Andhra HC (Pre-Telangana)
Gangikuntal Sridhar And Others vs The State Of Andhra Pradesh Rep. By The ... on 11 November, 2016
Bench: C.V. Nagarjuna Reddy, G. Shyam Prasad
THE HONOURABLE SRI JUSTICE C.V. NAGARJUNA REDDY AND THE HONOURABLE SRI JUSTICE G. SHYAM PRASAD
Writ Appeal No.1235 of 2016 amnd batch
11-11-2016
Gangikuntal Sridhar and others Appellants
The State of Andhra Pradesh Rep. by the Principal Secretary Health, Medical &
Family Welfare (1) Dept., Secretariat Buildings at Hyderabad and others
Respondents
Counsel for the Appellants :- Mr. S. Ramachandra Rao
Senior Counsel,
for Mr. K.R. Prabhakar
- Mr. Vedula Srinivas
Counsel for the Respondents: Advocate General (AP)
>HEAD NOTE :
? CITATIONS: 1. (2006) 4 SCC 1
2. (2003) 1 SCC 364
3. (2011) 9 SCC 286
4. (2013) 14 SCC 65
5. AIR 1978 SC 1410
6. (1994) 5 SCC 304
7. (2009) 5 SCC 193
8. (2009) 13 SCC 90
9. 1986 (Supp.) SCC 584
10. (1997) 9 SCC 377
11. (1985) 3 SCC 116
12. (2013) 8 SCC 345
13. (1992) 4 SCC 118
14. (1992) 1 SCC 489
15. (1992) 4 SCC 33
16. (1996) 7 SCC 562
17. (1997) 2 SCC 1
18. AIR 1967 SC 1071
19. (1972) 1 SCC 409
20. (1979) 4 SCC 507
COMMON JUDGMENT:(per the Honble Sri Justice C.V. Nagarjuna Reddy) These writ appeals arise out of common order dt.31.3.2016 in W.P. No.2176 of 2016 and batch. Writ Appeal (SR) No.75322 of 2016 and Writ Appeal Nos.318, 319, 320, 323, 324, 325, 414, 418, 607, 612, 730 and 755 of 2016 are filed by the petitioners in the writ petitions which were dismissed by the learned single Judge on the sole ground that the petitioners need to approach the Labour Court/Industrial Tribunal to establish the relationship of master and servant and the employer and employee and that the remedy under Article 226 of the Constitution of India is not an appropriate remedy. Writ Appeal No.437 of 2016 has been filed by the State of Andhra Pradesh feeling aggrieved by the direction issued to it by the learned single Judge to maintain status quo for a period of two months to facilitate the writ petitioners to avail alternative remedy.
2. During the hearing, the learned Advocate General for the State of Andhra Pradesh submitted that he is not pressing the writ appeal filed by the State since with the expiry of two months period from the date of passing of it, the order worked itself out. The learned Advocate General also conceded that this Court has jurisdiction to decide the issue raised by the writ petitioners, but, he has, however, requested that instead of remanding the cases to the learned single Judge for adjudicating the writ petitions on merits, the writ appeals may be disposed of on merits by us. The learned counsel for the appellants/writ petitioners accepted this proposal of the learned Advocate General. Though in normal course we would have remanded the cases to the learned single Judge for adjudication on merits, in consideration of the request of the learned Advocate General, we have heard all the learned counsel appearing for the appellants/writ petitioners and also the learned Advocate General for the State of Andhra Pradesh on merits. BACKGROUND FACTS
3. The combined State of Andhra Pradesh introduced a scheme called Rajiv Aarogyasri Health Insurance Scheme with effect from 1.4.2007 for providing quality health care to the families falling below poverty line (BPL). The scheme was initially introduced as a pilot project in the Districts of Anantapur, Mahaboobnagar and Srikakulam in the year 2007. A Deed of Trust, namely, Aarogyasri Health Care Trust (for short, the Trust) was executed in the name of the Governor of the State of Andhra Pradesh, on 24.08.2007, vide Document No.278 of 2007, whereunder Rajiv Aarogyasri Community Health Insurance Scheme (for short, the scheme) was formulated. The recitals of the Trust Deed show that the Honble Chief Minister of Andhra Pradesh was the Chairman, the Honble Minister for Medical Education & Health Insurance was Vice-Chairman-I, the Principal Secretary to Government, Health, Medical and Family Welfare Department was Vice-Chairman-II and other Government functionaries were the Trustees. The Trust inter alia envisaged identification of network hospitals in which the beneficiaries of the scheme could be provided healthcare and surgical operations. Clause 6 of the Trust Deed recited that the Trust will be fully owned by the Government of Andhra Pradesh. The appendix to the Trust Deed contains salient features of the scheme. The main objective of the scheme is to improve access to BPL families to quality medical care for treatment of diseases involving hospitalization and surgery through an identified network of healthcare providers. To start with, six diseases were identified for providing treatment to the beneficiaries.
PLEADINGS OF THE APPELLANTS/ WRIT PETITIONERS:
4. Since the pleadings in all the writ petitions are more or less similar, it would suffice if the averments in one of the writ petitions are briefly referred. Accordingly, we have chosen W.P. No.3724 of 2016 filed by 134 persons. The petitioners averred that the Trust is managed by the State Government, that for the purpose of administering the scheme, certain posts were created, which include the post of Aarogya Mitra for every health centre, and that Aarogya Mitra will attend to the work of registering the name of the patient and doing all the follow-up job at all stages of the medical treatment in and outside the primary health centres (PHCs). The petitioners relied upon a downloaded copy from the relevant government website explaining the role of Aarogya Mitras in PHC/Community Health Centres/Government Hospitals/District Hospitals, which reads as under:
A) IN THE HOSPITAL
- Publicity and awareness
- Maintain helpdesk at hospital
- Receive the beneficiary
- Verify the beneficiary criteria (eligibility criteria)
- Facilitate consultation with Doctor (PHC Doctor/Nearest Govt.
Hospital Doctor)
- Fill up the referral card
- Guide the patient to the next centre
- To counsel the patients who may require any one of the listed surgeries.
- To facilitate either to a Government Hospital for further tests or to a Network Hospital depending upon the advice of the doctor.
- To guide the patient to Network Hospital - Follow-up the referred cases - In effect to act as, a guide and friend for the prospective beneficiaries under the Aarogyasri scheme. B) OUTSIDE THE HOSPITAL - To send daily MiS of the patients - To spread the awareness of the scheme in the villages - To spread the awareness about the scheduled camps by network hospitals in the villages - To coordinate with network hospitals and help conduct camps - Mobilize the patients for camps - Follow up the patients identified in the camp to report to network hospital - Coordinate with local PR bodies, Village organizations (VOs),
Samakhyas, ANMs, Women Health Volunteers and Self-Help Groups for effective implementation of the scheme
- Move around the villages and encourage patients to come to avail the benefits of the scheme
- Educate villagers about the scheme and distribute brochures and other material
- Keep in touch with the District Coordinator
- Follow up the beneficiaries before and after Surgery/Therapy.
It was further averred that every health centre will have a counter at which Aarogya Mitra will receive the patients, verify their health cards, do the necessary registration and attend to all the works as extracted above both in the hospital and outside the hospital. The petitioners pleaded that the nature of the functions entrusted to Aarogya Mitra shows that he will coordinate with the patients and the network hospitals from the time of registration till the patients get necessary treatment and that he is an essential link in the operation of the scheme introduced by the Government as a welfare measure. The petitioners further averred that for the purpose of making appointments, the Government have decided to outsource Aarogya Mitras though the chosen outsourcing agencies to be selected by the District Level Committee headed by the District Collector. That the procedure adopted by the Government is that the initial selection of the Aarogya Mitras will be done through the selection process conducted by the District Rural Development Authority, headed by the District Collector, that newspaper notification will be issued calling for applications for the posts of Aarogya Mitra, written test will be held by the District Rural Development Authority and based on the performance, the candidates will be selected and that thereafter the selected candidates will be allotted to the outsourced agencies which also will be selected by the District Level Committees. That the salaries will be paid by the agency and the same will be reimbursed by the Government in lumpsum in the name of manpower supply, that the entire process of recruitment will be done by the Government according to its own procedure, that the selected candidates will be merely allotted to the outsourced agencies to make it appear that the Aarogya Mitras are their employees, that there is no contract of employment between them and the Government, and that this arrangement is only a smoke screen created by the Government. That the Government prescribe the remuneration payable to Aarogya Mitras from time to time as also the responsibilities of the outsourced agency towards the Aarogya Mitras.
5. It was further pleaded by the petitioners that they were appointed as Aarogya Mitras between 2008 2010 through the selection process and were allotted to different outsourced agencies by the District Level Committees. That the petitioners have been discharging their duties effectively and in an efficient manner without any adverse remarks, that the outsourced agencies will be giving appointment letters periodically to every petitioner and that there will be change in the outsourced agencies to which the petitioners are allotted from time to time. That all these measures are adopted by the Government to see that the outsourced staff will not claim any permanency in employment and that their services will be utilized by paying consolidated amounts without providing security of employment and also fair remuneration. That the nature of the job of the Aarogya Mitras is a full time job, as it could be seen from the nature of their role and responsibilities, and considering that they render integral, essential and indispensable service in administering the scheme, to continue Aarogya Mitras through outsourced agencies is unfair and that the petitioners are Graduates of different faculties and being unemployed are forced to work at substantially lower remuneration through outsourced agencies, though they were selected by the functionaries of the State Government.
6. Post-bifurcation of the State in the year 2014, pleaded the petitioners, the residuary State of Andhra Pradesh has issued G.O. Ms. No.127, dt.27.9.2014 renaming the scheme as Dr. Nandamuri Taraka Rama Rao (NTR) Aarogya Seva, that this name was again changed as Dr. NTR Vaidya Seva, vide G.O. Ms. No.157, dt.17.12.2014, and that the said Trust (respondent No.3) issued proceedings in Rc. No.1401/F25/2015, dt.13.08.2015, changing the nomenclature of the existing designation of Aarogya Mitra as Vaidya Mitra. That respondent No.1 has issued G.O. Rt. No.28, dt.20.1.2016 prescribing certain qualifications other than those prescribed earlier for Vaidya Mitras and required respondent No.3 to identify the number of posts and communicate the same to the respective District Collectors along with pay particulars to enable it to notify the same. That respondent No.1 has decided to discontinue all the existing Aarogya Mitras enmass without there being any valid reason and obviously for political considerations. That respondent No.3 has issued letter dt.21.1.2016 to all the District Collectors informing them about its orders and directing them to select outsourced agencies and also recruit the field staff as per the revised qualifications. That this action of respondent No.1 would result in removal of all the petitioners straightaway, as none of them possessed the revised qualifications, and that it is a deliberate act of respondent No.1 to prescribe a new set of qualifications only for the purpose of removing the existing persons. That the newly prescribed qualifications are totally unrelated to the functions and responsibilities of the Vaidya Mitras and such prescription is violative of Article 14 of the Constitution of India. That though the employer has got every right to prescribe certain qualifications for a post, the same cannot be exercised arbitrarily, unreasonably and retrospectively, affecting the persons already working for the last six to eight years. That every act of the State must be guided by reasonableness and fairness, but not in the manner to deprive the livelihood of a substantial number of persons in an arbitrary manner. That the reasons mentioned in G.O. Rt. No.28, dt.20.1.2016, notifying fresh set of qualifications, namely, that due to non-availability of the fully trained and qualified Aarogya Mitras and other staff BPL families are not getting full information and assistance on the procedures, are wholly incorrect and without any basis, that the existing field staff, like Aarogya Mitras, have been discharging their functions efficiently, that the responsibilities of Aarogya Mitras do not involve any aspects of the medical treatment, except coordinating with the patient and assisting him in referring to the network hospital and follow up the treatment given to him at every stage and that the said job require normal Graduation with a little skills of information technology. That the action of respondent No.1 in seeking to dispense with the entire field staff by embarking upon fresh recruitment process is inequitable and unconstitutional as the petitioners would be deprived of their livelihood for no valid reason. That though the field staff are appointed by the outsourced agencies, the entire process of their recruitment and allotment was under the control of the governmental authorities and that showing the field staff on the rolls of the outsourcing agencies is only a make believe their affair to escape the States obligation to provide security of employment and to pay fair remuneration.
PLEADINGS OF THE RESPONDENTS
7. A counter affidavit on behalf of respondent Nos.1 and 2 has been filed by its Principal Secretary, Health, Medical and Family Welfare Department. It is inter alia averred that the scheme was initially started as a pilot project in Anantapur, Mahaboobnagar and Srikakulam Districts in the year 2007, that the implementation of the scheme underwent certain changes and that from the year 2011 onwards the scheme was taken up by the Aarogyasri Health Care Trust, which was renamed as Dr. NTR Vaidya Seva Trust, post-bifurcation. That as per the Scheme, the Trust has a Coordinator at the District Level, who also reports to the District Collector, and that field staff, namely, Network Aarogya Mitra, PHC Aarogya Mitra, Network Team Leader, Divisional Team Leader, Office Associate, District Manager etc., are provided by an outsourcing agency which is identified by the District Collector. After identifying the outsourcing agency the District Collector enters into a contract agreement with it for providing the required number of field staff. That the contract with the outsourcing agency is a time-bound one, that it is the lookout of the outsourcing agency either to continue the persons who are already offering services or re-do the entire process replacing the persons and that, at any rate, neither the outsourcing agency, nor the persons whose services are engaged by it have any vested right to demand continuation.
8. The counter affidavit relied upon paragraph 45 of the judgment in The Secretary, State of Karnataka and Others v. Uma Devi (3) [for short, Umadevi] in order to aver that the petitioners do not have any vested right for seeking mandamus to interdict the implementation of the impugned G.O. That having regard to the requirement at the relevant point of time, Graduation in any faculty was prescribed as educational qualification and that subsequent appraisals about the functioning of the scheme and the efforts to improvise the same compelled respondent No.3 to suggest to the Government to prescribe more scientific qualifications, namely, appropriate qualification in the respective medical field, i.e., B.Sc. Nursing, M.Sc. Nursing etc., to the field staff to be recruited afresh in order to rejuvenate the system for deriving better results. That the process of evaluation, namely, Key Performance Indicators (KPI) was the basis for this appraisal and that having regard to those circumstances, the impugned G.O. was issued for the larger benefit of the patients hailing from BPL families, Employees Health Scheme (EHS) and Working Journalists Health Scheme (WJHS), necessitating discontinuance of the existing outsourcing agencies as a consequence of which the petitioners services are to be replaced by those persons who possess the prescribed qualifications as per the impugned G.O. It is further averred that the scheme was implemented in a phased manner, i.e., Scheme - I and Scheme II, that when the scheme was started as a Pilot Project in the year 2007 in three Districts, the available network hospitals were 60 and the number of procedures included in the scheme were 330, that in course of time the scheme was extended in a phased manner, that presently the scheme is in implementation in the entire State of Andhra Pradesh, under the name of Dr. NTR Vaidya Seva and that the total number of medical and surgical procedures was increased to 1044. That in addition to the scheme of Dr. NTR Vaidya Seva, other schemes like, EHS, WJHS are also being implemented and for the said schemes respondent No.3 Trust is the service provider. That at present 1885 procedures are provided for the State Government Employees and Pensioners, and that the scheme also provides OP facilities for 25 chronic diseases for all the employees and pensioners in identified Government General Hospitals in the State. That for the purpose of running the schemes successfully, Vaidya Mitras and Team Leaders require basic medical qualification, that the peripheral health centres are also increased, that in each of the centres there is one Vaidya Mitra, whose main function is to identify the beneficiaries and refer them to the appropriate hospital as per the symptoms, that similarly in health camps the Vaidya Mitras are expected to identify the beneficiaries and refer them to the appropriate hospital as per the symptoms for which, basic medical knowledge is a must and that by doing so the valuable lives of the beneficiaries are saved under the scheme. That the Vaidya Mitra will act as a coordinator between eligible patients and network hospitals from the beginning till the patient gets the necessary treatment for recovery from the sickness and that since most of the patients are from rural areas and are illiterate, falling short of necessary information regarding the available medical services, medical qualifications are prescribed for Vaidya Mitras under the impugned G.O, so that they will be in a position to provide more necessary information and better services to the rural and illiterate patients. That in case of the EHS and the WJHS, the beneficiaries will have doubts regarding their disease, specialist consultation, the investigations done, the treatment given, follow up and post operative complications and that Vaidya Mitras with the qualifications which are prescribed in the impugned G.O. will be able to provide complete answers to all the queries of the beneficiaries and justify their role as Vaidya Mitras.
9. The counter affidavit denied the allegation that the entire process is being done by the Government according to its own procedure and the selected candidates will be merely allotted to outsourcing agencies to make the things appear as if the Vaidya Mitras are the employees of the outsourcing agencies. It is further averred that the outsourcing agency, and not the District Committee, issues advertisements in newspapers, and the former will screen the eligible candidates as per the qualifications prescribed and conduct the skill test itself, that the selected list will be sent to the District Level Committee, that the Committee will verity whether the selected candidates have required qualifications and as per the eligibility and that the agency itself will issue appointment orders to the selected candidates. That the Trust is taking only service from the outsourcing agencies and that there is no contract between the Trust and the employees. The deponent denied that the petitioners have been discharging duties effectively and efficiently without any adverse remarks. That in order to review the performance of the field staff, KPIs are set up for all the levels of the field staff by grading them and that many field staff are not in the A Grade, many are in B and C Grades and some are even in D Grade. That as per the KPIs, the Vaidya Mitras working at the network hospitals have to forward the pre-authorization to the Trust within ten minutes for approval to enable the patient to undergo the treatment at the earliest, but from the data for the months of December 2015 and January 2016 it was noticed that the sending of pre- authorization got delayed even after five days. That this will deprive the patients of the early treatment, and the valuable time in life saving situations is lost and that in view of lack of medical knowledge and proper cross-checking of the hospital reports, there is either delay in making claims to or rejection of the pre-authorization claims by the network hospitals.
10. No reply affidavit is filed in W.P. No.3724 of 2016. However, the petitioners in W.P. No.2176 of 2016 (appellants in W.A. No.730 of 2016) have filed a reply affidavit. The reply affidavit referred to G.O. Ms. No.71, dt.27.02.2009, sanctioning 706 posts, including 450 posts of Aarogya Mitras. The reply affidavit also referred to the Employment Notification issued by the District Committee (Zilla Samakhya), Visakhapatnam, and the petitioners have filed a copy thereof. It was further averred that the said Notification was issued for filling up of 49 posts of Aarogya Mitras in Visakhapatnam District, through selection process, including a written test, and that respondent No.3, through Resolution No.264 of 2014, enhanced the remuneration from Rs.5,503/- to Rs.7,870/-. It was also specifically averred that the outsourcing agency has no role to play in disbursement of the payments to the field staff, who will have direct interaction with respondent No.3, that the said respondent will issue necessary instructions online to the staff and that KPI of the field staff will be done by the District Managers, which ultimately reaches respondent No.3 through the District Coordinators and Foss Executives. It was specifically asserted that the above noted facts would clearly show the true picture that the field staff were not appointed by the outsourcing agency and they were recruited by respondent No.3 through Zilla Samakhyas and were allotted to the outsourcing agency, to give an impression that the field staff are the recruitees of the outsourcing agency.
11. The Joint Secretary of the Health, Medical and Family Welfare Department, had filed an affidavit on 02.03.2016 wherein a plea was taken that the attempt of the petitioners to project that running of the Aarogyasri Health Care Trust is the sole liability of the State of Andhra Pradesh, that the petitioners have no vested right to demand their continuance, and that as per the Gazette of India, dt.07.05.2015, the Central Government has notified additional 35 institutions for inclusion in the X - Schedule of the Andhra Pradesh Reorganization Act, 2014 and item No.10 in the list is the Aarogyasri Health Care Trust, which means that both the States have a joint liability of running the scheme. It was further averred that on 23.09.2015, a Deed of Trust, namely, Dr. Nandamuri Taraka Ramarao Vaidya Seva Trust, was got registered in the office of the Sub-Registrar, Gunadala, Krishna District. Along with the affidavit, relevant documents referred therein have been filed.
12. In the rejoinder filed by the petitioners in W.P. No.2176 of 2016, it was averred that mere registration of Trust Deed in the name of Dr. NTR Vaidya Seva Trust does not alter the position in any manner, that as per Clause -9 of the Trust Deed the existing funds become the funds of the newly created Trust and that Annexure-I of the Trust Deed clearly shows that the Trust is nothing but continuation of the cashless health benefit cover for the BPL population in the State of Andhra Pradesh. That the newly formed Trust is only meant to continue the existing Dr. NTR Vaidya Seva Scheme. The petitioners have therefore refuted the averment that the newly formed Trust is an entirely different body and unconnected with the earlier operations.
13. On behalf of the appellants, Mr. S. Ramachandra Rao, learned Senior Counsel, and Mr. Vedula Srinivas, learned counsel, advanced their submissions. Mr. Dammalapati Srinivas, learned Advocate General for the State of Andhra Pradesh, made his submissions on behalf of the State and also Dr. NTR Vaidya Seva Trust.
SUBMISSIONS MADE BY SRI S. RAMACHANDRA RAO
14. (i) That Vaidya Mitras have been appointed at the behest of the State Government, that the selection, appointment, disciplinary power and payment of remuneration of Vaidya Mitras are completely controlled by the State Governments and that with the Head of the Department being the principal employer, master and servant relationship between respondent No.3 and the Vaidya Mitras is clearly established. (ii) That the Vaidya Mitras were appointed after fullfledged selection process by the selection committees constituted by the Government and headed by the District Collector concerned and other members, that as per Circular Memo No.14863-F/547/A2/SMPC/2007, dt.14.6.2007, the State Government has delegated the powers to the Heads of the Department to extend the contract service with outsourcing agency from year to year as long as the posts outsourced are within the sanctioned strength of the Department, and that as the appellants were appointed against the sanctioned posts and they are being continued year after year, though originally they were appointed for one year, they are deemed to be in regular government service. (iii) That the appellants - Vaidya Mitras possessed all the eligibility requirements prescribed by the notifications in pursuance of which they have applied for and been selected against the sanctioned permanent posts by the District Level Selection Committees headed by the District Collector and that the impugned G.O., prescribing altogether a new eligibility criteria, such as Degree in Nursing, and removing the appellants for not possessing such criteria is unconstitutional as per the judgments of the Supreme Court in P. Tulasidas v. Government of Andhra Pradesh and A.P. Dairy Development Corporation Federation v. B. Narasimha Reddy . (iv) That the method of selection and appointment of Vaidya Mitras through outsourcing agencies being followed by the State Government is only devised to defeat the constitutional status and protection of tenure of Vaidya Mitras, destroying the concept of public employment. (v) That the Apex Court in Nihal Singh v State of Punjab held that if initial appointments are made as per Rules, the same cannot be treated as irregular appointments and that the action of the State to make contractual appointment and create contractual relationship without choosing to create cadre amounts to arbitrary exercise of power.
(vi) That in Hussainbhai v. The Alath Factory Tezhilali Union the Apex Court held that where a worker or a group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer and that the Court must be astute to avoid mischief and achieve the purpose of law and not to be misled by the maya of legal appearance, that the ratio laid down by the Supreme Court in this case applies in all fours to the present case and that the State cannot deny its responsibility towards the appellants, being the beneficiary of the services rendered by the latter, in the guise of prescribing higher qualifications. (vii) That Dr. NTR Aarogya Seva Trust created by the Andhra Pradesh State Government under G.O. Ms. No.127, dt.27.9.2014 is being wholly controlled, managed and financed by the State and the Trust being the State under Article 12 of the Constitution of India, cannot arbitrarily dispense with the services of the appellants.
SUBMISSIONS OF Mr. VEDULA SRINIVAS
15. Mr. Vedula Srinivas, learned counsel, while adopting the submissions of Mr. S. Ramachandra Rao, further added that at the instance of respondent No.3 - Trust, the Government issued G.O. Ms. No.71, dt.27.2.2009, sanctioning 706 posts with effect from 1.4.2007, that the posts of 450 Aarogya Mitras are also part of the said G.O., that the Trust has been taking decisions for enhancement of the salaries of the field staff and also their postings in different network hospitals, that the Trust is none else than the erstwhile Rajiv Aarogyasri Health Insurance Scheme Trust, that the field staff are its own employees, that the posts in Dr NTR Vaidya Seva Trust are not the posts falling under the State service and that therefore the State is not competent to prescribe qualifications in respect of the posts borne by the Trust.
SUBMISSIONS OF THE LEARNED ADVOCATE GENERAL (AP)
16. The learned Advocate General while opposing the submissions of the learned counsel for the appellants submitted that even assuming that there exists a master and servant relationship, the engagement of the appellants being on outsourcing basis, they cannot seek continuance under the guise of challenging G.O. Rt. No.28, dt.20.1.2016 and that the Constitution Bench judgment of the Supreme Court in Umadevi (1 supra) disentitles the appellants from making such a claim. He has further argued that as held by the Supreme Court in R.K. Panda v Steel Authority of India even if the principal employers insist on the contractors at the time of renewal of contracts to retain the old employees and such a condition is incorporated in the contract itself, the same is only benevolently inserted to protect the interest of the source of livelihood of the contract labour and such a clause cannot by itself give rise to regularization in the employment of the principal employer. The learned Advocate General relied upon the judgments of the Supreme Court in Pinaki Chatterjee v Union of India and Harminder Kaur v Union of India referred to and discussed in Umadevi (1 supra) and argued that Zilla Samakhyas, which are autonomous bodies having their own bylaws and registered as Confederation of Mandal Samakhyas under Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995, select the outsourcing agencies which in turn supply the service providers, such as, Vaidya Mitras and that therefore neither the State nor the Trust has obligation to either continue the appellants or regularize their services. CONSIDERATION (A) What exactly is the nature of the employment of the appellants and who is the de jure employer
17. For determination of the true nature of the appointments of the appellants, it is necessary to delve into the background facts. In order to administer the scheme, a Trust was constituted under the Deed of Trust as referred to above. As per Clause - B of the Trust Deed, the Trust is created specifically to design, implement, administer and whenever necessary modify the scheme and to do all such other matters connected therewith. To start with, under Phase-I, the Scheme was introduced as a pilot project in three most backward Districts of the erstwhile State of Andhra Pradesh, i.e., Anantapur, Mahaboobnagar, and Srikakulam. Under Phase-II, the Scheme was implemented in all the remaining Districts. During the process of implementation of the scheme, the Trust, in its various Board Meetings held from time to time, approved appointment of 706 officers and staff, who are either on deputation or on contract or on outsourcing basis. The Chief Executive Officer of the Trust, vide his letter dt.28.1.2009 evidently informed the Government that as the Aarogyasri I & II Schemes were implemented in quick succession, the Trust could not seek advance approval of the appointments made by it for various technical and non-technical posts, that the technical staff have to be filled up by drafting the experts on deputation/contract basis and non-technical posts have to be filled up by drafting the experts from retired personnel/other personnel on contract basis with the remuneration fixed by the Board of Trustees and that the outsourcing staff have to be appointed as per G.O. Rt. No.2501, Finance (SMPC) Department, dt.31.07.2006 and may be paid allowances as fixed by the Board of Trustees. It was further stated that those working in the outsourcing posts, which are not mentioned in G.O. Rt. No.2501, dt.31.7.2006, shall be paid remuneration as fixed by the Board of Trustees. Having considered this letter, the Government of Andhra Pradesh issued G.O. Ms. No.71, Finance (SMPC) Department, dt.27.02.2009, according sanction for creation of 691 posts falling in 31 different categories. While for 11 category of posts, deputation/appointment or deputation/contract was prescribed as mode of appointment, the method of appointment for the remaining category of posts was either by contract or through outsourcing. Of these posts, 450 posts have been sanctioned for Aarogya Mitras to be filled up through outsourcing. For all the remaining posts, the remuneration was permitted to be fixed as per G.O. Rt. No.2501, Finance (SMPC) Department, dt.31.07.2006.
18. There is no dispute among the parties before us that the guidelines being issued from time to time by way of Government Orders are also made applicable to various categories of outsourcing employees for being engaged by the Trust. Therefore, the G.Os, which are relevant for outsourcing of services need to be examined.
One of the earliest G.Os., dealing with remuneration of the outsourced employees, is G.O. Rt. No.2501, Finance (SMPC) Department, dt.13.7.2006, fixing remuneration to nine categories of outsourcing employees taken through outsourcing agencies. Subsequently, the Government has issued G.O. Rt. No.4459, Finance (SMPC) Department, dt.27.12.2006 dealing with outsourcing of services in various Government Departments. Paragraph 4 of the said G.O. has envisaged constitution of Committees at the District Level for selection of outsourcing agencies headed by the District Collector as its Chairman, Deputy Director T&A and District Labour Officer, as Members, and District Employment Officer, as Member-Convenor. Clause 1 of the Annexure to the G.O. reads as under:
The Head of Office or Department who is principal employer should get permission from the Government in Finance Department to engage outsourcing services.
A reading of Guidelines 2 to 12 in the Annexure to the G.O. would show that the principal employer for outsourcing agencies shall have to register his office or department as per the provisions of the Contract Labour (Regulation and Adoption) Act, 1970 to engage the outsourcing services, that when the outsourcing agency gets the permission from the Head of the Department/Head of Office for outsourcing the services in the said Department or Office, the details of registration of principal employer shall be furnished to the Labour Department under Section 13 of the 1970 Act and the Rules made thereunder, for grant of licence, that the individuals sent by the outsourcing agency are eligible for 15 days Casual Leave per year or in proportion to the actual outsourcing period and there shall not be any reduction from the remuneration due to availing of such Casual Leave, that the outsourcing agency is responsible for payment of remuneration to each individual by the agency before the expiry of such period as prescribed and that the outsourcing agency should pay the remuneration as ordered by the Government from time to time to the categories of posts indicated therein. The payment of remuneration should be closely monitored by the Department and any violation in this regard should be brought to the notice of the Collector in the District, or the Secretary, General Administration (Services) Department, at Hyderabad, as the case may be, to black-list the agency concerned against whom such complaints on verification are found true. The women individuals are eligible for 120 days maternity leave without paying remuneration for the said period. The E.S.I. contribution will be made as per Rules and E.P.F. would be deducted from the remuneration of the employee, and the outsourcing agency has to pay the employers contribution.
The Government has also issued a Circular Memo No.14863- F/547/A2/SMPC/2007, dt.14.06.2007, referring to G.O. Rt. No.4459, Finance (SMPC) Department, dt.27.12.2006. Paragraph 3 thereof reads as under:
The Administrative Departments and Heads of Departments are submitting the proposals for continuation of the outsourcing services every year to Finance (SMPC) Department for concurrence, which leads time consuming for the said continuation. Hence, Government hereby decided to delegate the powers to the Head of the Department to extend the contract with the outsourcing agency from year to year as long as the posts outsourced are within the sanctioned strength of the Department as per the continuation orders issued by the Finance (SMPC) Department.
(Emphasis is ours)
19. G.O. Rt. No.4271, Finance (SMPC) Department, dt.01.11.2008, was issued with comprehensive guidelines for streamlining contract/ outsourcing appointments. Paragraph 3(I)(i) of the G.O., reads as under:
I. SELECTION OF OUTSOURCING AGENCIES:
(i)The Head of Office or Department who is the Principal employer should get permission from the Government in Finance (SMPC) Department to engage outsourcing services.
The composition of the District Level Committees for selection of outsourcing agencies as prescribed earlier is continued in this G.O. The District Employment Officer at the district level is the officer responsible to move the proposal for outsourcing of the functions and take the orders of the Collector and other Members concerned. As regards the payment of remuneration to the outsourced persons, the G.O. provides that all the Departments shall ensure that a bank account in the name of the contract/outsourcing persons is opened, and remuneration shall be paid to the agency which in turn shall pay the same by cheque to the persons against the bank account opened for the purpose only. The G.O. also reiterated Circular Memo No.8999-A/319/A2/SMPC/2007, dt.21.4.2007 regarding payment of remuneration to the contract/outsourcing persons as fixed by the Government in full duly deducting the Employees Contribution towards E.P.F., E.S.I. and Profession Tax. It also provides that the outsourcing agency shall produce a remittance certificate towards E.P.F and E.S.I. contributions at the time of submitting bill for the following month. It envisaged stringent action against the outsourcing agencies if they are found to have indulged in excess deductions from the remuneration to be paid to the outsourced persons towards E.P.F. and E.S.I. Clause III of the G.O. is of substantial significance, which reads as under:
III. CONTINUATION OF COTNRACT/OUTSOURCING PERSONS In the reference 6th read above Government has issued instructions to all the Departments to extend the contract/outsourcing agency contract beyond one year as long as posts are outsourced within the sanctioned strength of the Department as per implementation committee orders without referring file again to Finance Department. However, all the departments shall obtain concurrence of the Finance (SMPC) Department at the initial time of contract/outsourcing.
20. It is clear from the above discussed G.Os that as a matter of policy, the Government has decided to utilize the manpower either through contract or outsourcing process, instead of filling up the vacancies on permanent basis. While doing so, the Government has not left the choice of dealing with the outsourced persons through the outsourcing agencies. It has retained complete control over the outsourcing agencies and outsourced persons. To start with, the Head of Office or Department, who is considered as principal employer, was required to obtain permission from the Finance Department of the Government before commencing the process of engaging employees on outsourcing basis. At the Secretariat and Heads of Department level, Committee headed by the Principal Secretary/Secretary to Government in respect of Departments of Secretariat and Head of the Department in respect of Heads of Department, and at the District Level, the District Level Committees headed by the District Collector, shall select the outsourcing agencies. The respective Heads of the Departments have been vested with the power to regulate and oversee the appointments of the outsourced employees by the outsourcing agencies and ensure that the statutory deductions towards E.S.I. and E.P.F. and the contributions of the employer are made. As regards the tenure of the outsourced employees, all the Departments were permitted to extend the contracts for the outsourcing agencies beyond one year as long as the posts are outsourced within the sanctioned strength of the Departments with the concurrence of the Finance (SMPC) Department at the initial time of contract/outsourcing. Thus, not only that the Heads of the Departments are termed as principal employers, but also they have been exercising deep and pervasive control over the outsourcing agencies and the outsourced employees. With this background in view, we shall now refer to the facts leading to the appointment of the appellants.
21. Sri S. Ramachandra Rao, learned Senior Counsel appearing for the appellants in W.A. (SR) No.75322 of 2016 and W.A. Nos.414, 418, 607, 612 and 755 of 2016, submitted that through a selection process conducted by the District Rural Development Authority headed by the District Collector, after newspaper publication calling for applications and holding a written test, the appellants were selected based on their performance, and that thereafter they were allotted to the outsourcing agencies, which were also selected and appointed by the District Level Committees. However, Mr. Vedula Srinivas, learned counsel for the appellants in W.A. Nos.318, 319 and 730 of 2016 submitted that the appellants were selected by the District Level Committees, known as Zilla Samakhyas through a selection process inter alia consisting of a written test, and that all the appellants were appointed by the said Committees in pursuance of the said selection.
Contradicting these averments, it was pleaded on behalf of the State that the appellants were recruited by the outsourcing agencies only and hence there is no master and servant relationship between them and the State. As no material in support of the said averment was filed by the State, the appellants in W.A. No.730 of 2016, who are the petitioners in W.P. No.2176 of 2016 issued a written notice to the respondents under Order XII Rule 8 of the Code of Civil Procedure read with Rule 24 of the Writ Rules, to produce the following documents.
1. The Trust Deed of Rajiv Aarogyasri Scheme Trust.
2. Bye-laws of Rajiv Aarogyasri Scheme Trust.
3. Proceedings relating to the constitution of District Committees (Zilla Samakhyas) from time to time during the years 2008 to 2014, between Rajiv Aarogyasri Trust and District Collectors, for selection and appointment of the Field Staff under the scheme.
4. Proceedings issued by the Collectors authorizing the District Committees to hold the selection and appointment of the Field Staff under the Scheme.
5. Copies of Agreement entered into between the Rajiv Aarogyasri Trust with M/s. Om Detective Security Services and Golden Enterprises and other similar outsourcing agencies.
At the hearing, it was submitted by Mr. Vedula Srinivas, learned counsel for the appellants in W.A. Nos.318, 319 and 730 of 2016, that the learned Advocate General for the State of Andhra Pradesh submitted before the learned single Judge that post-bifurcation, the relevant records are in the custody of the State of Telangana and that since they are not in possession of any record, they are unable to produce the same. This stand taken by the State is reiterated before us by the learned Advocate General. Therefore, this Court did not have the benefit of looking into the relevant record to render a specific finding on the legal status of Zilla Samakhyas and their composition. However, based on the available record, appropriate conclusions need to be drawn in this regard.
22. The learned counsel for the appellants have placed before us a translated copy of the Employment Notice issued by the President, Zilla Samakhya, Pendurthi, Visakhapatnam District, and submitted that identical employment notices were issued by all District Committees (Zilla Samakhyas) in pursuance of which the appellants have applied, faced the selection process and been selected and appointed as Aarogya Mitras. To this extent, the learned Advocate General has not joined issue with the appellants counsel. The contents of the Employment Notice, we feel, are extremely important and they read as under:
District Committee Pendurthi, Visakhapatnam District Letter No.3/2007/ZS., Dated:16/6/2009 EMPLOYMENT NOTICE Eligible females to work through District Committee under Rajiv Arogyasri Scheme as Arogya Mithra to fill up vacancies, applications are invited. Eligibilities
1. Candidates are to be qualified in Multi Purpose Health Worker.
2. Candidates are to be resident of Visakhapatnam District. Nativity and residence certificate to be attached, without fail.
3. Candidates to be fit in viva-voce.
4. Candidates are to be willing to visit villages.
5. Candidates are to be qualified using computers.
The above mentioned eligible candidates, dt.23.06.2009 between 5:00 P.M. to submit their applications in District Committee, TTDC (Womens Welfare Centre), Pendurthi, Visakhapatnam 531 173.
Candidates on Dt.25.06.2009 to attend for the written exam along with original certificates Morning 10.00 A.M. at District Committee, TTDC (Womens Welfare Centre), Pendurthi, Visakhapatnam.
President District Committee Pendurthi, Visakhapatnam District Phone No.2571142, 2518276 Cell No:9866074044 (Note: The translation mistakes could not be corrected in order to retain its original form of employment notice as furnished by the appellants.)
23. The learned counsel for the appellants submitted that though the aforementioned Employment Notice was relating to the eligible female candidates, similar notifications were issued for eligible male candidates also and this submission is also not disputed by the learned Advocate General. Contrary to the stand taken by the respondents that the field staff are selected and outsourced by the outsourcing agencies, a translated copy of one of the appointment orders produced by the appellants, pertaining to appellant No.1 in W.A. No.730 of 2016, reads as under:
DISTRICT COMMITTEE KADAPA YSR DISTRICT Subject:- Rajiv Arogya Mitra Arogya Mitra Selection Appointment Reg.
Reference: Dt.11.10.2010 conducted Written Test and Interview.
To implement Rajiv Aarogya Sri in Kadapa District through District Committee to select Aarogya Mithras on temporary basis.
Sri O. Sudhakar Reddy, S/o. O. Poli Reddy, Village: Munilli, Mandal: B. Koduru, Primary Health Centre, B. Koduru is selected as Aarogya Mitra.
The above mentioned selection is purely on temporary basis. If the details given by the Arogya Mitra are found not correct, he will be terminated accordingly.
Sd/- xxxxx President District Committee Kadapa YSR Kadapa District To O. Sudhakar Reddy, S/o. O. Poli Reddy, B. Koduru, District Medical & Health Officer, Kadapa. C.C. to Star/Allied Insurance Agency, C.C. to District Rural Development Agency C.C. to District Committee.
From the above it is clear that in order to implement the scheme, Aarogya Mitras were selected on temporary basis through Zilla Samakhyas. Sri O. Sudhakar Reddy, S/o. O. Poli Reddy, Munilli Village, B. Koduru Mandal, B. Koduru, was one such person selected as Aarogya Mitra purely on temporary basis. The candidate was informed that if the information furnished by him and his work are not found satisfactory, he will be removed from the post of Aarogya Mitra.
24. Following the aforementioned selection, one Golden Enterprises, which was evidently selected as an outsourcing agency by the District Level Committee, headed by the District Collector, issued a formal order of appointment on 01.12.2010. Some of the conditions, which are relevant to the adjudication, read as under:
1. Your services will be placed at the disposal of our client M/s. Star Health and Allied Insurance Company Limited for the implementation of Phase III of Rajiv Aarogyasri Community Health Insurance Scheme.
You will be posted as AAROGYA MITHRA (PHC/UHP/CHC/AH/DH) in YSR District or any other PHC as may be specified by our Client from time to time for the implementation of Phase III of the above scheme.
2. The period of your employment under this contract will be strictly from 01.12.2010 to 14.04.2011 (as Phase III is for the period 15.04.2010 to 14.04.2011). This contract will automatically stand terminated upon expiry of the above period and you will cease to be in our service with effect from that date. The contract of employment can be extended for further period as may be specified, upon mutually agreeable terms and conditions.
3. During the currency of this contract, you are liable to be deployed to any other office in the District as per the requirement or in the office of any of our other clients. You will however continue to be in the service of our establishment and there will be no master and servant relationship between you and our client. You will have absolutely no claim or demand of any nature whatsoever against our client at any point of time.
4. You will be paid a salary of Rs.53712/- (Rupees Fifty Three Thousand Seven Hundred and Twelve Only) per annum on cost to the Company basis (including employers contribution of PF, ESI etc., as applicable). The breakup details are given in the Annexure I.
5.
6.
7. Hours of work, holidays and leaves etc., will be governed by the law for the time being in force at the place of posting.
8. You will devote your whole time and attention to the discharge of such of those duties and responsibilities as may be assigned to you from time to time by us or by our clients. You shall not take up any employment or engage yourself in any profession, avocation or business during the currency of this contract.
9.
10.
11. .
12. Nothing contained herein shall be construed as conferring on you the status of a permanent employee in our establishment. Except the salary specified in clause No.4 above, you will not be entitled to claim any benefit, allowance or privilege provided by us to the permanent employees of the establishment.
13. You shall not at anytime claim or demand any right to be absorbed in the regular employment of the establishment in any vacancy or otherwise.
14. Notwithstanding anything contained herein, either party may terminate this contract during its currency by serving 15 days notice on the other or by paying 15 days salary in lieu of such notice.
Annexure-I referred in Clause 4 of the above appointment order is as follows:
Golden Enterprises SALARY BREAK-UP DETAILS CTC:
4476.00 Gross Salary Details (A):
Cash Flow Head Monthly Yearly Basic + DA 3000.00 36000.00 House Rent Allowance 429.00 5148.00 Transport Allowance 500.00 6000.00 Gross Salary (A) 3,929.00 47,148.00 Others (B):
PLAINTIFF Contribution (Employer) 360.00 4320.00 ESIC Contribution (Employer) 187.00 2244.00 Others (B) 547.00 6564.00 CTC (A + B) 4,476.00 53,712.00 Standard Deductions PF Contribution (Employee) 360.00 4320.00 ESIC Contribution (Employee) 69.00 828.00 PT 0 0.00 Deductions (C) 429.00 5148.00 Net Salary (A-C) 3,500.00 42,000.00 Authorized Signatory Employee Signature
25. Appellant No.1 has filed a fresh appointment letter dt.15.4.2011 addressed to him by the Golden Enterprises for the period from 15.4.2011 to 14.4.2012 with the terms identical to that contained in appointment letter dt.1.12.2010. Similar appointment letters issued to the remaining appellants by either Golden Enterprises or Om Detective Security Services, the outsourcing agencies have also been filed. The claim of the appellants that they are being continued under similar appointment orders for periods not exceeding one year each time till the time of their filing the writ petitions is not disputed by the respondents. Impugned G.O.
26. In the above noted backdrop, it is appropriate to refer to the impugned G.O. It is stated in the G.O., that a review was taken up by the Government on the ongoing NTR Vaidya Seva Scheme. During the review, it was noticed that several formal and informal requests were being received to modify the qualifications for filling up of the field staff of the NTR Vaidyaseva, that the main object of the scheme is to provide medical facilities to the BPL families, and that due to non-availability of fully trained (lack of domain knowledge) and qualified Vaidya Mitras and other staff of the NTR Vaidyaseva, the BPL families, who are approaching the notified hospitals of NTR Vaidyaseva, are not getting full information and assistance on the procedures under the NTR Vaidyaseva. That the Chief Executive Officer of Dr. NTR Vaidyaseva, in his letter dt.02.12.2015, furnished the qualifications of the field staff and that after careful consideration, the following qualifications and skills were prescribed for field staff who shall be recruited through outsourcing agencies, subject to the guidelines issued in G.O. Rt. No.4271, Finance (SMPC) Department, dt.01.11.2008 for effective implementation of the scheme.
Post Qualifications Network Vaidya Mithra (NVM)
(a) Qualifications:
B. Sc Nursing, M. Sc Nursing, B Pharmacy, Pharmacy D, B. Sc Medical Lab Technology with good academic record.
(b) Skills:
i. Excellent communication skills. ii. Should read, speak, and write Telugu and English.
iii. Should have computer knowledge and efficient in MS office iv. Shall have basic understanding of Medical/Surgical specialities, and Hospitals administration. PHC Vaidya Mitra (PVM):
(a) Qualifications:
B. Sc. Nursing, M. Sc. Nursing, B. Pharmacy, Pharmacy D, B. Sc Medical Lab Technology with good academic record.
(b) Skills:
i. Excellent communication skills. ii. Should read, speak, and write Telugu and English. iii. Should have computer knowledge and efficient in MS office.
iv. Shall have basic understanding of Medical/Surgical specialities, and Hospitals administration. Network Team Leaders:
(a) Qualifications:
B. Sc. Nursing, M. Sc Nursing, B. Pharmacy, Pharmacy D, B.Sc Medical Lab Technology with good academic record.
(b) Experience: Minimum of 2 years of fulltime experience in hospital services.
(c) Skills:
i. Excellent communication skills and leadership qualities. ii. Should read, speak, and write Telugu and English. iii. Abide to handle difficult and complex situations. iv. Demonstrated experience with and knowledge of computerized data collection, management, reporting and analysis system, and v. Shall have basic understanding of Medical/Surgical specialities, and Hospitals administration.
(d) Additional Qualification: Any P.G., Experience in Hospital Administration will be preferred.
Divisional Team Leaders
(a) Qualification:
B. Sc Nursing, M. Sc Nursing, B. Pharmacy, Pharmacy D, B.Sc Medical Lab Technology with good academic record.
(b) Experience: Minimum of 2 years of fulltime experience in hospital services.
(c) Skills:
i. Excellent communication skills and leadership qualities. ii. Should read, speak, and write Telugu and English. iii. Able to handle difficult and complex situations iv. Demonstrated experience with and knowledge of computerized data collection, management, reporting and analysis systems, and v. Shall have basic understanding of Medical/Surgical specialities, and Hospitals administration.
(d) Additional Qualification: Any PG, Experience in Hospital Administration will be preferred.
The G.O. has permitted the Chief Executive Officer, Dr. NTR Vaidyaseva to identify the number of posts and communicate the same to the respective District Collectors along with pay particulars to enable to notify the same. It was also further directed that the guidelines issued in G.O. Rt. No.4459, Finance (SMPC) Department, dt.27.12.2006, and G.O. Rt. No.4271 Finance (SMPC) Department, dt.01.11.2008 relating to selection of outsourcing agencies at the District Level shall be strictly followed.
27. Through his letter dt.20.01.2016, the Chief Executive Officer of respondent No.3 Trust, addressed letters to the District Collectors and Magistrates, wherein it was informed that the post of Divisional Team Leader is merged with Network Team Leader for effective implementation of the scheme as Team Leaders, that PHC Vaidya Mitras and Network Hospitals Vaidya Mitras are merged as Vaidya Mitras, and that the Government also accorded permission to the District Collectors to select the outsourcing agencies through the Committee mentioned in the aforementioned G.Os., following the instructions and existing procedures and recruit field staff as per the selection criteria given in the said G.Os. He has also requested the District Collectors to select outsourcing agencies as per the procedure and also recruit the field staff with the revised qualifications duly following the instructions and existing procedures, giving district-wise details of the field staff to be recruited, which read as under:
S. No. District NWHs Team Leader Vaidya Mithras Vaidya Mithras in Network Hospitals Vaidya Mithras in PHCs
1.
Anantapur 14 8 121 30 91
2. Chittoor 28 8 174 64 110
3. East Godavari 44 12 235 94 141
4. Guntur 35 11 182 95 87
5. Krishna 39 10 179 94 85
6. Kurnool 32 6 160 61 99
7. Nellore 28 6 170 64 106
8. Prakasam 22 10 123 30 93
9. Srikakulam 13 4 131 31 100
10. Visakhapatnam 34 10 200 95 105
11. Vizianagaram 11 4 112 28 84
12. West Godavari 17 7 132 47 85
13. YSR Kadapa 10 6 105 18 87 Grand Total 327 102 2024 751 1273
28. The primordium of the respondents case is that there is no master and servant relationship between Vaidya Mitras and respondent No.3 Trust and that therefore no mandamus can be sought against the said respondent for continuance of the appellants. It is the further pleaded case of the respondents that for providing better quality services to the patients under the Aarogyasri Scheme, higher qualifications have been prescribed and that freedom of the State in this regard cannot be curtailed at the instance of the appellants who have no vested right for being continued. As noted above, the learned counsel for the appellants have submitted that the method of outsourcing resorted to by the respondents is a make believe affair and in reality respondent No.3 Trust is vested with the entire control over the Vaidya Mitras, that the State, through the District Level Committees select the outsourcing agencies, the Zilla Samakhyas select the Aarogya Mitras and place them at the disposal of the outsourcing agencies for being allotted to respondent No.3 - Trust, which has complete control over the Aarogya Mitras in their day to day performance.
29. Before the employment notices were issued by the respective Zilla Samakhyas, 691 posts falling under 31 different categories were sanctioned, by the Government of Andhra Pradesh. These posts include 450 posts of Aarogya Mitra. The learned counsel for the appellants have specifically asserted and the same is not denied during the hearing that all the posts of Aarogya Mitra against which the appellants have been working are sanctioned posts. Clause-III of G.O. Rt. No.4271, Finance (SMPC) Department, dt.01.11.2008, quoted hereinbefore, specifically provides for extending the contract/outsourcing agency contracts beyond one year as long as the posts are outsourced within the sanctioned strength of the Department, without referring the file again to the Finance Department. It is in this background that the employment notices issued in the year 2009 by the respective Zilla Samakhyas need to be considered. In this context, neither party has placed before us the exact composition of the Zilla Samakhyas. According to the learned Advocate General they are functioning under the cooperative sector having been registered under the Mutually Aided Cooperative Societies Act. He has, however, not explained how these Samakhyas are connected with the outsourcing agencies selected by the District Level Committees nor was any pleading raised that the Zilla Samakhyas have nothing to do with the District administration. Despite receipt of notice from some of the appellants as noted hereinbefore, the State failed to produce record. Even if the record is in the custody of the Telangana Government, it would not have been difficult for respondent No.1 to obtain relevant copies thereof. Even otherwise, Zilla Samakyas being registered under the Mutually Aided Cooperative Societies Act, the Registrar concerned of the A.P. Government is expected to possess all the records pertaining to the constitution and composition of the Samakhyas. Non-production of these details by the respondents gives rise to an adverse inference against them. In the absence of any link between the Zilla Samakhyas and the outsourcing agencies and in view of the failure of the respondents to produce relevant record, it is reasonable to presume that the District administration headed by the Collector has entrusted the function of selection of Aarogya Mitras to the Zilla Samakhyas.
30. The most striking feature which explodes the myth of outsourcing created by the State and the Trust is the employment notice issued by the Zilla Samakhya, Pendurthi, Visakhapatnam District, which, it is argued by the learned counsel for the appellants and not disputed by the learned Advocate General, is in pari materia with the employment notices issued in all Districts. The contents of the employment notice reproduced in the foregoing part of this judgment clearly reveal that there is no whisper therein that the selected candidates will be placed at the hands of the outsourcing agencies or that they will be supplied through those agencies to work for the Trust. Thus, in strict sense, the selected candidates are not privy to the internal arrangement between the Trust and the outsourcing agencies. Though G.O. Ms. No.71, dt.27.2.2009, envisages engagement of Aarogya Mitras through outsourcing, which, in normal parlance means supply of the personnel having required qualifications to suit the requirements of the Trust by the outsourcing agencies, in reality there is complete deviation in the procedure adopted by the District administration and the Trust.
31. Exhaustive guidelines as referred to above were issued under G.O. Rt. No.4271, Finance (SMPC) Department, dt.01.11.2008, for outsourcing of services and the District Level Committees headed by the District Collector were constituted for selection of outsourcing agencies. The outsourcing agencies are not given a free hand either in prescription of qualifications for Aarogya Mitras or their selection. Uniform qualifications were prescribed by the administration itself and the process itself was undertaken through the Samakhyas by issuing employment notifications. The selection process includes a written test and viva voce. It is only after the selection process is completed, that the selected candidates are allotted to outsourcing agencies, who, as noted above, were also selected by the District Level Committees headed by the District Collector. The remuneration payable to the Aarogya Mitras is also fixed by the State Government and was being revised by it from time to time. After completion of all these formalities, the selected candidates are allotted to the outsourcing agencies, which in turn issue formal appointment orders. The terms and conditions are also evidently settled by the Trust/District Administration. As discussed above, while outsourcing agency is selected by the District Level Committee, the outsourced persons are selected by the Zilla Samakhyas. The outsourcing agency is reduced to the status of a mere name lender and has remained a cloak facilitating the District administration/Trust to indulge in backseat driving in the matter of recruitment, administration and control of the Aarogya Mitras.
32. Indeed, Annexure to G.O. Rt. No.4459, dt.27.12.2006, designated Head of Department/Head of Office as principal employer who is required to get registration certificate under Section 7 of the Contract Labour (Regulation and Adoption) Act, 1970. The Annexure also contains various guidelines laying down service conditions, such as the entitlement of the outsourced staff for casual leave, prompt payment of remuneration by the outsourcing agency, maternity leave for women employees, ESI and EPF contributions etc. These facts, without any cavil of doubt, would establish that the Trust/District Level Committees have complete control over every aspect pertaining to the recruitment and control over the outsourced staff. The outsourcing agency, in our opinion, is a mere faade or a smokescreen obviously to ensure that the outsourced staff are not recognized as employees of the Trust and the benefits under service law and the protection under the Constitution were not available to them. These being the undeniable facts borne out from record, can it be said that there is no master and servant relationship between the State/respondent No.3 on one side, and outsourced employees on the other side Our emphatic answer is in the negative.
Lifting of the veil
33. The concept of lifting of the veil generally applied in corporate law can as well be applied even in service law where the State in order to avoid its constitutional and legal obligations hides behind the screen wearing an outsourcing/contract mask, while holding all the strings of control like a master in the puppet show.
The Apex Court in Hussainbhai (5 supra) laid bare a similar plea of the employer that in view of the agreements entered with the immediate contractors by the workmen, there is no direct employer employee vinculum juris existed between the company and the workmen. The Supreme Court has lucidly explained the proposition as under:
5. The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though sniped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. Myriad devices, half hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like, may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43A of the Constitution. The court must be astute to avoid mischief and achieve the purpose of the law and not be misled by the may a of legal appearances.
6. If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefits and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries or the make-believe trappings of detachment from the Management cannot snap the real-life bond. The story may vary but the inference defies ingenuity. The liability cannot be shaken off.
(Emphasis added)
34. The above reproduced dicta is tailor-made for these cases. As discussed above, the naked truth draped in perfect paper management remains that the Trust is the employer and the appellants are the employees with the outsourcing agencies, being mere name lenders and outsourcing being a mere subterfuge or camouflage. Following the foregoing discussion, we have no hesitation to hold that respondent No.3 Trust is the de jure employer of the appellants.
(B) Whether purporting to prescribe superior qualifications for the post of Vaidya Mitras the State can unilaterally dispense with the services of the appellants
35. The prescription of qualifications, it is trite, falls within the domain of the employer, but can an employer prescribe higher qualifications which would inevitably result in ousting of its existing employees, albeit working on temporary basis, is the question to be considered.
36. The issue whether the State Government can amend the Rules with retrospective effect rendering certain members of a cadre ineligible for promotion to the next higher post, fell for consideration of the Supreme Court in T.R. Kapur v. State of Haryana . The Apex Court in paragraph 16 of the report held as under:
It is well-settled that the power to frame rules to regulate the conditions of service under the proviso to Article 309 of the Constitution carries with it the power to amend or alter the rules with a retrospective effect: B.S. Vadhera v. Union of India (AIR 1969 SC 118), Raj Kumar v. Union of India [(1975) 4 SCC 13], K. Nagaraj v. Sate of A. P. [(1985) 1 SCC 523] and State of J & K v. Triloki Nath Khosa [(1974) 1 SCC 19]. It is equally well-settled that any rule which affects the right of a person to be considered for promotion is a condition of service although mere chances of promotion may not be. It may further be stated that an authority competent to lay down qualifications for promotion, is also competent to change the qualifications. The rules defining qualifications and suitability for promotion are conditions of service and they can be changed retrospectively. This rule is however subject to a well-recognised principle that the benefits acquired under the existing rules cannot be taken away by an amendment with retrospective effect, that is to say, there is no power to make such a rule under the proviso to Article 309 which affects or impairs vested rights. Therefore, unless it is specifically provided in the rules, the employees who are already promoted before the amendment of the rules, cannot be reverted and their promotions cannot be recalled. In other words, such rules laying down qualifications for promotion made with retrospective effect must necessary satisfy the tests of Article 14 and 16(1) of the Constitution: State of Mysore v. M.N. Krishna Murty [(1973) 3 SCC 559], B.S. Yadav v. State of Haryana (1980 Supp. SCC 524), State of Gujarat v. Raman Lal Keshav Lal Soni [(1983) 2 SCC 33] and Ex-Captain K.C. Arora v. State of Haryana [(1984) 3 SCC 281].
We are conscious of the fact that the Supreme Court in T.R. Kapur (9 supra) dealt with the permanent employees constituting a cadre. However, we do not find any reason for not applying the same analogy to the cases on hand where but for the make believe method of outsourcing adopted by the Trust backed by the State policy, all the appellants would have been holding permanent employment as Vaidya Mitras, for the following reasons, namely, (i) that there existed sanctioned posts; (ii) that the appellants have satisfied the prescribed qualifications; (iii) that they applied in pursuance of the employment notifications and (iv) that they were successful in written test and viva voce. Even for permanent appointment, no further requirements need be fulfilled by an aspirant. So much so, we do not find any reason why the ratio in T.R. Kapur (9 supra) cannot be made applicable to the present cases, more so, when the State in the guise of prescribing higher qualifications seeks to undertake wholesale replacement of one set of temporary employees with another set of temporary employees.
37. The judgment in P. Tulasidas (2 supra) also supports our view. In that case, the Supreme Court has recognized the orders issued by the State Government from time to time in exercise of its executive powers under Article 162 of the Constitution of India. The Supreme Court held that such executive orders have equal force as that of the Rules framed under Article 309 of the Constitution of India till such Rules are framed and that the rights acquired through such orders have sufficient legal basis, and such rights, benefits and perquisites acquired by the teachers concerned cannot be said to be the rights acquired otherwise than in accordance with law or brushed aside and trampled at the sweet will and pleasure of the Government, with impunity. The observations of the Supreme Court made in this context are apt to be reproduced herein below.
Consequently we are unable to agree that the Legislature could have validly denied those rights acquired by the appellants retrospectively not only depriving them of such rights but also enact a provision to repay and restore the amounts paid to them to the State. The provisions of the Act, though can be valid in its operation in futuro' cannot be held valid in so far as it purports to restore status quo ante for the past period taking away the benefits already available, accrued and acquired by them. For all the reasons stated above the reasons assigned by the majority opinion of the Tribunal could not be approved in our hands. The provisions of Sections 2 and 3(a) insofar as they purport to take away the rights from 10-2-1967 and obligates those who had them to repay or restore them back to the State are hereby struck down as arbitrary, unreasonable and expropriatory and as such is violative of Articles 14 and 16 of the Constitution of India .
38. The learned Advocate General submitted that due to lack of proper qualifications, the beneficiaries under the scheme are denied proper services and guidance, as a result of which the patients would be deprived of timely healthcare. Undoubtedly, the State can always undertake innovative measures for improving efficiency in rendering services. However, we cannot be oblivious of the flipside. This is a huge human problem where more than 2,000 persons are sought to be deprived of their bare sustenance. They are being employed for more than six years. And evidently in the hope that having been appointed through regular selection process a day will come when their services will be made permanent. The State which should act as a model employer is not expected to defeat the legitimate expectations of its citizens for no fault on their part. The innovative idea of the Chief Executive Officer of respondent No.3 imposing higher qualifications proved to be the nemesis for more than 2,000 individuals who will be thrown to the streets only for the reason of lack of higher qualifications.
Destruction of concept of public employment
39. During the past decade or so, the State has been moving from the conventional method of filling up posts on permanent basis, towards adopting the method of appointments through contract or outsourcing. The fabric of public employment in a welfare State developed to create employment opportunities to the unemployed youth is being gradually destroyed. Notwithstanding the Service Rules of the State Government, such as, A.P. State and Subordinate Service Rules, 1996, providing for constitution of Gazetted and Non-Gazetted cadre posts under the State Government, the State Departments and Public Sector Undertakings are leaning towards the aforementioned non-conventional methods for recruitment. This marked shift in the method of recruitment, we are afraid, is likely to destroy the very concept of public employment and it has a debilitating effect on the persons seeking employment, for being at the mercy of intermediary players, such as, contract workers suppliers and outsourcing agencies. The State in its multifarious activities requires manpower. Even when a post the work attached to which is perennial in nature is not filled up on permanent basis, a sense of great insecurity is created in the contract/outsourced employee. The fear of temporary nature of the work not only keeps the employee under deep stress and strain, but it also reduces his efficiency owing to insecurity of loosing employment. In our view, such a situation does not augur well for the administration as well as the employees. Lack of accountability, corruption, indiscipline, inefficiency, complacency etc., affecting the performance of the employees in public employment, appeared to be some of the reasons for the State and Public Sector Undertakings to shift to the method of making contract/outsourcing appointments. These maladies which have taken deep roots in the permanent cadre employees of State and Public Sector Undertakings, will not offer justification for doing away with the concept of public employment. For every ill, there are bound to be remedies. The State, instead of introducing appropriate reforms to eradicate the abovementioned ills plaguing the public employment, appear to be choosing the easier option of extracting work from unemployed youth using them as cheap labour by adopting artificial methods of contract or outsourcing employment.
40. In Nihal Singh (4 supra), the Supreme Court was highly critical of the modus operandi of the State of Punjab in resorting to the methods of outsourcing and termed creating contractual relationship instead of creating cadre posts, as highly arbitrary. The Court observed:
The creation of a cadre or sanctioning of posts for a cadre is a matter exclusively within the authority of the State. That the State did not choose to create a cadre but chose to make appointments of persons creating contractual relationship only demonstrates the arbitrary nature of the exercise of the power available under Section 17 of the Act. The appointments made have never been terminated thereby enabling various banks to utilize the services of employees of the State for a long period on nominal wages and without making available any other service benefits which are available to the other employees of the State, who are discharging functions similar to the functions that are being discharged by the appellants.
The Supreme Court further observed:
In our opinion, when the facts such as the ones obtaining in the instant case demonstrate that there is need for the creation of posts, the failure of the executive government to apply its mind and take a decision to create posts or stop extracting work from persons such as the appellants herein for decades together itself would be arbitrary action (inaction) on the part of the State.
41. In Air India Statutory Corporation v. United Labour Union the Supreme Court held that the public authority, instrumentality, agency or the person acting in public interest, though in the filed of private law, is not free to prescribe any unconstitutional conditions or limitations in their actions and they cannot exercise their power in arbitrary, unjust and unfair manner. It was further held that their action must be based on some rational and relevant principles and must not be guided by irrational or irrelevant considerations and that all their actions should satisfy the basic law requirements of Article 14.
42. In West Bengal State Electricity Board v. Desh Bandhu Ghosh , the Supreme Court while considering the action of termination of an employee by giving only three months notice, held that where a regulation enables an employer to terminate the services of an employee, in an entirely arbitrary manner and in a manner that confers vicious discrimination, the same must be struck down as being violative of Article 14 of the Constitution. It was further held that even the Standing Orders must be non-arbitrary and must not confer uncanalised and drastic powers upon the employer, which enables him to dispense with an inquiry and further enables him to dismiss an employee, without assigning any reason for the same, by merely stating that doing so would not be expedient and that it would be against the interests of the industry to allow continuation of employment with respect to the employee.
Social Context Judging
43. The preamble of our Constitution inter alia promised its citizens justice social, economic and political. In order to redeem this promise, the Constitution has made various provisions inter alia under Parts III, IV and IV-A. While the legislature is empowered to make laws to make justice of the three kinds promised in the preamble a reality, the executive is charged with the responsibility of implementing the laws, and the judiciary, the most pivotal organ of the three, is vested with the power to keep the other two organs, namely, legislature and executive, within their bounds, so as to ensure that constitutional rights of the citizens are always preserved and protected. Social justice adjudication is constitutionally mandated by Articles 14 to 18 (Right to Equality), Article 21 as interpreted by the Supreme Court, Articles 23-24 (Right against exploitation), Articles 29-30 (Cultural and Educational rights), Articles 38 to 49 (Directive Principles of fundamental governance), Article 51-A (Fundamental Duties), and Articles 330 to 342 (Special Provisions relating to Scheduled Castes, Scheduled Tribes, Anglo Indian Community etc.). The central issue involved in these provisions is what the Preamble articulated as social justice or equality and dignity of the individual. In other words, social context judging is essentially the application of equality jurisprudence as evolved by the Parliament and the Supreme Court in myriad situations presented before courts where unequal parties are pitted in adversarial proceedings when the courts are called upon to dispense equal justice. Where social and economic inequalities accentuate the disabilities of the poor in an unequal fight, the adversarial process itself operates to the disadvantage of the weaker party. In such a situation, the judge has to be not only sensitive to the inequalities of the parties involved, but also positively inclined to the weaker party, if the imbalances were not to result in miscarriage of justice. This result is achieved by what we call social context judging or social justice adjudication.
44. In Balmer Lawrie & Co. Ltd. V. Partha Sarathi Sen Roy the Supreme Court held as follows:
30. Where the actions of an employer bear public character and contain an element of public interest, as regards the offers made by him, including the terms and conditions mentioned in an appropriate table, which invite the public to enter into contract, such a matter does not relegate to a pure and simple private law dispute, without the insignia of any public element whatsoever.
Where an unfair and untenable, or an irrational clause in a contract, is also unjust, the same is amenable to judicial review. The Constitution provides for achieving social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and equal protection of the law. Thus, it is necessary to strike down an unfair and unreasonable contract, or an unfair or unreasonable clause in a contract, that has been entered into by parties who do not enjoy equal bargaining power, and are hence hit by Section 23 of the Contract Act, and where such a condition or provision becomes unconscionable, unfair, unreasonable and further, is against public policy. Where inequality of bargaining power is the result of great disparity between the economic strengths of the contracting parties, the aforesaid principle would automatically apply for the reason that, freedom of contract must be founded on the basis of equality of bargaining power between such contracting parties, and even though ad idem is assumed, applicability of standard form of contract is the rule. Consent or consensus ad idem as regards the weaker party may therefore, be entirely absent. Thus, the existence of equal bargaining power between parties becomes largely an illusion. The State itself, or a State instrumentality cannot impose unconstitutional conditions in statutory rules/regulations vis--vis its employees in order to terminate the services of its permanent employees in accordance with such terms and conditions. (Vide Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly: [(1986) 3 SCC 156]; DTC v. Mazdoor Congress : [1991 Supp (1) SCC 600 : AIR 1991 SC 101]; LIC v. Consumer Education and Research Centre:
[(1995) 5 SCC 482], K.C. Sharma v. Delhi Stock Exchange : [(2005) 4 SCC 4], and Punjab National Bank v. Astamija Dash : [(2008) 14 SCC 370].
(Emphasis is ours)
45. Though under the impugned G.O. higher qualifications have been prescribed for the post of Vaidya Mitras, the proposed appointments are also through the purported outsourcing method. Thus, in effect, the respondents are seeking to replace one set of the so called outsourced employees with another set, by prescribing higher qualifications. In State of Haryana v. Piara Singh the Supreme Court deprecated the practice of replacing one set of temporary employees with another set of temporary employees. The State having committed itself to continue the selected persons as long as the posts outsourced are within the sanctioned strength of the Department, cannot be allowed to resort to hire and fire policy like a private entrepreneur, nor can it be conceded with the power of wholesale replacement of the outsourced persons, who, in effect, are the employees of respondent No.3, in the guise of prescribing higher qualifications. Having regard to the unequal bargaining power between the parties, it would be a grave travesty of justice if the weak is subjected to meek surrender of their rights to the mighty State.
C. Whether the appellants are entitled to any relief, and if so, to what relief:
46. The learned Advocate General has sought to derive strength from the Constitution Bench judgment of the Supreme Court in Umadevi (1 supra), in fortification of his submission that the claim of the appellants either for their continuance or their regularization is in the teeth of the ratio laid down in the said Judgment. Before addressing this submission, we need to discuss briefly the judgment in Umadevi (1 supra).
Almost all the States and public sector undertakings in the country started indiscriminately engaging employees on temporary/contractual/ casual/daily-wage or ad hoc basis, without following the constitutional scheme of public employment. Such temporary employees gaining entry into the employment through backdoor methods used to approach High Courts and secure orders for their regularization. The issue as to whether the employees appointed by the State or its instrumentalities, on a temporary basis, or on daily wage or casual basis, have a right to approach the High Court for issue of writ of mandamus directing that they be made permanent in appropriate posts, was referred to the Constitution Bench in Umadevi (1 supra). The Supreme Court held that the guidelines issued in Piara Singh (13 supra) cannot be understood as laying down the law that ad hoc, temporary or casual employees engaged without following the regular recruitment procedure should be made permanent. After referring to its earlier decisions in Pinaki Chatterjee (7 supra), Harminder Kaur (8 supra), State of Punjab v. Surinder Kumar , Director, Institute of Management Development, U.P. v. Pushpa Srivastava , Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra , Ashwani Kumar v. State of Bihar , and a host of other decisions, the Supreme Court observed as under:
47. When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognised by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in cases concerned, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post.
Dealing with irregular appointments as distinguished from illegal appointments as explained in State of Mysore v. S.V. Narayanappa , R.N. Nanjundappa v. T. Thimmiah , and B.N. Nagarajan v. State of Karnataka of duly qualified persons in duly sanctioned vacant posts and their continuance in the posts for ten years or more but without the intervention of the orders of the Courts or Tribunals, the Supreme Court held that the question of regularization of the services of such employees may have to be considered on merits in the light of the principles settled by the Supreme Court in the cases referred to and in the light of the judgment. A further direction was given to the Union of India, State Governments and their instrumentalities to take steps to regularize as a one-time measure, the services of such irregularly appointed persons, who have worked for ten years or more in duly sanctioned posts but not under the cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that required to be filled up in cases where temporary employees or daily wagers are now employed.
47. On a proper reading of the judgment in Umadevi (1 supra), it would be evident that it basically dealt with the right of a temporary or ad hoc employee entering employment through backdoor method for regularization. The appellants in the present cases do not fall in such categories as, against the sanctioned posts of Aarogya Mitras, on consolidated remuneration and in pursuance of the notifications prescribing qualifications they applied for and were selected. If the State is resorting to shortcut methods of recruitment through contracts and outsourcing, the aspirants like the appellants are not to blame. The appellants are also not seeking their immediate regularization. They have approached this Court when they are sought to be replaced by the Government by another set of outsourced employees.
48. The Supreme Court in Nihal Singh (4 supra), more or less dealt with a similar situation. Invoking Section 17 of the Police Act, 1801, the State of Punjab has appointed Special Police Officers initially on an honorarium of Rs.15/- per day, which was subsequently enhanced to Rs.30/35/- per day. Nihal Singh and other similarly placed employees have approached the Punjab and Haryana High Court seeking appropriate directions for regularization of their services. After two rounds of litigation in which the petitioners were unsuccessful before the High Court, they have approached the Supreme Court. The contention on behalf of the State raised before the Supreme Court was that since the Special Police Officers are receiving payments from the banks, they were not the employees of the Police Department. This plea was rejected by the Supreme court by holding that the appointment was made by the State, the disciplinary control vests with the State and hence the mere fact that the payment of wages came from the bank, at whose disposal the services of each of the appellants was kept, did not render them employees of those banks. The Supreme Court framed a question whether compelling the State of Punjab to create posts and absorb the appellants into the service of the State on a permanent basis would be consistent with the Constitution Bench judgment in Umadevi (1 supra). Referring to paragraph 4 of the judgment in Umadevi (1 supra), the Supreme Court observed that prohibition on regularization of temporary employees/daily wage workers was applicable to initial appointments having been made without following any rational procedure envisaged under the scheme of the Constitution in the matter of public appointments, and that if the initial appointment of the appellants can never be categorized as an irregular appointment, the judgment in Umadevi (1 supra) will not come in the way of issuing directions for regularization. The Court noted that under Section 17 of the Police Act, the Superintendent of Police is required to choose suitable Ex-servicemen or other able-bodied persons for being appointed as Special Police Officers and that therefore it is not a case where the appellants were arbitrarily chosen to the exclusion of other eligible candidates. The following observations in Nihal Singh (4 supra) are instructive.
31. Therefore, we are of the opinion that the process of selection adopted in identifying the appellants herein cannot be said to be unreasonable or arbitrary in the sense that it was devised to eliminate other eligible candidates. It may be worthwhile to note that in Umadevi (3) case, 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.
While rapping the Government of Punjab for exploiting temporary employees by paying a pittance, the Supreme Court observed that the judgment in Umadevi (1 supra) cannot become a licence for exploitation by the State and its instrumentalities. The Supreme Court directed the State of Punjab to regularize the services of the appellants before it by creating necessary posts within a period of three months. Thus, the judgment in Umadevi (1 supra) understood in the light of the judgment in Nihal Singh (4 supra) does not, in our opinion, disentitle the appellants at least to insist on their continuance so long as the posts are not permanently filled up, by paying fair remuneration, without being replaced by the persons with purported higher qualifications.
49. Though the counter affidavit averred and the learned Advocate General has pleaded that overwhelming public interest needs immediate replacement of Aarogya Mitras with better qualified persons, no material is filed by the respondents to show that the performance of the appellants is either poor or not upto the mark or that any complaints have been received from the beneficiaries under the scheme that due to lack of sufficient knowledge, the appellants are unable to handle the patients. It is not the pleaded case of the respondents that at any point of time they issued notices to the appellants about their below par performance. They have also not pleaded that they intend to create a permanent cadre of Vaidya Mitras prescribing higher qualifications. Indeed, we are at a loss to know as to what prevented the respondents from creating such cadre when the scheme is being continued for many years and there is no likelihood of its discontinuance in near future. The State cannot be permitted to play ducks and drakes with the unemployed youth by replacing one set of temporary employees with another set in an arbitrary and whimsical manner. While we do not intend to test the wisdom of the State in prescribing B.Sc. Pharmacy, M.Sc. Pharmacy, B. Pharmacy, D. Pharmacy, B.Sc., Medical Lab Technology with good academic record even for PHC Vaidya Mitras, we are unable to comprehend why the PHC Vaidya Mitras need to possess such qualifications when the duties they are required to discharge are completely non-technical in nature. The downloaded copy from the relevant website consisting of the Role of Aaroga Mitras in and outside the hospital extracted hereinbefore would clearly show that neither nursing nor pharmacy duties have been entrusted to them. It is inter alia stated in the website that in effect Aarogya Mitra has to act as a guide and friend for the prospective beneficiaries under the Aarogyasri Scheme. We cannot therefore completely ignore the submissions of the learned counsel for the appellants that prescription of higher qualifications was only a ruse for effecting wholesale change by discontinuing the personnel who were appointed during the previous dispensation. At any rate, the respondents cannot be permitted to discontinue the existing Aarogya Mitras unceremoniously, abruptly severing the master and servant relationship and ignoring their responsibility arising out of such relationship towards the appellants. Such an action, we have no doubt in our mind, constitutes patent arbitrariness and manifest violation of provisions of Articles 14 and 16 of the Constitution of India.
Position in the Telangana State
50. In contrast to its counterpart State, the State of Telangana has decided to continue Aarogya Mitras. In its 17th Meeting of the Board of Trustees of Aarogyasri Health Care Trust held on 22.02.2016, one of the decisions taken was to enhance the remuneration of its outsourced employees, including PHC Aarogya Mitras and Network Aarogya Mitras, to Rs.12,000/- per month. We have referred to this decision of the State of Telangana, being conscious of the fact that the Andhra Pradesh Government is not bound by this decision, but to highlight the disparity in treatment of the contract/outsourcing staff of the Trust between the two neighbouring States. Even according to the respondents as the scheme is included in Schedule X of the A.P. Reorganization Act, it is the joint responsibility of both the States to run the scheme. It is therefore natural for the appellants to suffer heartburn while comparing their position with that of their one time colleagues presently working in the State of Telangana. Though this factor has no bearing on our decision making, the same we felt is nevertheless relevant for a holistic adjudication of the dispute.
CONCLUSION AND THE RELIEF
51. On the analysis as above, we are of the opinion that the appellants are entitled to be continued as Aarogya Mitras with temporary status so long as the posts against which they are engaged remain within the sanctioned strength in terms of Clause III of G.O. Rt. No.4271, Finance (SMPC) Department, dt.01.11.2008 and process for filling up the posts on permanent basis is not initiated. The appellants are also entitled to receive the remuneration as revised from time to time under the extant GOs issued by the State for outsourced employees or the resolutions that may be passed by the Trust. If any of the appellants are found committing any misconduct or their services are found not satisfactory, the Trust shall be free to proceed against them by following the principles of natural justice. This judgment does not however preclude the Trust from creating additional posts and engaging personnel with higher qualifications to guide the appellants in rendering proper service to the beneficiaries under the scheme, nor it restrains the State and the Trust from engaging personnel with higher qualifications as Vaidya Mitras, if they so choose, as envisaged under the impugned G.O. without disturbing the appellants.
52. In the light of the above directions, we do not feel the necessity of setting aside the impugned G.O. in toto. We, however, hold that the impugned G.O. shall not operate to the detriment of the continuance of the appellants as Aarogya Mitras.
53. With the above observations and directions, W.A. No.437 of 2016 is dismissed as infructuous, all the remaining Writ Appeals are allowed to the extent indicated above and the orders impugned therein are set aside.
As a sequel to disposal of the writ appeals, pending miscellaneous petitions shall stand disposed of as infructuous.
__________________________ C.V. NAGARJUNA REDDY, J _________________________ G. SHYAM PRASAD, J 11-11-2016