolutely mala fide and unfairness on the part of the Municipality or Panchayat which disentitles it to raise such contention before the Labour Court or Industrial Tribunal. It does not behove in the mouth of the Municipality or Panchayat that the appointment done by itself is irregular, and therefore, the person appointed must lose his job. On the ground of unfairness, mala fide, arbitrariness, exploitation and on the ground of acquiescence, the Municipality or Panchayat loses its right to challenge such appointments.
7.1.10 Finally, the learned Counsel submitted that there cannot be absolute principle that the Labour Court or Industrial Tribunal can never direct , regularization or permanency when there is no sanctioned post or when there is procedural irregularity. The Labour Court may or may not do it depending upon the facts of each case and the foundation in each of regularisation or permanency is a clear finding of unfair labour practice. To make good the above submissions, he placed reliance on the decision of the Supreme Court in the case of Chief Conservator of Forests and Anr. v. Jagannath Maruti Kondhare, reported in AIR 1996 SC 2898 : 1996 (2) SCC 293.
8.1 Mrs. D. T, Shah and Mr. B. R. Parikh, learned Counsel appearing for the workmen adopted the arguments of Mr. Mishra as well as Mr. Patel.
9.1 Mr. Koshti, who appeared as Intervener, after inviting our attention to various provisions of Gujarat Municipalities Act and Industrial Disputes Act, submitted that the Labour Court/Industrial Tribunal have ample powers to regularise the services of temporary employees appointed by public bodies. He cited judgment in the case of Smt. Sushma Gosain and Ors. v. Union of India and Ors., reported in AIR 1989 SC 1976.
10.1 Mr. A. D. Oza, learned Government Pleader placed on record different circulars of the Government and submitted that in view of the last circular dated 22nd January 2004 the local authority cannot act contrary to Government Resolution dated 22nd January, 2004. He submitted that in view of the extravagance on the part of the local authorities, the State Government has issued circular to the local authorities to see that no appointment is made without sanction of the Director of the Municipalities under Clause (d) of Section 271. He submitted that in any case, number of temporary daily wagers should not exceed beyond 10% of the total sanctioned posts. He placed reliance on the circulars dated 16th July 1977, 12th June 1978, 18th April, 1979, 2nd March, 1988, 8th February, 1996, 20th December, 1996 and 28th October, 1999. He pointed out that Finance Department of the State Government has issued Resolution on 20th October, 1991 wherein it was directed to have 5% cut in the revenue expenditure; review the number of staff, prohibition was issued against creation of new posts, transfer of employees, restriction on purchase of new furnitures, vehicles, etc., no tour for training, seminar and education, no subsidy, restriction on travelling expenses i.e. on petrol and diesel, etc. He submitted that in spite of the same the local authorities have not improved their financial conditions. By inviting our attention to the resolutions dated 9th September, 1998 and 12th June, 1995 issued by the Secretary, Urban Development Department putting restriction on appointments of daily-wagers and part-timers and other subsequent relevant circulars, he submitted that the Government has prescribed minimum structure of establishment of the Municipalities and has decided the norms of establishment. According to Mr. Oza, the local authorities are subject to grant and the Labour Court or the Industrial Court cannot ignore the Resolutions of the State Government and issue any directions contrary to such resolutions.
10.1.2 He relied on a decision of the Supreme Court in the case of Premier Automobiles v. K.S. Wadke, reported in AIR 1975 SC 2238 wherein the Supreme Court discussed the principles applicable to the jurisdiction of the Civil Court in relation to industrial disputes. He also invited our attention to a decision in the case of M.I. Isani v. S.J.P.B.M.S., reported in 1989 (1) GLR 380 and particularly Para 3 of the said decision, wherein it is held that Government Resolutions which have been relied on by the workmen and which have been relied on by the Labour Court only go to show that the workmen on the nominal muster roll become eligible after five years of service for being taken on work-charge establishment. These Resolutions do not provide that at the end of five years of service as daily-rated workers, they are to be made permanent and the status of permanency is far away from daily-rated workmen on nominal muster roll.
10.1.3 Decision in the case of Ahmedabad Municipal Corporation v. Meghajibhai Sanabhai Bhimsuriya, reported in 2000 (3) GLR 2072 was cited wherein it is held that the daily rated employees have no substantial right to claim permanent status de hors the recruitment rules.
10.1.4 An unreported decision of this Court in the case of Manoj Nagardas Panchhiwala v. State of Gujarat, in L.P.A. No. 295 of 2000 was also cited, wherein it is held that if the person concerned who had no authority or power to make the appointment, then the appointee cannot claim right to be continued in service.
10.1.5 He finally relied upon an unreported decision of this Court in the case of Gondal Nagarpalika Karmachari Sangathan v. Gondal Nagarpalika, in Special Civil Application No. 3532 of 2002 whereby the matter was sent back to Collector for a fresh decision in the light of the directions issued in the said order.
Reasoning :
11.1 After having considered the rival contentions and various decisions cited at the Bar, we do feel that the question posed before us has many facets and perception inasmuch as diverse views have been expressed on the question.
11.1.2 In order to appreciate the controversy, it is necessary to examine certain provisions of Industrial Disputes Act.
"Section 2(j) "industry" means any business, trade, undertaking, manufacture of calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen;
Section 2(k) "industrial dispute" means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any persons;
Section 2(s) "workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes or any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person" -
11.1.3 The powers of Labour Court and Industrial Court are subject to reference to Section 10 of the Act which read as under:
"Section 10. Reference of disputes to Boards, Courts or Tribunals :- (1) Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing -
(a) refer the dispute to a Board for promoting a settlement thereof; or
(b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or
(c) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or
(d) refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified on the Second Schedule or the Third Schedule, to a Tribunal for adjudication :
Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under Clause (c) :
Provided further that where the dispute relates to a public utility service and a notice under Section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this subsection notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced :
Provided also that where the dispute in the relation to which the Central Government is the appropriate Government, it shall be competent for the Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State Government."
11.1.4 At this stage, it is also necessary to mention Section 2(ra) which defines "unfair labour practice" to mean any of the practices specified in the Fifth Schedule. Clause 10 of Fifth Schedule reads as under :
"To employ workmen as badlis, casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen."
11.1.5 In view of the above provisions, it is clear that all matters specified in the Second Schedule or the Third Schedule can be referred to the Labour Court/Industrial Tribunal for adjudication. The workmen who are being employed as badlis, casuals or temporaries and are continued for year with the object of depriving them of the status and privileges of permanent workmen is termed as 'unfair labour practice.' Thus, a dispute being an industrial dispute between the employer and workmen of industry can be adjudicated by Labour Court/ Industrial Tribunal. Once, it is held that the Labour Court/Industrial Tribunal has power to adjudicate dispute regarding regularisation or permanency, the next question will arise as to whether can it go beyond the contract or rewrite the contract or alter or modify the terms of contract or impose new obligations or abolish old obligations?
11.1.6 In the case of Western India Automobiles Association v. Industrial Tribunal, Bombay and Anr., AIR (36) 1949 FC 111, while examining the powers of Industrial Tribunal to order reinstatement, it is observed as under :
"Although, the employer may be unwilling to do so, there will be jurisdiction in the Tribunal to direct the employment or non-employment of the person by the employer. This is the same thing as making a contract of employment when the employer is unwilling to enter into such a contract with a particular person. Conversely, if a workman is unwilling to work under a particular employer, a Trade Union may insist on his doing so and the dispute will be about the employment of the workman by the employer and thus become an industrial dispute subject to the award of the Tribunal. Therefore, if the bringing about of such relationship is within the jurisdiction of the Industrial Tribunal, because such disputes are covered by the definition of the expression 'industrial dispute' there is no logical ground to exclude an award of reinstatement from its jurisdiction. It can equally direct in the case of dismissal that an employee shall have the relation of employment with the other party, although one of them is unwilling to have such relation."
11.1.7 In the case of Bharat Bank Ltd. v. Employees of The Bharat Bank Ltd., AIR (37) 1950 SC 188, the Supreme Court, after following Western India Automobiles case (supra), observed in Para 61 as under :
"We would now examine the process by which an Industrial Tribunal comes to its decisions and I have no hesitation in holding that the process employed is not judicial process at all. In settling the disputes between the employers and the workmen, the function of the Tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of any existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace. An industrial dispute as has been said on many occasions is nothing but a trial of strength between the employers on the one hand and the workmen's organization on the other and the Industrial Tribunal has got to arrive at some equitable arrangement for averting strikes and lock-out which impede production of goods and the industrial development of the country. The Tribunal is not bound by the rigid rules of law. The process it employs is rather an extended form of the process of collective bargaining and is more akin to administrative than to judicial function."
11.1.8 The above decisions cited on behalf of the workmen in no uncertain terms lay down that the Labour Court/Industrial Court has wide powers. The award of the Tribunal may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law, but the Tribunal is not fettered in any way by these limitations.
11.1.9 Even by principally accepting that the Labour Court/Industrial Tribunal has wide jurisdiction, still the question will arise whether it can straightaway order regularisation or permanency when it is established that a person who had already entered service and has continued there for long for one reason or the other beyond his control and that the same may amount to "unfair labour practice" by the employer giving cause for industrial dispute? That is in fact the real controversy between the parties.
11.1.10 The case of Ahmedabad Municipal Corporation v. Virendra Kumar Jayantibhai Patel, reported in 1998 (1) GLR 17 (SC) : AIR 1997 SC 3002 : 1997 (5) Scale 50 : 1997 (6) SCC 650 : 1997 Lab.IC 2881, is a case arising from the decision of the Industrial Tribunal. The respondent raised a dispute claiming himself to be a permanent Dental Surgeon of the Corporation and the dispute was referred to the Industrial Tribunal under Section 10 of the Act. The Tribunal, by its award, held that the respondent was entitled to be made permanent in the staff of the Corporation. The Corporation challenged the said award in a petition under Article 226 of the Constitution of India which was dismissed by the High Court by holding that the Tribunal, after appreciating evidence on record, recorded a finding that the respondent-employee is a workman having served for requisite number of years, thus, entitled to the benefits of permanent employment. The Corporation approached the Supreme Court against the said decision. In Para 5 of the judgment, the Apex Court held as under :
"As noticed earlier, the recruitment of the doctors in the clinic run by the Corporation made in accordance with the statutory rules and by no other method. Under the rules, the vacancies are advertised for inviting applications from eligible candidates. After the applications are received the Selection Committee is constituted to select the candidates for appointment in the Corporation's clinic. Only after the candidates are selected they are taken in the service. It is also noticed earlier that respondent appeared before the Selection Committee but was not selected. Under such circumstances, there is no room for sympathy or equity in the matter of such appointment specially where the recruitment in service is governed by the statutory rules. If the reasoning given by the Tribunal is accepted, the statutory recruitment rules would become nugatory or otiose and the department can favour any person or appoint any person without following procedure provided in the recruitment rules which would lead to nepotism and arbitrariness. Once, the consideration of equity in the face of statutory rules is accepted then eligible and qualified persons would be sufferers as they would not get any chance to be considered for appointment. The result would be that persons lesser in merit would get preference in the matter of appointment merely on the ground of equity and compassion. It is, therefore not safe to bend the arms of law only for adjusting equity. We, therefore, find that the reasoning given by the Tribunal that sympathy demands the absorption of the respondent in the service of the Corporation suffers from error of law."
This judgment does provide that the Tribunal cannot absorb workmen in permanent service on account of long service rendered by the employee since the appointment itself is contrary to the statutory recruitment rules.
11.1.11 In the case of Ashwani Kumar and Ors. v. State of Bihar and Ors. (supra), the Bench of the Apex Court differed on certain issues and the matter was placed before the Larger Bench which was required to consider the question regarding regularisation of employees whose entry itself was illegal and void. The Apex Court considered the said question in Paras 12 and 13 of the said judgment which read as under :
"12. So far as the question of confirmation of these employees whose entry itself was illegal and void, is concerned, it is to be noted that question of confirmation or regularisation of an irregularly appointed candidate would arise if the concerned candidate is appointed in an irregular manner or on ad hoc basis against an available vacancy which is already sanctioned. But, if the initial entry itself is unauthorised and is not against any sanctioned vacancy, question of regularising the incumbent on such a non-existing vacancy would never survive for consideration and even if such purported regularisation or confirmation is given it would be an exercise in futility. It would amount to decorating a stillborn baby. Under the circumstances there was no occasion to regularise them or to give them valid confirmation. The so-called exercise of confirming these employees, therefore, remained a nullity. Learned Counsel for the appellants invited our attention to the chart showing the details of appointments of the concerned appellants as found at Anenxure-XXII at paged 243 to 255 of the Paper Book and also as a specimen a subsequent order of confirmation as found at page 256 in the case of Ashwani Kumar, It was submitted that such confirmation orders were also given to number of employees who were initially appointed as daily wagers T.B. Assistants by Dr. Mallick. Our attention is also invited to the letter of Joint Secretary Shri Anant Shukla written to the Superintendent, T. B. Hospital, Koelwar, Bhojpur on 17th October 1984, which is found as Annexure-X at page 127 on the Paper Book to show that steps were taken for ratification of the orders of appointment of the daily wage employees as per the direction of Deputy Director, T.B./Health Services, Bihar. As we have seen earlier when the initial appointments by Dr. Mallick so far as these daily wagers were concerned were illegal there was no question of regularising such employees and no right accrued to them as they were not confirmed on available clear vacancies under the Scheme. It passes one's comprehension as to how against 2500 sanctioned vacancies confirmation could have been given to 6000 employees. The whole exercise remained in the realm of an unauthorised adventure. Nothing could come out of nothing. Ex nihilo nihil fit. Zero multiplied by, zero remained zero. Consequently, no sustenance can be drawn by the appellants from these confirmation orders issued to them by Dr. Mallick on the basis of the directions issued by the concerned authorities at the relevant time. It would amount to regularisation of back-door entries which were vitiated from the very inception. It is not possible to agree with the contention of learned Counsel for appellants that the vacancies on the scheme had nothing to do with regular posts. Whether they are posts or vacancies they must be backed up by budgetary provisions so as to be included within the permissible infrastructure of the scheme. Any posting which is de hors the budgetary grant and on a non-existing vacancy would be outside the sanctioned scheme and would remain totally unauthorised. No right would accrue to the incumbent of such an imaginary or shadow vacancy.
13. In this connection, it is pertinent to note that question of regularisation in any service including any Government service may arise in two contingencies. Firstly, if on any available clear vacancies which are of a long duration, appointments are made on ad hoc basis or daily wage basis by a competent authority and are continued from time to time and if it is found that the concerned incumbents have continued to be employed for a long period of time with or without any artificial breaks and their services are otherwise required by the institution which employees them, a time may come in the service career of such employees who are continued on ad hoc basis for a given substantial length of time to regularise them so that the concerned employees can give their best by being assured security of tenure. But this would require one pre-condition that the initial entry of such an employee must be made against an available sanctioned vacancy by following the rules and regulations governing such entry. The second type of situation in which the question of regularisation may arise would be when the initial entry of the employee against an available vacancy is found to have suffered from some flaw in the procedural exercise though person appointing is competent to effect such initial recruitment and has otherwise followed due procedure for such recruitment. A need may then arise in the light of the exigency of administrative requirement for waiving such irregularity in the initial appointment by competent authority and the irregular initial appointment may be regularised and security of tenure may be made available to the concerned incumbent. But even in such a case the initial entry must not be found to be totally illegal or in blatant disregard of all the established rules and regulations governing such recruitment. In any case, back-door entries for filling up such vacancies have got to be strictly avoided. However, there would never arise any occasion for regularising the appointment of an employee whose initial entry itself is tainted and is in total breach of the requisite procedure of recruitment and especially when there is no vacancy on which such an initial entry of the candidate could even be effected. Such an entry of an employee would remain tainted from the very beginning and no question of regularising such an illegal entrant would ever survive for consideration, however, competent the recruiting agency may be. The appellants fall in this latter class of cases. They had no case for regularisation and whatever purported regularisation was effected in their favour remained an exercise in futility. Learned Counsel for the appellants, therefore, could not justifiably fall back upon the orders of regularisation passed in their favour by Dr. Mallick. Even otherwise for regularising such employees well established procedure had to be followed. In the present case, it was totally by-passed. In this connection we may profitably refer to Government Order dated 31st December 1986 to which our attention was invited by learned Counsel for the appellants. The said Government Order is found in the additional documents submitted in C.A. Nos. 10758-59 of 1995 at Annexure-IV, Secretary to Government of Bihar, Health Department, by communication dated 31-12-1986 had informed all regional Deputy Directors, Health Services, Tuberculosis Civil Surgeon-cum-Chief Medical Officer, and other concerned authorities in connection with the compliance and implementation of the orders passed and instructions issued by Deputy Director (Tuberculosis) Bihar, Patna under the Tuberculosis Control Programme covered under the 20-Point Programme. It was stated in the said communication that steps will be taken to fill up sanctioned Third and Fourth Grade posts as soon as possible according to the prescribed procedure and all possible efforts should be made to achieve the fixed targets in a planned and phased manner. Even this letter clearly indicates that the posts had to be filled up by following the prescribed procedure. Despite all these communications neither the initial appointments nor the confirmations were done by following the prescribed procedure. On the contrary all efforts were made to bypass the recruitment procedure known to law which resulted in clear violation of Articles 14 and 16(1) of the Constitution of India both at the initial stage of confirmation of these illegal entrants. The so-called regularisations and confirmations could not be relied on as shields to cover up initial illegal and void actions or to perpetuate the corrupt methods by which these 6000 initial entrants were drafted in the scheme by Dr. Mallick. For all these reasons, therefore it is not possible to agree with the contention of learned Counsel for the appellants that in any case the confirmations given to these employees gave them sufficient cloak of protection against future termination from services. On the contrary, all the cobwebs created by Dr. Mallick by bringing in this army of 6000 employees under the scheme had got to be cleared lock, stock and barrel so that public confidence in Government administration would not get shattered and arbitrary actions would not get satisfied."
The Apex Court, with the above observations, while deprecating back-door entries, in no uncertain terms, held that no regularisation can be made when initial entry itself is tainted and/or in breach of regular procedure of recruitment.
11.1.12 In Union of India v. Bishamber Dutt (supra), the Union of India challenged the decision of Central Administrative Tribunal, Principal Bench, New Delhi by filing Special Leave Petition. It was a case where the respondent along with others were appointed as Class IV employees in the office of Controller of Defence Accounts on part-time basis. They were receiving consolidated pay of Rs. 500/- per month which was raised to Rs. 600/- per month for working six hours a day. They were not appointed to the regular post after selection according to rules. The question that arose before the Supreme Court was whether they were entitled to temporary status or regularisation as directed by the Tribunal. The Apex Court held that since they were appointed on regular basis in view of the rules, the direction issued by the Tribunal to reguarlise service is absolutely illegal. While rejecting the submission to regularise them on the ground that they were working since long time, the Apex Court observed that: "Unless they are appointed on regular basis according to rules after consideration of the claim on merit, there was no question of regularisation of their services."
11.1.13 In the case of Madhyamik Siksha Parishad, V. P. v. Anil Kumar Mishra (supra), the Supreme Court in Para 4, has observed as under :
"4. We are unable to uphold the order of the High Court. There were no sanctioned posts in existence to which they could be said to have been appointed. The assignment was an ad hoc one which anticipatedly spent itself out. It is difficult to envisage for them, the status of workmen on the analogy of the provisions of Industrial Disputes Act, 1947, importing the incidents of completion of 240 days' work. The legal consequences that flow from work for that duration under the Industrial Disputes Act, 1947 are entirely different from what, by way of implication, is attributed to the present situation by way of analogy, The completion of 240 days' work does not, under that law import the right to regularisation. It merely imposes certain obligations on the employer at the time of termination of the service. It is not appropriate to import and apply that analogy, in an extended or enlarged form here".
In the aforesaid case the Supreme Court held that workers on temporary assignment only, working on unsanctioned posts, have no right of regularisation.
11.1.14 In the case of State of Haryana and Ors. v. Piara Singh and Ors., reported in AIR 1992 SC 2130 : 1992 (4) SCC 118 : 1992 (2) Scale 384 : 1992 LIC 2168 : 1992 (3) SCR 826 : JT 1992 (5) SC 179 : 1993 (2) LLJ 937 : 1993 (83) FJR 17 : 1992 (4) SLR 770, the Apex Court in Paras 44 to 50 has given guidelines as under :
"44. Before parting with this case, we think it appropriate to say a few words concerning the issue of regularisation of ad hoc/temporary employees in government service.
45. The normal rule, of course, is regular recruitment through the prescribed agency but exigencies of administration may sometimes call for an ad hoc or temporary appointment to be made. In such a situation, effort should always be to replace such an ad hoc/temporary employee by a regularly selected employee as early as possible. Such a temporary employee may also compete along with others for such regular selection/appointment. If he gets selected, well and good, but if he does not, he must give way to the regularly selected candidate. The appointment of the regularly selected candidate cannot be withheld or kept in abeyance for the sake of such an ad hoc/temporary employee.
46. Secondly, an ad hoc or temporary employee should not be replaced by another ad hoc or temporary employee; he must be replaced only by a regularly selected employee. This is necessary to avoid arbitrary action on the part of the appointing authority.
47. Thirdly, even where an ad hoc or temporary employment is necessitated on account of the exigencies of administration, he should ordinarily be drawn from the Employment Exchange unless it cannot brook delay in which case the pressing cause must be stated on the file. If no candidate is available or is not sponsored by the Employment Exchange, some appropriate method consistent with the requirements of Article 16 should be followed. In other words, there must be a notice published in the appropriate manner calling for applications and all those who apply in response thereto should be considered fairly.
48. An unqualified person ought to be appointed only when qualified persons are not available throughout the above processes.
49. If for any reason, an ad hoc or temporary employe is continued for a fairly long spell, the authorities must consider his case for regularisation provided he is eligible and qualified according to the rules and his service record is satisfactory and his appointment does not run counter to the reservation policy of the State.
50. The proper course would be that each State prepares a scheme, if one is not already in vogue, for regularisation of such employees consistent with its reservation policy and if a scheme is already framed, the same may be made consistent with our observations herein so as to reduce avoidable litigation in this behalf. If and when such person is regularised, he should be placed immediately below the last regularly appointed employee in that category, class or service, as the case may be."
In view of the aforesaid guidelines, the Court has very limited jurisdiction to examine whether the executive or State is acting fairly and is not exploiting the employees.
11.1.15 Likewise the observations made in Para 4 of the judgment in the case of State of H. P. v. Suresh Kumar Verma (supra) read as under :
"4. xxxxxxxxxxxx The vacancies require to be filled up in accordance with the rules and ail the candidates who would otherwise be eligible are entitled to apply for when recruitment is made and seek consideration of their claims on merit according to the Rules for direct recruitment along with all the eligible candidates. The appointment on daily wages cannot be a conduit pipe for regular appointments which would be a back-door entry, detrimental to the efficiency of service and would be breed seeds of nepotism and corruption. It is equally settled law that even for Class IV employees recruitment according to rules is a pre-condition. Only work-charged employees who perform the duties of transitory nature are appointed not to a post but are required to perform the work of transitory and urgent nature so long as the work exists. One temporary employee cannot be replaced by another temporary employee."
11.1.16 In the case of State of U. P. and Ors. v. Ajay Kumar (supra), it is held that it is now settled legal position that there should exist a post and either administrative instructions or statutory rules must be in operation to appoint a person to the post. Daily wage appointment will obviously be in relation to contingent establishment in which there cannot exist any post and it continues so long as the work exists. In view of this, the Apex Court held that the High Court was clearly in error in directing the appellant to regularise the service of the respondent to the post as and when the vacancy arises and to continue him until then.
11.1.17 In the case of Municipal Corporation, Bilaspur and Anr. v. Veer Singh Rajput and Ors. (supra), the Apex Court, in spite of long tenure of service, issued directions only for consideration and not otherwise and held that the Labour Court/Industrial Tribunal cannot issue directions for absorption. At the most, they can issue direction for consideration subject to availability of the post in the establishment.
11.1.18 In the case of Gujarat Agricultural University v. Rathod Lahu Bechar (surpa), considering the fact that 51000 daily-rated employees were exploited by the State Agency, the Supreme Court issued direction to prepare a Scheme in view of the fact that the petitioner-University was fully funded by the State Government and though there were posts, no regular appointments were made. Thus, even the Apex Court has exercised its jurisdiction in a rare manner for regularisation of daily-rated employees.
11.1.19 Even in the decision cited by Mr. Mishra for the workmen, the Apex Court has reiterated its earlier views. In the decision rendered by the Apex Court in the case of Dhirendra Chamoli v. State of U. P. (supra), the Apex Court has deprecated the practice of employing casual workers in organisations which were in existence for long twelve years on the ground of organisations being temporary and directed to sanction posts and recommended for regularisation of such workers. However, it was also held that in absence of sanctioned posts at therelevant time, they could not be regularised.
11.1.20 Likewise, in the case of Safai Majdoor Sangh and Ors. v. Municipal Corporation, Meerut (supra), the Apex Court, while giving directions to the Collector to assess the requirement of the Corporation of Safai workmen and its financial capacity, on receipt of the report, the State Government was directed to sanction the posts as per the requirement of the Corporation.
11.1.21 Similarly, in the decision of Railway Parcel and Goods Handling Mazdoor Union and Ors. v. Union of India (supra), the directions for regularisation and absorption were given subject to the workers being found medically fit and being below the age of superannuation.
11.1.22 In the case of Radha Raman Samanta v. Bank of India and Ors. (supra), the Apex Court gave direction for regularisation of an employee on the vacant post.
12.1 After considering the decisions cited before us, the following principles emerge :
(A) No regularisation or permanency can be effected de hors the statutory provisions or the guidelines.
(B) Long service put in by the workmen itself may not be a ground to regularise services of ad hoc/temporary workmen against the sanctioned set-up without following statutory procedure of recruitment. At the most, Labour Court/Industrial Tribunal can issue direction for consideration of absorption subject to availability of posts on the establishment.
(C) To avoid nepotism and corruption, no back-door entry in service;
(D) Financial capacity of the local body to have additional burden is a relevant consideration to be kept in mind while ordering regularisation or absorption.
12.1.2 The Apex Court, in no uncertain terms, ruled that the Labour Court/ Industrial Tribunal can neither regularise services of a workman nor grant permanency when his initial appointment itself is de hors the rules or not on the sanctioned post and has depricated orders of the High Court/Labour Courts/ Tribunals directing to regularise services of illegally recruited persons and has given guidelines. We are not impressed by the submission advanced on behalf of the workmen that the orders were passed in petitions under Article 226 of the Constitution of India, and therefore, such orders are not applicable in the present case in deciding the controversy. The Labour Courts/ Industrial Tribunals are required to pass orders consistent with the law laid down by the Higher Courts. Needless to say that the exercise of wide powers by Labour Court/ Tribunal is always subject to or governed by the law laid down by the Higher Courts.
12.1.3 As far as the cases on hand are concerned, wherein local authorities are involved, so far as the Municipality is concerned, it is bound by the statutory provisions, more particularly Sections 47, 50, 260 and 271 of the Gujarat Municipalities Act. As provided under Sub-section (2) of Section 47, the Municipality, with the previous sanction of the Director and if so required by the State Government, create all or any of the posts stated therein and shall have power to make appointment to the post as provided under Sub-section (3) of Section 47. Likewise, under Section 50 of the Act, it is obligatory on the part of the Municipality to obtain previous sanction of the Director to create such posts of officers and servants as specified under Sub-sections (1) and (2) of Section 47 as it shall deem necessary for the purpose of carrying out duties under the Act. Any recruitment in that behalf shall be determined in accordance with the rules made under Section 271 of the Gujarat Municipalities Act and the power to make appointment in any post referred to in Sub-section (1) shall vest in the Municipality or in the authority empowered by the Municipality by rules made in this behalf under Section 271. Thus, the local authority is the appointing authority and in service jurisprudence, the appointing authority has the key role to play in the matter of appointment. Before creating a post of Officer or a servant of the Municipality, previous sanction of Director of Municipalities is a mandatory condition which is known as "sanctioned set-up" of the Municipality.
12.1.4 True, as far as the petitioner Amreli Municipality is concerned, there are no rules under Section 271 of the Act. However, for filling up the vacancies, previous sanction by the Director of Municipalities is a statutory requirement. The Municipality is bound by the directions issued by the State Government from time to time. Likewise, under Section 260 of the Act, the Director of Municipalities is empowered to prevent extravagance in the employment. The Director can issue such directions without hearing the local authority or the employees in view of the fact that such directions are not affecting any individual employment.
12.1.5 As far as Municipal Corporations are concerned, Chapter IV provides for Municipal officers and servants, their appointments and conditions of service. Chapter III of the Schedule provides for method of appointment of certain Municipal officers and servants and their duties and powers. As far as Panchayats are concerned, the employees are governed by provisions of Section 227 of the Gujarat Panchayats Act which reads as under :
"Section 227. Panchayat service to be regulated by rules :
(1) For the purpose of bringing about uniform scales of pay and uniform conditions of service for persons employed in the discharge of functions and duties of Panchayats, there shall be constituted a panchayat service in connection with the affairs of Panchayats. Such service shall be distinct from the State service.
(2) The panchayat service shall consist of such classes, cadres and posts and the initial strength of officers and servants in each such class and cadre shall be such as the State Government may by order from time to time determine.
Provided that nothing in this sub-sec. shall prevent a district panchayat from altering with the previous approval of the State Government any class, cadre or number of posts so determined by the State Government."
12.1.6 So far as the Panchayats in the State of Gujarat are concerned, the Legislature has constituted Gujarat Panchayats Service Selection Board under Section 235 of the said Act having duty to select candidates for recruitment to such posts in the Panchayat service and to advice the panchayat in such matters as may be prescribed by rules. Under the Gujarat Panchayats Act, the State Government has framed several rules providing for recruitment of various employees under the Panchayat infrastructure. Such rules are statutory in nature. Some of such rules are mentioned hereunder to show that the recruitment procedure with respect to large number of posts under various Panchayats in the State are regulated by the rules statutorily framed in exercise of statutory powers of the State Government. To illustrate the following Rules can be pointed out :
1. Accountant (Class III) (Panchayat Service) Recruitment Rules, 1999.
2. Additional Assistant Engineer (Civil-Class III) (Panchayat Service) Recruitment Rules, 2002.
3. Agriculture Officer, Grade I (Class III) (Panchayat Service) Recruitment Rules, 1998.
4. Agriculture Supervisor (Class III) (Panchayat Service) Recruitment Rules, 1998.
5. Artist-cum-Photographer (Class III) (Panchayat Service) Recruitment Rules, 1998.
6. Assistant Administrative Officers (Class III) (Panchayat Service) Recruitment Rules, 1998.
7. Assistant District Malaria Officer (Class III) (Panchayat Service) Recruitment Rules, 1998.
8. Assistant Draftsman (Class I) (Panchayat Service) Recruitment Rules, 1998.
9. Assistant Instructor (Class III) (Panchayat Service) Recruitment Rules, 1998.
10. Auto Electrician (Class III) (Panchayat Service) Recruitment Rules, 1998.
11. Auxiliary Nurse Midwife (Class III) (Panchayat Service) Recruitment Rules, 1999.
12. Ayas, Dais (Class IV) (Panchayat Service) Recruitment Rules, 2002.
13. Cinema Operators (Class III) (Panchayat Service) Recruitment Rules, 1998.
14. Circle Inspector (Class III) (Panchayat Service) Recruitment Rules, 1998.
15. Compounder (Ayurved) (Class III) (Panchayat Service) Recruitment Rules, 2002.
16. Compounder (Class III) (Panchayat Service) Recruitment Rules, 1998.
17. Computer (Class III) (Panchayat Service) Recruitment Rules, 1998.
18. Deputy Accountant (Class III) (Panchayat Service) Recruitment Rules, 1999.
19. Deputy Chitnis (Class III) (Panchayat Service) Recruitment Rules, 1998."
It is thus clear that recruitment in local bodies is being governed by Recruitment Rules and established procedure and any appointment de hors these norms is per se illegal. Therefore, it would amount to regularisation of back-door entries which had vitiated from the very inception. As held by the Apex Court in Askwinikumar's case (supra), services of employees who have continued for long time can be regularised provided the initial entry must be made against available vacancies by following rules and regulations governing such industry. We therefore see merit in the submission advanced on behalf of the petitioners-local bodies.
12.1.7 The judgment of this Court reported in 1993 (2) GLR 997 (Kalol Municipality and Ors. v. Shantaben Kalidas and Anr.) has taken a view that even in case of employment in a Municipality governed by the provisions of Gujarat Municipalities Act and the rules framed thereunder, the Labour Court/Industrial Tribunal is not bound by the statutory rules framed under the Gujarat Municipalities Act. On going through the said decision, it appears that the Division Bench was not concerned with the question as to whether regularisation of workmen in that case was with respect to the workmen who were regularly appointed or were appointed de hors the statutory rules or any known method of recruitment. It further appears that the Division Bench had emphasized on the fact that the rules framed under Section 271 of the Gujarat Municipalities Act are unilateral rules and while framing rules for the purpose of deciding the strength of the workmen or their recruitment procedure, the workmen were not consulted or that the workmen were not involved in the rule making process.
12.1.8 We are afraid, we are not in a position to subscribe to the views expressed in Kalol Municipality's case (surpa). Deciding the strength and mode of recruitment of workmen is an exclusive domain of an employer. As observed in Para 21 of Piara Singh's case (supra) :
"21 Ordinarily speaking, the creation and abolition of a post is the prerogative of the Executive. It is the Executive again that lays down the conditions of service subject, of course, to a law made by the appropriate legislature. This power to prescribe the conditions of service can be exercised either by making rules under the proviso to Article 309 of the Constitution or (in the absence of such rules) by issuing rules/instructions in exercise of its executive power. The Court comes into the picture only to ensure observance of fundamental rights, statutory provisions, rules and other instructions, if any, governing the conditions of service. The main concern of the Court in such matters is to ensure the rule of law and to see that the Executive acts fairly and gives a fair deal to its employees consistent with the requirements of Articles 14 and 16."
In view of the fact that in the present case, the employer is a statutory body, a Municipality and the rules framed by it are required to be approved by the State Government, non-inclusion of workmen in the process of framing of rules is no ground for ignoring the rules which are statutory in nature.
Besides, it appears to us that the judgment in the case of Kalol Municipality (supra) is per incuriam inasmuch as it does not take into consideration the provisions of Sections 47 and 50 of the Gujarat Municipalities Act. In our opinion, irrespective of any rules framed under Section 271 of the Gujarat Municipalities Act, Section 50 independently requires prior approval and sanction of the Director of Municipalities. In absence of any such sanction being granted, no Municipality can create a post for being filled up either by regular selection process or by appointing temporary lad-hoc employees. We feel that the Division Bench in Kalol Municipality's case, completely ignored the 'sanctioning set-up' before making permanent the temporary or ad hoc appointment.
We are also of the view that the Division Bench overlooked the fact that when the Local Self-Government created under the statute by statutory provisions, makes appointment contrary to the statute, the Labour Court/Industrial Tribunal cannot order regularisation, is not answered in Kalol Municipality's case in the perspective of provisions of Gujarat Municipalities Act.
12.1.9 Apart from that, the view taken by the Division Bench in Kalol Municipality's case (supra) is impliedly overruled by the subsequent judgment of the Supreme Court. The Constitutional Bench of the Supreme Court, in the case of New Manekchowk Spinning and Weaving Mills Ltd. v. Textile Labour Association, Ahmedabad, reported in AIR 1961 SC 867 and in the case of Hindustan Times Ltd. v. Their Workmen, reported in AIR 1963 SC 1332, (a Four-Judges Bench) has held that the Industrial Tribunal is bound to consider and follow the statutory provisions of other enactments also while exercising powers under the Industrial Disputes Act.
12.1.10 In N.S. Giri v. Corporation of State of Mangalore, AIR 1999 SC 1958, in Para 5 of the said judgment, the Supreme Court was posed with a question --
"Whether an award made under Section 10(A) of the Industrial Disputes Act, 1947 can be given effect to if it be inconsistent with the statutory provisions governing the service conditions of the employees?".
After following the earlier decision in the case of New Manekchowk Mills Ltd. (supra) and Hindustan Times Ltd. (supra), the Apex Court held that an award under the Industrial Disputes Act cannot be inconsistent with the law laid down by the Legislature or by the Supreme Court and if it does so, it is illegal and cannot be enforced.
12.1.11 Thus, in our opinion, the decision rendered by the Division Bench in Kalol Municipality (supra) is impliedly overruled by the judgment of the Supreme Court in the case of N. S. Giri (supra) as well as by the subsequent decisions.
12.1.12 While deciding Kalol Municipality's case (supra), the Division Bench relied upon an unreported decision in Special Civil Application No. 351 of 1976 decided on 26/27-4-1976 as well as decision reported in Natvarlal Vithaldas Patel v. Municipality of Vadnagar, 1965 GLR 189. In our opinion, both the said judgments are impliedly overruled by the Supreme Court judgment with respect to right of regularisation of employees appointed against the sanctioned set-up and de hors the statutory rules provided for recruitment and more particularly the judgment of the Supreme Court in N.S. Giri's case (supra).
12.1.13 Even if it is held that the Labour, Court/Industrial Tribunal has wide jurisdiction to alter service conditions, it can exercise such powers subject to the recruitment rules, availability of sanctioned posts and subject to the grant and limits of budgetary provisions. When there is no permanent post, no direction can be given to the authorities to absorb daily wage employees by creating new posts. It is the common phenomenon in the case of Nagarpalikas/ Municipalities/Government Corporations where such appointments are made on political considerations. The parties in power may recruit their own persons as daily-rated employees, and thereafter, by seeking orders from the Court, they want to absorb such employees on permanent establishment. Time and again, such practice is deprecated in so many words in the judgments referred by us. The Panchayats, Municipalities, Municipal Corporations or Government Corporations as well as Government establishments are facing severe financial crisis only because of such staff which may be required for the time-being, but to make them permanent would definitely adversely affect the financial substratum of respective organisations and the Courts should not be party to such illegal and irregular appointments by allowing them to be continued at the cost of public exchequer. We are conscious of the fact that by not approving the appointments of such daily wagers, it will be very difficult for them to survive and the question of their livelihood would arise. Keeping this aspect in mind, we do feel that in appropriate cases, their interests are required to be protected. We accordingly give following guidelines :
(1) If casual workers or daily-rated workers are not required by the local bodies and whose services are likely to be terminated, they should be relieved on the principle of "last come, first go". In the event of filling up the posts in future, those who are eligible and qualified from and amongst the relieved workmen shall be preferred by waiving the age-limit.
(2) If the workmen who have continued for years as temporary employees, in the event of their termination, the authorities will see that no unqualified person is appointed in their place.
(3) The question of regularisation can also be considered by the authorities before terminating services provided the workers are eligible on the sanctioned posts.
(4) If the posts are not sanctioned, the authorities may take such steps which are necessary in accordance with the provisions of law/rules/ circulars within the budgetary provisions.
12.1.14 Thus, in view of the above, even if it is held that keeping daily-rated/casual employees for a long duration amounts to unfair labour practice, that fact by itself, will not make them permanent and/or regularise service. While deciding such preferences for regularisation or permanency, the Labour Court/Industrial Tribunal, at the most, can pass order directing the authorities to consider their claim in the light of factors/observations stated above instead of straight-away passing the orders of regularisation or granting permanency.
12.1.15 In view of the above discussion, we answer the question referred to us as under :
(i) The Labour Court/Industrial Tribunal has no jurisdiction to issue direction or pass an award regularising services of employees of a Municipality or local authority without there being any 'sanctioned set-up' and no person can be regularised if such a person had entered service without following selection process under the title of daily-rated employee.
(ii) In view of our answer to the above question, the judgment rendered by Division Bench in the case of Kalol Municipality v. Shantaben, reported in 1993 (2) GLR 997 is now no longer a good law in view of subsequent decisions rendered by the Apex Court and more particularly the decision in the case of N.S. Giri v. Corporation of State of Mangalore, AIR 1999 SC 1958. The subsequent decision rendered by the Division Bench of this Court in the case of Halvad Nagarpalika and Ors. v. Jani Dipakbhai Chandravadanbhai and Ors., reported in 2003 (4) GLR 3229 : 2003 (2) GHCJ 397 is held to be a good law. All the matters shall be placed before the concerned Courts taking up such matters for passing appropriate orders.
12.1.16 Before parting, we may like to observe that the unfortunate workmen who have continued for years as temporary employees and have succeeded before the Labour Court/Industrial Tribunal, in view of our decision, in the event of their termination, the authorities may see to it that no unqualified person is appointed in their place and their claim for regularisation be considered provided they are eligible on the sanctioned posts. If the posts are not sanctioned, the authorities may take such steps which are necessary in accordance with the provisions of law/rules/circulars within the budgetary provisions. So as to see that no irregularities are committed in the matter of appointment by Panchayats, Municipalities and Corporations, in our opinion, it would be advisable if the State Government issues an appropriate circular giving details with regard to the aforestated guidelines to all the local authorities. Order accordingly.