Page 1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2323 OF 2013
(@ out of SPECIAL LEAVE PETITION (CIVIL) NO. 4669/2012 )
The Chief Executive Officer,
Pondicherry Khadi and Village
Industries Board and Anr. …Appellants
Versus
K. Aroquia Radja & Ors. …Respondents
With
CIVIL APPEAL NO. 2324 OF 2013
(@ out of SPECIAL LEAVE PETITION (CIVIL) NO. 4688/2012 )
The Pondicherry Khadi and Village
Industries Board and Ors. …Appellants
Versus
K. Aroquia Radja & Ors. …Respondents
J U D G E M E N T
H.L. Gokhale J.
Leave Granted in both these appeals.Page 2
2. Both these appeals raise the question as to
whether the employees who are appointed on a co-terminus
basis have any right to continue in service after the
cessation of the engagement of the person with whose
engagement their services were made co-terminus.
Facts leading to these appeals are this wise:-
3. The Pondicherry Khadi and Village Industries Board
(Board for short) is a statutory body corporate constituted
under Section 3 of the Pondicherry Khadi and Village
Industries Board Act, 1980 (Board Act for short). The board is
running various Khadi spinning/weaving/silk centers which
provide employment opportunities to a large number of
persons, particularly women. It runs several Khadi Bhandars
for the sale of Khadi and Village Industries goods produced
by the board. The board has 219 sanctioned posts at
various levels as approved by the Government of
Puducherry. It has framed Recruitment Rules/Standing
Orders with respect to each of these posts.
4. Government of India had issued Office
Memorandum dated 18.5.1998, wherein after referring to
the principles laid down by this Court in Excise
2Page 3
Superintendent Malkapatnam, Krishna District, A.P.
Vs. K.B.N. Visweshwara Rao and Ors. reported in 1996
(6) SCC 216 (which recognises the recruitment through the
employment exchanges as the principle mode of
recruitment), it was directed that all vacancies arising under
the Central Government Offices/establishments (including
quasi-government institutions and statutory organizations)
irrespective of the nature and duration (other than those
filled through UPSC), are not only to be notified, but also to
be filled through the Employment Exchange alone. Other
permissible sources of recruitment were to be tapped only if
the Employment Exchange concerned issued a Nonavailability Certificate. There can be no departure from this
recruitment procedure unless a different arrangement in this
regard has been previously agreed to in consultation with
the Department and the Ministry of Labour (Directorate
General, employment & Training). Similar instructions are
also in force requiring vacancies against posts carrying a
basic salary of less than Rs. 500/- per month in Central
Public Sector undertaking to be filled only through
Employment Exchange.
3Page 4
5. It so transpired that one Shri P. Angalan, assumed
the office of the Chairman of the Board on 12.7.2002, and he
desired engagement of certain persons as his personal staff.
There was no provision for any sanctioned post of personal
staff in the board, yet without obtaining the names
sponsored by the Employment Exchange, the said Chairman
engaged five persons as his personal staff viz. the four
respondents herein and one T. Kumar (since deceased).
6. In view of the persuasion of the said Chairman, the
Government of Puducherry issued general orders dated
13.2.2003 appointing the respondents on co-terminus basis.
They were appointed on fixed scale of pay. The appointment
orders of these respondents clearly stated that their service
shall automatically stand terminated, as soon as the tenure
of the Chairman is over. The government order approving
the appointment of these five persons read as follows:-
“GOVERNMENT OF PONDICHERRY
DEPARTMENT OF INDUSTRIAL DEVELOPMENT
(INDUSTRIES AND COMMERCE)
No. J.12014/5/2002/Ind. & Com.B Pondicherry, the 26
Mar 2003
To
The Chief Executive Officer,
4Page 5
Pondicherry Khadi and Village Industries Board,
Plot No. 1 & 2, Kamaraj Salai,
New Saram, Pondicherry
Sir,
Sub: DID (Ind & Com.) – Providing personal staff to
the Chairman of the Boards/CorporationsApproval-Conveyed
Ref:1 I.D. No.A.52011/1/2002/DP&AR/SSI (2)
Dated 13.02.2003 of the Department of Personnel
and
Administrative Reforms (Personnel Wing),
Pondicherry
2. Letter No. 1/516/2002/Estt-I dated 13.03.2003
from the Chief Executive Officer, Pondicherry
Khadi and Village Industries Board, Pondicherry
I am directed to invite a kind reference to the I.D. Note cited
under reference one above.
2. Approval of the Government is hereby conveyed for the
engagement of the following personal staff by the Chairman
of the Pondicherry Khadi and Village Industries Board on coterminus basis as requested in the reference second cited
above:-
Sl
.N
o
Name and Address Post Scale of
Pay
1. K.Aroquia Radja, S/o Kulandai
Raj,
No. 24, II Cross, Balaji Nagar,
Pondicherry-13
Stenograph
er
Rs. 4500-
125-7000
2. G. Ayappan, S/o Gangadharan,
No. 29, II Cross, Mariamman
Nagar, Karamanikuppan,
Pondhicherry-4
Personal
Clerk
Rs. 3050-
75-3950-
80-4590
3. T. Kumar, S/o Thiagarajan,
Thirupur Kumaran Street,
Manjolai, Ariyankuppam,
Pondicherry-7
Staff Car
Driver
Rs. 3050-
75-3950-
80-4590
5Page 6
4. P. Rajesekar, S/o
Puroshothaman,
No. 8, Main Road, C.N.
Palayam, Arumapathpuram
(P.O.) Villianur via,
Pondicherry-10
Peon Rs. 2550-
55-2660-
3200
5. S. Ramachandran, S/o
Subramani,
64, Gangai Amman Koil Street,
Pillaichavadi, Pondicherry-14
Peon Rs. 2550-
55-2660-
3200
3. These official’s services shall automatically stand
terminated as soon as the Chairman ceases to hold his post.
4. Further, it is also requested to send proposals for
incorporating the provision of personal staff to Chairman in
the Act/Rules of corporation immediately.
Yours faithfully
(P.M.Emmanuel)
Under Secretary to Govt. (Ind. & Com.)”
7. Based on the above order of approval, a separate
office order dated 26.3.2003 was issued concerning the
appointment of the five persons, containing the terms and
conditions which were as follows:-
“…….
TERMS AND CONDITIONS FOR ENGAGEMENT OF
PERSONAL STAFF ON CO-TERMINUS BASIS
1. The individual is engaged on co-terminus basis.
It means that the services of the individual
stands automatically terminated as soon as the
present Chairman ceases to hold his
post/ceases to be in the office of the Chairman.
2. The terms of this engagement will be coterminus basis and coincide with the tenure of
6Page 7
the Chairman of the Board or will be in force till
the Chairman requires his service whichever is
earlier. When the necessity for his services
ceases, his services stands terminated from this
office without any prior notice and he will not
have any claim for regular
appointment/absorption in Board’s service
whatever be the duration of services in the
office.
3. No pay fixation will be done for his
engagement. But the pay will be claimed on
per with the same post and scale of pay exists
in the government against which he is engaged
and he will earn increment, as per Rules, every
year in the time scale of pay in which he is
engaged.
4. No Act/Service Rules/Regulations will be made
applicable to the individual for claiming the
regular appointment in the Board. Because of
working in the Board on co-terminus basis, he
does not have any right for claiming regular
appointment in the Board.
5. The engagement is neither temporary/regular
no adhoc basis. It is only purely co-terminus
basis for the purpose of assisting the Chairman
till he hold his post.
6. Neither legal nor the Board Resolution to be
passed shall bind over orders issued to the
individual to make him as a regular employee in
the Board in future.
7. Because of working as on Co-terminus basis,
the Board will not give any preference for
selection to any post if any recruitment is made
in the future.
8. Whatever be the period the individual served in
the Board it will not be accounted for any
purpose.
9. The individual has no right to go to anywhere
viz. Higher Authority/Legal Authority to claim
the services put by him for regular
appointment.
7Page 8
10. The benefits enjoyed by the regular
employee will not be made applicable to the
individual engaged on co-terminus basis.
Procedure and rules followed for regular
employees will not be followed in the case of
Co-terminus basis engagement.
11. On humanitarian ground he will avail casual
leave, as Board thinks fit.
12. The individual may claim T.A on
humanitarian basis, if permitted to go on tour
by the Chairman since he has to incur
expenditures for undertaking tour. The services
will confine only to the office of the Chairman
and not to the Board.
13. The individual may claim O.T.A in connection
with official duty performed by him in the office
of the Chairman.
14. The individual is exempted from production
of Medical Certificate and Character and
Antecedents, since it is not a
regular/temporary/adhoc appointment selected
by the Board as per Recruitment
Rules/Recruitment Committee.
15. During the tenure of his service, if he is found
under any mis-conduct or involved in any type
of criminal case, his services will be forthwith
terminated without any notice.
16. No other service terms and conditions will be
made applicable to the individual except the
above said facilities O.T.A and O.T.A.
In the event of the candidate is accepting the
above terms and conditions for the co-terminus
engagement, he is directed to report for duty
before the undersigned with his Bio-data/other
testimonies not later than 10 days time of receipt
of this office order.
……..”
8. The board, after obtaining the approval from the
Government as above, issued the necessary appointment
8Page 9
orders on 22.1.2004 to the five persons concerned, engaging
them as personal staff retrospectively from 22.7.2002,
although making clear once again, therein, that these
appointments were on co-terminus basis. In spite of this
position, the then Chairman moved a resolution and got it
passed in the board on 31.8.2005, to send a proposal to the
Government for absorption of five personal staff in lieu of
vacant posts for the Governor’s approval. However, the
Government declined to approve the said proposal. The
Chairman, therefore, got another resolution passed in the
Board for absorption of the five persons on 17.2.2006. The
said Chairman thereafter forwarded a note containing 8
paragraphs to the Lt. Governor of Puducherry. Paragraphs 5
to 8 of this note read as follows:-
“5. Accordingly, a proposal was sent to
Government for absorption of the above five
personal staff taking in account the continuous
service of 3 ½ years and experience in the
respective posts. Whereas the proposal has not
been agreed to by the Government on the ground
that the above appointments were made on coterminus basis with the tenure of the Chairman.
6. Again the above subject matter was
discussed in the 50th Board meeting held on
17.02.2006, where it has been resolved as follows:
9Page 10
“The Board was informed that the
proposal sent earlier for absorption of
personal staff of the Chairman has not been
approved by the Government. However,
Chairman has desired to send a separate
note with necessary justification to
government, in relaxation of the existing
norms, for approval, as a special case. The
Board has endorsed the same.”
7. Considering the fact that the above
proposal involves no additional creation of posts
involving additional financial liability, the power of
the board to relax any of the provisions of
recruitment Rules, wherever it is felt necessary,
length of service put in by the above personal
staff and in the light of deliberation of the Board,
the Government is solicited to approve the above
proposal of absorption of the 5 personal staff of
the Chairman, in relaxation of existing norms, as a
special case.
8. Bio-data of the personal staff are placed
in the file for kind perusal.”
Paragraph 7 of the above note was approved by the then Lt.
Governor of Puducherry on 26.2.2006 in spite of the fact that
this time the note was not routed through the concerned
Administrative Secretariat, namely Department of Industrial
Development (Industries & Commerce), and Office of the
Chief Secretary of the Government of Puducherry.
9. It is relevant to note that earlier the services of
some other similarly situated temporary employees of the
Legislative Assembly Department, Puducherry were not
1Page 11
regularized and came to be terminated. On their termination
they had approached the Central Administrative Tribunal,
and their Original Applications were dismissed. Those orders
were confirmed by the High Court and by this Court by its
order 6.3.2006 in SLP (C) No. 7859-7877 of 2005 in the case
of Ilango & Ors. Vs. Union of India & Ors. It is also material
to note that a similar proposal for regularization of services
concerning other co-terminus employees, engaged by the
very Board, also came to be rejected by the Lt. Governor,
subsequently, on 17.6.2008.
10. The above proposal for absorption of these five
persons was kept in abeyance due to the declaration of
elections of the State Assembly of Puducherry in March
2006. The then Chairman P. Angalan resigned from his
chairmanship when his term expired on 16.4.2006, and
thereafter, alongwith him all the four respondents and above
referred T. Kumar were relieved from their services.
11. The respondents filed a Writ Petition nearly two
years later bearing No. 3181 of 2008 seeking a direction to
implement the resolution dated 17.2.2006 and the approval
dated 26.2.2006. In their Writ Petition they accepted in para
1Page 12
3 that they were appointed on co-terminus basis. In para 6
thereof, they stated that they were already dis-engaged
from their services after the resignation of the Chairman in
April 2006. In spite of these averments in the petition, a
Single Judge of the High Court of Madras relied upon the fact
that an approval had been given to their absorption, and the
issue was kept in abeyance only till the elections of the year
2006 were over, and two years had gone thereafter.
Therefore, the learned Single Judge by the order dated
26.2.2008, directed that the petitioner herein (which was the
respondent in that petition) shall act as expeditiously, as
possible, preferably within a period of 6 weeks from the date
of receipt of a copy of the order in accordance with the note
of approval. It is material to note that the petition was
disposed of at the admission stage itself, and the present
petitioner did not have any opportunity to file a reply to
place the necessary facts on record such as the recruitment
rules and the nature of respondents’ engagement.
12. In view of passing of this order the appellants filed
a Writ Appeal, bearing No. 1131 of 2011 before the Division
Bench of Madras High Court, and placed the necessary
1Page 13
material on record. Yet the Bench gave importance to the
fact that board had sought an approval from the Lt.
Governor of Pondicherry which had been granted.
Therefore, according to the Division Bench, there was no
error in the order of the Single Judge directing the
implementation of the decision of the board to absorb the
respondents herein. The appeal was consequently
dismissed.
13. In the meanwhile, the respondents filed another
Writ Petition bearing No. 13428 of 2010 since no order was
being passed by the Board with respect to their absorption in
spite of the order passed by the Single Judge in Writ Petition
No.3181 of 2008. During the pendency of this second Writ
Petition, the petitioner passed order dated 10.1.2011
rejecting the claim of the respondents. Therefore, the
respondents amended the second Writ Petition and
challenged this order dated 10.1.2011. This second Writ
Petition reached for hearing after the dismissal of the Appeal
Nos. 1131 of 2011 filed by the appellants herein. That being
so, the learned Single Judge who heard Writ Petition No.
13428 of 2010 allowed the same, and quashed the order of
1Page 14
10.1.2011, after referring to the dismissal of the Writ Appeal
filed by the appellants herein. Being aggrieved by the
judgment and order in that Writ Petition the appellants have
filed the second SLP (C) No.4688 of 2012 which has been
heard alongwith SLP (C) No.4669 of 2012 which has been
filed to challenge the order of the Division Bench in Writ
Appeal No.1131 of 2011. Both these appeal arising out of
these two SLPs have been heard and are being disposed off
together.
Consideration of the submissions of the rival
parties:-
14. The principle contention of the appellants is that
as seen from the above narration of facts, the engagement
of the respondents was clearly on a co-terminus basis.
There was no assurance to them that they will be continuing
in service after the tenure of the Chairman of the Board was
over. There are recruitment rules and a procedure by which
the employees under the Board are to be engaged. It was
submitted on behalf of the appellant that any departure
therefrom would mean allowing a back door entry in
Government Establishment / Quasi Government employment
1Page 15
which would be violative of Articles 14 and 16 of the
Constitution of India. As against this submission of the
appellant, it was pointed out by the respondents that in their
case there has been an approval by the Board and then by
the Lt. Governor. That being so, there was no reason to
interfere into the orders passed by the Division Bench as
well as by the Single Judge in the two matters before us
directing implementation .
15. We have noted the submissions of counsel for both
the parties. It is very clear from the narration of facts as
above that the respondents were engaged only because
their names were sponsored by the then Chairman of the
Board. They have not come into the service either through
the Employment Exchange or through any procedure in
which they were required to compete against other eligible
candidates. It is also seen that the proposal which was sent
to the Governor for his approval was not sent through the
normal routine of the concerned Administrative machinery,
and through the Chief Secretary of Puducherry. Since the
proposal was not routed through the normal channel of
administration, the factual position with respect to the
1Page 16
irregular employment of the respondents could not be
placed before the Governor. The relevant facts such as
those relating to their initial engagement, availability of
sanctioned posts in the same category in the Board, relevant
rules for engagement of the employees etc. could also not
be placed before the Governor. Even so the proposal itself
recorded that the respondents had put in just 3½ years of
service, and the proposal to regularize them had been once
turned down by the Government. Section 15 of the Board
Act clearly laid down that the Board was bound by the
directions given by the Government in the performance of its
function under the Act. The Governor was not supposed to
act on his own, but with the aid and advice of the Council of
Ministers. The question as to whether it will result into
creation of additional posts and additional financial liability
was required to be referred to the Government. Besides, the
resolution only recorded the request of the Chairman in that
behalf. It was not a resolution of the Board approving
regularization or relaxing the existing norms, as a special
case.
1Page 17
16. The learned Single Judge allowed the Writ Petition
No.3181 of 2008 at the admission stage itself without
affording an opportunity to the appellants to place these
relevant facts before the Court, which led to an erroneous
decision. If the petition was to be allowed, the least that was
expected was to permit the respondents to the petition to
file their response, and then take the decision one way or
the other. Again the Division Bench also did not look into the
substantive issue before it although the relevant material
was placed before the bench in the writ appeal. The learned
Single Judge who heard the second writ petition merely
followed the decision of the Division Bench in writ appeal.
17. The learned Single Judge who heard the Writ
Petition No.3181 of 2008 and also the Division Bench which
heard the writ appeal could not have ignored that the
respondents were clearly told that their services were coterminus, and they will have no right to be employed
thereafter. Condition No.4 and 6 of the earlier referred
terms and condition are very clear in this behalf. The
respondents had taken the co-terminus appointment with
full understanding. It was not permissible for them to
1Page 18
challenge their dis-engagement when the tenure of the
Chairman was over. What a Constitution Bench of this Court
has observed in paragraph 45 of Secretary, State of
Karnataka and Ors. Vs. Umadevi (3) and Ors. reported
in 2006 (4) SCC 1, is quite apt. The said para reads as
follows:-
“45. While directing that appointments,
temporary or casual, be regularised or made
permanent, the courts are swayed by the fact that
the person concerned has worked for some time
and in some cases for a considerable length of
time. It is not as if the person who accepts an
engagement either temporary or casual in nature,
is not aware of the nature of his employment. He
accepts the employment with open eyes. It may
be true that he is not in a position to bargain—not
at arm's length—since he might have been
searching for some employment so as to eke out
his livelihood and accepts whatever he gets. But
on that ground alone, it would not be appropriate
to jettison the constitutional scheme of
appointment and to take the view that a person
who has temporarily or casually got employed
should be directed to be continued permanently.
By doing so, it will be creating another mode of
public appointment which is not
permissible………”
18. As stated by this Court in Umadevi (supra),
absorption, regularization or permanent continuance of
temporary, contractual, casual, daily-wage or adhoc
1Page 19
employees appointed/recruited and continued for long in
public employment dehors the constitutional scheme of
public employment is impermissible and violative of Article
14 and 16 of the Constitution of India. As recorded in
paragraph 53 of the report in SCC, this Court has allowed as
a one time measure, regularization of services of irregularly
appointed persons, provided they have worked for ten years
or more in duly sanctioned posts.
That is also not the case
in the present matter.
19. In another judgment of this Court in State of
Gujarat and Anr. Vs. P.J. Kampavat and Ors. reported in
1992 (3) SCC 226, this Court had occasion to look into a
similar situation.
That was a case where persons concerned
were appointed directly in the office of the Chief Minister on
purely temporary basis for a limited period up to the tenure
of the Chief Minister.
This Court held that such an
appointment was purely a contractual one, and it was coterminus with that of the Chief Minister’s tenure, and such
service came to an end simultaneously with the end of
tenure of the Chief Minister. No separate order of
1Page 20
termination or even a notice was necessary for putting an
end to such a service.
20. We have to note that
in the present case the
M.L.A. concerned was to function as the Chairman during the
course of his tenure as an M.L.A., and had resigned with the
announcement of the election for the state assembly. A
proposal for regularization of the co-terminus employees
appointed by him was directly sent to the Governor without
the same being routed through the State Government.
Similar such proposals have come to be rejected.
As
observed by this Court in Union of India Vs. Dharam Pal
reported in 2009 (4) SCC 170, the requirement of being
employed through proper channel could not be relaxed in an
arbitrary and cavalier manner for the benefit of a few
persons. This would be clearly violative of Articles 14 and 16
of the Constitution of India.
21. This being the scenario, the learned Single Judge
as well as the Division Bench, and the subsequent learned
Single Judge have erred in passing the orders that they have.
The High Court has erred in deciding Writ Petition No.3181 of
2008 by directing the board to implement the
2Page 21
resolution/note issued by the Chairman and approved by the
Governor. The Division Bench has also erred in leaving the
order passed by the learned Single Judge in that petition
undisturbed. So has the learned Single Judge erred who
heard the second Writ Petition.
22. For the reasons stated above both these appeals
are allowed, and the impugned judgments and orders in Writ
Appeal No. 1131 of 2011 as well as one in Writ Petition No.
3181 of 2008 and Writ Petition No. 13428 of 2010 are setaside. Writ Petition No. 3181 of 2008 and 13428 of 2010
shall stand dismissed. Consequently the Interim Applications
in both these appeals, and the Contempt Petition No.1841 of
2011 filed by the respondent in the Madras High Court will
also stand disposed of. In the facts of the present case we
do not pass any order as to the costs.
……..………………..……..J.
[ G.S. Singhvi]
………………………..…..J.
[ H.L. Gokhale ]
……………………………..J.
2Page 22
[Ranjana Prakash
Desai]
New Delhi
Dated : March 12th, 2013
2
