Himachal Pradesh High Court
Aditya Sharma & Others vs State Of H.P. & Others on 15 December, 2023
Author: Satyen Vaidya
Bench: Satyen Vaidya
IN THE HIGH COURT OF HIMACHAL PRADESH,
SHIMLA
CWP No. 1877 of 2020 a/w CWP No.
.
1886 of 2020
Reserved on: 8.12.2023
Date of decision: 15.12.2023.
1. CWP No. 1877 of 2020
Aditya Sharma & others ...Petitioners.
of
Versus
State of H.P. & others ...Respondents.
2. CWP No. 1886 of 2020
rt
Ashok Kumar Sharma & others ...Petitioners
Versus
State of H.P. & others ...Respondents
Coram:
The Hon'ble Mr. Justice Satyen Vaidya, Judge.
Whether approved for reporting?1No.
For the petitioner : Mr. Rajiv Jiwan, Sr. Advocate with Mr.
Pradeep K. Sharma, Advocate, for the
petitioners.
For the respondents: Mr. I. N. Mehta, Sr. Additional
Advocate Generals with Mr. J. S.
Guleria and Mr. Rohit Sharma, Deputy
Advocates General for the respondent-
State.
Mr. Sunil Mohan Goel, Advocate, for
respondent No.3 in both the petitions.
Mr. Nitin Thakur and Mr. Paras
Dhaulta, Advocates, for the private
respondents.
1
Whether reporters of Local Papers may be allowed to see the judgment?
::: Downloaded on - 15/12/2023 20:32:57 :::CIS
-2-
Satyen Vaidya, Judge:
Both these petitions have been heard and are .
being decided together as common questions of fact and law arise therein.
2. The petitioners in both these petitions were initially inducted on contract basis as Officers Grade-III of (Assistant Managers) in respondent No.3 bank (for short 'the Bank'). All the petitioners were recruited against the rt quota of direct recruits in terms of the Scheme known as "The scheme for appointment of Staff in various categories under direct recruitment quota on contract basis" approved by the Registrar of Cooperative Societies, Himachal Pradesh vide communication dated 22.10.2011 (for short 'the Scheme').
3. The only difference between the petitioners in CWP No. 1886 of 2020 and in CWP No. 1877 of 2020 is that the former were appointed in the year 2012 and the later were appointed in the month of December, 2013.
Notwithstanding the difference in date of appointments of petitioners in both the petitions, all of them were regularized from the same date i.e. 1.6.2016.
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -3-4. The recruitment to the post of Officers Grade-
III (Assistant Managers) in the Bank was permissible .
through two modes i.e. direct and by way of promotion in the proportion of quota reserved for each category.
5. During the period between the initial appointment of the petitioners on contract basis and the of date of their regularization, the private respondents in both the petitions came to be promoted as Officers rt Grade-III (Assistant Managers) in the bank.
6. The bank circulated the tentative seniority list of Officers Grade-III (Assistant Managers) on 24.1.2019 wherein the private respondents were placed above the petitioners in seniority position. Representations were filed on behalf of the petitioners against the tentative seniority list. The petitioners claimed seniority above the private respondents in the grade of Officers Grade-III (Assistant Managers) on the premise that their entire contract service was liable to be considered for the purpose of seniority.
7. The bank rejected the representations of the petitioners and circulated final seniority list on ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -4- 30.5.2020. Hence the present petitions with the following substantive prayers:-
.
"i) That the respondent No.3 (Bank) may kindly be directed to grant seniority for the services rendered by the petitioners w.e.f. December 2013 till 1.6.2016.
ii) That the respondent No.3 may kindly be directed to consider the case of petitioners for promotion after giving them such seniority.
of
iii) That the respondent No.3 may kindly be directed to re-
draw the final seniority list after giving the benefit of seniority to the petitioners.
rt
iv) In an alternative the respondents may kindly be directed to re-draw the final seniority list after placing the petitioners notionally above the employees who were juniors and were promoted in the year 2014 and 2017 without disturbing their promotion.
v) That the respondents may kindly be directed to pay the entire arrears along with interest w.e.f. December, 2013 and other consequential benefits in the interest of justice."
8. I have heard Mr. Rajiv Jiwan, learned Senior Advocate for the petitioners and Mr. I.N. Mehta, learned Senior Additional Advocate General for the respondent-
State, Mr. Sunil Mohan Goel for the respondent Bank and Mr. Nitin Thakur, Advocate for the private respondents and have also gone through the record carefully.
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -5-9. It is not disputed by the respondents that the initial appointment of the petitioners was against the .
existing substantive posts. It is also not in dispute that the appointments of petitioners were made after due selection process.
10. Mr. Sunil Mohan Goel, learned counsel for the of Bank at the outset raised an objection as to the maintainability of these petitions before this Court under rt Article 226 of the Constitution of India. He contended that the bank was not the State or other entity under Article 12 of the Constitution. He further submitted that the question raised in the instant petitions was purely a service matter and this Court in writ jurisdiction is not competent to issue any writ against the bank.
11. The question as raised on behalf of the bank already stands decided against the bank by this Court in CWP No. 4031 of 2021 titled Suresh Kaushal vs. State of H.P. & others vide judgment dated 28.9.2023. In that case also the bank had raised the similar plea on the premise of judgment passed in case of C. K. Malhotra vs. Himachal Pradesh State Co-operative Bank & others, ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -6- reported in 1993 (3) Shimla Law Cases 243. According to the learned counsel for the bank, the verdict in C. K. .
Malhotra (supra) stood affirmed by the Full Bench of this Court in CWP No. 3634 of 2012 titled as Vikram Chauhan vs. Managing Director & others along with connected matters.
of
12. This Court however rejected the contention raised on behalf of the bank by holding as under:-
rt "11. Taking the issue of maintainability first, it will be relevant to notice the mandate as rendered by the Hon'ble Division Bench of this Court in C. K. Malhotra (supra). The relevant extract of the same is reproduced as under:-
"98. Consequently, we have no hesitation in holding that the three Societies, namely, The Himachal Pradesh State Co-operative Bank Ltd.;
The Kangra Central Co-operative Bank Ltd, and the Himachal Pradesh State Co-operative Marketing and Development Federation Ltd, are not other authorities' and, as such, cannot be characterised as 'State' when the meaning of Art. 12 of the Constitution and the same are also not authority within the meaning and for the purpose of Article 226 of the Constitution. Order passed by the Societies under their respective service regulations against its employees, as such, or in connection with employment cannot be corrected by way of writ petitions. The petitions also would ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -7- not be maintainable in order to challenge the action of the Registrar since the same is not an exercise of statutory power conferred upon him .
under the provisions of the Act or the Rules but an exercise of powers by him under service regulations framed under Bye-laws having no force of law. The writ petition also will not be maintainable since none of the three Societies are discharging any public functions."
of
12. Indisputably, it was mandated firstly that the Himachal Pradesh State Co-operative Bank Limited was rt not the other authority to be characterised as State within the meaning of Article 12 of the Constitution and was also not an authority for the purpose of Article 226 of the Constitution. It was further held that the order passed by the Society under its service regulations against its employees as such or any kind of employment cannot be corrected by way of writ petition. The petitions to challenge the action of Registrar were also held to be not maintainable since the same was not an exercise of statutory powers conferred upon him under the provisions of the Act or the rules but an exercise of powers by him under service regulations framed under bye-laws having no force of law. Further, the writ petitions against the bank were held to be not maintainable since the Society was not discharging any public functions.
13. The pronouncement in C. K. Malhotra (supra) came for consideration before a Full bench of this Court in CWP No. 3634 of 2012, titled as, Vikram Chauhan vs. Managing Director & others along with connected matters reported in Latest HLJ 2013 ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -8- (H.P.) 742 (FB). The Hon'ble Full Bench of this Court after taking notice of the question referred to it observed as under:-
.
"The Division Bench while hearing CWP NO 3634 of 2012-D vide order dated 20 July, 2012 has referred the following question to be considered by the Full Bench.
"Whether the Kangra Central Co-operative Bank, the Himachal Pradesh State Co-
of operative Bank Ltd and the Jogindra Central Co- operative Bank, are 'State' rt within the meaning of Article 12 of the Constitution of India and whether a writ would lie against them?"
2. The question, as formulated raises two independent issues. Firstly, whether the State Cooperative Banks are State within the meaning of Article 12 of the Constitution? The second question, which, in our view is an independent question, is, whether a writ would lie against those Cooperative Banks."
14. After discussing the law on the issues, Hon'ble Full Bench answered the formulated issues as under:-
"15. For the view taken by us on both facets of the referred questions, proceed to answer the Reference as under:
(1) The question as to whether Kangra Bank is a State within the meaning of Article 12 of the Constitution of India, is no more res Integra. It has been authoritatively answered by the Apex Court in S.S. Rana's case (supra).::: Downloaded on - 15/12/2023 20:32:57 :::CIS -9-
(2) Even in the case of H.P, State Cooperative Bank Ltd., the question has been answered by the Division Bench of our High Court in .
Chandresh Kumar Malhotra's case (supra).
There is no conflicting decision of
coordinate Bench of this Court
necessitating pronouncement on that
question by the Full Bench.
(3) In the case of Jogindra Central Cooperative of Bank, the decision in Mehar Chand's case (supra) is rendered by the learned Single rt Judge of this Court and no conflicting decision of the co-ordinate Bench muchless of the Division Bench or Larger Bench of our High Court with regard to the stated Bank has been brought to our notice. In any case, the said question can be conveniently answered by the Division Bench in appropriate proceedings whether in the form of writ petition or Reference made by the learned Single Judge of this Court, as the case may be. As and when such occasion arises, the issue can be answered on the basis of settled legal principles and including keeping in mind the exposition of S.S. Rana's case (supra) of the Apex Court concerning another Cooperative Bank constituted under the Himachal Pradesh State Cooperative Act. (4) As regards the second part of the question as to whether a writ would lie against the stated Cooperative Banks, we hold that it is not appropriate to give a definite answer ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -10- to this question. For, it would depend on several attending factors. Further, even if the said Banks were held to be not a State .
within the meaning of Article 12, the High Court in exercise of powers under Article 226 of the Constitution of India, can certainly issue a writ or order in the nature of writ even against any person or Authority, if the fact situation of the case so of warrants. In other words, writ can lie even against a Corporative Society. Whether the rt same should be issued by the High Court would depend on the facts of each case."
15. Thus, the judgment passed by the Hon'ble Division Bench in C.K. Malhotra was upheld in so far as it had held that the Bank was not a State or other authority within the meaning of Article 12 of the Constitution. However, while answering the second facet of the issue, the Hon'ble Full Bench specifically held that no definite answer could be given to the question referred to it and would depend on several attending factors. Even if the Bank was held to be not a State within the meaning of Article 12 of the Constitution, the High Court in exercise of powers under Article 226 of the Constitution was held jurisdiction to issue a writ or order in nature of writ even against any person or authority, if the fact situation of the case warranted. It has further been held that the writ can lie even against the co-operative authorities, however, its maintainability would depend on the facts of each case.
16. Recently, in petition for Special Leave to Appeal (Civil) No. 1246 of 2015, titled as, The Kangra ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -11- Central Co-operative Bank Pensioners Welfare Association (Regt.) vs. State of H.P., three Judges Bench of the Hon'ble Supreme Court after taking the .
notice of what has been held by the Full Bench in Vikram Chauhan (supra) has held as under:-
"The issue concerning maintainability was considered by the Full bench and the observations made by the Full bench summed up the law on the point quite succinctly. On the facts of as found by the Single Judge, which were recorded in paragraph 19 of the judgment, rt without entering into any other question, in our view, the petition as filed was perfectly maintainable. The Division Bench was in error in setting aside the view taken by the Single Judge in allowing the writ petition and in rejecting the review petition."
17. In view of above exposition, it cannot be said that the writ against the Bank will not be maintainable in any circumstance."
13. This Court has been called upon to adjudicate the issues which necessarily have to be decided at the touch stone of constitutional provisions enshrined in Articles 14 and 16. Thus, I am of the considered view that this Court holds jurisdiction to decide the instant petitions.
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -12-14. The facts are not in dispute. The initial appointment of the petitioners as Officers Grade-III .
(Assistant Managers) on contract basis is prior to the dates on which the private respondents were promoted in the said grade. It is equally true that the date of regularization of the services of petitioners as Officers of Grade-III (Assistant Managers) in the bank is subsequent to the dates on which the private respondents stood rt promoted as Officers Grade-III (Assistant Managers).
15. Since the appointment of the petitioners as Officers Grade-III (Assistant Managers) though on contract basis was against substantive sanctioned posts, they were offered appointments after their selection through a valid selection process. In the aforesaid factual background, the claim of the petitioners cannot be said to be ill-founded.
16. This Court while dealing with an identical issue in CWP No. 963 of 2023, titled as, Ramesh Kumar Sharma & others vs. State of H.P. & others has held as under:-
14. Thus on facts, it is established that the initial appointment of petitioners, though on contract basis, ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -13- was in pursuance of due selection process in terms of prevalent rules. It is also not the case of the respondents that the initial appointment of petitioners .
was not against the then existing vacancies.
15. It is no more res-integra that the initial appointment, though not on regular basis, if had been made after holding selection process in terms of Rules shall be counted towards seniority.
16. The law on the issue has been articulated by the of Constitutional Bench of Hon'ble Supreme Court in Direct Recruit Class-II Engineering Officers' Association Vs. State of Maharashtra and others rt (1990) 2 SCC 175 as under:-
"13. When the cases were taken up for hearing before us, it was faintly suggested that the principle laid down in Patwardhan's case was unsound and fit to be over-ruled, but no attempt was made to substantiate the plea. We were taken through the judgment by the learned counsel for the parties more than once and we are in complete agreement with the ratio decidendi, that the period of continuous officiation by a government servant, after his appointment by following the rules applicable for substantive appointments, has to be taken into account for determining his seniority; and seniority cannot be determined on the sole test of confirmation, for, as was pointed out, confirmation is one of the inglorious uncertainties of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies. The principle for deciding inter se seniority has to conform to the principles of equality spelt out by ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -14- articles 14 and 16. If an appointment is made by way of stop-gap arrangement, without considering the claims of all the eligible available .
persons and without following the rules of appointment, the experience on such appointment cannot be equated with the experience of a regular appointee, because of the qualitative difference in the appointment. To equate the two would be to treat two un-equals as equal which of would violate the equality clause. But if the appointment is made after considering the claims of all eligible candidates and the appointee rt continues in the post uninterruptedly till the regularization of his service in accordance with the rules made for regular substantive appointments, there is no reason to exclude the officiating service for purpose of seniority. Same will be the position if the initial appointment itself is made in accordance with the rules applicable to substantive appointments as in the present case. To hold otherwise will be discriminatory and arbitrary. This principle has been followed in innumerable cases and has been further elaborated by this Court in several judgments including those in Baleshwar Dass v. State of U.P. and others, [1981] 1 SCR 449, and Delhi Water Supply and Sewage Disposal Committee and others v. R.K. Kashyap and others, [1989] Supp. 1 SCC 194, with which we are in agreement. In Narender Chadha and others v. Union of India and others, [ 1986] 1 SCR 211, the officers were promoted al- though without following the procedure prescribed under the ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -15- rules, but they continuously worked for long periods of nearly 15-20 years on the posts without being reverted. The period of their .
continuous officiation was directed to be counted for seniority as it was held that any other view would be arbitrary and violative of Articles 14 and 16. There is considerable force in this view also. We, there- fore, confirm the principle of counting towards seniority the period of of continuous officiation following an appointment made in accordance with the rules prescribed for regular substantive appointments in the service. rt
47. To sum up, we hold that:
(A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirmation.
The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop-gap arrangement, the officiation in such post cannot be taken into account for considering the seniority.
(B) If the initial appointment is not made by following the procedure laid down by the rules but the appointee continues in the post uninterruptedly till the regularization of his service in accordance with the rules, the period of officiating service will be counted.
(C) When appointments are made from more than one source, it is permissible to fix the ratio for recruitment from the different sources, and if rules are framed in this regard they must ordinarily be followed strictly.
(D) If it becomes impossible to adhere to the existing quota rule, it should be substituted by an appropriate rule to meet the needs of the ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -16- situation. In case, however, the quota rule is not followed continuously for a number of years because it was impossible to do so the inference is irresistible that the quota rule had broken .
down.
(E) Where the quota rule has broken down and the appointments are made from one source in excess of the quota, but are made after following the procedure prescribed by the rules for the appointment, the appointees should not be pushed down below the appointees from the other source inducted in the service at a later date.
of (F) Where the rules permit the authorities to relax the provisions relating to the quota, ordinarily a presumption should be raised that there was rt such relaxation when there is a deviation from the quota rule.
(G) The quota for recruitment from the different sources may be prescribed by executive instructions, if the rules are silent on the subject.
(H) If the quota rule is prescribed by an executive instruction, and is not followed continuously for a number of years, the inference is that the executive instruction has ceased to remain operative.
(I) The posts held by the permanent Deputy Engineers as well as the officiating Deputy Engineers under the State of Maharashtra belonged to the single cadre of Deputy Engineers.
(J) The decision dealing with important questions concerning a particular service given after careful consideration should be respected rather than scrutinized for finding out any possible error. It is not in the interest of Service to unsettle a settled position.
With respect to Writ Petition No. 1327 of 1982, we further hold:
(K) That a dispute raised by an application under article 32 of the Constitution must be held to be barred by principles of res judicata ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -17- including the rule of constructive res judicata if the same has been earlier decided by a competent court by a judgment which became final."
.
17. Recently, Hon'ble Division Bench of this Court, vide judgment dated 03.08.2023, passed in CWP No. 2004 of 2017 along with CWP No. 629 of 2018, has held as under:-
"15. The above judgments of the Hon'ble of Supreme Court make it amply clear that if the initial appointment is made after considering the claims of all eligible candidates and the rt appointees continued on the post uninterruptedly till the regularization of the service in accordance with the Rules made for regular substantive appointments, there is no reason to exclude the officiating service for the purpose of seniority and same will be the position if the initial appointment itself is made in accordance with the Rules applicable to substantive appointments.
{{{{
16. Coming to the facts of the present case, the initial appointment of the original applicants admittedly was made in accordance with the Rules applicable to substantive appointment to the post in issue and through the Recruitment Agency prescribed in the Recruitment Rules. The only thing was that rather than offering appointment to the original applicants on regular basis, they were offered appointment on contract basis and their services were subsequently regularized, as has already been mentioned hereinabove.::: Downloaded on - 15/12/2023 20:32:57 :::CIS -18-
17. Thus, in the backdrop of the factual scenario of the present case, learned Tribunal rightly held the original applicants to be entitled .
for seniority from the date of their initial appointment on contract basis, followed by regularization, as their initial appointment was made by following the Rules in vogue for making substantive appointment against the post and the process of recruitment was undertaken by the of Subordinate Selection Board in which the claims of all eligible candidates were considered."
18.rt The abovesaid view has been taken by Hon'ble Division Bench after placing reliance upon the judgments passed by Hon'ble Supreme Court in Direct Recruit's case supra (1990) 2 SCC 715, Aghore Nath Dey (1993) 3 SCC 371 and also the judgment of Hon'ble Division Bench of this Court in Narender Singh Naik, LPA No. 271 of 2011 and affirmed by Hon'ble Supreme Court in Special Leave to Appeal (C) No(s). 34038 of 2012.
19. Thus, the legal position is well settled. The initial appointment, even though made on temporary or ad-hoc basis, if had been made in terms of prevalent recruitment rules and after holding the due process of selection, the service rendered thereafter continuously till regularisation is liable for consideration for the purposes of seniority.
17. The respondents on the other hand have contended that the contract services of the petitioners were governed under specific contract entered by them ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -19- with the bank under the Scheme. It is submitted that their regularization was not under the recruitment rules .
but were result of the Scheme, which specifically provided for prospective benefit of regularization.
18. In my considered view, the claim of the petitioners cannot be defeated on the premise as raised of by the respondents. By invocation of the Scheme, the bank had adopted recruitment on contract basis on the rt posts falling under the quota through direct recruitment as an alternative in relaxation to the general applicable service rule. Clause-2 of the Scheme provided as under:-
"2. RELAXATION.
The provisions for appointment of staff on contract basis, against vacancies in various categories of staff under direct recruitment quota in the Bank, contained in the Scheme would be in relaxation to Bank's Employees Service Rules for appointment of staff in the Bank, unless specifically indicated."
19. Clause-12 of the Scheme provided as under:-
"12. RIGHT OF REGULARIZATION, PERMANENT ABSORPTION ETC.
The contractual appointees who have completed 5 years of continuous service shall be eligible for ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -20- regularization in subject to the following conditions:
i) The contractual appointees who have .
completed 5 years service will be
considered for regularization against
available vacancies,
ii) The Bank's Board of Directors will consider
the regularization of contractual
appointees;
of
iii) The Bank shall constitute a sub-committee consisting of President, Vice- President, rt Registrar or his nominee, Managing Director/General Manager and one Director Co-opted by President and Vice-President, which will determine the suitability of the contractual appointees based on the criteria to be devised by the Bank, which should interalia include the following alongwith any other parameters as deemed appropriate:-
1. Punctuality in attendance.
2. Work and conduct of contractual appointees.
3. Evaluation of their previous 5 years' ACRs etc. iv ) The regularization will be on the basis of satisfactory performance of the contract appointee during the contract period to be assessed by the Bank and also depending on the financial health of the Bank.
v) The regularization will be strictly on the basis of seniority subject to fitness and the ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -21- fulfillment of eligibility conditions prescribed in the Service Rules;
vi) The candidate should be medically fit and .
he/she will have to submit a certificate of his/her fitness from a Govt./registered medical practitioner on the prescribed proforma at the time of joining.
viii) The contractual appointees so regularized shall be put in at the minimum of the scale of of the post.
ix) The contractual appointee so regularized rt shall be liable to be posted anywhere within the jurisdiction of the Bank.
x) The regularization shall be subject to order regarding reservation in the service for SC/ST/OBC/other categories of persons issued by the H.P. Govt. from time to time.
xi) The policy shall cover the existing contractual employees also, if any.
xii) The regularization will be from prospective
date i.e. from the date of issue of
regularization order.
20. Indisputably, the services of the petitioners have been regularized even before completion of five years of continuous contractual service. Thus, the right of regularization and permanent absorption was also the feature of the same scheme under which the petitioners were initially appointed on contract basis. In aforesaid background, no exception can be carved out in the case ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -22- of the petitioners' vis-à-vis the dictum in direct recruits case (supra).
.
21. Learned counsel for the bank further contended that as per Clause-12 (xii) of the Scheme, the benefit of regularization has been conferred upon the petitioners from prospective date i.e. w.e.f. 1.6.2016. The of petitioners have accepted their specific terms of employment under the Scheme and have also executed rt the contract agreement with a specific stipulation. Their appointment would not confer any right of continuation and seniority. It is also contended that since the petitioners have not laid any challenge to the terms of the policy, they were estopped from claiming the benefit of seniority from the dates prior to the date of their regularization.
22. As noticed above, this Court while deciding CWP No. 963 of 2023 titled as Rakesh Kumar Sharma & others vs. State of H.P. & others has already dispelled the contention on the premise of the alleged prospective benefit of regularization in the relevant policy/scheme. It has been held as under:-
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -23-"20. The private respondents have made an attempt to persuade this Court to take a different view in the matter on the premise that the contract service of the .
petitioners was governed under specific contracts entered by them with the state Government and their regularisation also not being the part of the recruitment rules but result of policy of the Government that too having prospective operation, cannot be treated as regular service and counted towards seniority. The of contention so raised, in my considered view, deserves rejection for the reason that contract was one of the modes of appointment prescribed under the Rules. The rt appointments were to be made against existing sanctioned posts. That being so, petitioners cannot be faulted and their case cannot form an exception to the dictum of law as noticed above".
The case in hand is no different and hence the contention so raised needs to be rejected.
23. As regards the plea of estoppel sought to be applied against the petitioners, it can be seen that the petitioners had accepted the terms thereof at a stage when they had no other option. The legal proposition on the issue is well settled. A Division Bench of this Court vide judgment dated 18.12.2014, passed in LPA No. 132 of 2014, titled as, Lokpal vs. State of H.P. & others after expounding the legal position has held as under:-
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -24-"7. This case reflects a sorry state of affairs where the respondents on the sheer strength of its bargaining power have taken advantage of their position and .
imposed wholly un-equitable and unreasonable condition of employment on their prospective employees, who did not have any other choice but to accept the employment on the terms and conditions offered by the respondents. This action of the respondents is violative of Article 14 of the Constitution. Here it is apt to of reproduce relevant observations of the Hon'ble Supreme Court in the celebrated decision of Central Inland Water Transport Corporation Ltd. Vs. Brojo Nath Ganguly and rt another, (1986) 3 SCC 156, which reads as under:-
"88. As seen above, apart from judicial decisions, the United States and the United Kingdom have statutorily recognized, at least in certain areas of the law of contracts, that there can be unreasonableness (or lack of fairness, if one prefers that phrase) in a contract or a clause in a contract where there is inequality of bargaining power between the parties although arising out of circumstances not within their control or as a result of situations not of their creation. Other legal systems also permit judicial review of a contractual transaction entered into in similar circumstances. For example, section 138(2) of the German Civil Code provides that a transaction is void "when a person" exploits "the distressed situation, inexperience, lack of judgmental ability, or grave weakness of will of another to obtain the grant or promise of pecuniary advantages........which are obviously disproportionate to the performance given in ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -25- return." The position according to the French law is very much the same.
89. Should then our courts not advance with the .
times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of nineteenth-century theories?
of Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the courts sit rt back and watch supinely while the strong trample under-foot the rights of the weak? We have a Constitution for our country. Our judges are bound by their oath to "uphold the Constitution and the laws". The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Art.
14. This principle is that, the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type.::: Downloaded on - 15/12/2023 20:32:57 :::CIS -26-
No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For .
instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to of situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms rt imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -27- bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its, own facts and .
circumstances."
In terms of the aforesaid exposition of law, it is clear that this Court has the jurisdiction and power to strike or set aside the unfavourable term of contract of employment which purports to give effect to unreasonable bargain violating Article 14 of the of Constitution.
8. The undertaking obtained from the appellant is so unfair and unreasonable that it shocks the conscious of rt this Court. It reflects the inequality of the bargaining power between the appellant and the respondents which emanates from the great disparity in the economic strength between the job seeker and job giver.
9. The appellant was compelled by circumstances to accept the offer made by the respondents, but then the mere acceptance of this offer would not give it a stamp of approval regarding its validity. It is an age old maxim that "necessity knows no law" and a person sometimes may have to succumb to pressure of the other party to bargain who is in stronger position. Although, it may not be strictly in place, but the Court cannot shut its eyes to this ground reality.
10. At this stage, it shall be apt to quote the following observations of the Hon'ble Supreme Court in Chairman and MD NTPC Ltd. Vs. Rashmi Construction Builders and Contractors (2004) 2 SCC 663:-
"28. Further, necessitas non habet legem is an age-old maxim which means necessity knows no law. A person may sometimes have to succumb to ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -28- the pressure of the other party to the bargain who is in a stronger position."
11. Notably the respondents herein are none other than .
the functionaries of the State who are expected to function like a model employer. A model employer is under an obligation to conduct itself with high probity and expected candour and the employer, who is duty bound to act as a model employer has social obligation to treat an employee in an appropriate manner so that of an employee is not condemned to feel totally subservient to the situation. A model employer should not exploit its employees and take advantage of their rt helplessness and misery. The conduct of the respondents falls short of expectation of a model employer.
12. The Hon'ble Supreme Court in its decision in Bhupendra Nath Hazarika and another Vs. State of Assam and others, (2013) 2 SCC 516 has succinctly explained this position in the following terms:-
"61. Before parting with the case, we are compelled to reiterate the oft stated principle that the State is a model employer and it is required to act fairly giving due regard and respect to the rules framed by it. But in the present case, the State has atrophied the rules. Hence, the need for hammering the concept.
62. Almost a quarter century back, this Court in Balram Gupta V. Union of India 1987 Supp SCC 228 had observed thus: (SCC p. 236, para 13)
"13.... As a model employer the Government must conduct itself with high probity and candour with its employees."
::: Downloaded on - 15/12/2023 20:32:57 :::CIS -29-In State of Haryana V. Piara Singh (1992) 4 SCC 118 the Court had clearly stated: (SCC p. 134, para 21).
.
"21....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."
63. In State of Karnataka V. Umadevi (3) (2006) 4 of SCC 1 (SCC P. 18, para 6) the Constitution Bench, while discussing the role of State in recruitment procedure, stated that if rules have been made rt under Article 3089 of the Constitution, then the Government can make appointments only in accordance with the rules, for the State is meant to be a model employer.
64. In Mehar Chand Polytechnic V. Anu Lamba (2006) 7 SCC 161 (SCC p. 166, para 16) the Court observed that public employment is a facet of right to equality envisaged under Article 16 of the Constitution of India and that the recruitment rules are framed with a view to give equal opportunity to al the citizens of India entitled for being considered for recruitment in the vacant posts.
65. We have stated the role of the State as a model employer with the fond hope that in future a deliberate disregard is not taken recourse to and deviancy of such magnitude is not adopted to frustrate the claims of the employees. It should always be borne in mind that legitimate aspirations of the employees are not guillotined and a situation is not created where hopes end in ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -30- despair. Hope for everyone is gloriously precious and a model employer should not convert it to be deceitful and treacherous by playing a game of .
chess with their seniority. A sense of calm sensibility and concerned sincerity should be reflected in every step. An atmosphere of trust has to prevail and when the employees are absolutely sure that their trust shall not be betrayed and they shall be treated with dignified of fairness then only the concept of good governance can be concretised. We say no more."
24. rt Even otherwise, in view of law laid down in direct recruits case, the principle of estoppel cannot be applied against the petitioners. In this view of the matter, there was no requirement for the petitioners to have challenge the terms of the Scheme.
25. In view of above discussions, the petitioners in both the petitions succeed. Respondent No.3 bank is directed to grant benefit of seniority to the petitioners in both the petitions in the grade of Officers Grade-III (Assistant Managers) from the dates of their initial appointments in the grade on contract basis. Though, the petitioners have not sought the quashing of seniority list dated 30.5.2020, but in order to dispense substantial justice, this Court quashes and sets aside the said ::: Downloaded on - 15/12/2023 20:32:57 :::CIS -31- seniority list, being an ancillary relief. Respondent No.3 bank is accordingly directed to re-draw the seniority list .
of Officers Grade-III (Assistant Managers) by considering the entire contract service of the petitioners towards seniority in the said grade. The promotions to the next higher grade in respondent No.3 bank will also abide by of the re-drawn seniority list of Officers Grade-III (Assistant Managers). rt
26. Both the petitions are disposed of. Pending applications, if any, also stand disposed of.
(Satyen Vaidya)
15th December, 2023 Judge
(kck)
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