PAY SLIPS FOR IRLA OFFICERS

Dear friends, at long last IRLA has re-organised  their web site...you can get your payslips from the below given address...  http://paoirla.org    sign in  with your irla number as user name, & date of birth as password (eg.if irla number is 13112, that is your user name & if your date of birth is  14/12/1967, sign with month/date/year....ie, 12/14/1967.....all the best

Fraud Appointments judgements

IN THE SUPREME COURT OF INDIA


CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3702 OF 2006

A. Manjula Bhashini & others …..Appellant (s)

Versus

The Managing Director, A.P. Women’s .....Respondent (s)

Cooperative Finance Corporation Ltd.

and another

With C.A. Nos.3685 of 2006, 3703 of 2006, 3704 of 2006, 3705 of 2006, 3706 of 2006, 3707 of 2006,

3709 of 2006, 3710 of 2006, 3712 of 2006, 3713 of 2006, 3714 of 2006, 3715 of 2006, 3716 of 2006, 3717

of 2006, 3718 of 2006, 3721 of 2006, 3723 of 2006, 3724 of 2006, 3726 of 2006, 3727 of 2006, 3728 of

2006, 3729 of 2006, 3730 of 2006, 3731 of 2006, 3732 of 2006, 3733 of 2006, 3734 of 2006, 3737 of

2006, 3742 of 2006, 3744 of 2006, 3748 of 2006, 3749 of 2006, 3750 of 2006, 3751 of 2006, 3752 of

2006, 3753 of 2006, 3754 of 2006 and 3755 of 2006.

J U D G M E N T

G.S. Singhvi, J.

1. Whether the persons employed on daily wage basis or nominal muster roll or

consolidated pay or as contingent worker on full time basis in different departments of the

Government of Andhra Pradesh and its agencies/instrumentalities are entitled to be regularised in

service on completion of 5 years and whether amendments made in the Andhra Pradesh (Regulation

of Appointments to Public Services and Rationalization of Staff Pattern and Pay Structure) Act,

1994 (for short ‘the 1994 Act’) by Amendment Act Nos.3 and 27 of 1998 are ultra vires the

provisions of the Constitution are the questions which arise for determination in these appeals, some

of which have been filed by the State Government and its agencies/instrumentalities and some have

been filed by the employees, who could not convince the Andhra Pradesh Administrative Tribunal

(for short “the Tribunal”) and/or the High Court to accept their prayer for issue of a mandamus to

the concerned authorities to regularise their services.2. In 1970s, 80s and early 90s, the country witnessed an unusual phenomena in the field of

public employment. Lakhs of persons were engaged/employed under the Central and State

Governments in violation of the doctrine of equality enshrined in Articles 14 and 16 of the

Constitution, Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 (for short

‘the 1959 Act’) and the rules framed under proviso to Article 309 of the Constitution. The officers

who were entrusted with the task of making appointments on Class III and Class IV posts misused

their power and employed their favourites or all those who enjoyed political power without

considering the claims of other similarly situated persons. For avoiding compliance of the mandate

of the equality clause enshrined in the Constitution and other statutory provisions, the empowered

authorities resorted to the mechanism of employing the persons of their choice on daily wages or

nominal muster roll or contract or part time basis with the hope that on some future date the

Government will frame policy for regularisation of such employees. In this manner, nepotism,

favoritism and even corruption became hallmark of the appointments and a huge illegal employment

market developed in the country, a fact of which cognizance was taken by this Court in Delhi

Development Horticulture Employees’ Union v. Delhi Administration [(1992) 4 SCC 99].

3. State of Andhra Pradesh was no exception to the aforementioned malady. Thousands of

persons were employed in different departments of the Government and agencies/instrumentalities

of the State on daily wages or nominal muster roll or consolidated pay or part time basis. In some

cases, employment was given despite the fact that sanctioned posts were not available. Even if the

posts existed, the concerned authorities neither issued advertisement nor sent requisition to the

employment exchange(s) and made appointments in complete disregard of Articles 14 and 16 of the

Constitution and the relevant statutory provisions including the 1959 Act depriving thousands of

unemployed persons of their right to be considered for appointment to public posts/offices.

4. In order to check the menace of irregular appointments, which was creating unwarranted

financial burden on the State, and, thereby adversely affecting the welfare schemes and developmentprogrammes and also causing dissatisfaction among the members of younger generation who were

denied the right of consideration for appointment, the Government of Andhra Pradesh decided to

bring a legislation for totally banning appointment on daily wages, regulating appointment on

temporary basis and for rationalisation of staff pattern and pay structure. In furtherance of that

decision, the Governor of Andhra Pradesh promulgated the Andhra Pradesh (Regulation of

Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Ordinance,

1993. The same was published in the State Gazette dated 25.11.1993. The Ordinance was replaced

by the 1994 Act, which was enforced with effect from 25.11.1993. The State Government’s

determination to curb irregular appointments and reduce burden on the State exchequer is clearly

reflected in the statement of objects and reasons contained in the bill presented before the legislative

assembly, the relevant portions of which are extracted below:

“…………The number of employees has been increasing at an enormous rate. The

census of Government employee conducted by the State Government in 1976, 1981

and 1988 and as projected in 1993 shows that the number of employees of the

Government, Universities, Institutions receiving Grant-in-Aid and Public Sector

Undertakings, Local Bodies has increased from 6.78 lakhs in 1976 to 12.34 lakhs in

1993 which constituted an increase of 82%. Out of this, the employees of the

Departments of the State alone increased from 2.85 lakhs to 5.56 lakhs representing an

increase of 95%. The Public Sector Undertakings grew at 128% from 1.44 lakhs to

3.28 lakhs. Among the Government employees and Local Body employees, the class

IV and other categories constitute about 41%.

The expenditure particulars show that the amount spent on the salaries,

allowances and pension of Government employees, Panchayat Raj employees,

employees paid out of the Grant-in-Aid, amounts to a figure of Rs.4277 crores in 1993-

94 salaries on the due dates. Government considers that it is not fair that people’s

interest should be neglected and even sacrificed by not taking up schemes just to pay

salaries to its employees.

In addition to the salary and pension commitment there is a heavy debt

servicing burden on the Government. The debt also has been increasing from year to

year. In 1983 the total outstanding debt was Rs.2543 crores. It has now reached

Rs.10970 crores during 1993-94. At present, the Government are paying as much as

Rs.1012 crores for payment of interest and Rs.330 crores for repayment of principal

amount every year. The total amount of non-plan items of expenditure in 1993-94 is

amounting to Rs.6222 crores, which cannot be avoided. The Government are not able

to complete a number of Irrigation Projects and Power Projects because of lack of

funds. For the same reason productive assets like completed irrigation projects and

roads are not being properly maintained resulting in wastage of assets whose

replacement will cost several hundreds of crores of rupees. At present, the

Government are spending 81% of the debt they receive from the Government of India,

Market borrowings and all other categories of loans for repayment; which means only

19% of the total debt is being added to our resources. But it is estimated that fromnext year onwards the repayment will be more than the debt receipts. If the

Government are caught in such a debt trap the amount available to the State

Government will be limited to its own tax and non-tax revenues and the devolutions

from the Government of India. The devolutions expected from the Government of

India is about Rs.1698 crores in 1993-94. Since the expenditure on establishment is

already 105% of the own tax and non-tax revenues of the state, it can be seen that

between this expenditure and other non-plan expenditure the Government would have

exhausted the most of the resources leaving very little for welfare schemes and

developmental programmes. Since no Government can allow such total neglect of

welfare and developmental activities the employees of the State will not be getting

salaries on time and eventually they will not be getting their full salary also.

The irregular appointments are adversely affecting the interest of several

thousands of unemployed persons who have registered in the employment exchange

and awaiting their turn for orders. It is also adversely affecting the interests of

Scheduled Castes, Scheduled Tribes and backward Classes who have reservation in

employment since the N.M.R. appointments are not taking care of the reservation for

these categories. Government have constituted District Selection Committees and

some ad hoc Selection Committees besides the Andhra Pradesh Public Service

Commission to take up recruitment in accordance with law in Government

Departments. Irregular appointments are depriving these legitimate recruiting bodies

from performing their functions. Irregular appointments in excess of sanctioned

strength will also result in industrial undertakings becoming unviable and eventually

sick. When a unit goes sick, it results in retrenchment and even winding-up, thus,

adversely affecting the interests of the existing employees who are recruited against

sanctioned strength and through authorised process of selection. Similarly

unauthorised appointments over and above the sanctioned strength in Government

Departments would also increase the number of employees and to that extent militate

against the Government looking after the existing employees who have been recruited

through proper channel. The Act will, therefore, protect the interests of candidates in

Employment Exchanges, reserved categories, the existing employees who were

recruited through proper channel and the legitimate functions of the recruiting

agencies.

From the above, it can be seen that the financial position of the State arising

out of excessive expenditure on staff is so alarming that it cannot be tackled by

ordinary administrative actions and instructions. It is, therefore, thought that a time

has come when we have to provide for deterrent action for illegal and irregular

appointments by enacting a law. It has accordingly been decided to enact a law to

achieve the following objects, namely:-

(a) totally banning such appointments in the institutions covered by legislation;

(b) imposing stringent penalties for making appointments by public servants

on violation of the law;

(c) to protect public servants from being held for contempt for non-compliance

of the orders of Tribunal or High Court and also for abatement of pending cases

claiming regularization of services which are already filed before the courts of law by

making a suitable provisions therefor; and

(d) to protect the interests of candidates registered with Employment

Exchange, the reservation rights of Scheduled Castes, Scheduled Tribes and Backward

Classes, the rights of the existing employees who are recruited through proper channel

and the functions of Andhra Pradesh Public Service Commission, District SelectionCommittees and other Selection Committees constituted by the Government.

The legislation will prevent further deterioration of finances of the State

and at the same time conserve the resources for the welfare and developmental

activities.”

5. For the sake of convenient reference, Sections 2(ii), 3, 4, 7 and 9 of the 1994 Act

(unamended) are reproduced below:

“2(ii) ‘daily wage employee’ means any person who is employed in any public

service on the basis of payment of daily wages and includes a person employed on the

basis of nominal muster roll or consolidated pay either, on full-time or part-time or

piece rate basis or as a workcharged employee and any other similar category of

employees by whatever designation called other than those who are selected and

appointed in a sanctioned post in accordance with the relevant rules on a regular

basis.

3. Prohibition of daily wage appointments and regulation of temporary

appointments.– (1) The appointment of any person in any public service to any post, in

any class, category or grade as a daily wage employee is hereby prohibited.

(2) No temporary appointment shall be made in any public service to any post, in any

class, category or grade without the prior permission of the competent authority and

without the name of the concerned candidate being sponsored by the Employment

Exchange.

4. Regulation of recruitment.– No recruitment in any public service to any post in any

class, category or grade shall be made except, –

(a) from the panel of candidates selected and recommended for appointment

by the Public Service Commission/College Service Commission where the post is

within the purview of the said Commission;

(b) from a panel prepared by any Selection Committee constituted for the

purpose in accordance with the relevant rules or orders issued in that behalf; and

(c) from the candidates having the requisite qualification and sponsored by

the Employment Exchange in other cases where recruitment otherwise than in

accordance with clauses (a) and (b) is permissible.

Explanation: – For the removal of doubts it is hereby declared that nothing in this

section shall apply to compassionate appointments made in favour of

son/daughter/spouse of any person employed in public service who dies in harness or

who retires from service on medical grounds, in accordance with the relevant orders

issued from time to time.

7. Bar for regularization of services.– No person who is a daily wage employee and no

person who is appointed on a temporary basis under section 3 and is continuing as

such at the commencement of this Act shall have or shall be deemed ever to have a

right to claim for regularization of services on any ground whatsoever and the services

of such person shall be liable to be terminated at any time without any notice and

without assigning any reason:Provided that in the case of Workmen falling within the scope of section 25-F of the

Industrial Disputes Act, 1947, one month’s wages and such compensation as would be

payable under the said section shall be paid in case of termination of services:

Provided further that nothing in this section shall apply to the Workmen governed by

Chapter V-B of the Industrial Disputes Act, 1947.

Explanation.– For the removal of doubts it is hereby declared that the termination of

services under this section shall not be deemed to be dismissal or removal from service

within the meaning of article 311 of the Constitution or of any other relevant law

providing for the dismissal or removal of employees but shall only amount to

termination simpliciter, not amounting to any punishment.

9. Abatement of claims.– Notwithstanding anything contained in any judgment,

decree or order of any court, tribunal or other authority, the claims for regular

appointment of all daily wage employees and persons appointed on a temporary basis,

shall stand abated and accordingly,–

(a) no suit or other proceeding shall be instituted, maintained or continued in

any court, tribunal or other authority by the daily wage or temporary appointees

against the Government or any person or authority whatsoever for the regularization

of the services;

(b) no court shall enforce any decree or order directing the regularization of

the services of such persons; and

(c) all proceedings pending in any court or tribunal claiming the

regularization of services shall abate.”

6. As soon as the 1994 Act was enacted, the beneficiaries of illegal employment market and

back door entrants became apprehensive of termination of their services in terms of Section 7.

Therefore, they approached the State Government through their mentors and sympathizers in the

political and bureaucratic set up and succeeded in getting the rigor of that section relaxed. This is

evinced from the fact that by taking shelter of the judgment of this Court in State of Haryana v.

Piara Singh [(1992) 4 SCC 118] and using its executive power under Article 162 of the Constitution,

the State Government issued G.O.Ms. No.212 dated 22.4.1994 (hereinafter referred to as ‘G.O. dated

22.4.1994’) for facilitating regularisation of the services of those employed on daily wages or nominal

muster roll or consolidated pay subject to the condition that such persons had worked continuously

for a minimum period of 5 years and were continuing on 25.11.1993. The relevant portions of G.O.

dated 22.4.1994 are reproduced below:

“Government notice that appointing authorities of the Institutions andEstablishments under the control of State Government, Local Authorities,

Corporations owned and controlled by the State Government and other bodies

established by the State Government grossly violated the instructions issued from

time to time by the Government and appointed persons indiscriminately to

various categories of services either on Daily Wage basis or temporary basis

without there being a post and without being sponsored by Employment

Exchange and without observing the rule of reservation to the Scheduled Caste,

Scheduled Tribe and Backward classes. In most of the cases, the persons

appointed for a specific work have been continued even after their need ceased.

After a lapse of some time, all these appointees have approached the various

Courts and Tribunals for regularization of their services and Courts and

Tribunals have been directing the State Government to regularize the services on

the ground that they have a long service to their credit. This practice has been

causing considerable drain on the finances of the State Government. Government

have thought it imperative to prohibit the unauthorised and irregular

appointments by a law in the public interest. Accordingly the State Government

have enacted law regulating the appointments to Public Services and for

Rationalisation of the Staff Pattern and Pay Structure in the reference read

above. This will streamline the recruitment along healthy lines, to enforce

Employment Exchanges (Compulsory Notification of Vacancies) Act in its true

letter and spirit, to follow the rule of reservation enshrined in the Constitution

with utmost strictness and to punish those who are guilty of violating the law.

The above Act came into force with effect from 25.11.1993.

2. Though the reference 2

nd

cited, information has been obtained from various

Government Offices, Local Bodies, Public Sector undertakings etc., from the

information received by Government it is seen that appointing authorities have

violated the instructions issued by Government and appointed several individuals.

Appointments have been made indiscriminately in the Government Offices, Local

Bodies, Universities, Public Sector undertakings and various other Bodies and

Institutions operating on Government finances. In fact, there is no need to

continue all these Daily Wage/Temporary employees for the reasons that not all of

them are appointed in sanctioned posts and the recruitment was in many cases

not through Employment Exchange. Their appointment was made without

following rule of reservation and in the case of workcharged employees, there is

no work for them as the specific work for which they were appointed has already

been completed. Though the Act provides that no person who is Daily Wage

employee and no person who is appointed on temporary basis shall have any right

to claim for regularization of service on any ground, it has been the endeavour of

the Government to regularize as many as NMR/Daily Wage employees as possible

who are otherwise qualified depending on the requirement of the workload while

keeping in mind the hardship that would be caused if their services are not

regularised. The Hon’ble Supreme Court in its Judgement dated 12.8.1992 in

Civil Appeal No. 2979/92 and batch have also observed to evolve an appropriate

policy for regularization. Accordingly, Government after careful examination of

the whole issue and in supersession of all previous orders on the subject including

G.O.Ms. No. 193, General Administration Department, dated 14.3.1990 and

keeping in view the above judgement of Supreme Court of India, have formulated

a scheme for regularization of services of the persons appointed on Daily

Wage/NMR or on consolidated pay and are continuing on the date of

commencement of the Act. Government accordingly decided that the services of

such persons who worked continuously for a minimum period of 5 years and are

continuing on 25.11.1993 be regularised by the appointing authorities subject to

fulfillment of the following conditions:1) The persons appointed should possess the qualifications prescribed as per rules in

force as on the date from which his/her services have to be regularised.

2) They should be within the age limits as on the date of appointment as NMR/Daily

wage employee.

3) The rule of reservation wherever applicable will be followed and back-log will be setoff against future vacancies.

4) Sponsoring of candidates from Employment Exchange is relaxed.

5) Absorption shall be against clear vacancies of posts considered necessary to be

continued as per work-load excluding the vacancies already notified to the Andhra

Pradesh Public Service Commission / District Selection Committee.

6) In the case of Workcharged Establishment, where there will be no clear vacancies,

because of the fact that the expenditure on Workcharged is at a fixed percentage of

P.S. charges and as soon as the work is over, the services of workcharged

establishment will have to be terminated, they shall be adjusted in the other

departments, District Offices provided there are clear vacancies of last Grade

Service.”

7. A number of persons who were employed on daily wages or nominal muster roll or

consolidated pay, but did not complete 5 years on 25.11.1993 challenged the aforesaid G.O. by filing

writ petitions and applications before the High Court and Tribunal respectively. A learned Single

Judge of the High Court allowed the writ petitions and held that all persons employed on daily

wages or nominal muster roll or contract basis are entitled to be considered for regularisation on

completion of 5 years. The Division Bench upheld the order of the learned Single Judge with the

modification that daily wagers etc. would be entitled to be considered for regularisation with effect

from the date of completion of 5 years continuous service. The special leave petitions filed by the

State Government and agencies and instrumentalities of the State were dismissed by this Court vide

judgment titled District Collector v. M.L. Singh [1998 (2) ALT 5 (SC)], which is reproduced below:

“We have heard the learned counsel for the parties. These matters relate to

regularisation and payment of wages to the respondents who were employed on daily

wage basis. By the impugned judgment, the Division Bench of the High Court, while

affirming with modification the order passed by the learned Single Judge has directed

that all employees who have completed five years of continuous service should be

considered for regularization in accordance with the terms of G.O.Ms. No.212, dated

April 22, 1994 and that they should be paid their wages at par with the wages paid to

the permanent employees of that category. As regards payment of wages there is no

dispute between the parties that the same have to be paid from the date of

regularization. Insofar as regularization is concerned, we are of the view that the HighCourt has rightly directed that on the basis of the Notification G.O. Ms. No. 212, the

respondent employees shall be regularized with effect from the date or dates, they

completed five years continuous service. It is however made clear that the other

condition laid down in the said G.O.Ms. No. 212 will have to be satisfied for the

purpose of regularisation. The special leave petitions are disposed of accordingly. No

costs.”

8. The part time employees, who were not covered by G.O. dated 22.4.1994 also approached

the Tribunal and High Court claiming regularisation of their services. By an interlocutory order

dated 25.4.1997, the High Court directed that a scheme be framed for regularisation of their

services. The State Government promptly implemented the High Court’s directive and issued

G.O.(P) No.112 dated 23.7.1997 for regularization of part time employees who had worked

continuously for a minimum period of 10 years and were continuing on 25.11.1993 subject to the

following conditions:-

1. “Absorption shall be against clear vacancies of posts considered necessary to be

continued as per work-load excluding the vacancies already notified to the Andhra

Pradesh Public Service Commission or as the case may be, the District Selection

Committee.

2. The persons appointed should possess the qualifications prescribed as per rules in force

as on the date from which his or her services have to be regularised.

3. The person should be within the age limit as on the date of appointment as part-time

employee.

4. The Rule of Reservation wherever applicable will be followed and back-log will be set off

against future vacancies.

5. The sponsoring of candidate from Employment Exchange is relaxed.

6. If there are two candidates, one part-time and the second one a full-time employee (Daily

Wage employee) of any category or name and there exists only one vacancy, the senior

most between the two in terms of continuous service already rendered prior to 25-11-

1993 treating two years of part-time service as one year of full-time service, relative

seniority will be calculated and regularization will be suggested for the senior among the

two accordingly.

7. The regularization of services of full-time employee already made in terms of G.O.Ms.

No.212, Finance & Planning (FW.PC.III) Department, dt.22-4-1994 will not be reopened

for giving effect to the present order.”

9. Although, in State of Haryana v. Piara Singh (supra) this Court did not lay down aproposition that the government/public employer is bound to frame policy for regularisation of all

daily wage employees and similarly situated persons and the policy contained in G.O. dated

22.4.1994 was intended to be only one time measure for regularisation of the services of the persons

employed on daily wages or nominal muster roll or consolidated pay who completed 5 years

continuous service on 25.11.1993, interpretation thereof by the High Court, which was approved by

this Court became basis for lodgment of claim for regularisation of service by all those who were

employed on daily wages or nominal muster roll or consolidated pay on or before 25.11.1993 and the

cut off date specified in the G.O. for determination of eligibility for regularisation became

redundant.

10. With a view to clearly bring out the object underlying the policy of regularisation

contained in G.O. dated 22.4.1994 and to make the same an integral part of the statute, the

legislature amended the 1994 Act. The first amendment was made by Act No.3 of 1998, which was

published in Andhra Pradesh Gazette dated 3.1.1998 and was brought into force at once. Sections 1,

2 and 3 of Amendment Act No.3 of 1998 read thus:

“1. Short title and commencement. (1) This Act may be called the

Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation

of Staff Pattern and Pay Structure) (Amendment) Act, 1998.

(2) It shall come into force at once.

2. Amendment of section 4., Act 2 of 1994. In the Andhra Pradesh

(Regulation of Appointments to Public Services and Rationalisation of Staff Pattern

and Pay Structure) Act, 1994, (hereinafter referred to as the principal Act), in section

4, in sub-section (2), after clause (b), the following shall be added, namely: -

“(c) to the appointments made in favour of members of Scheduled Castes

or Scheduled Tribes, who or whose parents or spouse are subjected to

atrocities, in accordance with the relevant orders issued from time to time.”



3. Amendment of section 7. In section 7 of the principal Act;-

(a) in the opening paragraph for the expression, “Section 3 and”, the expression,

“Section 3 and no person who” shall be substituted;

(b) in the first proviso, for the words “provided that,” the words “provided also

that” and in the second proviso, for the words “provided further that”, the

words “provided also that” shall respectively be substituted;(c) After the opening paragraph and before the first proviso so amended, the

following provisions shall be inserted, namely:

“Provided that the services of a person, who worked on daily

wage/NMR/Consolidated pay/Contingent worker on full time basis continuously for a

minimum period of five years and is continuing as such on the date of the

commencement of the Act shall be regularised in accordance with the scheme

formulated in G.O.Ms. No. 212, Finance & Planning (FW.PC. III) Department, dated

the 22

nd

April, 1994:

Provided further that the services of a person who worked on part-time basis

continuously for a minimum period of ten years and is continuing as such on the date

of the commencement of this Act shall be regularised in accordance with the scheme

formulated in G.O. (P).112, Finance & Planning (FW.PC. III) Department, dated the

23

rd

July, 1997.”

11. After 8 months, the 1994 Act was again amended by Act No.27 of 1998. The preface and

Sections 1, 4 and 7A of the second Amendment Act read as under:

“Whereas, according to the provisions of the Andhra Pradesh (Regulation of

Appointments to Public Services and Rationalisation of Staff Pattern and Pay

Structure) Act, 1994 and in accordance with the scheme formulated in the orders

issued by the Government in G.O.Ms. No. 212, Finance & Planning (FW.PC.III)

Department dated the 22nd April, 1994, the services of a person who worked on daily

wage/NMR/Consolidated pay/Contingent worker on full time basis and also

continuing as such as on the 25th November, 1993, the date on which the aforesaid

Act has come into force shall be regularised;

And Whereas, in various judgments rendered by the different courts, the

orders issued by the Government in G.O.Ms.No. 212, Finance & Planning

(FW.PC.III) Department, dated the 22nd day of April, 1994 have been interpreted,

that the completion of five years of service as on 25th November, 1993 shall mean that

as and when any employee completes five years of service and that the first proviso

under Section 7 of the said Act have also been interpreted to mean as two separate

and independent conditionalities;

And Whereas, the said interpretation is contrary to the intendment and

the policy of the Government;

And Whereas, the Government felt it necessary to remove the ambiguity

found in the said proviso to section 7 of the said Act;

1. Short title and commencement. (1) This Act may be called the Andhra

Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff

Pattern and Pay Structure) (Second Amendment) Act, 1998.

(2) Sub-section (1) of section 3 shall be deemed to have come into force on the

28

th

October, 1996 and the remaining provisions shall come into force at once.

4. Amendment of section 7. In section 7 of the principal Act for the first

proviso, the following proviso shall be substituted, namely:-

Provided that the services of those persons continuing as on the 25

th

November, 1993having completed a continuous minimum period of five years of service on or before

25

th

November, 1993 either on daily wage, or nominal muster roll, or consolidated pay

or as a contingent worker on full time basis, shall be regularised in substantive

vacancies, if they were otherwise qualified fulfilling the other conditions stipulated in

the scheme formulated in G.O.Ms. No. 212, Finance & Planning (FW.PC. III)

Department, dated the 22

nd

April, 1994.

7A. Abatement of Claims. (1) Notwithstanding any Government order, judgement,

decree or order of any Court, Tribunal or other authority, no person shall claim for

regularization of service under the first proviso to section 7 as it was incorporated by

the Andhra Pradesh (Regulation of Appointments to Public Services and

Rationalisation of Staff Pattern and Pay Structure) (Amendment) Act, 1998.

(2) No suit or other proceedings shall be maintained or continued in any

Court, Tribunal or other authority against the Government or any person or other

authority whatsoever for regularization of services and all such pending proceedings

shall abate forthwith;

(3) No Court shall enforce any decree or order directing the Government or

any person or other authority whatsoever for regularization of services.”

12. The daily wage employees and similarly situated persons who would have been affected

by the amendments challenged the same in a batch of writ petitions filed before the High Court.

Some employees also filed applications before the Tribunal. The writ petitions were allowed by the

learned Single Judge of the High Court vide judgment titled D. Sesharani v. Managing Director,

A.P. Women’s Co-op. Finance Corporation [2001 (2) ALT 607]. The learned Single Judge held that

the amendments are contrary to the fundamental rights guaranteed to the petitioners under Articles

14, 16 and 21 of the Constitution and the Directive Principles of State Policy enshrined in Articles

39A, 41, 42 and 43. The learned Single Judge further held that Section 7A of the Amendment Act

by which judicial review was denied to the aggrieved persons is contrary to the law laid down by the

Supreme Court in Minerva Mills Limited v. Union of India [(1980) 2 SCC 591] and L. Chandra

Kumar v. Union of India [(1995) 1 SCC 400]. The learned Single Judge then relied upon the

judgment of this Court in State of Haryana v. Piara Singh (supra) and declared that the State

Government is obliged to create posts for regularisation of the services of daily wagers etc. from the

date of completion of 5 years service.

13. The appeals preferred by the State Government and its agencies/instrumentalities were

allowed by the Division Bench and the order of the learned Single Judge was set aside by placingreliance upon the judgments of this Court in S.S. Bola v. B.D. Sardana [1997 (8) SCC 522], Gujarat

Agricultural University v. Rathod Labhu Bechar [2001 (3) SCC 574] and Indra Sawhney v. Union of

India [2000 (1) SCC 168]. The Division Bench also reversed the direction given by the learned

Single Judge to the State Government for creation of posts for regularisation of the services of daily

wagers etc., but declared that the ban imposed on regularisation would be effective from the date of

enforcement of Amendment Act No.27/1998 i.e. 19.8.1998 and all persons who have completed 5

years service as on the date of coming into force thereof would be entitled to be considered for

regularisation of their services. The relevant portions of the Division Bench judgment are extracted

below:

“58. The entire basis whereupon the judgment of the learned single Judge is based is,

therefore, erroneous. As indicated hereinbefore having regard to the mode of

appointment the requirements thereof, absence of sanctioned posts, non-observance of

the statutory rules the part-time employees, ad hoc employees and NMRs did not

derive any legal right whatsoever to continue in service. In fact, save and except the

right conferred upon them to be considered for regularisation by reason of

G.O.Ms.No.212, they did not have any other legal right whatsoever. It is now well

settled principle that by reason of a catena of decisions of the High Court as also of the

Supreme Court of India a prolonged service would not ripen into permanence nor by

reason thereof the status of employee can be changed.

59. It is also not a case where an individual decision inter-party had been

sought to be taken away by reason of the said Amendment Act in terms whereof their

rights and liabilities alone were affected. The interpretation of a policy decision is a

judgment in rem and by reason thereof, no inter-party rights had been conferred or

adjudicated upon.

60. The validation Act or for that purpose any Amendment Act does not

offend the doctrine of separation of powers. It is also trite that the Court in exercise

of its jurisdiction under Article 226 of the Constitution while exercising its power of

judicial review over legislation would not invalidate an act on the ground of malice or

otherwise. Such an approach, in our opinion, is wholly unwarranted inasmuch as the

question as to whether the statute suffers from the vice of fraud on legislation or not

must be kept confined to the legislative competence and not otherwise. Right to

employment is not a fundamental right or a constitutional right. In terms of Articles

14 and 16 of the Constitution the right of a citizen is confined only to consideration

therefore. Thus it would be incorrect to contend that the same would be a right of

property.

67. The next question which may arise for consideration would be as to

whether the cut off date 25.11.1993 is so arbitrary as to attract the wrath of Article 14

of the Constitution.

68. Fixing a cut off date is normally not arbitrary unless it can be said to be

case where such a date has been fixed arbitrarily or capriciously and no reason exists

therefor.69. After the decision of the Apex Court in Piara Singh’s case (supra) the State

had appointed a committee. The committee had gone into the matter and made

certain recommendations including fixation of cut off date. Such a cut off date was

fixed keeping in view the coming into force of such policy decision. In Sushma

Sharma v. State of Rajasthan the Apex Court has held:

It may be borne in mind that wisdom or lack of wisdom in the action of the

Government or legislature is not justiciable by court. See in this connection the

observations of the U.S. Supreme Court in the case of Metropolis Theatre Company

v. City of Chicago and Ernest J. Magerstadt (1912) 57 I Ed 730). To find fault with a

law is not to demonstrate its invalidity. There the learned judge Mr. Justice Mc

Kenna observed as follows:

“It may seem unjust and oppressive, yet be free from judicial interference.

The problems of government are practical ones and may justify, if they do not

require, rough accommodations, illogical, it may be, and unscientific. But even such

criticism should not be hastily expressed. What is best is not always discernible, the

wisdom of any choice may be disputed or condemned. Mere errors of government

are not subject to our judicial review. It is only its palpably arbitrary exercises which

can be declared void.

This passage has been quoted with approval by Chief Justice Chandrachud in

Prag Ice & Oil Mills v. Union of India (1978) 3 SCR 293 at p.333: AIR 1978 SC 1296

at p.1318.

70. Yet again in the matter of Cauvery Water Disputes Tribunal the Apex

Court clearly held:

To the extent that the Ordinance interferes with the decision of this Court and

of the Tribunal appointed under the Central legislation, it is clearly unconstitutional

being not only in direct conflict with the provisions of Article 262 of the Constitution

under which the said enactment is made but being also in conflict with the judicial

power of the State.

71. There is another aspect of the matter which we may not lose sight of. In

terms of Act 2 of 1994 a complete ban had been imposed in making recruitment of

NMR, part-time or ad hoc employees. Thus on and from 25.11.1993 nobody had been

employed nor could be employed. Any such appointment would ex facie violate the

provisions of the said Act 2 of 1994 which not only contains a penal provision but also

imposed statutory liability upon the officers to pay and unto the State all such salaries

and emoluments paid to such employees. Even a ban had been imposed on the

treasuries to honour such bills.

72. Act 27 of 1998 has come into force on 19.8.1998. Thus the ban which now

would be imposed, as regards grant of regularisation will be effective from that date.

Can it be said that five years continuous service as on 13.8.1998 is a condition which

is wholly arbitrary and irrational so as to attract Articles 14 and 246 of the

Constitution. The answer to the aforementioned question must be rendered in

negative. It will be a repetition to state that by reason of G.O.Ms.No.212 no workman

derives any vested right to be appointed as such. But the employees who fulfill the

criteria were entitled to be only considered therefor. Regularisation of service in

terms of aforementioned G.O.Ms.No.212 is dependant upon fulfillment of the

condition enumerated therein. As is evident from the decision of the apex Court in

M.L.Singh’s case (supra) a distinction must be borne in mind between a vested right

and a right to be considered inasmuch as the requirement of a clear vacancy has adirect nexus therewith. Even if there were clear vacancies, such vacancies were

required to be filled up having regard to the reservation policy of the State. ”

14. Learned counsel for the employees supported the order of the learned Single Judge and

argued that the Division Bench committed serious error by declaring that Amendment Act Nos.3 of

1998 and 27 of 1998 are constitutional. Learned counsel relied upon the judgments of this Court in

Madan Mohan Pathak vs. Union of India [(1978) 2 SCC 50], State of Gujarat vs. Raman Lal Keshav

Lal Soni [(1983) 2 SCC 33], Chairman, Railway Board vs. C.R. Rangadhamaiah [(1997) 6 SCC 623],

Govt. of Andhra Pradesh vs. G.V.K. Girls High School [(2000) 8 SCC 370] and argued that

amendments made in the 1994 Act are liable to be struck down not only because the same have the

effect of nullifying the judgment of this Court in District Collector vs. M.L. Singh (supra), but also

because Section 7A of Act No.27 of 1998 is a clear encroachment upon the courts’ power of judicial

review, which is one of the basic features of the Constitution. Learned counsel further argued that

by virtue of the policy contained in G.O. dated 22.4.1994, persons appointed on daily wages or

nominal muster roll or consolidated pay acquired a right to be regularised in service and the State

could not have deprived them of the said right by retrospectively amending the 1994 Act. Another

argument of the learned counsel is that once this Court held that all persons appointed on daily

wages or nominal muster roll or consolidated pay are entitled to be regularised with effect from the

date of completion of 5 years continuous service, the legislature was not justified in prescribing

25.11.1993 as the cut off date for determining the eligibility of daily wagers etc. for the purpose of

regularisation. Learned counsel emphasized that the interpretation placed by this Court on G.O.

dated 22.4.1994 is final and the same could not have been undone by amending the 1994 Act.

15. Learned counsel for the State of Andhra Pradesh and its agencies/instrumentalities

argued that the 1994 Act was amended to clarify the object underlying the policy of regularisation

contained in G.O. dated 22.4.1994 and to make the same an integral part of the statute and the

Division Bench rightly held that the Amendment Acts do not have the effect of nullifying the

judgment of this Court in District Collector v. M.L. Singh (supra). Learned counsel pointed out that

the policy contained in G.O. dated 22.4.1994 was one time measure for relaxing the negative

mandate contained in Section 7 against regularisation of the persons appointed on daily wages or ontemporary basis and argued that the legislature did not exceed its jurisdiction by laying down the

requirements of completing 5 years continuous service on or before 25.11.1993 for the purpose of

regularisation. They, however, questioned the direction given by the Division Bench for considering

the cases of all daily wagers and like for regularisation who completed 5 years on 19.8.1998 i.e. the

date on which Amendment Act No.27 of 1998 was published in the Gazette, by arguing that it was

legally impermissible for the Division Bench to change and/or extend the date of eligibility for

regularisation from 25.11.1993 to 19.8.1998 simply because the amendment made in Section 7 by Act

No.27 of 1998 was not enforced retrospectively.

16. In the light of the above, we shall first consider whether the amendments made in the

1994 Act have the effect of nullifying or overriding the judgment of this Court in District Collector

v. M.L. Singh (supra) and whether Section 7A of Act No.27 of 1998 amounts to an encroachment on

courts’ power of judicial review. For this purpose, it is necessary to understand the true nature of

the 1994 Act, mischief sought to be remedied by enactment thereof and the reasons for its

amendment. The 1994 Act was enacted in the backdrop of the decision taken by the State

Government to curb irregular appointments, to rationalise the staff pattern and pay structure and

thereby reduce unnecessary expenditure and also to ensure that only those selected by the specified

recruiting agencies are appointed against the sanctioned posts. This is clearly discernible from the

statement of objects and reasons contained in the Bill which led to enactment of the 1994 Act and

provisions contained therein to which reference will be made hereinafter. Although in Aswini

Kumar Ghose v. Arabinda Bose [AIR 1952 SC 369], it was held that the statement of objects and

reasons contained in the Bill cannot be used or relied upon for the purpose of construction of the

statute, this rule has not been strictly followed in the subsequent judgments. In A. Thangal Kunju

Musaliar v. M. Venkatachalam Potti [AIR 1956 SC 246], the statement of objects and reasons were

used for judging reasonableness of the classification made in an enactment to see if it infringed or

was contrary to the Constitution. In Central Bank of India v. Workmen [AIR 1960 SC 12], it was

held that the statement of objects and reasons can be used for the limited purpose of understanding

the background and antecedent state of affairs leading up to the legislation. The same view wasreiterated in large number of other judgments including Bhaiji v. Sub-Divisional Officer, Thandla

[(2003) 1 SCC 692], in which the Court referred to Principles of Statutory Interpretation by Justice

G.P. Singh, 8th Edn., 2001 and observed:

“Reference to the Statement of Objects and Reasons is permissible for understanding

the background, the antecedent state of affairs, the surrounding circumstances in

relation to the statute, and the evil which the statute sought to remedy. The weight of

judicial authority leans in favour of the view that the Statement of Objects and

Reasons cannot be utilized for the purpose of restricting and controlling the plain

meaning of the language employed by the legislature in drafting a statute and

excluding from its operation such transactions which it plainly covers.”

17. In B. Banerjee v. Smt. Anita Pan [(1975) 1 SCC 166], this Court approved the view

expressed by the Calcutta High Court that the statement of objects and reasons contained in the

West Bengal Premises Tenancy (Second Amendment) Bill, 1969 and proceedings of the legislature

including the speech made by the Minister at the time of introducing the Bill could be looked into for

understanding the true character of the amendment and observed:

“The explosive import of neglecting such a distressing urban development reasonably

obliges the State to impose drastic restrictions on landlords’ right to property. And

when circumvention of wholesome legal inhibitions is practised on a large scale the

new challenge is met by clothing the law with more effective armour and that is the

rationale of the Amendment Act. The learned Judges rightly refer to the legislative

proceedings, notorious common knowledge and other relevant factors properly

brought to their ken. The “sound-proof theory” of ignoring voices from Parliamentary

debates, once sanctified by British tradition, has been replaced by the more legally

realistic and socially responsible canon of listening to the legislative authors when their

artifact is being interpreted.”

18. In K.P. Varghese v. ITO, Ernakulam [(1981) 4 SCC 173], this Court while rejecting the

argument of the revenue that rule of strict construction should be applied for interpreting Section

52(2), referred to the statement of objects and reasons contained in the Bill presented before the

Parliament, speech made by the Finance Minister and observed:

“Now it is true that the speeches made by the members of the legislature on the floor

of the House when a Bill for enacting a statutory provision is being debated are

inadmissible for the purpose of interpreting the statutory provision but the speech

made by the Mover of the Bill explaining the reason for the introduction of the Bill can

certainly be referred to for the purpose of ascertaining the mischief sought to be

remedied by the legislation and the object and purpose for which the legislation isenacted. This is in accord with the recent trend in juristic thought not only in western

countries but also in India that interpretation of a statute being an exercise in the

ascertainment of meaning, everything which is logically relevant should be

admissible.”

19. In Chern Taong Shang v. S. D. Baijal [(1988) 1 SCC 507], the Court referred to the object

sought to be achieved by enacting Maritime Zones of India (Regulation of Fishing by Foreign

Vessels) Act, 1981 i.e. preventing the illegal poaching of fishes by foreign vessels including foreign

vessels chartered by Indian parties by providing deterrent punishment to protect Indian fishermen

and observed:

“It is pertinent to mention that in interpreting a statute the court has to ascertain the

will and policy of the legislature as discernible from the object and scheme of the

enactment and the language used therein. Viewed in this context it is apparent that the

said Act has been made with the sole purpose of preventing poaching of fishes by

foreign vessels chartered by Indian citizens within the exclusive economic zone of

India as specified in Rule 8(1) (q) of Maritime Zone of India Rules as amended in 1982

as well as in breach of the provisions of the said Act and the terms and conditions of

permit issued under Section 5 of the said Act.”

20. In Utkal Contractors and Joinery v. State of Orissa [1987 (3) SCC 279], the Court

interpreted the provisions of the Orissa Forest Produce (Control of Trade) Act, 1981 and observed:-

“………A statute is best understood if we know the reason for it. The reason for a

statute is the safest guide to its interpretation. The words of a statute take their colour

from the reason for it. How do we discover the reason for a statute? There are

external and internal aids. The external aids are Statement of Objects and Reasons

when the Bill is presented to Parliament, the reports of committees which preceded the

Bill and the reports of Parliamentary Committees. Occasional excursions into the

debates of Parliament are permitted. Internal aids are the preamble, the scheme and

the provisions of the Act. Having discovered the reason for the statute and so having

set the sail to the wind, the interpreter may proceed ahead. No provision in the statute

and no word of the statute may be construed in isolation. Every provision and every

word must be looked at generally before any provision or word is attempted to be

construed. The setting and the pattern are important. It is again important to

remember that Parliament does not waste its breath unnecessarily. Just as Parliament

is not expected to use unnecessary expressions, Parliament is also not expected to

express itself unnecessarily. Even as Parliament does not use any word without

meaning something, Parliament does not legislate where no legislation is called for.

Parliament cannot be assumed to legislate for the sake of legislation; nor indulge in

legislation merely to state what it is unnecessary to state or to do what is already

validly done. Parliament may not be assumed to legislate unnecessarily.”

21. In Gurudevdatta VKSSS Maryadit v. State of Maharashtra [(2001) 4 SCC 534], a three-Judge Bench of this Court interpreted the provisions of Maharashtra Cooperative Societies Act,

1960, Maharashtra Cooperative Societies (Second Amendment) Ordinance, 2001 and observed:

“Further, after introduction of the Bill and during the debates thereon before

Parliament, if a particular provision is inserted by reason of such a debate, question of

indication of any object in the Statement of Objects and Reasons of the Bill does not

and cannot arise. The Statement of Objects and Reasons needs to be looked into,

though not by itself a necessary aid, as an aid to construction only if necessary. To

assess the intent of the legislature in the event of there being any confusion, Statement

of Objects and Reasons may be looked into and no exception can be taken therefor —

this is not an indispensable requirement but when faced with an imperative need to

appreciate the proper intent of the legislature, statement may be looked into but not

otherwise………….

While the Statement of Objects and Reasons in the normal course of events cannot be

termed to be the main or principal aid to construction but in the event it is required

to discern the reasonableness of the classification as in the case of Shashikant Laxman

Kale v. Union of India [1990 (4) SCC 366] Statement of Objects and Reasons can be

usefully looked into for appreciating the background of the legislature’s

classification.”

22. The proposition which can be culled out from the aforementioned judgments is that

although the statement of objects and reasons contained in the Bill leading to enactment of the

particular Act cannot be made the sole basis for construing the provisions contained therein, the

same can be referred to for understanding the background, the antecedent state of affairs and the

mischief sought to be remedied by the statute. The statement of objects and reasons can also be

looked into as an external aid for appreciating the true intent of the legislature and/or the object

sought to be achieved by enactment of the particular Act or for judging reasonableness of the

classification made by such Act.

23. We may now advert to the statement of objects and reasons contained in the Bill

introduced in Andhra Pradesh Legislative Assembly. A perusal thereof shows that between 1976 and

1993, the total number of employees of the State Government, agencies/instrumentalities of the State

and bodies/institutions receiving aid from the Government increased by 82% i.e. from 6.78 lakhs to

12.34 lakhs and in 1993-1994, the State Government had to spend more than 80% of total revenue in

payment of salaries, allowances, pension, etc. of the employees causing severe strain on the revenueof the State which adversely affected implementation of the welfare schemes and development

programmes. That apart, there was growing dissatisfaction among several thousand unemployed

persons including those belonging to Scheduled Castes, Scheduled Tribes and Other Backward

Classes, who were registered with the Employment Exchanges but could not get opportunity of

competing for selection for appointment against the sanctioned posts. With a view to redeem the

situation, the State Government decided to totally prohibit employment on daily wages and also

restrict appointment on temporary basis and, at the same time, ensure that all appointments are

made against the sanctioned posts only on the recommendations of the specified recruiting agencies.

In furtherance of that decision, the Governor of Andhra Pradesh promulgated the ordinance, which

was replaced by the 1994 Act. The term ‘daily wage employee’ has been defined in Section 2(ii) to

mean any person employed in any public service on the basis of payment of daily wages and includes

a person employed on the basis of nominal muster roll or consolidated pay either on full-time or

part-time or piece rate basis or as a workcharged employee and any other similar category of

employees by whatever designation called other than those who are selected and appointed on

sanctioned posts in accordance with the relevant rules on a regular basis. The term ‘public service’

has been defined in Section 2(vi) to mean service in any office or establishment of the Government, a

local authority, a Corporation or undertaking wholly owned or controlled by the State Government,

a body established under any law made by the Legislature of the State whether incorporated or not,

including a University, and any other body established by the State Government or by a Society

registered under any law relating to the registration of societies for the time being in force, and

receiving funds from the State Government either fully or partly for its maintenance or any

educational institution whether registered or not but receiving aid from the Government. By Section

3(1), total prohibition came to be imposed on the appointment of any person in any public service to

any post, in any class, category or grade as a daily wage employee. By Section 3(2), it came to be

provided that no temporary appointment shall be made in any public service to any post, in any

class, category or grade without the prior permission of the competent authority and without the

name of the concerned candidate being sponsored by the Employment Exchange. Section 4 of the

Act lays down that no recruitment in any public service to any post in any class, category or gradeshall be made except from the panel of candidates selected and recommended for appointment by

the Public Service Commission/College Service Commission or from a panel prepared by any

Selection Committee constituted for the purpose in accordance with the relevant rules or orders or

from among the candidates having the requisite qualification and sponsored by the Employment

Exchange. Section 5 of the Act provides that where an appointment has been made otherwise than

in accordance with Section 4, the drawing authority shall not sign the salary bill of the appointee

concerned and the Pay and Accounts Officer, Sub-Treasury Officer or any other officer upon whom

duty has been cast of passing the salary bill shall not pass such bill. Section 6 envisages imposition of

different types of penalties on the holders of elective offices or any other officer or authority

responsible for making appointment in contravention of the provisions of the Act. It also provides

for recovery of the pay and allowances paid to a person appointed in contravention of the provisions

of the Act. Section 7 contains a prohibition against regularization of persons appointed on daily

wages or on temporary basis. It lays down that such appointee shall have no right to claim

regularisation of service on any ground whatsoever and his/her service shall be liable to be

terminated without any notice and without assigning any reason. By virtue of first proviso to the

Section 7, an exception has been made in the case of workman to whom Section 25(F) of the

Industrial Disputes Act, 1947 is applicable. The service of such person can be terminated only after

complying with the provisions of Section 25(F). Section 9 of the Act contains a non obstante clause

and lays down that notwithstanding anything contained in any judgment, decree or order of any

court, tribunal or other authority, the claims for regular appointment of all daily wage employees

and persons appointed on a temporary basis, shall stand abated and no suit or other proceedings

shall be instituted, maintained or continued in any court, tribunal or other authority by daily wage

or temporary appointees and no court shall enforce any decree or order directing regularisation of

the services of such persons. Section 10(1) imposes a bar to the creation of posts in any office or

establishment relating to a public service without the previous sanction of the competent authority.

Section 10(2) declares that any appointment made to any post created in violation of sub-section (1)

shall be invalid and the provisions of Sections 5, 6, and 7 shall mutatis mutandis apply to such

appointment. Section 11 envisaged constitution of a committee to review the existing staff pattern inall offices and establishments and also the pay scales, allowances, exgratia, etc. payable to the

employees of different categories other than teaching staff of the Universities and submission of

report by the committee to State Government containing specific recommendations. By Section 12,

the committee was clothed with the powers of civil court in relation to certain specified matters.

Section 14 postulates imposition of penalty for abatement of any offence punishable under the Act.

Section 15 provides for imposition of penalty on the officers of the companies acting against the

provisions of the Act.

24. If the State Government had sincerely implemented the provisions of the 1994 Act, it may

have succeeded in cleansing the mess created due to irregular employment of thousands of persons

and, thereby, saved considerable revenue which could be utilized for execution of welfare schemes

and development programmes. By ensuring that appointments against the sanctioned posts are

made only from among the candidates selected by the specified recruiting agencies like Public

Service Commission/College Service Commission etc. or from among the candidates sponsored by

the employment exchanges, the State Government could have demonstrated its commitment to the

system established by rule of law and determination to comply with the equality clause enshrined in

the Constitution and other relevant statutory provisions in their true spirit. Unfortunately, that did

not happen because, in spite of the prohibition contained in Section 7 against regularisation of the

existing daily wage employees and persons appointed on temporary basis, the State Government

wilted under the pressure exerted by the vested interests and issued G.O. dated 22.4.1994

incorporating therein policy for regularisation of the services of those appointed on daily wages or

nominal muster roll or consolidated pay, who had continuously worked for 5 years and were

continuing on 25.11.1993, i.e., the date of enforcement of the 1994 Act. This was intended to be one

time measure and not an ongoing process/scheme for regularisation of the services of all daily wage

employees on their completing 5 years. A somewhat similar policy framed by the Government of

India in 1993 for grant of temporary status to the casual labourers and regularisation of their

services was considered by this Court in Union of India v. Mohan Pal [(2002) 4 SCC 573] and it was

held that a policy of this nature cannot be interpreted as creating a right in favour of all casuallabourers to be regularized in service irrespective of the date of completion of the specified period.

The 1993 Scheme envisaged conferment of temporary status and benefit of regularisation upon

casual labourers who had completed 240 days in a year (206 days in the case of offices observing 5

days a week). Those who did not fulfill this condition approached the Central Administrative

Tribunal, which allowed their applications and held that the casual labourers are entitled to the

benefit of temporary status and regularisation as and when they fulfill the conditions enumerated in

the 1993 Scheme. While reversing the order of the Central Administrative Tribunal, this Court

observed:

“……..We do not think that clause 4 of the Scheme envisages it as an ongoing scheme.

In order to acquire “temporary” status, the casual labourer should have been in

employment as on the date of commencement of the Scheme and he should have also

rendered a continuous service of at least one year which means that he should have

been engaged for a period of at least 240 days in a year or 206 days in case of offices

observing 5 days a week. From clause 4 of the Scheme, it does not appear to be a

general guideline to be applied for the purpose of giving “temporary” status to all the

casual workers, as and when they complete one year’s continuous service. Of course, it

is up to the Union Government to formulate any scheme as and when it is found

necessary that the casual labourers are to be given “temporary” status and later they

are to be absorbed in Group ‘D’ posts.”

The ratio of the afore-mentioned judgment was reiterated in Union of India v. Gagan

Kumar [2005 (6) SCC 70] and Director General, Doordarshan, Mandi House v. Manas Dey [2005

(13) SCC 437].

25. So far as these appeals are concerned, we find that the learned Single Judge interpreted

G.O. dated 22.4.1994 as entitling all daily wage employees to claim regularisation in service with

effect from the date of completion of 5 years irrespective of the date on which such period was

completed or would have been completed. The Division Bench maintained the order of the learned

Single Judge with the modification that regularisation would be from the date of completion of 5

years continuous service. This Court approved the view taken by the Division Bench apparently

because even though the policy contained in G.O. dated 22.4.1994 was intended to be one time

measure for facilitating regularisation of those who completed 5 years service on 25.11.1993, it did

not contain a specific stipulation that only those who have completed 5 years continuous service as

on 25.11.1993 will be regularised. A reading of the judgment in District Collector vs. M.L.Singh (supra) makes it clear that while examining correctness of judgment of the Division Bench of

the High Court, this Court did not consider the background in which the 1994 Act was enacted,

mischief sought to be remedied by it and various provisions contained therein including Section 7

whereby it was made clear that no person employed on daily wage or on temporary basis and

continuing as such on the date of commencement of the Act shall have or shall ever be deemed to

have the right to claim regularisation of service and his/her services shall be liable to be terminated

at any time without any notice and without assigning any reason. We may observe that if the

officers responsible for drafting G.O. dated 22.4.1994 had bothered to carefully read the provisions

of the 1994 Act then instead of using the expression “such persons who worked continuously for a

minimum period of 5 years and are continuing on 25.11.1993”, they would have employed the

expression “such persons who have completed minimum 5 years of continuous service on or before

25.11.1993 on daily wages or nominal muster roll or consolidated pay”. However, utter nonapplication of mind by the concerned officers resulted in the use of an ambiguous expression in the

policy of regularisation which generated enormous litigation requiring the individual employees and

the State Government to invest money for an avoidable exercise.

26. In order to remove the ambiguity and imperfectness in the language of G.O. dated

22.4.1994 and make the policy of regularisation an integral part of the 1994 Act, the legislature

enacted Amendment Act Nos.3 of 1998 and 27 of 1998. The purpose of making the policy of

regularisation a part of the 1994 Act was not to dilute the main object of the 1994 Act, i.e., to curb

the menace of irregular appointments and also ensure that appointments are made against the

sanctioned posts only from among the candidates selected by the designated recruiting agencies but

also to harmonize the same with the prohibition contained in Section 7 against regularisation of daily

wage and temporary employees. The preface of Act No.27 of 1998 clearly shows that the policy

contained in G.O. dated 22.4.1994 was intended to be one time measure for regularisation of the

persons employed on daily wages or nominal muster roll or consolidated pay, who completed 5 years

continuous service on or before 25.11.1993, i.e., the date of enforcement of the 1994 Act and it was

not a continuing scheme for regularisation of all ‘daily wage employees’ as and when they were tocomplete 5 years period. The language of first proviso to Section 7 by which the policy of

regularisation was engrafted in the 1994 Act shows that the amendments were made with the sole

object of removing the ambiguity in the policy contained in G.O. dated 22.4.1994 and the same were

not intended to nullify or override the judgment in District Collector vs. M.L. Singh (supra). We

have no doubt that if the language of the policy contained in G.O. dated 22.4.1994 was similar to the

one contained in newly inserted proviso to Section 7 and there was no ambiguity in it, the courts

would not have interpreted the same in a manner which would entitle all persons employed on daily

wages before 25.11.1993 to claim regularisation irrespective of the date of completion of 5 years

service. Here it will also be apposite to mention that the policy contained in G.O. dated 22.4.1994 did

not confer an indefeasible right upon all daily wage employees (as the term has been defined in

Section 2(ii) of the 1994 Act) to be regularised in service de-hors the date of enforcement of the Act.

Therefore, it cannot be said that by incorporating the policy of regularisation in the 1994 Act, the

legislature has taken away an accrued or vested right of the daily wage employees. It is interesting

to note that the judgment of this Court in State of Haryana v. Piara Singh (supra) of which shelter

was taken by the State Government for framing the policy of regularisation of daily wagers etc. in

the teeth of the prohibition contained in Section 7 against such regularisation does not lay down that

there will be wholesale regularisation of daily wagers, casual employees, work charge employees, etc.

While dealing with the question whether the High Court was right in declaring that the government

could not have prescribed the requirement of particular length of service on a particular date as a

condition for regularisation, this Court observed:

“These orders are not in the nature of a statute which is applicable to all existing and

future situations. They were issued to meet a given situation facing the Government at

a given point of time. In the circumstances, therefore, there was nothing wrong in

prescribing a particular date by which the specified period of service (whether it is one

year or two years) ought to have been put in. Take for example, the orders issued by

the Haryana government. The first order is dated January 1, 1980. It says, a person

must have completed two years of service as on December 31, 1979 i.e., the day

previous to the issuance of the order. However could it be said that fixing of such a

date is arbitrary and unreasonable? Similarly the order dated January 3, 1983 fixes

September 15, 1982 as the relevant date. This notification/order does two things.

Firstly, it excludes Class III posts of clerks from the purview of the SSSB in the case of

those who have completed a minimum of two years of service as on September 15,

1982, and secondly, it provides for their regularisation subject to certain conditions.

No particular attack was made as to this date in the High Court. Consequently the

Government of Haryana had no opportunity of explaining as to why this particulardate was fixed. Without giving such an opportunity, it cannot be held that the fixation

of the said date is arbitrary. What is more relevant is that the High Court has not held

that this particular date is arbitrary. According to it, fixation of any date whatsoever is

arbitrary, because in its opinion the order must say that any and every person who

completes the prescribed period of service must be regularised on completion of such

period of service. The next order dated March 24, 1987 prescribes the date as

December 31, 1986 i.e., the end of the previous year. In the circumstances, we see no

basis for holding that fixation of the date can be held to be arbitrary in the facts and

circumstances of the case.”

(emphasis added)

27. The distinction between legislative and judicial functions is well known. Within the scope

of its legislative competence and subject to other constitutional limitations, the power of legislature

to enact laws is plenary. In exercise of that power, the legislature can enact law prospectively as well

retrospectively. The adjudication of the rights of the parties according to law enacted by the

legislature is a judicial function. In the performance of that function, the court interprets and gives

effect to the intent and mandate of the legislature as embodied in the statute. If the court finds that

the particular statute is ultra vires the power of legislature or any provision of the Constitution, then

the same can be struck down. It is also well settled that the legislature cannot by bare declaration,

without anything more, directly overrule, reverse or override a judicial decision. However it can, in

exercise of the plenary powers conferred upon it by Articles 245 and 246 of the Constitution, render

a judicial decision ineffective by enacting a valid law fundamentally altering or changing the

conditions on which such a decision is based. Such law can also be given retrospective effect with a

deeming date or with effect from a particular date.

28. The question whether the legislature possesses the power to enact law apparently

affecting pre-existing judgment or amend the existing law which has already been interpreted by the

Court in a particular manner, has been considered in several cases. In Government of A.P. v. H.M.T.

Ltd. [1975 (2) SCC 274], this Court considered whether the amendment made in definition of a

‘house’ contained in the Andhra Pradesh (Gram Panchayat) Act, by amending Act No.16 of 1974

was intended to undo the judgment of the High Court which had interpreted the unamended

definition and held that buildings other than factory premises were not a ‘house’. After noticing theunamended and amended definitions of the term `house’, the Court held as under:-

“The new definition of “house” which is to be read retrospectively into the Act meets

effectively both the objections by reason of which the High Court held that the

buildings constructed by the respondent were not a “house”. By the amendment, the

old clause: “having a separate principal entrance from the common way” is dropped

and the definition of “house” is re-framed to include a “factory”. It is clear and is

undisputed that the buildings constructed by the respondent — the colony buildings as

well as the factory buildings — answer fully the description of a “house” and are

squarely within the new definition contained in Section 2(15).

We see no substance in the respondent’s contention that by re-defining the term

“house” with retrospective effect and by validating the levies imposed under the

unamended Act as if notwithstanding anything contained in any judgment, decree or

order of any court, that Act as amended was in force on the date when the tax was

levied, the Legislature has encroached upon a judicial function. The power of the

Legislature to pass a law postulates the power to pass it prospectively as well as

retrospectively, the one no less than the other. Within the scope of its legislative

competence and subject to other constitutional limitations, the power of the

Legislature to enact laws is plenary. In United Provinces v. Atiqa Begum, Gwyer, C.J.

while repelling the argument that Indian Legislatures had no power to alter the

existing laws retrospectively observed that within the limits of their powers the Indian

Legislatures were as supreme and sovereign as the British Parliament itself and that

those powers were not subject to the “strange and unusual prohibition against

retrospective legislation”. The power to validate a law retrospectively is, subject to the

limitations aforesaid, an ancillary power to legislate on the particular subject.

The State Legislature, it is significant, has not overruled or set aside the judgment of

the High Court. It has amended the definition of “house” by the substitution of a new

Section 2(15) for the old section and it has provided that the new definition shall have

retrospective effect, notwithstanding anything contained in any judgment, decree or

order of any court or other authority. In other words, it has removed the basis of the

decision rendered by the High Court so that the decision could not have been given in

the altered circumstances. If the old Section 2(15) were to define “house” in the

manner that the amended Section 2(15) does, there is no doubt that the decision of the

High Court would have been otherwise. In fact, it was not disputed before us that the

buildings constructed by the respondent meet fully the requirements of Section 2(15)

as amended by the Act of 1974.”

(emphasis added)

29. In Indian Aluminium Co. v. State of Kerala [1996 (7) SCC 637], this Court examined

the validity of the Kerala Electricity Surcharge (Levy and Collection) Act, 1989 and upheld the

same. It is borne out from the judgment that by Section 36 of the Finance Act, 1978, the Central

Excise and Salt Act, 1944 was amended for imposition of central excise duty on electricity under

item 11-E in the First Schedule to the Excise Act and fixed 2 paisa per kilo watt electricity unit. To

recoup the loss caused to the Kerala Electricity Board by imposition of central excise duty, the StateGovernment issued an order under Section 3 of the Kerala Essential Articles Control (Temporary

Powers) Act, 1961 whereby surcharge @ Rs.2.5 paisa per unit was levied. On 1.10.1984, the

Government of India withdrew the levy of excise duty on electricity. However, the State

Government did not withdraw the surcharge. Therefore, the consumers filed writ petition in the

High Court. During the pendency of the writ petition, the State Government discontinued the levy

of surcharge by issuing an ordinance. In Chakolas Spinning and Weaving Mills Ltd. vs. K.S.E.

Board [1988 (2) KLT 680], a Division Bench of the High Court ruled that levy of surcharge was

beyond the competence of the State. Special leave petition filed against the order of the High Court

was dismissed. Thereafter, the Kerala Electricity Surcharge (Levy and Collection) Ordinance, 1989

was promulgated, which later on became the 1989 Act. This Court upheld the power of the State to

enact law for levy of surcharge on the electricity supplied by the Electricity Board. The Court

referred to the earlier judgments in Prithvi Cotton Mills Ltd. v. Broach Borough Municipality [1969

(2) SCC 283], Patel Gordhandas Hargovindas v. Municipal Commissioner [1964 (2) SCR 608],

Orient Paper Mills Ltd. v. State of Orissa [AIR 1961 SC 1438], M/s. Misrilal Jain v. State of Orissa

[1977 (3) SCC 212), Tirath Ram Rajendra Nath v. State of U.P. [1973 (3) SCC 585], Government of

A.P. v. H.M.T. Ltd. (supra), I.N. Saksena v. State of M.P. [1976 (4) SCC 750] and some other

judgments and held:

“The validity of the Validating Act is to be judged by the following tests: (i) whether

the legislature enacting the Validating Act has competence over the subject-matter; (ii)

whether by validation, the legislature has removed the defect which the court had

found in the previous law; (iii) whether the validating law is consistent with the

provisions of Chapter III of the Constitution. If these tests are satisfied, the Act can

validate the past transactions which were declared by the court to be unconstitutional.

The legislature cannot assume power of adjudicating a case by virtue of its enactment

of the law without leaving it to the judiciary to decide it with reference to the law in

force. The legislature also is incompetent to overrule the decision of a court without

properly removing the base on which the judgment is founded.

The court does not have the power to validate an invalid law or to legalise

impost of tax illegally made and collected or to remove the norm of invalidation or

provide a remedy. These are not judicial functions but the exclusive province of the

legislature. Therefore, they are not encroachment on judicial power.

In exercising legislative power, the legislature by mere declaration, withoutanything more, cannot directly overrule, revise or override a judicial decision. It can

render judicial decision ineffective by enacting valid law on the topic within its

legislative field fundamentally altering or changing its character retrospectively. The

changed or altered conditions should be such that the previous decision would not

have been rendered by the court, if those conditions had existed at the time of

declaring the law as invalid. It is also empowered to give effect to retrospective

legislation with a deeming date or with effect from a particular date………….

The vice pointed out in Chakolas case has been removed under the Kerala

Electricity Surcharge (Levy and Collection) Act, 1989. Consequently, Section 11 of

this Act validated the invalidity pointed out in Chakolas case removing the base. In the

altered situation, the High Court would not have rendered Chakolas case under the

Act. It has made the writ issued in Chakolas case ineffective. Instead of refunding the

duty illegally collected under invalid law, Section 11 validated the illegal collections

and directed the liability of the past transactions as valid under the Act and also

fastened liability on the consumers. In other words, the effect of Section 11 is that the

illegal collection made under invalid law is to be retained and the same shall now stand

validated under the Act. Thus considered, Section 11 is not an incursion on judicial

power of the court and is a valid piece of legislation as part of the Act.”

30. The judgment in S.S. Bola v. B.D. Sardana (supra) calls for a detailed reference because

the main issue considered in that case is similar to the one raised in these appeals. The facts of that

case show that in A.N. Sehgal v. Raje Ram Sheoran [1992 Supp (1) SCC 304] and S.L. Chopra v.

State of Haryana [1992 Supp (1) SCC 391], this Court interpreted the rules framed under proviso to

Article 309 of the Constitution and gave certain directions for fixation of seniority of the members of

engineering services. After about three years, the State legislature enacted the Haryana Service of

Engineers, Class I, Public Works Department (Buildings and Roads Branch), (Public Health

Branch) and (Irrigation Branch) Act, 1995 and repeal the existing rules. The Act was given

retrospective effect from 1.11.1966 that is the date on which the State of Haryana was formed. The

Punjab and Haryana High Court struck down various provisions of the Act on the ground that the

same were enacted with the sole object of nullifying the earlier judgments of this Court in A.N.

Sehgal v. Raje Ram Sheoran (supra) and S.L. Chopra v. State of Haryana (supra). By majority of

2:1, this Court held that the 1995 Act is a valid piece of legislation and set aside the order of the

High Court. G.B. Pattanaik, J. (as he then was), who rendered leading judgment of the majority

noted that in Sehgal’s case and Chopra’s case, the Court had not invalidated the recruitment rules

but merely interpreted some provisions relating to determination of the inter se seniority of thedirect recruits and promotees and held that the Act cannot be invalidated on the ground that it was

an encroachment on judicial function. Pattanaik, J. then referred to the statement of objects and

reasons contained in the Bill introduced in Haryana Vidhan Sabha, various judgments of this Court

including in State of Gujarat v. Raman Lal Keshav Lal Soni (supra) and held:

“……….In view of the aforesaid legal position when the impugned Act is examined

the conclusion is irresistible that the said Act cannot be said to be an Act of

usurpation of the judicial power by the Haryana Legislature, but on the other hand it

is a valid piece of legislation enacted by the State Legislature over which they had

legislative competence under Entry 41 of List II of the Seventh Schedule and by

giving the enactment retrospective effect the earlier judgments of this Court in

Sehgal and Chopra have become ineffective. But since this does not tantamount to a

mere declaration of invalidity of an earlier judgment nor does it amount to an

encroachment by the legislature into the judicial sphere the Court will not be justified

in holding the same to be invalid. Needless to mention that the impugned Act has

neither been challenged on the ground of lack of legislative competence nor has it

been established to have contravened any provisions of Part III of the Constitution.

Consequently Mr Sachar’s contention has to be rejected and the Act has to be

declared intra vires. Necessarily, therefore the seniority list drawn up on different

dates in accordance with the earlier Rules of 1961 will have to be annulled and fresh

seniority list has to be drawn up in accordance with the provisions of the Act since the

Act has been given retrospective effect with effect from 1-11-1966. It may, however,

be reiterated that any promotion already made on the basis of the seniority list drawn

up in accordance with the Recruitment Rules of 1961 will not be altered in any

manner.”

Pattanaik, J. then referred to the judgment in Zohrabi v. Arjuna [1980 (2) SCC 203],

wherein it was held that a mere right to take advantage of the provisions of an Act is not an accrued

right and proceeded to observe:

“In the aforesaid premises, it must be held that the direct recruits did not have a

vested right nor had any right accrued in their favour in the matter of getting a

particular position in the seniority list of Executive Engineers under the pre-amended

Rules which is said to have been taken away by the Act since such a right is neither a

vested right of an employee nor can it be said to be an accrued right. Thus there is no

bar for the legislature to amend the law in consequence of which the inter se position

in the rank of Executive Engineer might get altered. Consequently, we see no

invalidity in the enactment of the Haryana Service of Engineers, Class I, Public

Works Department (Buildings and Roads Branch), (Public Health Branch) and

(Irrigation Branch) Respectively Act, 1995.”

S. Saghir Ahmad, J. who agreed with Pattanaik, J expressed his views in the following

words:

“It would be within the exclusive domain of the judiciary to expound the law as it isand not to speculate what it should be as it is the function of the legislature. It is also

within the exclusive power of the judiciary to hold that a statute passed by the

legislature is ultra vires. The legislature in that situation does not become a helpless

creature as it continues to remain a living pillar of a living Constitution. Though it

cannot directly override the judicial decision, it retains the plenary powers under

Articles 245, 246 and 248 to alter the law as settled or declared by judicial decisions.

This is what was observed by this Court in Anwar Khan Mehboob Co. v. State of M.P

which had the effect of indirectly overruling its previous decision in Firm Chhotabhai

Jethabai Patel & Co. v. State of M.P. The legislature can also validate an Act which

was declared invalid by the Court or amend it with retrospective effect so as to

remove the grounds of its invalidity. (See: Rai Ramkrishna v. State of Bihar and Jadao

Bahuji v. Municipal Committee.)

The power to make a law includes the power to give it retrospective effect subject to

the restriction imposed by Article 20(1) that a legislature cannot make retrospective

penal laws. It would be valid for the legislature to make any other enactment with

retrospective effect provided no fundamental right is infringed by reasons of its

taking away the vested right. Under the scheme of the Constitution, it is competent

for the legislature to put an end to the finality of a judicial decision and, therefore, it

would be competent for the legislature to render ineffective the judgment of a court

by changing the basis of the Act upon which that judgment was founded.

Where, however, the statutory provision is interpreted by the Court in a particular

manner and directions are issued for implementing the judgment in the light of the

interpretation placed on the statutory provisions, the legislature need not pass a

validating Act. In this situation, the legislature, in exercise of its plenary powers

under Articles 245, 246 and 248 can make a new Act altering fundamentally the

provisions which were the basis of the judgment passed by the Court. This can be

done with retrospective effect. So far as service conditions are concerned, they can be

altered with retrospective effect by making service rules under Article 309 or by an

Act of the legislature.”

31. In Mylapore Club v. State of T.N. [2005 (12) SCC 752], a three-Judge Bench examined

the validity of Sections 2 and 3 of the Madras City Tenants’ Protection (Amendment) Act, 1994 (Act

No. 2 of 1996). By Section 2 of the 1996 Act, Section 1 of the Madras City Tenants’ Protection Act,

1921 was amended and clause (f) was added providing for exemptions for tenancies of land owned

by religious institutions and religious charities belonging to Hindu, Muslim, Christian or other

religions. By Section 3, it was declared that any proceeding instituted by a tenant in respect of any

land owned by such a religious institution or religious charity, which was being exempted from the

operation of the Act pending before any court or other authority, would stand abated and all rights

and privileges conferred by the extension of the Madras City Tenants’ Protection Act, 1921 wouldcease and would become unenforceable. However, a proviso was added to the effect that nothing

contained in Section 3 shall be deemed to render invalid, any suit or proceeding in which a decree or

order passed had been executed or satisfied in full before the date of the coming into force of the

amending Act. It was argued on behalf of the tenant Club that the amendment made by Sections 2

and 3 of Act No. 2 of 1996, whereby exemption was granted to certain tenancies was not in

consonance with the object of the parent Act. It was further contented that Section 3 of the

amending Act which provided for certain pending proceedings to abate was a legislative act to put

an end to a judicial proceedings and the same was clearly unconstitutional. While rejecting the first

argument, the Court observed:

“The power to legislate is a plenary power vested in the legislature and unless those

who challenge the legislation clearly establish that their fundamental rights under the

Constitution are affected or that the legislature lacked legislative competence, they

would not succeed in their challenge to the enactment brought forward in the wisdom

of the legislature. Conferment of a right to claim the benefit of a statute, being not a

vested right, the same could be withdrawn by the legislature which made the

enactment. It is open to the legislature to bring in a law that has retrospective

operation. That position is not disputed. When it affects vested rights or accrued

rights, that question will have to be considered in that context. But the right to take

advantage of a statute has been held to be not an accrued right. It could not be said

that Amendment Act 2 of 1996 lacked either legislative competence or that it is

unconstitutional. It is a matter for the legislature to balance the object of the Parent

Act with the object of protecting the rights of religious institutions and religious

charities and on the basis of the material available to the legislature, the decision to

exempt the buildings of such religious institutions and religious charities has been

taken.”

While rejecting the second argument, the Court observed:

“By Section 3 of amending Act 2 of 1996 impugned herein, which is in pari materia

with Section 9 of the amending Act of 1960, the legislature had intended that pending

proceedings should be affected. Even otherwise, once the applicability of the Act

itself is withdrawn, no relief can be granted to a person who could have been or who

was earlier a beneficiary under that enactment, after such withdrawal. Here, the

section provides that even if some steps have been taken pursuant to the claim by the

tenant under Section 9 of the Parent Act, the proceeding cannot be continued in view

of the exemption enacted in favour of the institutions. Reading Section 3 of amending

Act 2 of 1996, it could not be said that it is a legislative intervention with a judicial

decision. The proviso to Section 3 of amending Act 2 of 1996 has saved concluded

transactions based on judicial adjudications. All that the said Section 3 does is to

make it explicit that the amendment is intended to apply to pending proceedings. In

the context of Section 6 of the General Clauses Act, unless it is shown that any right

has accrued to the claimant under Section 6 of the General Clauses Act, such a

provision making it clear that the Act could not be applied any more to pending

proceedings is not in any way invalid or incompetent. Unless the proceedings haveconcluded and the rights of the landlord have passed to the tenant, no right accrues to

the tenant. He is only in the process of acquiring a right, the process having been set

in motion at his instance. When pending proceedings are affected by an amendment,

it is open to the legislature to provide that the said process cannot continue. That

alone has been done by Section 3 of amending Act 2 of 1996. Therefore there is no

merit in challenge to Section 3 of the amending Act.”



32. Before parting with this aspect of the case, we consider it proper to notice the ratio of the

judgments on which reliance has been placed by the learned counsel for the employees. In Madan

Mohan Pathak v. Union of India (supra), a seven-Judge Bench considered the constitutional validity

of the Life Insurance Corporation (Modification of Settlement) Act, 1976 by which an attempt was

made to nullify the mandamus issued by the Calcutta High Court for payment of bonus to the

employees in terms of the settlements. This Court declared that the 1976 Act is violative of Article

31(2) of the Constitution and also held that by simply bringing new legislation, the Parliament could

not nullify the mandamus issued by the High Court for payment of cash bonus to the employees in

terms of the settlement.

33. In State of Gujarat v. Raman Lal Keshav Lal Soni (supra), this Court considered the

question whether the State legislature could retrospectively amend the Gujarat Panchayats Act,

1961 and deprive the employees of the Panchayats of their status as government servants. The High

Court allowed the writ petition filed by the members of the Panchayat service belonging to the local

cadre and declared that they have acquired the status of government servants. The High Court also

issued consequential directions for equation of posts, revision of pay scales and payment of salaries.

During the pendency of the appeals, the 1961 Act was amended with retrospective effect from 1978

and members of Panchayat service were sought to be deprived of their status as government

servants. This Court struck down the amendment on the ground that the same violated

fundamental right acquired by the employees of the panchayats and observed:

“Now, in 1978 before the Amending Act was passed, thanks to the provisions of the

principal Act of 1961, the ex-municipal employees who had been allocated to the

panchayat service as Secretaries, Officers and servants of Gram and Nagar

Panchayats, had achieved the status of government servants. Their status as

government servants could not be extinguished, so long as the posts were not

abolished and their services were not terminated in accordance with the provisions ofArticle 311 of the Constitution. Nor was it permissible to single them out for

differential treatment. That would offend Article 14 of the Constitution. An attempt

was made to justify the purported differentiation on the basis of history and ancestry,

as it were. It was said that Talatis and Kotwals who became Secretaries, Officers and

servants of Gram and Nagar Panchayats were government servants, even to start

with, while municipal employees who became such Secretaries, Officers and servants

of Gram and Nagar Panchayats were not. Each carried the mark of the ‘brand’ of

his origin and a classification on the basis of the source from which they came into the

service, it was claimed, was permissible. We are clear that it is not. Once they had

joined the common stream of service to perform the same duties, it is clearly not

permissible to make any classification on the basis of their origin. Such a

classification would be unreasonable and entirely irrelevant to the object sought to be

achieved. It is to navigate around these two obstacles of Article 311 and Article 14

that the Amending Act is sought to be made retrospective, to bring about an artificial

situation as if the erstwhile municipal employees never became members of a service

under the State. Can a law be made to destroy today’s accrued constitutional rights

by artificially reverting to a situation which existed 17 years ago? No.

The legislation is pure and simple, self-deceptive, if we may use such an expression

with reference to a legislature-made law. The legislature is undoubtedly competent to

legislate with retrospective effect to take away or impair any vested right acquired

under existing laws but since the laws are made under a written Constitution, and

have to conform to the dos and don’ts of the Constitution, neither prospective nor

retrospective laws can be made so as to contravene fundamental rights. The law must

satisfy the requirements of the Constitution today taking into account the accrued or

acquired rights of the parties today. The law cannot say, 20 years ago the parties had

no rights, therefore, the requirements of the Constitution will be satisfied if the law is

dated back by 20 years. We are concerned with today’s rights and not yesterday’s. A

legislature cannot legislate today with reference to a situation that obtained 20 years

ago and ignore the march of events and the constitutional rights accrued in the course

of the 20 years. That would be most arbitrary, unreasonable and a negation of

history.”

34. In Chairman, Railway Board v. C.R. Rangadhamaiah (supra), the Constitution Bench

considered the question whether the Railway Administration could amend the rules with

retrospective effect and reduce the pension payable to the employees and held that such an

amendment violated Articles 14 and 16 of the Constitution, inasmuch as it affected vested right of

the employees.

35. In Govt. of Andhra Pradesh v. G.V.K. Girls High School (supra), this Court answered in

negative the question whether the Government could issue a G.O. and deny benefit of grant-in-aid to

the school and amend the Andhra Pradesh Education Act, 1982 for denying the benefit of the

judgment rendered by the High Court in favour of the respondent. 36. In none of the above noted cases, this Court considered an issue akin to the one examined

by us. Therefore, the proposition of law laid down in those cases cannot be relied upon for

entertaining the claim of daily wage employees for regularisation irrespective of the fact that they

may not have completed 5 years continuous service on or before 25.11.1993.

37. In view of the above discussion, we hold that the amendments made in the 1994 Act by

Act Nos.3 of 1998 and 27 of 1998 do not have the effect of nullifying or overriding the judgment in

District Collector v. M.L. Singh (supra). We further hold that the policy of regularisation contained

in first proviso to Section 7 of Act No.27 of 1998 is one time measure intended to benefit only those

daily wage employees, etc. who completed 5 years continuous service on or before 25.11.1993 and the

employees who completed 5 years service after 25.11.1993 cannot claim regularisation.

38. The question whether Section 7A of Act No. 27 of 1998 amounts to an encroachment on

the court’s power on judicial review is answered in negative in view of the three-Judge Bench

judgment in Mylapore Club v. State of Tamil Nadu (supra) and we respectfully follow the ratio of

that judgment. Even otherwise, in view of the interpretation placed by us on the policy of

regularisation contained in first proviso to Section 7 of the 1994 Act, the question of abatement of

claims etc. has become purely academic.

39. We shall now consider whether the cut off date, i.e., 25.11.1993 specified in the first

proviso to Section 7 of the 1994 Act (as amended by Act No. 27 of 1998) for determination of the

eligibility of daily wage employees to be considered for regularisation is arbitrary, irrational and

violative of Articles 14 and 16 of the Constitution. Undisputedly, the Ordinance issued in 1993 was

the first exercise of legislative power by the State to prohibit employment on daily wages and to

restrict appointments on temporary basis and, at the same time, streamline the recruitment in public

services by adopting a procedure consistent with the doctrine of equality embodied in Articles 14

and 16 of the Constitution. The 1994 Act was enforced with effect from 25.11.1993, i.e., the date onwhich the Ordinance was published in the official Gazette. Therefore, that date had direct bearing

on the policy of regularisation circulated vide G.O. dated 22.4.1994, which was issued by the State

Government in exercise of its executive power under Article 162 of the Constitution. When that

policy was engrafted in the 1994 Act in the form of proviso to Section 7, the legislature could not

have fixed any date other than 25.11.1993 for determining the eligibility of daily wage employees

who fulfilled the requirement of 5 years continuous service. If any other date had been fixed for

counting 5 years service of daily wage employees for the purpose of proviso to Section 7, the object

sought to be achieved by enacting the 1994 Act would have been defeated, inasmuch as the regular

recruitment could not have been made for appointment against the sanctioned posts and back door

entrants would have occupied all the posts. Therefore, the cut off date i.e.25.11.1993 prescribed by

the legislature for determining the eligibility of daily wage employees and others covered by Section

7 of the 1994 Act cannot be dubbed as arbitrary, unreasonable, irrational or discriminatory. This

view of ours is in tune with judicial precedents on the subject. In Union of India v. Parameswaran

Match Works [(1975) 1 SCC 305], a three-Judge Bench was called upon to decide whether the date

for making the declaration, i.e., September 4, 1967 fixed for grant of the benefit of concessional rate

of duty was irrational and arbitrary. The High Court declared that the cut off date fixed for grant

of the concessional rate of duty violated Article 14 of the Constitution. This Court disapproved the

view taken by the High Court and held that the choice of a date as the basis for classification cannot

always be dubbed as arbitrary even if no particular reason is forthcoming for the same, unless it is

shown to be capricious or whimsical. It was further held that there is no mathematical or logical

way for fixing a particular date and the decision of the legislature or its delegate must be accepted

unless the fixation of date is found to be very wide off the reasonable mark.

40. In Sushma Sharma v. State of Rajasthan [(1985) Supp. SCC 45], fixation of 25

th

June,

1975 as the cut off date for the determination of eligibility of temporary teachers for the purpose of

absorption in terms of the Rajasthan Universities Teachers (Absorption of Temporary Lecturers)

Act, 1973 was challenged on the ground of discrimination and violation of Articles 14 and 16. A

learned Single Judge of the High Court declared that the cut off date was arbitrary and violative ofthe equality clause enshrined in the Constitution. The Division Bench reversed the order of the

learned Single Judge and held that the cut off date did not offend the doctrine of equality. This

Court approved the view taken by the Division Bench and observed:

“The object of this legislation was to provide for absorption of temporary lecturers of

long standing. So therefore experience and continuous employment were necessary

ingredients. The Hindi version of the Ordinance used the expression “ke prarambh ke

samaya is roop me karya kar rahe hein” is capable of meaning “and are continuing”

to work as such at the time of the commencement of the Ordinance. Keeping the

background of the purpose of the Act in view that would be the proper construction

and if that is the proper construction which is in consonance with the English version

of the Ordinance and the Act as well as with the object of the Act then in our opinion

the Act and the Ordinance should be construed to mean that only those would be

eligible for screening who were appointed prior to June 25, 1975 and were continuing

at the time of the commencement of the Ordinance i.e. June 12, 1978 i.e.

approximately about three years. If that is the correct reading, then we are unable to

accept the criticism that those who were for a short period appointed prior to June 25,

1975 then again with interruption were working only at the time of the commencement

of the Ordinance i.e. June 12, 1978 would also be eligible. In other words people with

very short experience would be eligible for absorption. That cannot be the purpose of

the Act. It cannot be so read reasonably. Therefore on a proper construction it means

that all temporary lecturers who were appointed as such on or before June 25, 1975

and were continuing as such at the commencement of the Ordinance shall be

considered by the University for screening for absorption. The expression “were

continuing” is significant. This is in consonance with the object of the Act to ensure

continuity of experience and service as one of the factors for regularising the

appointment of the temporary lecturers. For regularising the appointment of

temporary lecturers, certain continuous experience is necessary. If a Legislature

considers a particular period of experience to be necessary, the wisdom of such a

decision is not subject to judicial review. Keeping the aforesaid reasonable meaning of

clause 3 of the Ordinance and Section 3 of the Act in view, we are of the opinion that

the criterion fixed for screening for absorption was not an irrational criterion not

having any nexus with the purpose of the Act. Therefore, the criticism that a teacher

who was working even for two or three months only before June 25, 1975 and then

with long interruptions was in employment of the University at the time of the

commencement of the Ordinance would be eligible but a teacher who had worked

continuously from June 26, 1975 i.e. after the date fixed i.e. June 25, 1975 for three

years would be ineligible and as such that will be discrimination against long

experience, cannot be accepted. Such a construction would be an unreasonable

construction unwarranted by the language used in the provisions concerned. It is wellsettled that if a particular period of experience is fixed for screening or for absorption,

it is within the wisdom of the Legislature, and what period should be sufficient for a

particular job or a particular employment is not subject to judicial review.”

(emphasis added)

41. In Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212], it was held that fixing of

1

st

August as the cut off date for determining the eligibility in the matter of age of the candidates

appearing in the examination held for recruitment to the Indian Administrative Service/IndianForeign Service etc. cannot be termed as arbitrary merely because the preliminary examination was

held prior to that date. The court accepted the explanation given by the Union of India that 1

st

of

August of the year is normally fixed for determination of the eligibility of the candidates and the

same was not modified before holding the preliminary examination because it was only a screening

test and marks obtained at such examination were not taken into consideration at the time of

preparing the final result. In Union of India v. K.G. Radhakrishana Panickar [(1998) 5 SCC 111], it

was held that the decision of the railway administration to fix 1.1.1961 as the cut off date for the

purpose of counting of past service of Project Casual Labourers for the purpose of retrial benefits

was not arbitrary or unreasonable because two separate schemes were framed for regularisation of

casual labourers.

42. The question which remains to be considered is whether the Division Bench was justified

in holding that all daily wage employees who completed 5 years service on the date of enforcement of

Act No. 27 of 1998, i.e., 19.8.1998 would be entitled to be considered for regularisation of their

services. A reading of paragraphs 54, 67, 68 and 72 of the impugned judgment shows that even

though the Division Bench did not find the cut off date i.e. 25.11.1993 specified in first proviso to

Section 7 for determining the eligibility of daily wage employees for regularisation to be arbitrary,

irrational or discriminatory, yet it changed the said date from 25.11.1993 to 19.8.1998 solely on the

premise that Act No. 27 of 1998 was enforced with effect from that date. In our view, once the

Division Bench negatived the challenge to the validity of Act Nos.3 of 1998 and 27 of 1998, there was

no warrant for altering the date of eligibility specified in first proviso to Section 7 of the 1994 Act

and thereby extend the zone of eligibility of daily wage employees who could be considered for

regularisation. As a corollary, we hold that the declaration made by the Division Bench that all

persons who completed 5 years service as on the date of coming into force of Act No.27 of 1998

would be entitled to be considered for regularisation of their services is legally unsustainable and is

liable to be set aside.

43. In the result, the appeals filed by the employees (C.A. Nos.3702, 3703, 3704, 3705, 3706,3707, 3709, 3710, 3721, 3733, 3734, 3737, 3742, 3744, 3748, 3749 and 3751 of 2006) are dismissed and

those filed by the State Government and agencies/instrumentalities of the State (C.A. Nos.3685, 3712,

3713, 3714, 3715, 3716, 3717, 3718, 3723, 3724, 3726, 3727, 3728, 3729, 3730, 3731, 3732, 3750, 3752,

3753, 3754 and 3755 of 2006) are allowed. The declaration made by the Division Bench that the ban

on regularisation will be effective from 19.8.1998 i.e. the date on which Act No.27 of 1998 came into

force and that all persons who have completed 5 years service as on that date would be entitled to be

considered for regularisation of service is set aside. It is, however, made clear that the daily wage

employees and others who are covered by Section 7 of the 1994 Act (amended) and whose services

have not been regularised so far, shall be entitled to be considered for regularisation and their

services shall be regularised subject to fulfillment of the conditions enumerated in G.O. dated

22.4.1994. With a view to obviate further litigation on this issue, we direct the Government of

Andhra Pradesh, its officers and agencies/instrumentalities of the State to complete the exercise for

regularisation of the services of eligible employees within four months of the receipt/production of

copy of this order, without being influenced by the fact that the application, writ petition or appeal

filed by any such employee may have been dismissed by the Tribunal or High Court or this Court.

Since some of the appeals decided by this order relate to part time employees, we direct that similar

exercise be undertaken in their cases and completed within four months keeping in view the

conditions enumerated in G.O.(P). No.112 dated 23.7.1997.

……………………….J.

[ B.N. Agrawal ]

……………………….J.

[ G.S. Singhvi ]

New Delhi,

July 06, 2009