1999 JTR(SC) 144
1999 AIR(SC) 923 ; 1999 AIR(SCW) 487 ; 1999 3 ALT(SC) 53 ; 1999 1 CLR 849 ; 1999 81 FLR 645 ; 1999 1 JT 278 ; 1999 LIC 1106 ; 1999 2 LLN 35 ; 1999 1 Scale 256 ; 1999 2 SCC 317 ; 1999 SCC(L&S) 551 ; 1999 1 SCR 408 ; 1999 3 SCT 294 ; 1999 3 SCT 766 ; 1999 1 SLR 636 ; 1999 1 UJ 304 ; 1999 2 UPLBEC 889 ; 1999 KHC 991 ; 1999 1 Supreme 355
1999(1) Supreme 355
Supreme Court of India
(From Rajasthan High Court)
Mrs. Sujata V. Manohar & R.C. Lahoti, JJ.
Rajendra & Ors. etc. -Appellants
versus
State of Rajasthan & Ors. -Respondents
Civil Appeal Nos. 5476-83 of 1998
With
Civil Appeal Nos. 5484-5494 of 1998
With
Writ Petition (C) No. 540 of 1998
Decided on 5-2-1999
Counsel for the Parties :
For the Appellants : V.A. Mohta, Sr. Advocate, Kailash Vasdev, Advocate.
For the Appellant/Petitioner in C.A. Nos. 5484-94/98 and W.P. No. 540/98 : Surya Kant, Advocate.
For the Respondents : Aruneshwar Gupta and S.N. Rath, Advocates.
Important Point
When the posts temporarily created for fulfilling the needs of a particular project or scheme limited in its duration come to an end on account of the need for the project itself having come to an end either because the project was fulfilled or had to be abandoned wholly or partially for want of funds, the employer cannot by a writ of mandamus be directed to continue employing such employees as have been dislodged because such a direction would amount to requisition for creation of posts though not required by the employer and finding such posts though the employer did not have the funds available for the purpose.
Act
Referred
:CONSTITUTION OF INDIA : Art.12
INDUSTRIAL DISPUTES ACT : S.2(j)
SERVICE LAW : .
(A) The Societies Registration Act, 1860 read with the Industrial Disputes Act, 1947 (Section 2(j)) and the Constitution of India (Article 12) are the primary statutory lenses through which this case must be viewed. The impugned appointments were made by District Rural Development Agencies (DRDAs) established under the Societies Registration Act, 1860 as instrumentsality of the State of Rajasthan, bringing them within the definition of 'State' under Article 12. The dispute arises from the termination of employees serving under temporary posts created under State-funded rural development schemes, where the DRDAs, being agencies of the State and 'industry' under Section 2(j) of the Industrial Disputes Act, 1947, were subject to the procedural and substantive requirements of that statute, even though the ultimate decision to abolish the posts was taken by the Government. The constitutional validity of the termination is tested against Article 12's guarantee against arbitrary State action.
(B) Key legal principles include: temporary employment under developmental schemes does not confer a fundamental right to regularisation; employment under such schemes is contingent on the availability of funds and lasts only for the scheme's duration; an expert committee's recommendation based on administrative and financial considerations attracts judicial deference; where post-abolition no vacancies exist, the doctrine of last-come-first-go does not apply; and the State cannot be compelled via writ of mandamus to create fresh posts to absorb employees displaced by bona fide rationalisation.
Facts of the case:
The State of Rajasthan, through 33 District Rural Development Agencies (DRDAs), appointed temporary employees under centrally sponsored poverty alleviation and rural development schemes funded entirely by the State. In 1992, the Government abolished 273 posts based on the recommendations of the Rajender Jain Committee, leading to termination of several employees classified as Class-III and Class-IV. Petitions were filed challenging the termination on grounds including lack of compliance with the Industrial Disputes Act, 1947, and the right to be accommodated in other DRDAs or regularised by the State Government.
Findings of Court:
The court held that the DRDA Societies were instrumentalities of the State and 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947. It found that the decision to abolish the posts was a bona fide administrative decision taken after due application of mind by an expert committee, based on financial and rationalisation considerations. The court observed that the employees were appointed on a temporary basis with clear understanding that the appointments were non-transferable and existed only for the limited duration of the schemes. It further held that mandating creation or absorption of posts would amount to compelling the State to fund non-existent positions, which is impermissible. No material was placed on record to show that new vacancies had been created to absorb the petitioners, and the State's affidavit indicated that absorption was not feasible.
Issues:
Whether temporary employees appointed under State-funded rural development schemes through DRDAs, held to be 'industry' under the Industrial Disputes Act, 1947, have a right to regularisation or restoration of service after the posts are abolished on grounds of financial constraints and administrative rationalisation. Whether the High Court was correct in setting aside the termination orders and directing reconsideration of absorption, and whether the State is under a writ obligation to accommodate such employees in other departments or DRDAs.
Ratio Decidendi:
Appointments under temporary developmental schemes do not give rise to a legal right to regularisation or restoration after the scheme ends; judicial intervention cannot compel the State to create or restore posts when funding and administrative rationale have changed, and the decision to abolish posts based on an expert committee's recommendation is entitled to respect unless mala fide or without material consideration.
Result:
The appeals and writ petition are dismissed.
(A) The Societies Registration Act, 1860 read with the Industrial Disputes Act, 1947 (Section 2(j)) and the Constitution of India (Article 12) are the primary statutory lenses through which this case must be viewed. The impugned appointments were made by District Rural Development Agencies (DRDAs) established under the Societies Registration Act, 1860 as instrumentsality of the State of Rajasthan, bringing them within the definition of 'State' under Article 12. The dispute arises from the termination of employees serving under temporary posts created under State-funded rural development schemes, where the DRDAs, being agencies of the State and 'industry' under Section 2(j) of the Industrial Disputes Act, 1947, were subject to the procedural and substantive requirements of that statute, even though the ultimate decision to abolish the posts was taken by the Government. The constitutional validity of the termination is tested against Article 12's guarantee against arbitrary State action.
(B) Key legal principles include: temporary employment under developmental schemes does not confer a fundamental right to regularisation; employment under such schemes is contingent on the availability of funds and lasts only for the scheme's duration; an expert committee's recommendation based on administrative and financial considerations attracts judicial deference; where post-abolition no vacancies exist, the doctrine of last-come-first-go does not apply; and the State cannot be compelled via writ of mandamus to create fresh posts to absorb employees displaced by bona fide rationalisation.
Facts of the case:
The State of Rajasthan, through 33 District Rural Development Agencies (DRDAs), appointed temporary employees under centrally sponsored poverty alleviation and rural development schemes funded entirely by the State. In 1992, the Government abolished 273 posts based on the recommendations of the Rajender Jain Committee, leading to termination of several employees classified as Class-III and Class-IV. Petitions were filed challenging the termination on grounds including lack of compliance with the Industrial Disputes Act, 1947, and the right to be accommodated in other DRDAs or regularised by the State Government.
Findings of Court:
The court held that the DRDA Societies were instrumentalities of the State and 'industry' within the meaning of Section 2(j) of the Industrial Disputes Act, 1947. It found that the decision to abolish the posts was a bona fide administrative decision taken after due application of mind by an expert committee, based on financial and rationalisation considerations. The court observed that the employees were appointed on a temporary basis with clear understanding that the appointments were non-transferable and existed only for the limited duration of the schemes. It further held that mandating creation or absorption of posts would amount to compelling the State to fund non-existent positions, which is impermissible. No material was placed on record to show that new vacancies had been created to absorb the petitioners, and the State's affidavit indicated that absorption was not feasible.
Issues:
Whether temporary employees appointed under State-funded rural development schemes through DRDAs, held to be 'industry' under the Industrial Disputes Act, 1947, have a right to regularisation or restoration of service after the posts are abolished on grounds of financial constraints and administrative rationalisation. Whether the High Court was correct in setting aside the termination orders and directing reconsideration of absorption, and whether the State is under a writ obligation to accommodate such employees in other departments or DRDAs.
Ratio Decidendi:
Appointments under temporary developmental schemes do not give rise to a legal right to regularisation or restoration after the scheme ends; judicial intervention cannot compel the State to create or restore posts when funding and administrative rationale have changed, and the decision to abolish posts based on an expert committee's recommendation is entitled to respect unless mala fide or without material consideration.
Result:
The appeals and writ petition are dismissed.
Judgment
R.C. Lahoti, J.-In the early eighties, the Government of Rajasthan introduced various programmes and allied schemes for poverty elimination, employment generation etc. It brought into existence bodies known as District Rural Development Agencies (hereinafter referred to as ‘DRDAs’) registered under the Societies Registration Act, 1860. The main object of these agencies was to plan and administer the area development programme aiming at integrated Rural Development. In the year 1992, these DRDAs were concerned with the following schemes:
Limit of Admn. Expenses
(i) I.R.D.P. (Antyodaya) 10.15%
(ii) Desert Development Programme 5%
(iii) Jawahar Rozgar Yojna 2%
(iv) Indira Avas Yojna 2%
(v) Apna Gaon Apana Kam 2%
(vi) Bio-gas Plants -
(vii) Development of Women and Children of Rural Areas. -
2. The main object of the Agencies was to implement such Schemes and to identify beneficiaries including small and marginal farmers, agricultural labourers and other persons eligible for assistance under these Schemes. The agencies also co-ordinated execution of these plans for the benefit of the identified participants through the existing agencies engaged in this direction in the field whether private, public or co-operative. Each District Rural Development Agency was an independent entity with a District Collector as ex-officio Chairman and a Project Director as the Chief Executive Officer.
3. There are 33 districts in the State of Rajasthan and as such there were 33 DRDAs in the State with an ex-officio Chairman and a Project Director. Subject to the allocation of the fund by the State of Rajasthan to each DRDA for implementation of particular scheme, persons were employed on various posts pursuant to the State Rural Development Agency Employees Service Regulation, 1983. Each DRDA was an independent Agency located in each district. The appointments were made locally and seniority of the employees was also maintained on district basis. There was no inter se seniority. The jobs were not interchangeable or transferable from one DRDA to another. The services of the employees strictly depended on funds made available to individual DRDA for implementating its scheme for only a fixed administrative expenses were met out of the same.
4. In the year 1992, looking to the availability of the funds, the Government of Rajasthan took a decision to abolish 273 posts in the entire State of Rajasthan belonging to different DRDAs. The DRDAs were accordingly informed. This led to termination of several LDCs, and Class-IV (Peons). The petitioners in Civil Appeal Nos. 5476-83 of 1988 and Civil Appeal Nos. 5484-5494 of 1988 are such Class-III and Class-IV employees.
5. Several petitions were filed before the High Court of Rajasthan challenging such termination of the employees. The principal grounds of challenge were that the petitioners having been appointed regularly against different posts, their services could not have been so terminated unceremoniously; that the petitioners though outwardly appointed in several societies were in fact the employees of the State Government inasmuch as their salaries were being paid from the funds made available by the State Government and even if the need for such employment had come to an end with the societies, there were several vacancies available with the State Government against which the petitioners could have been accommodated and regularized; that the DRDA was ‘industry’ within the meaning of Section 2(j) of the Industrial Disputes Act, 1947 and yet the provisions of Section 25-F were not complied with and so the termination was bad; and that the rule of ‘last-come-first-go’ was not followed.
6. The learned Single Judges before whom came up the petitions for hearing allowed the same and several orders of termination were directed to be quashed. The State of Rajasthan, as well as the Societies preferred writ appeals which were heard by a Division Bench and have been allowed reversing the Single Bench decisions. The aggrieved petitioners have come up to this court. The learned Single Judges and the Division Bench have both held that the DRDA Societies were instrumentalities of the State within the meaning of Article 12 of the Constitution and hence amenable to writ jurisdiction of the High Court. This finding has not been assailed before this Court, being unnecessary in the submission of the learned counsel for the State of Rajasthan, and hence we express no opinion thereon. So also neither the Single Judge nor the Division Bench has held the DRDA Society to be an ‘industry’ for the purpose of the Industrial Disputes Act, 1947. This finding is also not assailed before us.
7. A perusal of the judgments of the Learned Single Judge and the Division Bench goes to show that the Learned Single Judge allowed the writ petition solely on the ground that though the petitioners were employees of the DRDA Societies which were independent bodies, the decision to abolish the posts and consequently to terminate the employment of the petitioners was taken by the State Government which was followed by the societies without any application of mind of their own. Inasmuch as the Societies terminated the employment of the petitioners at the behest of the State Government and not on their own, the decision was vitiated. Having so set aside the orders of termination, the learned Single Judge left it open to the DRDAs concerned to take decision afresh after properly applying mind to the financial and administrative aspects of the case. In the event of the services of the employees of the DRDAs being terminated after following the directions of the High Court, the State Government was advised to consider the absorption of the petitioners in various other departments if State Government by practice was doing so. The Division Bench has differed with the Learned Single Judges and therefore set aside their decisions.
8. Having heard the learned counsel for the parties, we are of the opinion that these appeals are wholly devoid of any merit and hence are liable to be dismissed. It is not disputed that the employment was given to the petitioners under various schemes framed by the State of Rajasthan and entrusted to the DRDA Societies for implementation. The societies did not have any funds of their own. The funding was hundred percent by the State of Rajasthan. One Rajender Jain Committee was constituted in the year 1992 to review several decisions taken regarding various schemes of S.S. and I.R.D. which recommended that out of the then 1339 posts in the DRDAs under various schemes, 338 posts needed to be abolished and 112 new posts deserved to be provided under various schemes. The 338 abolished posts included 19 posts of UDCs, 43 posts of LDCs, and 24 posts of Class-IV. The newly created 112 posts did not include any posts of UDCs, LDCs and Class-IV.
9. Several appointment letters filed on behalf of the petitioners themselves go to show that the appointments were made by District Rural Development Agencies. There is no material brought on record to hold that the societies were merely a veil but the real employer was the State of Rajasthan. The appointment letters clearly go to show that the petitioners were appointed as temporary LDCs/Class-IV employees for a period of six months or date of expiry of the posts whichever was earlier. The foot-notes inserted in the letters of appointment stated that the appointment was purely temporary and the services of the agency were not transferable in any other department of the Government though the period of appointment would be extended after putting in satisfactory service during the period of initial appointment i.e. six months. Such appointments were extended from time to time but on similar terms and conditions. Inasmuch as the need for the work for partially over and the Government was finding it difficult to provide funds for administrative expenses which it found to be non-productive and unnecessary, an expert committee was appointed to review the situation. Decision for abolition of posts was taken consistently with the findings and recommendations of such committee.
10. In our opinion, the decision of this Court in Delhi Development Horticulture Employees’ Union v. Delhi Administration, Delhi & Ors.1 clinches the issue. It was a case of a temporary employment provided to the petitioners therein under Jawaharlal Nehru Rozgar Yojna. It was held that the right to livelihood was found not feasible to be incorporated as a fundamental right in the Constitution and therefore the employment was also not guaranteed under the constitutional scheme. Employment schemes were brought into being consistently with the limited resources available at the disposal of the State. It was further held:
“To get an employment under such scheme and to claim on the basis of the said employment, a right to regularisation is to frustrate the scheme itself. No Court can be a party to such exercise. It is wrong to approach the problems of those employed under such schemes with a view to providing them with full employment and guaranteeing equal pay for equal work. These concepts, in the context of such schemes are both unwarraned and misplaced. They will do more harm than good by depriving the many of the little income that they may get to keep them from starvation. They would benefit a few at the cost of the many starving poor for whom the schemes are meant. That would also force the State to wind up the existing schemes and forbid them from introducing the new ones, for want of resources. This is not to say that the problems of the unemployed deserve no consideration or sympathy. This is only to emphasise that even among the unemployed a distinction exists between those who live below and above the poverty line, those in need of partial and those in need of full employment, the educated and uneducated, the rural and urban unemployed etc.”
11. In Sandeep Kumar & Ors. v. State of Uttar Pradesh & Ors.2 there were employees working on project of slum clearance. The project was for a particular purpose and there was no permanent need for work. The employment having been brought to an end and the terminations having been subjected to challenge, it was held that a direction as to regularisation of services of such employees could not be given. In State of Himachal Pradesh v. Ashwani Kumar & Ors.3 a project had to be closed down for non-availability of funds. It was held that a direction to regularise the displaced employees of the project could not be given because such direction would amount to creating posts and continuing them in spite of non-availability of work. So is the view taken in State of U.P. & Ors. v. U.P. Madhyamik Shiksha Parishad Shramik Sangh & Anr.4.
12. In the cases at hand, on Special Leave Petitions being filed, by interim orders passed by this Court the employment of the petitioners was protected and they were continued in service. In its concerns for the employees, the court directed the State of Rajasthan to examine the possibility of absorption of the petitioners if necessary by shifting them to other DRDAs and to indicate a scheme/roster for absorption/appointment. The court also at one stage adjourned the hearing in these matters to enable the respondent-State to frame a scheme, if any, so as to absorb the petitioners. An additional affidavit has been filed on behalf of respondent-State on 6.10.98 setting out the relevant facts and circumstances and explaining why the posts earlier held by the petitioners were abolished and how and why presently there were no posts available against which the petitioners could be accommodated or absorbed. However, at the end, the respondent-State has made a statement (vide para 9 of the affidavit dated 6.10.1998) which reads as under:
“In view of the facts mentioned above and after evaluating the fact that the number of person working are already in excess to the posts existing in the DRDAs in the above mentioned categories, it is submitted that there is no scope of adjusting/absorbing persons for the present, however in case if additional posts are created in future due to some new schemes/programmes, the petitioners and similarly situated persons can be given preference according to their seniority subject to eligibility after giving relaxation of age.”
13. In our opinion, when the posts temporarily created for fulfilling the needs of a particular project or scheme limited in its duration come to an end on account of the need for the project itself having come to an end either because the project was fulfilled or had to be abandoned wholly or partially for want of funds, the employer cannot by a writ of mandamus be directed to continue employing such employees as have been dislodged because such a direction would amount to requisition for creation of posts though not required by the employer and funding such posts though the employer did not have the funds available for the purpose. The decision taken by the respondent-State to abolish the posts was a bona fide decision taken after due application of mind by appointing an Expert Committees which went deep into all relevant considerations and made recommendations in the interest of rationalization. The decision is based on administrative and financial considerations. There is nothing wrong in the societies having acted on the policy decision of the State Government. Really speaking there was hardly anything left to be done by the DRDA societies at their own end. Inasmuch as the societies did not have any funds of their own independent of those made available by the State Government how could the societies have continued with the posts and the incumbents thereon though they were left with no means to pay salaries attaching with the posts.
14. An attempt was made by the petitioners to bring in some new material on record to raise a plea that a few years after the abolition of the posts, the respondents have opened new avenues of employment where against the petitioners could be accommodated. The respondents have disputed such stand taken on behalf of the petitioners. We find it difficult to entertain such plea taken at this stage and sustain the same when no reliable material has been placed before us to uphold such plea of the petitioners. In fact a similar attempt was made before the Division Bench also by the petitioners moving an application for review of the judgment of the Division Bench but the review, petition was dismissed by the Division Bench forming an opinion that a new plea was not open for consideration in review jurisdiction of the court and if at all there was any substance in such plea of the petitioners then it provided a new cause of action enabling the petitioners to file a fresh petition. In our opinion, the Division Bench was right in taking the view which it did. From the affidavit filed on behalf of State of Rajasthan and the figures placed before us in the form of a tabular statement we are satisfied that the State has already made effort at accommodating dislodged employees of one DRDA in other DRDAs as far as possible. There are no transferees/deputationists from Government occupying posts meant for LDCs or Class-IV in DRDAs and therefore the petitioners’ plea that they may be accommodated by repatriating such governmental employees has no merit and no foundation.
15. We do not find any reason to interfere with the well considered judgment of the Division Bench of the High Court. In our opinion, these appeals are liable to be dismissed and are dismissed accordingly subject to the observation that the petitioners must feel satisfied with the stand taken by the State Government in the affidavit dated 6.10.1998 filed on its behalf, the relevant extract wherefrom has been reproduced in para 12 above. Subject to this observation C.A. 5476-83 of 1988 and CA 5484-94 of 1988 are dismissed.
16. Writ Petition (Civil) No. 540 of 1998 was filed by Rafiq Ahmad and others who were working as bio-gas mistry Grade-II under DRDAs and their employment was also terminated consequent upon a decision taken to abolish the posts of Bio-Gas Mistries Grade-II. This writ petition was simply retained for hearing with the appeals dealt with hereinabove. As we have found the petitioners in the civil appeals not entitled to any relief, for the same reasons the petitioners in Writ Petition (C) No. 540 of 1998 also are held not entitled to any relief. The petition is dismissed subject to the observation that in the event of any additional posts being created in future due to some new schemes/programmes being introduced, the petitioners herein may be given preference according to their seniority subject to eligibility after giving relaxation of age in view of the service so far rendered by each one of them in the DRDAs.
(C.R.) Appeals and writ petition dismissed.
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