Gujarat High Court
Zaveri Kalpesh Arunbhai & 5 vs State Of Gujarat & 8 on 24 August, 2016
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
C/SCA/13179/2015 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 13179 of 2015
With
SPECIAL CIVIL APPLICATION NO. 11924 of 2015
With
CIVIL APPLICATION NO. 1950 of 2016
In
SPECIAL CIVIL APPLICATION NO. 11924 of 2015
With
CIVIL APPLICATION NO. 10285 of 2015
In
SPECIAL CIVIL APPLICATION NO. 11924 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE J.B.PARDIWALA
==========================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ?
YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or NO any order made thereunder ?
========================================================== ZAVERI KALPESH ARUNBHAI & 51....Petitioner(s) Versus STATE OF GUJARAT & 8....Respondent(s) ========================================================== Appearance:
MR. K.B. PUJARA ADVOCATE WITH MS. G. R. VIJAYALAKSHMI, ADVOCATE for the Petitioner(s) No. 1 - 52 Page 1 of 55 HC-NIC Page 1 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT MR. KAMAL B. TRIVEDI, ADVOCATE GENERAL WITH MR. UTKARSH SHARMA AGP - ADVANCE COPY SERVED TO GP/PP for the Respondent(s) No. 1 MR. B.B. NAIK SENIOR ADVOCATE WITH MR. A.K. CLERK, ADVOCATE for the Respondent(s) No. 2 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 24/08/2016 CAV COMMON JUDGMENT 1 Since the issues raised in all the captioned writ applications are more or less the same, those were heard analogously and are being disposed of by this common judgment and order.
2 For the sake of convenience, the Special Civil Application No.13179 of 2015 is treated as the lead matter.
3 By this writ application, under Article 226 of the Constitution of India, the writ applicants, serving as the 'Direct Sales Executives' with the Life Insurance Corporation of India, on contractual basis, have prayed for the following reliefs:
"12(A)That this Hon'ble Court may be pleased to direct the respondent Life Insurance Corporation of India to cover all Direct Sales Executives under (staff) Regulations, 1960 in the interest of justice considering the fact that the petitioners are working under the respondent Corporation for the last 56 years and are securing good business for the respondent Corporation;
(B) That this Hon'ble Court may be pleased to direct the respondent Life Insurance Corporation of India to extend the Scheme of Direct Sales Executives by reviewing the same after every 3 years for the period of 3 to 5 years upto the concerned employee reaches the age of 60 years (i.e. the age of superannuation);Page 2 of 55
HC-NIC Page 2 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT (C) That this Hon'ble Court may be pleased to direct the respondent Life Insurance Corporation of India to give renewal commission for the policies procured by them, till the date of maturity of policy, in the interest of justice;
(D) That this Hon'ble Court may be pleased to direct the respondent Life Insurance Corporation of India to absorb/promote all Direct Sales Executive as Development Officer in the employment of the Corporation at the Division where they are working and when any occasion of vacancy arises for regular employment in similar categories as Development Officers, then those who have worked as Direct Sales Executive in the Corporation, should be absorbed according to the seniority, senior person should be given preference for absorption in regular cadre of the Apprentice Development Officer in the respondent Corporation by giving age relaxation, in the interest of justice;
(E) That this Hon'ble Court may be pleased to pass such and further order as the nature and circumstances of the case may require;
(F) That this Honourable Court may be pleased to direct the respondent Corporation to keep 52 posts vacant for absorbing them as per the new notification at Annexure D to the petition, in the interest of justice;
(G) That this Honourable Court may be pleased to award cost of this petition in the interest of justice;"
3 The case of the writ applicants may be summarized as under:
3.1 The Life Insurance Corporation (for short, the 'L.I.C.') invited applications through a public advertisement for the appointment of the 'Direct Sales Executives' purely on the contract basis for a period of three years to function under the jurisdiction of its Zonal Offices including the Western Zone covering the State of Gujarat.
3.2 The advertisement specified the contractual nature of engagement, general conditions, selection procedure, etc. 3.3 The primary role of the 'Direct Sales Executives' is to promote and sale the Life Insurance Policies. The minimum qualification prescribed Page 3 of 55 HC-NIC Page 3 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT was Graduate with the minimum age of 21 years and maximum 35 years. The remuneration of the 'Direct Sales Executives' is based on his/her achievement of the specific business benchmark and performance of the assigned tasks. The scheme also provides that the remuneration would be subject to the specific performance and as such, there would be no fixed remuneration.
3.4 It is the case of the writ applicants that they all were appointed accordingly, and are now sought to be terminated from service on the ground that their services are no longer required. The contractual period has also come to an end on 31st March 2016, however, by virtue of the interim order passed by this Court, the writ applicants have continued in service as on date.
3.5 Hence, these writ applications.
4 Mr. K.B. Pujara, the learned counsel appearing for the writ applicants vehemently submitted that the action on the part of the Corporation in not extending the contractual period further is arbitrary and violative of Articles 14 and 16 of the Constitution of India. Mr. Pujara submits that the Corporation could not have appointed the writ applicants as the 'Direct Sales Executives' on contractual basis, as the Life Insurance Corporation Act itself does not recognize such contractual employment. Mr. Pujara submits that the appointments of the writ applicants could be termed as regular, and therefore, their services need to be protected. Mr. Pujara submits that the Corporation has the trapping of the "State" being the "other authority" under Article 12 of the Constitution of India. The Corporation being a "State" under Article 12 of the Constitution is expected to act fairly and reasonably. According to Mr. Pujara, the policy adopted by the Corporation is one of "hire and Page 4 of 55 HC-NIC Page 4 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT fire". Mr. Pujara submits that all the writ applicants have put in best of their efforts and have so far given excellent business to the Corporation.
It has been vehemently submitted that the Corporation could have considered the question of renewal or extension of the contract of appointment on completion of the contractual period.
5 Mr. Pujara submits that the State actions, including actions of the instrumentalities and agencies of the State, must not only be in conformity with the fundamental rights guaranteed by Part III of the Constitution, but must also be in accordance with the directive principles of the State policy prescribed by Part IV. Clause (a) of Article 39 provides that the State shall, in particular, direct its policy towards "securing that the citizens, men and women, equally have the right to adequate means of livelihood." Article 41 requires the State, within the limits of its economic capacity and development to "make effective provisions for securing the right to work". According to Mr. Pujara, all the writ applicants could be said to be the regular employees of the Corporation appointed under the Life Insurance Corporation Act, 1956 and are governed by the Regulations framed thereunder. Mr. Pujara has placed reliance on a decision of the Kerala High Court in the case of V.J. Johnson v. State of Bank of India [Writ Petition (Civil) No.27178 of 2010 decided on 26th June 2014] in support of his submissions.
6 Mr. Pujara also tried to invoke the 'doctrine of legitimate expectation'.
7 In such circumstances referred to above, Mr. Pujara prays that there being merit in all the writ applications, they be allowed and the reliefs prayed therein be granted.
Page 5 of 55HC-NIC Page 5 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT 8 On the other hand, all the writ applications have been vehemently opposed by Mr. B.B. Naik, the learned senior advocate assisted by Mr. A.K. Clerk, the learned counsel appearing for the Corporation. Mr. Naik submitted that no case worth the name is made out for grant of any relief as prayed for in the writ applications. Mr. Naik clarified that the appointments were purely contractual in nature, and with eyes wide open, each of the writ applicants had agreed to abide by all the terms and conditions. According to Mr. Naik, there is no master and servant relationship between the Corporation and the writ applicants. They could not be said to be in the employment of the Corporation and the L.I.C. (Staff) Regulations, 1960 do not apply to the writ applicants. According to the learned senior advocate, all these aspects were made very clear in the appointment order itself prescribing the terms and conditions.
9 Mr. Naik submits that according to the scheme, the maximum period of contract is six years and having completed the maximum period, it is always open for the Corporation not to regularise the contract further. Mr. Naik submits that mere long service on contractual basis by itself would not confer any legal right on any of the writ applicants to continue in service or claim regularisation.
10 Mr. Naik has placed strong reliance on a decision rendered by a learned Single Judge of the Kerala High Court in the case of Financial Service Executives Welfare Association v. Life Insurance Corporation of India and others [Writ Petition (Civil) No.9608 of 2014 decided on 17th November 2014]. According to Mr. Naik, the said decision is squarely applicable so far as the cases in hand are concerned. Mr. Naik further pointed out that the case in hand is one of the 'Direct Sales Executive'. Whereas the case before the Kerala High Court was of the Page 6 of 55 HC-NIC Page 6 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT 'Financial Service Executives' appointed by the L.I.C. Mr. Naik further pointed out that the judgment of the learned Single Judge of the Kerala High Court was carried in appeal by the unsuccessful Financial Service Executives. A Division Bench of the Kerala High Court affirmed the judgment and order passed by the learned Single Judge in the Writ Appeal No.1707 of 2014 decided on 9th March 2015. Mr. Naik further pointed out that the decision of the Division Bench referred to above was carried before the Supreme Court and the Special Leave to Appeal (Civil) No.14641 of 2015 was ordered to be dismissed on 9th March 2016.
11 Mr. Naik has vehemently submitted that the 'doctrine of legitimate expectation' has no application worth the name so far as the cases in hand are concerned.
12 Mr. Naik has also placed reliance on the following decisions to substantiate his contention that there is no scope for this Court to issue a writ of mandamus directing the Corporation to regularise the services of the 'Direct Sales Executives':
(1) State of Gujarat and another v. P.J. Kampavat and others [(1992)3 SCC 226] (2) Ram Singh and others v. Union Territory, Chandigarh and others [(2004)1 SCC 126] para 15 (3) Indian Overseas Bank v. Workmen [(2006) 3 SCC 729] para 18 (4) Electronics Corpn. Of India Ltd. v. Electronics Corpn. Of India Service Engineers Union [(2006) 7 SCC 330] paras 10, 11, 14 and 17 (5) Council of Scientific and Industrial Research and others v.Page 7 of 55
HC-NIC Page 7 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT Ramesh Chandra Agrawal and another [(2009) 3 SCC 35] paras 36, 39, 42 to 44.
(6) Chief Executive Officer, Pondicherry Khadi and village Industries Board and another v. K. Aroquia Radja and others [(2013) 3 SCC 780] paras 15 to 17, 21 to 23.
(7) Brij Mohan Lal v. Union of India and others [2012(6) SCC 502] (8) Bhavnagar Municipal Corporation v. Salimbhai Umarbhai Mansuri [2013(14) SCC 456] 13 Mr. Naik has also placed reliance on the following averments made in the affidavitinreply filed on behalf of the Corporation:
"Para 2: The averment of petitioners to cover Direct Sales Executives under LIC Staff regulations is misconceived and misleading, as the petitioners were evidently engaged on contractual basis to sell life insurance policies. It is submitted that LIC (Staff) Regulation, 1960 is not at all applicable to petitioners, as they have been engaged on contractual basis. It is clearly mentioned in clause 10 of the engagement letter that LIC of India (Staff) Regulations, 1960 will not be applicable to them and they have agreed to the same. Raising the matter now is unwarranted, unjustified, illegal and bad in law. By invoking the judicial power under Article 226 and 227 of the Constitution of India, it is submitted that this Honourable Court will be exercising its power of judicial review over the terms and conditions of the contract which is not permissible under law.
Para 3.3 The averments and submission contained therein is not applicable to petitioners, as their engagement was purely on contractual basis, which was explicitly stated in the engagement letter and agreed by them. Therefore invoking LIC Staff Regulations in the petition is misleading and strongly refuted since the same are not applicable to the petitioners who are governed by the terms of the contract.
Para 3.4 The petitioners (DSEs) were engaged, at different points of time, as Life Insurance intermediaries, between the Principal, the Corporation and the buyers of Life Insurance products, purely on contractual basis, to sell life insurance business and service the policyholders after obtaining the license prescribed under IRDA Agent's Regulations. As such there is no post of DSEs in the Corporation. It is merely a nomenclature given to distinguish them from 'Agents' of the main channel. The engagement of DSEs is governed by DSE scheme, 2010 as Page 8 of 55 HC-NIC Page 8 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT amended upto 17032011.
The terms and conditions of engagement of Direct Sales Executives are clearly laid out in the engagement letter and the terms and conditions of the contract which have been accepted by the petitioners willingly. Thus the petitioners had joined as Direct Sales Executives with full understanding of the nature of the engagement advertised for and period of contract of engagement.
Para 3.5 The averments and submissions contained herein are denied. It is denied that the DSE's were on the "pay roll" of the respondent Corporation. All payment to them are on basis of specific performance parameters and they are not entitled to any fixed remuneration in terms of the contract. The petitioners have tried to equate their engagement & profile of assignment to that of Development Officers, which is not correct. The primary assigned task of DSE is to sell life insurance policies, having valid IRDA license to do so. Development officers are the ClassII employees of the Corporation, whose basic job is to sponsor and train Agents. The DSEs are IRDA licensed holders to sell the insurance policies and act as intermediaries between the Principal, the Corporation and the insured public or customers of life insurance as per the terms and condition of the engagement. The Development Officers on the other hand, are Not Authorised to sell.
The Corporation had set educational qualification to apply for, to develop a separate group of intermediaries, who would be trained further to tap specific segments of the life insurance market. By setting the eligibility conditions and age limit to apply, at no stage the Corporation had assured or contracted the petitioners for continuity of engagement beyond 6 years. In fact it was clearly mentioned in the advertisement that selection as a DSE does not confer any right on the candidate to be appointed as en employee in the Corporation. It is denied that they were "promoted" as SSEI and SSEII as alleged. In order to give the petitioners incentives, the Corporation had designed SSEI and SSEII scheme, which is inbuilt in the DSE scheme 2010 itself and is purely temporary, the eligibility of the DSE's being reviewed every year based on their performance of the previous year, with a view to incentivize as SSEI or SSEII, based on performance, in no way places them at part with any employee of the Corporation. It is reiterated, that it is nothing but a reward scheme to incentivize better performing DSEs.
It is categorically denied that the nature of work of the petitioners is similar to Development Officers of the Corporation. The petitioners are engaged on contract basis to sell the life insurance policies after obtaining valid license from IRDA and get performance based remuneration, if any.
It is totally inappropriate to equate the petitioners' engagement and Page 9 of 55 HC-NIC Page 9 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT nature of work with that of Development Officers. The primary task of DSE is to sell policies, having obtained valid IRDA license to do so. The engagement of DSEs is purely contractual and is governed by DSE scheme 2010 as amended upto 17032011 and as per terms and conditions of the engagement.
On seeking to be absorbed as Development Officers in the employment of the Corporation, the petitioners wish to make a back door entry, knowing fully well that they had been engaged on contractual basis, maximum 6 years and in no way the nature of their engagement and/or duties can be compared to that of Development Officers.
It is denied that Corporation by setting maximum age to apply for DSE, in any way blocked their option or choice to apply anywhere else. The petitioners had joined of their own volition, knowing fully well that DSE is a contractual engagement. There is also no restriction on their exit from the scheme for taking up any other job during the contract period. It is also denied that the petitioners were given any assurance to be absorbed an employee. As per DSE Scheme, 2010 which governs the engagement of the petitioners, the period of contract shall cease at the end of maximum 6 years. It is denied that the Corporation is compelling or has compelled the petitioners to take agency or to leave the so called job. The Corporation has entered into voluntary, transparent, fair and legally valid contract with the petitioners and has fully complied with all conditions.
Para 3.7 The recruitment of Apprentice Development Officers is governed by a Gazette notification which is a Government notified scheme and which does not allow for any such inclusion. A true copy of the advertisement dated 010615 in respect of Western Zone of the Corporation for the post of Apprentice Development Officers in Western Zone is annexed herewith and marked as "AnnexureII". It is denied that the petitioners were "promoted" as alleged or otherwise. It is denied that they are performing the work like Development Officers as alleged or otherwise. It is amply evident that the petitioners are not governed by Staff Regulations, 1960. It is submitted that since the petitioners are not in the employment of the Corporation, the question of job security or promotion does not arise."
14 Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the writ applicants are entitled to any of the reliefs prayed for in these writ applications.
15 Before adverting to the rival submissions canvassed on either Page 10 of 55 HC-NIC Page 10 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT sides, I must look into the terms and conditions on which the writ applicants were appointed as the 'Direct Sales Executives'.
16 It appears that the Corporation formulated a scheme called the "LIC of India (Direct Sales Executives) Scheme, 2010". The same came into effect from 1st April 2010. Clause 2 of the said scheme provides for definitions. Clause 2(e) defines the term DSE as "DSE means a Direct Sales Executive under the Scheme". Clause 2(l) defines the "Trainee Direct Sales Executive". Clause 3 provides for the "nature of engagement". Clause 7 provides for the "mode of selection". Clause 10 provides for "training". Clause 11 provides for the "apprenticeship period". Clause 13 provides for the "remuneration". Clause 19 provides for the "period of engagement". Clause 20 provides for "termination of contract". Clause 21 provides for the "continuity as a direct agent". Clause 23 provides for "renewal of contract". Clause 25 provides for "general". Clause 26 provides for the "career prospects for DSE (SSE levelI)".
17 Thus, the scheme makes it abundantly clear that the engagement of the 'Direct Sales Executive' was purely on contractual basis. It also makes it abundantly clear that the selection as a 'Direct Sales Executive' would in no manner confer any right upon any candidate to claim entitlement of employment with the Corporation. It also makes it clear that being a contractual engagement, the selected 'Direct Sales Executives' are not eligible to receive any amount other than the remuneration mentioned in the scheme.
18 Let me now look into one of the appointment letters. The appointment letter contains the following terms and conditions:
"1. Terms of Selection:
Contractual Engagement for a period of 3 financial years s a Direct Sales Executive renewable at the sole discretion of the Corporation subject to Page 11 of 55 HC-NIC Page 11 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT certain terms and conditions for another 2 years and further 1 year only.
2. Remuneration:
The remuneration payable to you will depend on the amount of eligible first year premium completed in a month as per the following during the period of contract. The business review shall be done every month.
Eligible First Year Premium in a Remuneration on the eligible first year Month premium completed in the month Upto Rs.33,000 30% of the eligible premium Rs.33,001 to Rs.75,000 31.5% of the total eligible premium Beyond Rs.75,000 33.3% of the total eligible premium The total remuneration for the month will be inclusive of the following components:
1. Conveyance Reimbursement - Rs.1,200/ or 10% of monthly remuneration or actual expenses, whichever is lowest.
2. Mobile/Internet Data Card Reimbursement - Rs.600/ or 5% of the monthly remuneration or actual expenses, whichever is lowest.
Reimbursement for conveyance / mobile / Internet data card expenses will be payable only on production of related bills subject to specified limits.
9. Termination of contract:
The contract will be terminated forthwith without giving any notice to you in case you do not procure the stipulated minimum New Business in a year. The contract shall also be liable for being terminated, for any misconduct committed by you or if you commit breach of any Statutory Provisions or if you are found to be indulging in activities detrimental to the interests of the Corporation or would be in contravention to the terms of this contract.
10. The provisions of LIC of India (Staff) Regulations, 1960 will not be applicable to you. In respect of all matters not set forth herein, your selection will be governed by such rules/instructions as may be framed from time to time.
12 Your selection being purely on contractual basis, you will not be entitled to any other benefits whatsoever such as terminal benefits or contribution to Provident Fund or Welfare Fund or Health Care Fund etc."
Page 12 of 55HC-NIC Page 12 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT 19 I take notice of the fact, more particularly, having regard to the prayer clause that what has been prayed substantially is regularisation in the service of the Corporation. The main relief sought for is that all the 'Direct Sales Executives' should be covered under the Staff Regulations 1960 framed by the Corporation. It has also been prayed that they be continued till they reach the age of 60 i.e. the age of superannuation. The writ applicants have also prayed for absorption in the Corporation on permanent basis according to the seniority.
20 For the purpose of seeking a writ of mandamus, one has to establish the legal right. The petitioners do not have any legal right emanating from any statutory Rules/Regulation. In the absence of any provision for the regularisation of contract employees, this Court should not give a direction to the respondents to consider the petitioners for regularisation in service.
21 The Supreme Court has authoritatively ruled that the Courts should not issue directions to the department/ Government Institution or Organizations to regularise the services of an employee. Such a direction and implementation of the same would be violative of Articles 14 and 16 of the Constitution. When the petitioners were offered employment, the advertisement, as well as, the appointment order made it clear that the selection and appointment was on the contract basis. The contract appointment cannot be converted into a regular appointment on the sole ground that the petitioners have continued for a long time. Had the respondents notified the selection and appointment for the 'regular recruitment', large scale candidates who were eligible and/or already working elsewhere on contract basis would be denied to compete for selection and appointment. In other words, each and every eligible candidate must know the nature of public appointment. This Page 13 of 55 HC-NIC Page 13 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT Court should not give direction to regularise the petitioners' services by way of writ of a mandamus, since the petitioners have not pointed out under which statutory rules they have got the right to seek regularisation. Unless a legal right is vested in a person, the Court should not issue writ of mandamus to the respondents. Mandamus can be issued against a public authority only on its failure to perform mandatory legal duty. If there is no such failure, mandamus would not be issued.
22 The Supreme Court in the case of Mani Subrat Jain v. State of Haryana, [(1977) 1 SCC 486] held as follows : "9. The High Court rightly dismissed the petitions. It is elementary though it is to be restated that no one can ask for a mandamus without a legal right. There must be a judicially enforceable right as well as a legally protected right before one suffering a legal grievance can ask for a mandamus. A person can be said to be aggrieved only when a person is denied a legal right by some one who has a legal duty to do something or to abstain from doing something (See Halsbury's Laws of England 4th Ed. Vol. I, paragraph 122; State of Haryana v. Subash Chander Marwaha & Ors. (1) Jasbhai Motibhai Desai v. Roshan Kumar Haji Bashir Ahmed & Ors. (2) and Ferris Extraordinary Legal Remedies paragraph 198."
23 In the case of Tirumala Tirupathi Devasthanams v. K. Jotheeswara Pillai (dead) by LRs and others, [(2007)9 SCC 461], it has been held that :
"9. ........... The principles, on which a writ of mandamus can be issued, are well settled and we will refer to only one decision rendered in The Bihar Eastern Gangetic Fishermen Cooperative Society Ltd. vs. Sipahi Singh, AIR 1977 SC 2149, where this Court observed as under :
A writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of a writ is to compel performance of public duties prescribed by statute and to keep subordinate Page 14 of 55 HC-NIC Page 14 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT tribunals and officers exercising public functions within the limits of their jurisdiction. It follows, therefore, that in order that mandamus may issue to compel the authorities to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance."
24 Let me at this stage examine the nature of duties of the 'Direct Sales Executives'. The main purpose of appointment of the 'Direct Sales Executives' is as under;
"1. Procuring maximum Business from leads provided to you and your own sales activity
2. Canvassing LIC's Products and closing the sale.
3. Completing the documentation work for completing the proposal and getting all requirements that may be called for during the completion of proposal.
4. Post sales customer relationship management.
5. Any other job as per instructions given to you by Branch Manager (Direct Mktg) and the Sr. Division Manager of the Division from time to time."
25 Having regard to the nature of duties referred to above, it is abundantly clear that the relationship between the respondent Corporation and the writ applicants is not of master and servant and it resembles a relationship between the Principal and Agent. At best, the appointment of the 'Direct Sales Executives', can be equated to that of an agent appointed under the provisions of the Life Insurance Corporation of India (Agents) Rules 1972.
26 The learned Single Judge of the Kerala High Court in the case of Financial Service Executive Welfare Association (supra), while considering an almost identical claim put forward by the 'Financial Service Executives' held as under:
Page 15 of 55HC-NIC Page 15 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT "16. The bone of contention in this writ petition is whether the persons appointed as FSEs are eligible to be absorbed ultimately into the general track of employment under the respondent Corporation. It is settled law that class litigations by an association of employees or trade unions could be entertained only when the issues raised are of general nature. Of course, instances are there where the individual grievance of the members of the association and such general issues overlap. In the nature of the reliefs sought for in the writ petition, it is impossible to hold that the grievance of the first petitioner association as a whole could be redressed in a petition like this. If this Court venture to do that this Court would be exercising its powers of judicial review over the terms and conditions of a contract which is not permissible.
17. It is crucial to note that while seeking the appointment as FSEs, the appointees are liable to furnish declaration that in the light of the terms and conditions of appointment, it will not confer any right on such person to claim employment under the respondent Corporation merely by virtue of their engagement as FSEs. Such a declaration was given by the second petitioner which is produced and marked as Ext.R7(a). After giving such a declaration by the second petitioner, either in his individual capacity or in his capacity as the representative of the first petitioner association, the petitioners are estopped from claiming regularisation in the service of the respondent Corporation. Here, it is relevant to note that there is an express bar under the provisions of LIC of India (Staff Regulation of 1960) which prohibits the employee of the respondent Corporation from claiming regularisation of his service merely because of his appointment on a temporary basis. The posts of FSEs are not declared posts under the regular employment. Therefore, a person who is appointed as FSE cannot seek regularisation to any permanent post in the Life Insurance Corporation.
18. Even in cases where there is master and servant relationship, the scope of interference by Courts to specifically enforce service is limited. The general rule is that courts will not ordinarily force an employer to retain the service of an employee, who he no longer wishes to employ. However, this rule is subject to three well recognised exceptions.
19. The first exception is the case of a public servant who is dismissed from service in contravention of Article 311 of the Constitution of India. In appropriate cases, it is open to the Court to declare that such a public servant continues to remain in service, even though by doing so, in effect, the State is forced to continue to employ the servant whom it does not desire to employ.Page 16 of 55
HC-NIC Page 16 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT
20. Secondly, under the industrial law, jurisdiction of the Labour and Industrial Tribunals to compel the employer to employ a worker, whom he does not desire to employ, is recognised.
21. The third instance is where a statutory body acts in breach of a mandatory obligation imposed by the statute and terminates an employee. There also, the Court is having the power to declare such action invalid, even if by making such declaration the body is compelled to do something which it does not desire to do so. This position is well settled through the decisions of the Apex Court in S.R.Tewari v The District Board Agra (AIR 1964 SC 1680), U.P. State Warehousing Corporation v C.K.Tyagi (AIR 1970 SC 1244), Indian Airlines Corporation v Sukhdeo Rai (AIR 1971 SC 1828), Executive Committee of Vaish degree College, shamli and others v Lakshmi Narain and others (AIR 1976 SC 888(1). The right of an employee to continue in service cannot be specifically enforced except under the aforesaid three circumstances.
22. As the main purpose of the appointment of FSEs is to secure maximum business of life insurance policies, their job is to canvass policies and increase the business of the Corporation, it cannot be termed as performance duties in a permanent post.
23. The petitioners are relying upon a provision in the scheme which envisages the extension of their service after the completion of three years. However, what the scheme provides is that the FSEs shall be allowed to continue as an agent, if they desire to do so. However, they can act only as direct agents either after the period of contract is over or even when the contract with them is prematurely terminated on reasons other than misconduct. This would give a sufficient indication that the appointment of FSEs is not a regular appointment. The aforesaid option to continue the engagement with the Corporation as direct agent would also necessarily imply the relationship between the respondent Corporation and the FSEs is that of a principal and agent. It is also crucial to note that the contract of appointment cannot be extended beyond a period of six years which also would indicate that the FSEs are not appointed as against a regular post.
24. The petitioners have a case that the benefit of provident fund and gratuity are not being extended to the FSEs. However, it was averred in the counter affidavit filed by the respondent that the work relating to making of provisions of the provident fund and gratuity is applicable to FSEs is under process and there has been a decision on the part of the Corporation to bring the FSEs within the purview of the provident fund scheme. However, as far as the question raised in this writ petition is Page 17 of 55 HC-NIC Page 17 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT concerned, the same has no relevance."
"26. It was strenuously argued by the learned Senior Counsel for the petitioners that the duties of FSEs are to be treated at par with the Development Officers. It is crucial to note that the post of Development Officers is a post falling under class2 category of Life Insurance Corporation of India Staff Regulation Act, 1960. The nature of work and duties of the Development Officers are distinct and different from the FSEs.
27. The argument that the creation of FSEs as contractual employees is arbitrary and contrary to the provisions of the Contract Labour Abolition Act, 1970 is also unacceptable as it was not open to the petitioner to raise such a contention after accepting the terms and conditions of appointment with their eyes wide open. Preamble to the aforesaid act shows that the Act has been promulgated to regularise the employees in such establishment and provide its abolition. In certain circumstances, a person shall be deemed to be employed as a contract labourer in connection with the working of an establishment when he is hired or where he is employed by or through a contractor with or without the knowledge of the principal employer.
28. In the present case, the FSEs were appointed as per Ext.P1 administrative instructions. Therefore, it will not come within the purview of the Contract Labour Abolition Act, 1970. As the person appointed is on a contract basis and such relationship between the persons employed and person employing could only be as that of principal and agent, violation under Articles 14, 19 and 21 of the Constitution of India cannot be complained of as rightly pointed out by the learned standing counsel for the respondent Corporation.
29. Relying on Ext.P14 which is the copy of the Insurance Regulatory and Development Authority (Licensing of Corporate Agent) Amendment Regulation, 2010, it was argued by the learned senior counsel for the petitioner that the respondent Corporation is not insisting enforcement of a class in Ext. P14 clarifying that the bank with specified person is the agent and consequently, the FSCs who are engaged to deal with the specified person of the bank would be wrongly treated as agent, though the intention was to treat the bank employee as the specified person 'Corporate Agent'. However, such a contention has no relevance at all in the case of the petitioners who are claiming regularisation in the service of the respondent Corporation. The fact that the FSEs are entitled to claim appointment as agent after the period of contract as FSEs is over, leads to the conclusion that what is envisaged in Ext.P1 is that such FSEs are not entitled for regularisation in any of the regular posts under the respondent Corporation.Page 18 of 55
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30. So long as the appointment of the petitioners are not under the statutory scheme or rules, it is not possible for this Court to accept the argument that the inaction on the part of the respondent Corporation in not regularising FSEs was unfair within the domain of rules of law.
31. The power of judicial review under Article 226 of the Constitution of India cannot be invoked by the petitioners to review the terms and conditions of appointment which is purely on contract basis. A direction to the respondent Corporation by this Court to regularise the service of the petitioners would result in rewriting the contract of appointment which is not envisaged by law.
On a consideration of the entire materials now placed on record, this Court is of the view that the petitioners are not entitled to succeed.
In the result, this writ petition fails and accordingly, it is dismissed."
27 The above referred judgment of the learned Single Judge was carried further in appeal. The Division Bench, speaking through Ashok Bhushan, Actg. C.J., (as His Lordship then was), while affirming the judgment of the learned Single Judge, held as under:
"9. From the submissions made by learned counsel for the parties and the pleadings on record, the following are the issues which arise for consideration in the appeal:
I. Whether the Life Insurance Corporation (Financial Service Executive) Scheme, 2007 is a statutory scheme?
II. Whether the FSEs engaged by the Corporation after selection under contract of service are entitled to be regularised in the service of the Corporation?
III. Whether Exhibit P1 Scheme, which mentions the engagement of contractual appointment, is illegal, arbitrary and violative of the Contract Labour Abolition Act, 1970?
IV. Whether the FSEs are entitled to be granted the benefit of provident fund, maternity leave, gratuity etc.?
10 Before we consider the respective submissions of learned counsel for the appellants, it is necessary to look into the statutory provisions Page 19 of 55 HC-NIC Page 19 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT pertaining to the Corporation.
11. The Corporation was established and incorporated under Section 3 of the Life Insurance Corporation of India Act, 1956. Section 6 of the Act enumerates the functions of the Corporation. Section 23 empowers the Corporation to employ such members of persons as it may think fit to discharge its functions under the Act. Under Section 48 the Central Government is empowered to make Rules. Under Section 49 the Corporation, with previous approval of the Central Government, is empowered to make regulations. In exercise of power under Section 49, the Life Insurance Corporation of India (Staff) Regulations, 1960 has been framed by the Corporation with previous approval of the Central Government. Regulation 2 of the Regulations, 1960 is regarding applicability of the regulations to every wholetime (salaried) employee, which is to the following effect:
"2. They shall apply to every wholetime (salaried) employee of the Corporation (in India) unless otherwise provided by the terms of any contract, agreement or letter of appointment."
Regulation 5 deals with classification of staff and Regulation 6 deals with Appointing Authority. Regulations 5 and 6 are as follows:
"5. The staff of the Corporation shall be classified as follows: Class IOfficers Class II(Development) Officers Class IIISupervisory and Clerical Staff Class IV Subordinate staff.
6. Appointments including promotions shall be made by the authorities specified in this behalf in scheduled I."
Regulation 8 deals with Temporary Staff, which is to the following effect:
"8. (1) Notwithstanding anything contained in these Regulations, a Managing Director, Executive Director (Personnel), a Zonal Manager or a Divisional Manager may employ staff in Classes III and IV on a temporary basis subject to such general or special directions as may be issued by the Chairman from time to time.
(2) No person appointed under subregulation(1) shall only by reason of such appointment be entitled to absorption in the service of the Corporation or claim preference for recruitment to any post."
12. In the present case the FSEs have been engaged under the Scheme, 2007. A copy of the modified Scheme has been brought on record as Page 20 of 55 HC-NIC Page 20 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT AnnexureI to the Writ Appeal. Instruction for implementation of the Scheme has been brought on record as Exhibit P1. Paragraph 3 of the Scheme deals with nature of the engagement, which is to the following effect:
"3. Nature of Engagement:
The engagement shall be purely on Contractual Basis initially for a period of three years. The terms and conditions of engagement will be governed by LIC of India (Financial Services Executives) Scheme, 2007."
13. Paragraph 5 deals with the conditions of eligibility. Clause 6 deals with the mode of selection. Paragraphs 9 and 11 deal with training and practical training. Minimum business parameters have been laid down in paragraph 15. Remuneration has been detailed in paragraph 17. Paragraph 19 deals with leave and paragraph 20 deals with traveling expenses. Paragraph 23 deals with termination of contract. Paragraph 24 deals with continuity as direct agent. Paragraph 26 deals with renewal of contract. Along with Exhibit P1 Annexure6 has been annexed, which is a format of a letter of contract to be issued for engagement of FSEs. The term of selection is mentioned in paragraph 1, which is to the following effect:
"1. Terms of Selection: Contractual appointment for a period of 3 years as a Financial Services Executive Renewable at the sole discretion of the Corporation subject to certain terms and conditions for another 2 years only."
14. Paragraph 8 of the letter is about termination of contract. In the said paragraph it is clarified that the provisions of the Regulation, 1960 will not be applicable and the selection will be on a contractual basis for a period of three years and they shall not be entitled to any other benefits such as gratuity, bonus, medical benefits, pension etc. It is useful to quote the relevant portion of paragraph 8, which is to the following effect:
"8. Termination of Contract: The provisions of LIC of India (Staff) Regulations, 1960 will not be applicable to you. In respect of all matter not set forth herein, your selection will be governed by such rules as may be framed from time to time. You shall, conform with and obey all orders and directions which may be given to you in the course of your duties by any person or persons under whose jurisdiction, superintendence or control you may, from the time being, be placed.Page 21 of 55
HC-NIC Page 21 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT Your selection being on contractual basis for a period of three years, you will not be entitled to any other benefits such as Gratuity, Bonus, Medical Benefits, Pension etc. as provided by the Corporation of its employees in the regular cadre."
15. The principal claim, which has been laid by the petitioners in the Writ Petition is regarding their claim to be absorbed/regularised in the regular service of the Corporation despite they having accepted contractual engagement for limited period.
ISSUEI:
16. The first issue relates to the nature of the Scheme, 2007. The submission of learned counsel for the petitioners is that the Scheme, 2007 is a statutory scheme. As noted above, under Section 23 of the Life Insurance Corporation Act, 1956, the Corporation is entitled to employ such number of persons as it thinks fit. The Corporation is, thus, a statutory body, which is empowered to employ such number of persons as it thinks fit. As noted above, regulations are framed, i.e., Regulations, 1960 in exercise of power vested in the Corporation under clauses (b) and (bb) of subsection (2) of Section 49. Section 49(2)(b) and (bb) as it existed at the time of the Scheme, 2007 was to the following effect:
"(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents;
(bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of Section 11:"
Section 49(2)(b) has been substituted in the Life Insurance Corporation Act, 1956 by Act 8 of 2012 in the following manner:
"49.Power to make regulations. (1) ...
(2) ...
(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of the agents."
17. The Regulations, 1960 contemplate employment of staff as classified in the Regulations, 1960 and recruitment is contemplated against the vacancies in sanctioned post as per Regulation 7. ScheduleI of the Regulations, 1960 enumerates different categories of staff, i.e., ClassI Page 22 of 55 HC-NIC Page 22 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT officers, ClassII Development Officers, ClassIII Supervisors and clerical staff and ClassIV subordinate staff. The engagement of the members of FSEs is in accordance with the Scheme, 2007 and has not been made in accordance with Regulations, 1960. FSEs are not included in the category of staff as contemplated in Regulations, 1960. Thus, the engagement of members of FSEs is not in accordance with Regulations, 1960. Whether the Scheme, 2007 is statutory in nature is the question to be answered. Although the engagement of FSEs is not covered by the Regulations, 1960, but the jurisdiction and power of the Corporation to engage any other category of staff apart from regular staff cannot be denied, which flows from power under Section 23 as noted above. Every employer is entitled to engage the staff including daily wage employees/contractual employees in exigency of service. That situation has been very well accepted by the the Constitution Bench of the Supreme Court in Secretary, State of Karnataka and others v. Umadevi and others [(2006)4 SCC 1]. In paragraph 12 of the judgment it was held as follows:
"12. In spite of this scheme, there may be occasions when the sovereign State or its instrumentalities will have to employ persons, in posts which are temporary, on daily wages, as additional hands or taking them in without following the required procedure, to discharge the duties in respect of the posts that are sanctioned and that are required to be filled in terms of the relevant procedure established by the Constitution or for work in temporary posts or projects that are not needed permanently. This right of the Union or of the State Government cannot but be recognized and there is nothing in the Constitution which prohibits such engaging of persons temporarily or on daily wages, to meet the needs of the situation. But the fact that such engagements are resorted to, cannot be used to defeat the very scheme of public employment. Nor can a court say that the Union or the State Governments do not have the right to engage persons in various capacities for a duration or until the work in a particular project is completed. Once this right of the Government is recognized and the mandate of the constitutional requirement for public employment is respected, there cannot be much difficulty in coming to the conclusion that it is ordinarily not proper for courts whether acting under Article 226 of the Constitution or under Article 32 of the Constitution, to direct absorption in permanent employment of those who have been engaged without following a due process of selection as envisaged by the constitutional scheme."
18. The Scheme, 2007 has been framed by the Corporation, which is a statutory authority. The Corporation is a State within the meaning of Article 12 of the Constitution of India and the Corporation has to conform to the provisions of Articles 14 and 16 of the Constitution of India in Page 23 of 55 HC-NIC Page 23 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT discharge of its function. Learned counsel for the petitioners has placed reliance on Life Insurance Corporation of India v. D.J.Bahadur and others (AIR 1980 SC 2181). The Apex Court had laid down the following in paragraph 88 of the judgment:
"88. Section 23 of the L. I. C. Act gave to the Corporation the power to employ such number of persons as it though fit for the purpose of enabling it to discharge its functions under the Act and declared that every person so employed or whose services stood transferred to the Corporation under Section 11 would be liable to serve anywhere in India. Section 49 conferred on the Corporation the power to make regulations for the purpose of giving effect to the provisions of the Act with the previous approval of the Central Government. Subsection (2) of that section enumerated various matters in relation to which such power was particular conferred. Clauses (b) and (bb) of subsection (2) read thus : "(b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents;
"(bb) the terms and conditions of service of persons who have become employees of the Corporation under subsection (1) of Section 11:"
Another judgment relied on by learned counsel for the petitioners is an Apex Court judgment in Jayantilal Amratlal v. F.N.Bana and others (AIR 1964 SC 648). The Apex Court in the said case had occasion to consider the definition of 'law' as given in Section 2(d) of the Bombay Reorganisation Act, 1960. The question was as to whether the notification by President issued under Article 258(1) of the Constitution of India has force of law. In the above context the Apex Court had considered various expressions including Subordinate Legislation, Regulation, Scheme etc. Paragraph 40 of the judgment is as follows:
"40. Let us now look to the definition in S. 2(d) in the light of this basic concept of law and see how the various terms included within "law'' as having the force of law satisfy this basic concept. The first term included in S. 2(d) is enactment. An enactment has necessarily the force of law because it is an expression of the legislative will and is expressly enacted as law by the legislature and would necessarily contain a body of rules which have to be obeyed by persons living in the particular community. The second term used in S. 2(d) is ordinance having the force of law. If an ordinance is passed, say under Art. 123 or Art. 213 of the Constitution, it stands exactly on the same footing as an enactment Page 24 of 55 HC-NIC Page 24 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT and would necessarily have the force of law. If it is another kind of ordinance, it can have the force of law if it lays down a binding rule of conduct and the body passing it has the authority of law to lay down such a binding rule of conduct. Such an ordinance would usually be subordinate legislation. The third term is regulation. A regulation may be a direct command of the legislature in which case it will stand on the same footing as an enactment. Examples of this kind of regulations are to be found in the old regulations passed by the GovernorGeneral before 1857 under his lawmaking power, some of which are still in force in this country. Secondly, regulations may be a kind of subordinate legislation and in such a case they are bound to consist of a body of rules which regulate the conduct of persons living in the community and are enforceable by courts or other authorities provided the body passing the regulations has the authority to do so. The fourth term is order. Orders may be two kinds; they may be merely executive orders laying down no course of conduct for anybody, though they may have the authority of law or may not be opposed to any law and courts or other authorities may recognise them. Another kind of orders will be in the form of subordinate legislation laying down rules of conduct which can be enforced by courts or other authorities. An example of such orders may be found in various orders passed under the Defence of Indian Act. 1939 or the Essential Commodities Act, 1955. These orders lay down a body of rules which regulate the conduct of person or person living in the community and are enforceable by courts or other authorities. The next term is byelaw. Byelaws are a wellknown species of subordinate legislation. They lay down general rules of conduct governing persons and are enforceable by courts or other authorities if passed by a body having the authority of law to do so. The next term is rule. Rules are again a wellknown species of subordinate legislation laying down general rules of conduct and if they are passed by a body having the authority to do so they are enforceable by courts or other authorities. The next term is scheme. Schemes may be of two kinds. They may embody subordinate legislation containing a body on rules binding of persons with whom they are concerned and in such a case if passed by a body having the necessary authority they will be enforceable by courts or other authorities and would have the force of law. But there may be another kind of schemes which are merely executive in nature and they do not contain any rules of conduct for anybody to follow. This will not have the force of law and will not be enforceable by courts or other authorities, as they lay down no rule of conduct which courts or other authorities may enforce. The next term is notification. Notifications again may be of two kinds. Most government orders are notified so that the public may know them. All of them have not the force of law. Only such notifications have Page 25 of 55 HC-NIC Page 25 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT the force of law which are a species of subordinate legislation passed by a body having the authority to promulgate them and which lay down rules of conduct for persons in the community to obey. But there may be notifications which lay down no rule of conduct. For example, all appointments, and transfers of officers are notified through notifications and these are merely executive orders for the purpose of the information of public and do not lay down any rule of conduct to be followed by persons in the community. The last term is "other instruments'' and these again may be of two kinds, like schemes. It they have the characteristic of subordinate legislation and contain a rule or body of rules to be followed by persons living in the community they will have the force of law and will be enforced by courts or other authorities. But they can also be merely executive in nature; for example, sale deeds, mortgage deeds etc. are all instruments but have not the force of law. Similarly treaties between sovereign powers are also instruments but they have by themselves no force of law. That is why we find specific provision in Art. 253 for legislation to give effect to international agreements."
From the above paragraph it is clear that while considering the expression 'scheme' the Apex Court referred to two kinds of scheme. Firstly, they may embody subordinate legislation containing a body of rules binding on persons with whom they are concerned and in such a case if passed by a body having the necessary authority they will be enforceable by Courts or other authorities and would have the force of law. But there may be another kind of scheme which is merely executive in nature and they do not contain any rules of conduct for anybody to follow. This will not have the force of law and will not be enforceable by Courts or other authorities as they lay down no rule of conduct which Courts or other authorities may enforce. The power under Section 23 given to the Corporation to employ staff is not a power of subordinate legislation, rather it is a statutory power to employ staff to carry out the purpose of the Act. The said power is a statutory/administrative power given to the Corporation. The Corporation is empowered to make regulations under Section 49 of the Life Insurance Corporation Act, 1956, which is in the nature of subordinate legislation. From the above judgment of the Supreme Court it is clear that the scheme 2007 cannot be held to be subordinate legislation. But, as observed above, the Corporation being a State within the meaning of Article 12 of the Constitution, it has to conform with the provisions of the Constitution of India. Even in its administrative action the Corporation is bound to act in a fair and reasonable manner and any scheme framed by it for engagement of staff has to be tested on the touchstone of Articles 14 and 16 of the Constitution of India. Thus, the fact that the Scheme, 2007 whether a statutory scheme or non statutory scheme does not make much difference. When the Corporation has floated a scheme exercising statutory power, the scheme has to be reasonable, fair Page 26 of 55 HC-NIC Page 26 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT and conforming to mandate of Article 14 and 16 of the Constitution of India.
19. We, thus, are of the view that the Scheme, 2007 framed by the Corporation has to conform to various constitutional obligations on the Corporation. The first issue is answered accordingly.
ISSUES II & III
20. Issues II and III being inter connected are being taken together. The Corporation issued a Scheme for engagement of Financial Services Executives on contractual basis. Various salient features of the Scheme have already been noticed above. The Scheme provided for a mode of selection, training, allocation, minimum business parameters, remuneration, leave, travelling expenses, termination of contract etc. As noted above, Annexure6, which is part of Exhibit P1 is on the subject engagement as Financial Services Executives. Paragraph 1 of Annexure6 terms of selection mentions "contractual appointment for a period of 3 years as a Financial services Executive renewable at the sole discretion of the Corporation subject to certain terms and conditions for another 2 years only".
21. The Scheme, thus, clearly and expressly stated that the appointment is a contractual appointment for three years with renewal of two years further. One of the submissions is that even the Scheme itself contemplated continuance for seven years, since details of remuneration to be paid in 7 th year have been mentioned in the Scheme itself. It is further submitted that most of the FSEs are continuing even in the 7 th year. Be that as it may, the FSEs having been appointed on contractual basis and the services have been extended upto 6th or 7th year does not change the nature and character of the Scheme. As noted above, the engagement of FSEs is not an engagement under Regulations, 1960, which Regulations contemplate appointment in regular services in different categories of staff as enumerated therein. We have already noted above that Regulation 8, which deals with appointment of staff on temporary basis subject to general or special directions issued by the Chairman, shall not give any right for absorption in the services of the Corporation or claim preference for recruitment for any post. This has been clearly stated in Regulation 8 as noted above. The statutory provision thus, indicate that persons engaged on temporary basis cannot claim any absorption in the regular service.
22. Learned counsel for the appellants attacked the provisions in the Scheme, 2007, wherein the engagement of FSEs has been treated to be engagement on contractual basis. The submission is that the clause defining the engagement on contractual basis is arbitrary and violative of Articles 14 and 16 of the Constitution of India. He submitted that all Page 27 of 55 HC-NIC Page 27 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT members of FSEs have gone through regular selection process, they should be treated to be appointed on regular basis. Mere undergoing through a process for selection for a particular job whether contractual or temporary does not change the nature and character of the engagement. Learned counsel for the appellants has relied on the judgment of the Apex Court in Central Inland Water Transport Corporation Ltd. v. Brojo Nath (AIR 1986 SC 1571). The appellants have submitted that in the changing scenario and the changing method of engagement, the Court should take a progressive view and should protect the party, who is not in a position to obtain any better conditions of service. The Apex Court in the said case was considering Rule 9(i) of the Central Inland Water Transport Corporation Ltd. Service Discipline and Appeal Rules (1979) which provided for termination of services of permanent employees without giving any reason and without giving a notice. The Apex Court in the said case has laid down that such clause is opposed to public policy and void in view of Section 23 of the Indian Contract Act. The Apex Court held that Rule 9(i) was violative of Articles 14 and 16 of the Constitution of India and it confers an absolute, arbitrary and unguided power upon the Corporation. The following was laid down in paragraphs 90, 100 and 101 of the judgment:
"90. 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 nineteenthcentury theories? 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 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. 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 Page 28 of 55 HC-NIC Page 28 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT 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 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 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 infra structural 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 bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its, own facts and circumstances.
xx xx xx
100. The power conferred by Rule 9(i) is not only arbitrary but is also discriminatory for it enables the Corporation to discriminate between employee and employee. It can pick up one employee and apply to him clause (i) of Rule 9. It can pick up another employed and apply to him clause (ii) of Rule 9. It can pick up yet another employee and apply to him subclause (iv) of clause (b) of Rule 36 read with Rule 38 and to yet another employee it can apply Rule
37. All this the Corporation can do when the same circumstances exist as would justify the Corporation in holding under Rule 38 a regular disciplinary inquiry into the alleged misconduct of the employee. Both the contesting Respondents had, in fact, been asked to submit their explanation to the charges made against them. Sengupta had been informed that a disciplinary inquiry was proposed to be held in his case. The charges made against both the Respondents were such that a disciplinary inquiry could easily have been held. It was, however, not held but instead resort was had to Rule 9(i).
101. The Corporation is a large organization. It has offices in various parts of West Bengal, Bihar and Assam as shown by the said Rules, and possibly in other States also. The said Rules form part of the contract of employment between the Corporation and its Page 29 of 55 HC-NIC Page 29 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT employees who are not workmen. These employees had no powerful workmen's Union to support them They had no voice in the framing of the said Rules. They had no choice but to accept the said Rules as part of their contract of employment. There is gross disparity between the Corporation and its employees, whether they be workmen or officers. The Corporation can afford to dispense with the services of an officer. It will find hundreds of others to take his place but an officer cannot afford to lose his job because if he does so, there are not hundreds of jobs waiting for him. A clause such as clause (i) of Rule 9 is against right and reason. It is wholly unconscionable. It has been entered into between parties between whom there is gross inequality of bargaining power. Rule 9(i) is a term of the contract between the Corporation and all its officers. It affects a large number of persons and it squarely falls within the principle formulated by us above. Several statutory authorities have a clause similar to Rule 9(i) in their contracts of employment. As appears from the decided cases, the West Bengal State Electricity Board and Air India International have it. Several Government companies apart from the Corporation (which is the First Appellant before us) must be having it. There are 970 Government companies with paidup capital of Rs. 16,414.9 crores as stated in the written arguments submitted on behalf of the Union of India. The Government and its agencies and instrumentalities constitute the largest employer in the country. A clause such as Rule 9(i) in a contract of employment affecting large sections of the public is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies and consequently it is against public good. Such a clause, therefore, is opposed to public policy and being opposed to public policy, it is void under section 23 of the Indian Contract Act."
23. There cannot be any dispute to the proposition laid down by the Apex Court in the above judgment. Rule 9(i), which came up for consideration in the above case was a power given to the Corporation to terminate the permanent employees without notice and without reason. In the present case the Scheme under which the FSEs are engaged is defined as a contractual scheme and the terms of the scheme and appointment letter clearly indicate that the FSEs are engaged on contractual basis. It was also clearly mentioned in the engagement order that Regulations, 1960 is not applicable to the engagement of FSEs. Thus, we cannot accept the submission of learned counsel for the appellants that engagement of the appellants has to be treated as engagement on regular basis and contractual engagement is arbitrary and violative of Articles 14 and 16 of the Constitution. As noted above, employer has full authority and jurisdiction to engage temporary casual and contractual staff in exigency of service. But, the mere fact that casual, temporary and contractual staff have been engaged and allowed to continue for a few years, that itself will Page 30 of 55 HC-NIC Page 30 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT not entitle them to claim right for regularisation in service.
24. The Apex Court in National Fertilizers Ltd. v. Somvir Singh [(2006) 5 SCC 493] had occasion to consider regularisation of employees, who were appointed without intimation of vacancy to the Employment Exchange. The appointments were contractual and the Apex Court held that a person, who obtained recruitment on contractual basis cannot claim regularisation in service. In paragraph 2 of the judgment it was stated as follows:
"2. ....The respondent, thus, on his own showing was appointed on a contractual basis. It is trite that a person who obtained recruitment on contractual basis cannot claim regularisation in service...."
25. The Constitution Bench of the Apex Court in Umadevi's case (supra) has clearly laid down that casual/temporary members, who were appointed ad hoc basis de hors Rules cannot claim absorption or regularisation in service, even though they were allowed to continue for several years. It is useful to refer to paragraphs 26 and 33 of the judgment, which are to the following effect: "
"26. With respect, why should the State be allowed to depart from the normal rule and indulge in temporary employment in permanent posts? This Court, in our view, is bound to insist on the State making regular and proper recruitments and is bound not to encourage or shut its eyes to the persistent transgression of the rules of regular recruitment. The direction to make permanent the distinction between regularisation and making permanent, was not emphasized here can only encourage the State, the model employer, to flout its own rules and would confer undue benefits on a few at the cost of many waiting to compete. With respect, the direction made in paragraph 50 of Piara Singh (supra) are to some extent inconsistent with the conclusion in paragraph 45 therein. With great respect, it appears to us that the last of the directions clearly runs counter to the constitutional scheme of employment recognized in the earlier part of the decision. Really, it cannot be said that this decision has laid down the law that all ad hoc, temporary or casual employees engaged without following the regular recruitment procedure should be made permanent.
xx xx xx
33. It is not necessary to notice all the decisions of this Court on this aspect. By and large what emerges is that regular recruitment should be insisted upon, only in a contingency an ad hoc appointment can be made in a permanent vacancy, but the same Page 31 of 55 HC-NIC Page 31 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT should soon be followed by a regular recruitment and that appointments to nonavailable posts should not be taken note of for regularisation. The cases directing regularisation have mainly proceeded on the basis that having permitted the employee to work for some period, he should be absorbed, without really laying down any law to that effect, after discussing the constitutional scheme for public employment."
26. Thus, in view of the pronouncement of the judgment by the Apex Court in Umadevi's case (supra) this Court exercising jurisdiction under Article 226 of the Constitution cannot issue any direction to absorb the contractual employees, i.e., FSEs in the regular establishment of the Corporation.
27. Learned counsel for the appellants has placed reliance on the judgment of the Apex Court in Nihal Singh v. State of Punjab (AIR 2013 SC 3547). In the above case the Apex Court was considering the claim of Special Police Officers, who were appointed on daily wage basis in exercise of power under Section 17 of the Police Act, 1861 and they were allowed to continue and their claim for regularisation was denied by the High Court. The Special Officers took the matter to Apex Court, wherein the claim of the petitioners were allowed. The facts of the case have been noted in paragraphs 5 and 8 of the judgment, which are to the following effect:
"5. The factual background in which persons such as the appellants herein came to be appointed is recorded in the judgment in LPA No. 209 of 1992 as follows: "I was at the meeting held on March 24, 1984 between the Advisor to the Governor of Punjab and Senior officers of the banks in the public Sector Operating in Punjab that, after reviewing the security arrangements for banks in Punjab, it was decided that SPOs be appointed for the said purpose in terms of section 17 of the Police Act, 1861 (hereinafter referred to as the Act). This step was taken as it was felt that it would not be possible for the State Govt. to provide the requisite police guards to banks and that, thereafter, this additional force be raised, in order to do so, the banks undertook to take over the financial burden of the SPOs to be appointed, but it was clearly understood that as per the provisions of the Act, such Police Officers would be under the discipline and control of the Senior Superintendent of Police of the district concerned. As regards their remuneration it was decided that SPOs would be paid an honorarium of Rs. 15/ per day. This was, however, later enhanced to Rs. 30/ per day. Relevant in the context of the SPOs to be appointed, was the further decision"Page 32 of 55
HC-NIC Page 32 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT xx xx xx
8. In the background of such appointments, various persons who were appointed, including the appellants herein, approached the High Court of Punjab and Haryana from time to time seeking appropriate directions for regularisation of their services. It appears that the petitioners herein also had approached the High Court earlier in CWP No.19390 of 2001 praying that their services be regularised in the light of notification No.11/34/20004PP III/1301 dated 23.1.2001. The said writ petition was dismissed by order dated 12.12.2001 directing consideration of the cases of the petitioners therein (appellants herein) in accordance with the law and pass a speaking order."
In the above case the Apex Court noticed the statutory provisions and the nature of appointment and held that appointment of the Police Officers was made in accordance with the statutory procedure contemplated under the Act. The following was laid down in paragraphs 24, 25, 29 and 32 of the judgment:
"24. Even going by the principles laid down in Umadevi's case, we are of the opinion that the State of Punjab cannot be heard to say that the appellants are not entitled to be absorbed into the services of the State on permanent basis as their appointments were purely temporary and not against any sanctioned posts created by the State.
25.In our opinion, the initial appointment of the appellants can never be categorized as an irregular appointment. The initial appointment of the appellants is made in accordance with the statutory procedure contemplated under the Act. The decision to resort to such a procedure was taken at the highest level of the State by conscious choice as already noticed by us. The High Court in its decision in LPA No.209 of 1992 recorded that the decision to resort to the procedure under section 17 of the Act was taken in a meeting dated 24.3.1984 between the Advisor to the Government of Punjab and senior officers of the various Banks in the public sector. Such a decision was taken as there was a need to provide necessary security to the public sector banks. As the State was not in a position to provide requisite police guards to the banks, it was decided by the State to resort to section 17 of the Act. As the employment of such additional force would create a further financial burden on the State, various public sector banks undertook to take over the financial burden arising out of such employment. In this regard, the written statement filed before the High Court in the instant case by respondent Nos.1 to 3 through the Assistant Inspector General of Police (Welfare and Litigation) is Page 33 of 55 HC-NIC Page 33 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT necessary to be noticed. It is stated in the said affidavit:
"2. That in meeting of higher officers held on 27.3.1984 in Governor House, Chandigarh with Shri Surinder Nath, IPS, Advisor to Governor of Punjab, in which following decisions were taken:
i) That it will not be possible to provide police guard to banks unless the Banks were willing to pay for the same and additional force could be arranged on that basis, it was decided that police guards should be requisitioned by the Banks for their biggest branches located at the Distt. and SubDivisional towns. They should place the requisition with the Dist. SSPs endorsing a copy of IG CID. In the requisition, they should clearly state that the costs of guard would be met by them. It will then be for the police department to get additional force sanctioned. This task should be done on a top priority. In the meantime depending upon the urgency of the need of any particular branch, police deptt. may provide from police strength for its protection.
ii) For all other branches guards will be provided by Dist.
SSP after selecting suitable exservicemen or other able bodied persons who will be appointed as Special Police Officer in terms of Section 17 of the Police Act. Preference may be given to persons who may already be in possession of licenced weapons. All persons appointed as SPO for this purpose will be given a brief training for about 7 days in the Police Lines in the handling of weapons taking suitable position for protection of branches. These SPOs will work under the discipline and control and as per Police Act, they will have the same powers, privileges and protection and shall be amenable to same penalty as an ordinary police personnel."
xx xx xx
29. The abovementioned process clearly indicates it is not a case where persons like the appellants were arbitrarily chosen to the exclusion of other eligible candidates. It required all able bodied persons to be considered by the SSP who was charged with the responsibility of selecting suitable candidates.
xx xx xx
32. Therefore, we are of the opinion that the process of selection adopted in identifying the appellants herein cannot be said to be Page 34 of 55 HC-NIC Page 34 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT unreasonable or arbitrary in the sense that it was devised to eliminate other eligible candidates. It may be worthwhile to note that in Umadevi's case (AIR 2006 SC 1806 : 2006 AIR SCW 1991), this Court was dealing with appointments made without following any rational procedure in the lower rungs of various services of the Union and the States."
28. Thus, the case of Nihal Singh (supra) was on its own facts and in view of the special feature, as noted in the judgment itself, the Apex Court held the appointment not to be irregular appointment. In the above circumstances, the Apex Court held that those employees were entitled to be regularised in service.
29. Thus, the above case is clearly distinguishable from the present case. In the present case the appointment has been offered as contractual appointment for limited period of service. Therefore, the above case cannot help the appellants in the present case.
30. Learned counsel for the appellants has also relied on District Transport Officer v. Kunchan (2009(3) KLT 954). In the above Full Bench case the Court considered the claim of daily wage drivers/conductors appointed in the Kerala State Road Transport Corporation, who were subsequently absorbed in the regular employment of the Corporation on the advice made by the Kerala Public Service Commission. The question which arose before the Full Bench was as to whether the daily wage period of the said employees could be reckoned for purpose of pension. In the above case there was a settlement between the Corporation and the employees, wherein it was agreed that daily wage periods of such drivers and conductors, who were appointed on daily wage basis, and fulfill certain conditions, shall be reckoned for purpose of pension. The said case was on different issue and does not help the appellants in the present case.
31. In view of the foregoing discussion, we are of the view that the contractual appointment of the appellants cannot be said to be arbitrary or violative of Article 14 of the Constitution, nor the appellants can be held to have any right to claim absorption in the regular service of the Corporation. Both Issues II and III are answered accordingly."
28 As noted above, the judgment and order passed by the Division Bench was challenged by way of the Special Leave to Appeal (Civil) No.14641 of 2015 before the Supreme Court, and by order dated 9th March 2016, the said Special Leave to Appeal came to be dismissed.
Page 35 of 55HC-NIC Page 35 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT 29 I am in complete agreement with the two judgments referred to above and propose to take the very same view so far as the 'Direct Sales Executives' are concerned.
30 Mr. Pujara made an attempt to distinguish the judgment rendered by the Kerala High Court referred to above on the ground that the same dealt with the case of the Financial Services Executives and the F.S.Es. should not be compared with the Direct Sales Executives. In this regard, a short additional affidavit has also been filed explaining the distinction between the two schemes. However, I am not impressed by this submission, because ultimately the entire issue is with regard to the right of the contractual employees to hold the post.
31 If a contractual appointment is made, the appointment comes to an end at the end of the contract. The Government or the instrumentality of the "State" cannot confer any permanency of such employment either by way of regularisation or by way of absorption. The regularisation is not a mode of appointment. I may also refer to one Division Bench decision this Court in the case of Nareshkumar Manilal Parmar v. ONGC Limited and another [Letters Patent Appeal No.424 of 2001], wherein the Division Bench observed as under:
"In Central Inland Water Transport Corporation Ltd. and Anr. (supra), the Supreme Court had occasion to consider validity of Rule 9(i) of the Central Inland Water Transport Corporation (Service Discipline and Appeals) Rules, 1979. The said rule empowers the Corporation to terminate services of the permanent employees without any reason and by giving notice. While adjudicating the validity of the said rule, the Supreme Court has observed that said rule is void under Section 23 of the Contract Act, as being opposed to public policy and is also ultra vires Article 14 of the Constitution as well as violative of directive, principles contained in Article 39(d) and 41 of the Constitution. Further, the Supreme Court has observed that the principle is that Courts will not enforce and will, when called upon to do so, strike down unfair and unreasonable contract or unfair and unreasonable clause in a contract entered into between the Page 36 of 55 HC-NIC Page 36 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT parties who are not equal in bargaining power. In the case before us, we find that the agreement which was executed between the appellant No. 1 and the respondent is neither unfair nor unreasonable in its nature.
Looking to the requirements and exigency of the situation, respondent had decided to engage the respondent No.1 as pharmacist on contractual basis till regular appointment was made. All terms and conditions were mentioned in the advertisement as well as in the letter by which the respondent No.1 was engaged as pharmacist on contractual basis. Consequently, we are of the opinion that the principle laid down by the Supreme Court in the case of Central Inland Water Transport Corporation (supra) cannot be made applicable to the facts of the present case, more particularly in view of the provisions of Section 2(oo) (bb) of the Industrial Disputes Act, 1947."
32 In Director, Institute of Management Development, U.P. v. Smt. Pushpa Srivastava, [AIR 1992 SC 2070], the Supreme Court observed in para 20 to 23 as under :
"20. Because the six months' period was coming to an end on 28th February, 1991, she preferred the writ petition a few days before and prayed for mandamus which was granted by the learned Judge under the impugned judgment. The question is whether the directions are valid in law. To our mind, it is clear that where the appointment is contractual and by efflux of time, the appointment comes to an end, the respondent could have no right to continue in the post. Once this conclusion is arrived at, what requires to be examined is, in view of the services of the respondent being continued from time to time on 'adhoc' basis for more than a year whether she is entitled to regularisation? The answer should be in the negative. However, reliance is placed by learned counsel on behalf of the respondent on the case in Jacob v. Kerala Water Authority, (1990 (1) Suppl SCR 562: AIR 1990 SC 2228) (supra).
21. This ruling, in our considered view, does not advance the case of the respondent, as it turned on the interpretation of Rule 9(a)(i) of Kerala State and Subordinate Service Rules of 1958. The relevant portion of the judgment is at page 569 (of Suppl SCR)': (at p. 2233 of AIR) which is extracted below.
"The claims made by the employees in this group of cases is contested mainly on the plea that their tenure and service conditions were regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service Rules, 1958 (hereinafter called 'the Rules') which were statutory in character and were, therefore, binding on the Authority as well as the employees. it is contended that the Page 37 of 55 HC-NIC Page 37 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT employees belonging to different categories were appointed on different dates by the PHED prior to Ist April, 1984 under this rule and, therefore, their services could only be regulated thereunder."
22. In dealing with this, at page 577 (of 1990 (1) Supp SCR 562) : (at p. 2238 of AIR 1990 SC 2228), the Court observed:
"If any person who does not possess the requisite qualifications is appointed under the said clause, he will be liable to be replaced by a qualified person. Clause (iii) of Rule 9 states that a person appointed under clause (i) shall, as soon as possible, be replaced by a member of the service or an approved candidate qualified to hold the post. Clause (e) of Rule 9, however, provided for regularisation of service of any person appointed under clause (1) of subrule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules. This is a clear indication that in the past the Government also considered it Just and fair to regularise the services of those who had been in continuous service for two years' period to the cutoff date. The spirit underlying this treatment clearly shows that the Government did not consider it just, fair or reasonable to terminate the services of those who were in employment for a period of two or more years' period to the cutoff date. 'This approach is quite consistent with the spirit of the rule which was intended to be invoked to serve emergent situations which could not brook delay. Such appointments were intended to be stopgap temporary appointments to serve the stated purpose and not long term ones. The rule was not intended to fill a large number of posts in the service but only those which could not be kept vacant till regular appointments were made in accordance with the rules. But once the appointments continued for long, the services had to be regularised if the incumbent possessed the requisite qualifications as was done by subrule (e). Such an approach alone would be consistent with the constitutional philosophy adverted to earlier. Even otherwise, the rule must be so interpreted, if the language of the rule permits, as will advance this philosophy of the Constitution. If the rule is so interpreted it seems clear to us that employees who have been working on the establishment since long, and who possess the requisite qualifications for the job as obtaining on the date of their employment, must be allowed to continue on their jobs and their services should be regularised".
23. In the instant case, there is no such rule. The appointment was purely ad hoc and on a contractual basis for a limited period. Therefore, by expiry of the period of six months, the right to remain in the post comes to Page 38 of 55 HC-NIC Page 38 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT an end."
33 In Gridco Ltd. and another v. Sadananada Doloi and others, [AIR 2012 SC 729], the Supreme Court observed, in paras 26, 27 and 28, as under :
"26. A conspectus of the pronouncements of this court and the development of law over the past few decades thus show that there has been a notable shift from the stated legal position settled in earlier decisions, that termination of a contractual employment in accordance with the terms of the contract was permissible and the employee could claim no protection against such termination even when one of the contracting parties happened to be the State. Remedy for a breach of a contractual condition was also by way of civil action for damages/compensation. With the development of law relating to judicial review of administrative actions, a writ Court can now examine the validity of a termination order passed by public authority. It is no longer open to the authority passing the order to argue that its action being in the realm of contract is not open to judicial review. A writ Court is entitled to judicially review the action and determine whether there was any illegality, perversity, unreasonableness, unfairness or irrationality that would vitiate the action, no matter the action is in the realm of contract. Having said that we must add that judicial review cannot extend to the Court acting as an appellate authority sitting in judgment over the decision. The Court cannot sit in the armchair of the Administrator to decide whether a more reasonable decision or course of action could have been taken in the circumstances. So long as the action taken by the authority is not shown to be vitiated by the infirmities referred to above and so long as the action is not demonstrably in outrageous defiance of logic, the writ Court would do well to respect the decision under challenge.
27. Applying the above principles to the case at hand, we have no hesitation in saying that there is no material to show that there is any unreasonableness, unfairness, perversity or irrationality in the action taken by the Corporation. The Regulations governing the service conditions of the employees of the Corporation, make it clear that officers in the category above E9 had to be appointed only on contractual basis.
28. It is also evident that the renewal of the contract of employment depended upon the perception of the management as to the usefulness of the respondent and the need for an incumbent in the position held by him. Both these aspects rested entirely in the discretion of the Corporation. The respondent was in the service of another employer before he chose to Page 39 of 55 HC-NIC Page 39 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT accept a contractual employment offered to him by the Corporation which was limited in tenure and terminable by three months' notice on either side. In that view, therefore, there was no element of any unfair treatment or unequal bargaining power between the appellant and the respondent to call for an oversympathetic or protective approach towards the latter. We need to remind ourselves that in the modern commercial world, executives are engaged on account of their expertise in a particular field and those who are so employed are free to leave or be asked to leave by the employer. Contractual appointments work only if the same are mutually beneficial to both the contracting parties and not otherwise."
34 I am also not impressed by the submission canvassed on behalf of the writ applicants as regards the 'doctrine of legitimate expectation'. In fact this doctrine will have no application in cases of contractual employment.
35 Legitimate in legal parlance means that which is lawful, legally recognized by law or according to law Expectation means the act or the instance of expecting or looking forward something expected or hoped for probability of an event and expectation is most often relatable to ones prospects. In Halsburys Laws of England, Fourth Edition, Volume I(I) 151 legitimate expectations finds mention of the following :
"A person may have a legitimate expectation of being treated in a certain way of an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The existence of a legitimate expectation may have a number of different consequences; it may give locus standi to seek leave to apply for judicial review; it may mean that the authority ought not to act so as to defeat the expectation without some overriding reason of public policy to justify its doing so; or it may mean that, if the authority proposes to defeat personss legitimate expectation, it must afford him an opportunity to make representations on the matter. The Courts also distinguish, for example in licensing cases, between original applications, applications to renew and revocations; a party who has been granted a licence may have a legitimate expectation that it will be renewed unless there is some good Page 40 of 55 HC-NIC Page 40 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT reason not do so, and may therefore be entitled to greater procedural protection than a mere applicant for grant."
36 The Supreme Court in the case of Union of India v. Hindustan Development Corporation [AIR 1994 SC 988] has pointed out that the concept of legitimate expectation first stepped into the English Law in Schmidt v. Secretary of State for Home Affairs, (1969) 2 Ch 149, wherein it was observed that an alien who had been given leave to enter the United Kingdom for a limited period had a legitimate expectation of being allowed to stay for the permitted time and if that permission was revoked before the time expires, that alien ought to be given an opportunity of making representations. Thereafter the concept has been considered in a number of cases. In A.G. of Hong Kong v. Ng Yuen Shiu, (1983) 2 AC 629, Lord Fraser said that the principle that a public authority is bound by its undertakings as to the procedure it will follow, provided they do not conflict with its duty, is applicable to the undertaking given by the Government of Hong Kong to the respondent that each case would be considered on its merits. In Council of Civil Services Union v. Minister for the Civil Service, (1984) 3 All ER 935, a question arose whether the decision of the Minister withdrawing the right to Trade Union membership without consulting the staff which according to the appellant was his legitimate expectation arising from the existence of a regular practice of consultation, was valid. It was contended that the Minister had a duty to consult the staff as per the existing practice and that though the employee did not have a legal right, he had a legitimate expectation that the existing practice and that though the employee did not have a legal right, he had a legitimate expectation that the existing practice would be followed. On behalf of the Minister on the basis of the evidence produced, it was contended that the decision not to consult was taken for reasons of national Page 41 of 55 HC-NIC Page 41 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT security. The Court held as under: "An aggrieved person was entitled to invoke judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal.
Noticing, however, Of late the doctrine of legitimate expectation is being pressed into service in many cases particularly in contractual sphere while canvassing the implications underlying the administrative law, The Supreme Court has proceed to add, Since we have not come across any pronouncement of this Court on this subject explaining the meaning and scope of the doctrine of legitimate expectation, we would like to examine the same a little more elaborately at this stage, and put the questions, who is the expectant and what is the nature of the expectation? When does such an expectation become a legitimate one and what is the foundation for the same? What are the duties of the administrative authorities while taking a decision in cases attracting the doctrine of legitimate expectation.
The Supreme Court has thereafter answered the above as follows:
28. Time is a three fold present: the present as we experience it, the past as a present memory and future as a present expectation. For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law of custom or an establishment procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should Page 42 of 55 HC-NIC Page 42 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense.
29. It has to be noticed that the concept of legitimate expectation in administrative law has now, undoubtedly, gained sufficient importance. It is stated that Legitimate expectation is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action and this creation takes it place beside such principles as the rules of natural justice, unreasonableness, the fiduciary duty of local authorities and in future, perhaps, the principle of proportionately. A passage in Administrative Law, Sixth Edition by H.W.R. Wade page 424 reads thus: These are revealing decisions. They show that the courts now expect Government department to honour their published statements or else to treat the citizen with the fullest personal consideration. Unfairness in the form of unreasonableness here comes close to unfairness in the form of violation of natural justice, and the doctrine of legitimate expectation can operate in both contexts. It is obvious, furthermore, that this principle of substantive, as opposed to procedural, fairness may undermine some of the established rules about estoppel and misleading advice, which tend to operate unfairly. Lord Scarman has stated emphatically that unfairness in the purported exercise of a power can amount to an abuse or excess of power, and this seems likely to develop into an important general doctrine.
Another passage at page 522 in the above book reads thus:
It was in fact for the purpose of restricting the right to be heard that legitimate expectation was introduced into the law. It made its first appearance in a case where alien students of scientology were refused extension of their entry permits as an act of policy by the Home Secretary, who had announced that no discretionary benefits would be granted to this sect. The court of Appeal held that they had no legitimate expectation of extension beyond the permitted time and so no right to a hearing, though revocation of their permits within that time would have been contrary to legitimate expectation. Official statements of policy, therefore, may cancel legitimate expectation, just as they may create it, as seen above. In a different context, where carhire drivers had habitually offended against Airport Byelaws, with many convictions and unpaid fines, it was held that they had not legitimate expectation of being heard before being banned by the Airport authority.
There is some ambiguity in the dicta about legitimate expectation, which may mean either expectation of a fair hearing or expectation of the licence or other benefit which is being sought. But the result is the same Page 43 of 55 HC-NIC Page 43 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT in either case; absence of legitimate expectation will absolve the public authority from affording a hearing.
37 In some cases a question arose whether the concept of the legitimate expectations is an impact only on the procedure or whether it also can have a substantive impact and if so to what extent. Att. Gen. for New South Wales v. Quin, (1990)64 Australian Law Journal** Reports 327 is a case from Australia in which this aspect is dealt with. In that case the Local Courts Act abolished Courts of Petty Sessions and replaced them by Local Courts. S. 12 of the Act empowered the Governor to appoint any qualified person to be a Magistrate in the new Courts system. Mr. Quin, who had been a Stipendiary Magistrate in charge of a Court of Petty Sessions under the old system applied for, but was refused, an appointment under the new System. That was challenged. The challenge was upheld by the appellate Court on the ground that the Selection Committee had taken into account an adverse report on him without giving a notice to him of the contents of the same.
In the appeal by the Attorney General against that order before the High Court, it was argued on behalf of Mr. Quin that he had a legitimate expectation that he would be treated in the same way as his former colleagues considering his application on its own merits. Coming to the nature of the substantive impact of the doctrine, Brennan, J. observed that the doctrine of legitimate expectations ought not to unlock the gate which shuts the Court out of review on the merits. and that the Courts should not trespass into the forbidden filed of the merits by striking down administrative acts or decisions which failed to fulfill the expectations. In the same case Mason, C.J., was of the view that if substantive protection is to be accorded to legitimate expectations that would encounter the objection of entailing crucial interference with administrative decisions on the merits by precluding the decisionmaker Page 44 of 55 HC-NIC Page 44 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT from ultimately making the decision which he or she considers most appropriate in the circumstances.
38 In R.V. Secretary of State for the Home Department, ex parte Redudock, [(1987) 2 All ER 518], Taylor, J. after referring to the ration laid down in some of the above cases held thus: "On these authorities I conclude that the doctrine of legitimate expectation in essence imposes a duty to act fairly. Whilst most of the cases are concerned, as Lord Roskill said, with a right to be heard, I do not think the doctrine is so confined. Indeed, in a case where ex hypothesi there is no right to be heard, it may be thought the more important to fair dealing that a promise or undertaking given by a Minister as to how he will proceed should be kept. Of course such promise or undertaking must not conflict with his statutory duty or his duty, as here, in the exercise of a prerogative power. I accept the submission of counsel for the secretary of State that the respondent cannot fetter his discretion. By declaring a policy he does not preclude any possible need to change it. But then if the practice has been to publish the current policy, it could be incumbent on him in dealing fairly to publish the new policy, unless again that would conflict with his duties. Had the criteria here needed changing for national security reasons, no doubt the respondent could have changed them. Had those reasons prevented him also from publishing the new criteria, no doubt he could have refrain from doing so. He had even decided to keep the criteria but depart from them in this single case for national security reasons, no doubt those reasons would have afforded him a defence to judicial review as in the GCHQ case."
39 In Breen v. Amalgamated Engineering Union, [(1971) 2 Queen Bench Division 175], Lord Denning observed as under:
"If a man seeks a privilege to which he has no particular claim such as an appointment to some post or other then he can be turned away without a word. He need not to be heard. No explanation need be given; see the cases cited in Schmidt v. Secretary of State for Home Affairs (1969) 2 Ch 149, 170171. But if he is a man whose property is at stake, or who is being deprived of his livelihood, then reasons should be given why he is being turned down, and he should be given a chance to be heard. I go further. If he is man who has some right or interest, or some legitimate expectation of which it would not be fair to deprive him without a hearing, or reasons given, then these should be afforded him, according as the case may Page 45 of 55 HC-NIC Page 45 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT demand."
40 When a challenge is made on the basis of the doctrine of legitimate expectation, the Supreme Court pointed out, that the same would not give scope to claim relief straight way from the administrative authorities in the absence of any crystallized right. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise or the position changes at the last minute e.g. change in the policy, amendment in the rules and regulations etc. In other words, where a persons legitimate expectation is not fulfilled by taking a particular decision then the decisionmaker should justify the denial of such expectation by showing some overriding public interest. In the present case no public interest is being projected for the purpose of deleting the names of the petitioners from the select list but the decision rendered by the Division Bench of this Court is being made the basis for denial of such expectation.
41 A person who puts forward his claim on the doctrine of legitimate expectation, in the first instance, most satisfy that there is a foundation and thus has the locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. If it is a question of policy, even by way of change of the policy, the Court may refuse to interfere with such decision. In a given case whether there are such facts and circumstances, giving rise to the legitimate expectation, would be primarily a question of fact. If these tests are satisfied and if the Court is satisfied that a case of legitimate expectation is made out Page 46 of 55 HC-NIC Page 46 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT then the next question would be whether the failure to give an opportunity of hearing before the decision of affecting such legitimate expectation is taken, has resulted in failure of justice and whether on that ground the decision should be quashed. If that be so then what should be the relief is again a matter which would be dependent on the several factors.
42 The Supreme Court in the case of Union of India (supra) has quoted from Schmidts case (1969(2) Ch149): "..........If a denial of legitimate expectation in a given case amounts to denial of rights guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse or violation of principles of natural justice, the same can be questioned on the wellknown grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but of the Court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognized general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the Courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. If follows that the concept of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the Court out of review on the merits, particularly when the element of speculation and uncertainity is inherent in that very concept. As cautioned in Attorney General for New South Wales case the Courts should restrain themselves and restrict such claims duly to the legal limitations. It is a wellmeant caution. Otherwise a resourceful litigant having vested interests in contracts, licences etc., can successfully indulge in getting welfare activities mandated by a directive principles thwarted to further his own interest. The caution, particularly in the changing scenario, becomes all the more important.
43 A Constitution Bench of the Supreme Court in the Secretary, State of Karnataka v. Umadevi [2006 (4) SCC 1] referred to the Page 47 of 55 HC-NIC Page 47 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT circumstances in which the doctrine of legitimate expectation can be invoked thus:
"The doctrine can be invoked if the decisions of the administrative authority affect the person by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decisionmaker to enjoy and which he can legitimately expect to be permitted to continue to do until there have been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or
(ii) he has received assurance from the decisionmaker that they will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn."
44 Another Constitution Bench, referring to the doctrine, observed thus in the Confederation of Exservicemen Associations v. Union of India [2006 (8) JT 547] :
"No doubt, the doctrine has an important place in the development of Administrative Law and particularly law relating to 'judicial review'. Under the said doctrine, a person may have reasonable or legitimate expectation of being treated in a certain way by an administrative authority even though he has no right in law to receive the benefit. In such situation, if a decision is taken by an administrative authority adversely affecting his interests, he may have justifiable grievance in the light of the fact of continuous receipt of the benefit, legitimate expectation to receive the benefit or privilege which he has enjoyed all throughout. Such expectation may arise either from the express promise or from consistent practice which the applicant may reasonably expect to continue."
"In such cases, therefore, the Court may not insist an administrative authority to act judicially but may still insist it to act fairly. The doctrine is based on the principle that good administration demands observance of reasonableness and where it has adopted a particular practice for a long time even in absence of a provision of law, it should adhere to such practice without depriving its citizens of the benefit enjoyed or privilege exercised."
45 Thus, from the above at least one thing is clear that no relief can be granted solely on the basis of the doctrine of legitimate expectation.
Page 48 of 55HC-NIC Page 48 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT The doctrine of legitimate expectation can be brought in aid with the other circumstances emerging from the record of the case including some right if not a indefeasible right.
46 The distinction between a temporary employee and a permanent employee is wellsettled. Whereas a permanent employee has a right to the post, a temporary employee appointed on contractual basis has no right to the post. It is only a permanent employee who has a right to continue in service till the age of superannuation (unless he is dismissed or removed after an inquiry, or his service is terminated due to some other valid reason earlier). As regards a temporary employee, there is no age of superannuation because he has no right to the post at all. Hence, it follows that no direction can be passed in the case of any temporary employee that he should be continued till the age of superannuation. [See: Indian Drugs and Pharmaceuticals Limited v. Workman, Indian Drugs and Pharmaceuticals Limited, (2007) 1 SCC 408] 47 It is not as if the person who accepts an engagement either temporary or casual in nature, is not aware of the nature of his employment. He accepts the employment with eyes open. It may be true that he is not in a position to bargain not at arms length since he might have been searching for some employment so as to eke out his livelihood and accepts whatever he gets. But on that ground alone, it would not be appropriate to jettison the constitutional scheme of appointment and to take the view that a person who has temporarily or casually got employed should be directed to be continued permanently. By doing so, it will be creating another mode of public appointment which is not permissible. If the court were to void a contractual employment of this nature on the ground that the parties were not having equal bargaining power, that too would not enable the court to Page 49 of 55 HC-NIC Page 49 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT grant any relief to that employee. A total embargo on such casual or temporary employment is not possible, given the exigencies of administration and if imposed, would only mean that some people who at least get employment temporarily, contractually or casually, would not be getting even that employment when securing of such employment brings at least some succor to them. After all, innumerable citizens of our vast country are in search of employment and one is not compelled to accept a casual or temporary employment if one is not inclined to go in for such an employment. It is in that context that one has to proceed on the basis that the employment was accepted fully knowing the nature of it and the consequences flowing from it. In other words, even while accepting the employment, the person concerned knows the nature of his employment. It is not an appointment to a post in the real sense of the term. The claim acquired by him in the post in which he is temporarily employed or the interest in that post cannot be considered to be of such a magnitude as to enable the giving up of the procedure established, for making regular appointments to available posts in the services of the State. [See : Secretary, State of Karnataka v. Umadevi, (2006) 4 SCC 1] 48 The appointment of the writ applicants under the scheme framed by the Corporation was for a particular purpose and object. If the Corporation has taken a decision not to extend the contractual period, then this Court, in exercise of its writ jurisdiction under Article 226 of the Constitution, should not issue a writ of mandamus. It is for the Corporation to take an appropriate decision whether they would like to continue the writ applicants as the 'Direct Sales Executives'. I do not find fault with their initial appointment on contractual basis. The initial appointment was well in accordance with the scheme, but to say that having once appointed on contractual basis, they should be continued Page 50 of 55 HC-NIC Page 50 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT for all times to come till they attains the age of superannuation, would be too much and will amount to encroaching into the executive or legislative domain. The Court, must, therefore, exercise judicial restraint. I can well understand and appreciate the plight of the writ applicants who would be rendered jobless, but there is nothing this Court can do within the four corners of law.
49 The decision relied upon by Mr. Pujara of the Kerala High Court in the case of V.J. Johnson (supra) is also of no avail to him. In the said case, the petitioners were governed by the Officers - Marketing and Recovery (Rural) Service and Conduct Rules as well as the Customer Relationship Executive Service and Conduct Rules, framed by the Bank of India. The respective contracts were renewable on completion of the contractual period depending on their performance and suitability of the OMRs / CRE - PB and the need of the respondent - Bank, at its discretion. The petitioners ceased to be the employees of the Bank on completion of the contractual period of their appointments stipulated in the respective contracts. The learned Single Judge took the view that when the relevant service rules provided for the renewal or extension of the contract of an appointment on completion of the contractual period, depending on the performance and suitability of the persons so appointed, at the Bank's discretion and the need of the Bank, the Bank owed a legal duty to consider the entitlement or eligibility of the petitioners for renewal or extension of the contract appointment, subject to fulfillment of the criteria for such extension, especially when it considered the entitlement of other similarly situated persons. I find it extremely difficult to subscribe to the view taken by the learned Single Judge. It appears that what weighed with the learned Single Judge was the fact that although the appointments of the petitioners therein were on contract basis for a specified period, yet having regard to the provisions of the service rules governing the field, such appointees were Page 51 of 55 HC-NIC Page 51 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT entitled for renewal or extension of the contract on completion of the contractual period.
50 In such circumstances, the learned Single Judge issued direction to Bank to consider the question of renewal or extension of their contract appointment on completion of the contractual period. So far as the case in hand is concerned, the Corporation made itself very clear that there is no further requirement of the writ applicants and therefore, there is no question of considering renewal or extension of the contract.
51 In the case of Bhavnagar Municipal Corporation (supra), the Supreme Court, while considering the question whether the termination of service of the respondent therein on the basis of the contract appointment would amount to retrenchment within the meaning of Section 25H of the I.D. Act so as to claim reinstatement, observed as under:
"11..The contract of appointment consciously entered into by the employer and the employee would, over and above the specific terms of the written agreement, indicates that the employment is shortlived and the same is liable to termination, on the fixed period mentioned in the contract of appointment."
52 In the case of Brij Mohal Lal (supra), the Supreme Court, while considering the scheme and policy of appointment of the District Judge of the Fast Track Court and the prayers of the petitioners therein to extend the FTC Scheme for another five years, observed in paras 172 and 205 as under:
"172. The prayer for regularisation of service and absorption of the petitioner appointees against the vacancies appearing in the regular cadre has been made not only in cases involving the case of the State of Orissa, but even in other States. Absorption in service is not a right. Regularisation also is not a statutory or a legal right enforceable by the persons appointed under different rules to different posts. Regularisation Page 52 of 55 HC-NIC Page 52 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT shall depend upon the facts and circumstances of a given case as well as the relevant rules applicable to such class of persons."
"205. Thus, these two orders must be seen in light of the fact that the Union of India, as well as the State Governments of their own, extended the FTC Scheme for another five years i.e. till 2010 and thereafter, by another year. The Central Government ultimately took the decision not to finance the FTC Scheme with effect from 30th March, 2011. Even thereafter, a number of States have taken the decision to continue the FTC Scheme while retaining the appointees thereto till 2012, 2013 and even till 2016. The State of Haryana has even thought of making it as a permanent feature of dispensation of justice in the State. The cumulative effect of all these factors is that the petitioners had a legitimate expectation that either their services would be continued as the FTC Scheme would be made a permanent feature of the justice administration in the concerned State or they would be absorbed in the regular cadre. But mere expectation or even legitimate expectation of absorption cannot be a cause of action for claiming the relief of regularization, particularly when the same is contrary to the Rules and letters of appointment."
53 Lastly, it was submitted that the matter may be considered sympathetically.
54 The Article 41 of the Constitution of India, no doubt, provides for the right to work, but this has been deliberately kept by the founding fathers of our Constitution in the Directive Principles and hence made unenforceable in view of the Article 37, because the founding fathers in their wisdom realized that while it was their wish that everyone should be given employment, but the ground realities of our country should not be overlooked. In my view, Article 21 of the Constitution should not be stretched so far as to mean that everyone must be given a job. The number of available jobs are limited, and hence the Courts must take a realistic view of the matter and must exercise selfrestraint. [See :
Indian Drugs and Pharmaceuticals (supra)].
55 In Rajendra vs. State of Rajasthan [AIR 1999 SC 923], the Page 53 of 55 HC-NIC Page 53 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT Supreme Court following its own decision in Delhi Development Horticulture Employees Union v. Delhi Administration, Delhi [AIR 1992 SC 789], held that the right to livelihood was found not feasible to be incorporated as a fundamental right in the Constitution and therefore employment was also not guaranteed under the Constitutional scheme. In Sandeep Kumar vs. State of U.P. [AIR 1992 SC 713], the Supreme Court observed that where there was no work in the project the employees cannot be regularized. In State of Himachal Pradesh vs. Ashwani Kumar [1996 (1) JT 214], the Supreme Court held that where a project has to be closed down for nonavailability of funds a direction to regularize the displaced employees of the project could not be given because such direction would amount to creating posts and continuing them in spite of nonavailability of work. The same view was taken in State of U.P. vs. U.P. Madhyamik Shiksha Parishad Shramik Sangh [AIR 1996 SC 708]. It follows from these decisions that there is no legal right in the temporary employees (whether called casual, adhoc, contractual or daily rated workers) to get absorption, or to be continued in service or get regular pay.
56 In the case of Indian Drugs and Pharmaceuticals Limited (supra), the Supreme Court observed as under:
"48 Before parting with this case, we would like to state that although this Court would be very happy if everybody in the country is given a suitable job, the fact remains that in the present state of our country's economy the number of jobs are limited. Hence, everybody cannot be given a job, despite our earnest desire.
49 It may be mentioned that jobs cannot be created by judicial orders, nor even by legislative or executive decisions. Jobs are created when the economy is rapidly expanding, which means when there is rapid industrialization. At present, the state of affairs in our country is that although the economy has progressed a little in some directions, but the truth is that this has only benefited a handful of persons while the plight of Page 54 of 55 HC-NIC Page 54 of 55 Created On Sat Aug 27 06:23:01 IST 2016 C/SCA/13179/2015 CAV JUDGMENT the masses has worsened. Unemployment in our country is increasing, and has become massive and chronic. To give an example, for each post of a Peon which is advertised in some establishments there are over a thousand applicants, many of whom have MA, M.Sc., M.Com or MBA degrees. Recently, about 140 posts of Primary School Teachers were advertised in a District in Western Madhya Pradesh, and there were about 13000 applicants i.e. almost 100 applicants for each post. Large scale suicides by farmers in several parts of the country also shows the level of unemployment. These are the social and economic realities of the country which cannot be ignored.
50 One may be very large hearted but then economic realities have also to be seen. Giving appointments means adding extra financial burden to the national exchequer. Money for paying salaries to such appointees does not fall from the sky, and it can only be realized by imposing additional taxes on the public or taking fresh loans, both of which will only lead to additional burden on the people."
57 In the overall view of the matter, I have reached to the conclusion that the writ applicants are not entitled to any of the reliefs prayed for in the writ applications. The hearing of all the writ applications was concluded on 31st March 2016 and the judgment was reserved. At the time of reserving the judgment, it was ordered that the interim order of statusquo shall continue till the pronouncement of the judgment with a clarification that the continuance of the writ applicants in the service beyond the contractual period shall not confer any other right. The contractual period came to an end on 31st March 2016. By virtue of the interim order passed by this Court, all the writ applicants have continued in service till this date.
58 In view of the above, all the writ applications fail and are hereby rejected. The interim order stands vacated forthwith. The connected Civil Applications are also disposed of.
(J.B.PARDIWALA, J.) chandresh Page 55 of 55 HC-NIC Page 55 of 55 Created On Sat Aug 27 06:23:01 IST 2016