Nagabhushana G.R. vs The Chairman, State Bank of India and Others

B.S. Patil, J.—1. In this writ petition, originally petitioner had sought for a writ of mandamus against the respondent - State Bank of India and its authorities to absorb/regularize him as Technical Officer (Farm Sector) in the cadre of JMGS-1 with effect from 02.08.2010, the date on which similarly placed persons engaged in State Bank of India and its associate banks were absorbed on the basis of policy formulated by the Competent Authority of the State Bank of India vide Circular dated 20.07.2010 - Annexure-M thereby according continuity of service to him.

An order dated 29.01.2014 was passed as per Annexure-AL by the Chief General Manager of the respondent - Bank rejecting the request made by the petitioner. In the said order, reference has been made to the advice tendered by the Ministry of Law and Justice with the approval of Minister of Law and Justice which has been extracted in the impugned order itself. Based on the said advice, respondent - Bank has come to the conclusion that petitioner was appointed as Technical Officer (Farm Sector) at Hubballi Zonal Office on 31.03.2008 for initial period of two years. On his satisfactory performance, his contract was renewed twice and the contract was to expire on 30.03.2014; therefore, as per the terms and conditions of the contract, on expiry of the contract period, he would not have any right to get permanently absorbed in the Bank''s service and the Bank was not required to regularize his service. It also made it clear that in case of further requirement, the contract would be renewed, but there was no proposal to regularize his services. The said order Annexure-AL also refers to another employee by name H.M. Girish who was also appointed on contract basis as Officer Marketing and Recovery at Hassan. It is in this background, petitioner has filed an application seeking amendment of the writ petition to incorporate additional prayer to quash Annexure-AL and also to include certain additional grounds in support of the said relief.

Petitioner contends that direction issued by the Finance Ministry as is evident from Annexure-AL makes reference to the judgment of the Apex Court in UMADEVI''s case - , (2006) 4 SCC 1 and states that law laid down therein binds all public authorities including the State Bank of India and the ratio of the said case has to be followed. He urges that Finance Ministry had not considered the case of the petitioner to opine one way or the other regarding his entitlement to seek absorption/regularization. It is his submission that even as per the law laid down by the Apex Court in UMADEVI''S case, particularly paragraph 31 and in the light of the judgment rendered in the case of Amarkant Rai v. State of Bihar & Others - , 2015 (8) SCC 265, wherein by considering the ratio laid down in Umadevi''s case and Nihal Singh & Others v. State of Punjab & Others , (2013) 14 scc 65, the Apex Court has held that existence of the need for creation of the posts would be a relevant factor with reference to which the executive Government was required to take rational decision. Attention of the Court is also invited to the observations made in paragraph 7 of the said decision, wherein it is stated as under:

"7. It is evident from the above that there is an exception to the general principles against ''regularisation'' enunciated in Umadevi: , (2006) 4 SCC 1, if the following conditions are fulfilled:

(i) The employee concerned should have worked for 10 years or more in duly sanctioned post without the benefit or protection of the interim order of any court or tribunal. In other words, the State Government or its instrumentality should have employed the employee and continued him in service voluntarily and continuously for more than ten years.

(ii) The appointment of such employee should not be illegal, even if irregular. Where the appointments are not made or continued against sanctioned posts or where the persons appointed do not possess the prescribed minimum qualifications, the appointments will be considered to be illegal. But where the person employed possessed the prescribed qualifications and was working against sanctioned posts, but had been selected without undergoing the process of open competitive selection, such appointments are considered to be irregular."

In this regard, it is contended by the learned counsel for the petitioner that appointment of the petitioner was made after identifying the vacancies available and by applying reservation in accordance with the recruitment rules. Insofar as the requirement of appointment as against sanctioned vacancies, it is urged by the learned Senior Counsel Sri B.M. Shyam Prasad that all the indicia of a sanctioned vacancy was present in the case on hand at the time when appointment of the petitioner was made which was discernable from the various steps taken by the Bank in following the rules of recruitment for reserved categories. He also brings to notice of the Court that periodically pay-scale of the petitioner has been increased and the bank has felt the need for continued employment of the petitioner in the post for which he was appointed on contract basis. In this regard, he has invited the attention of the Court to Annexure-AE.

Insofar as the judgment rendered by this Court in the case of H.M. Girish in W.P. No. 25747/2015 disposed of 23.07.2015, it is contended by the learned Senior counsel that the said judgment proceeds on the basis of the fact that Finance Ministry after considering the matter had issued a direction to the effect that ''on expiry of the contract, the officer working on contractual basis will not have any right to get permanently absorbed in the Bank''s service and the bank need not regularise their services'', as is evident from the observation made in paragraph 8 of the said order. But indeed, no such direction or opinion has been expressed in the letter dated 10.12.2013 issued by the Finance Ministry. In fact, the advice issued by the Finance Ministry is produced at Annexure-AK along with an application by the petitioner. It reads as under:

"F. No. 16/1/33/2013-IR Government of India Ministry of Finance Department of Financial Services

Jeevan Deep, Parliament Street, New Delhi- 110001. Dated the December 10, 2013

CEOs of all Public Sector Banks including SBI and its Associates

Sub: Recruitment policy of PSBs

I am directed to refer to the subject cited above and to say that it has brought to the knowledge of this Department that some Banks have regularized the services of contractual employees leading to litigation in various Courts.

In this context, it has been decided to bring to the notice of all the PSBs the advice tendered by the Ministry of Law & Justice with the approval of the Hon''ble Minister of Law & Justice which is as follows:

"that all the public authorities including SBI are bound by the law laid down by the Supreme Court keeping in view the provisions of Articles 141 of the Constitution and any submission made by the SBI or any public authority against the law laid down by the Apex Court cannot be supported. The ratio of Umadevi''s case is binding on the Government as well as the PSUs in the same way as it is binding on the courts."

It is, therefore, requested that the advice of Ministry of Law & Justice may be brought to the notice of the Board of Directors for meticulous compliance.

Yours faithfully,

(Manish Kumar) Under Secretary to Government of India"

It is thus evident from the letter that no such advice or opinion directing that on expiry of the contract, officer on contractual basis would not have any right to get permanently absorbed in the bank''s service and the bank need not regularise their service was tendered by the Ministry. What has been stated in the said letter is that ratio of UMADEVI''s case was binding on the Government as well as PSBs in the same way as it was binding on the Courts. Indeed, it is as per the impugned order - Annexure-AL issued by the Board in its meeting dated 29.01.2014 that such a direction has been issued. It is further contended by the learned Senior Counsel appearing for the petitioner that in the decision rendered by this Court in W.P. No. 25747/2015, the judgment in UMADEVI''s case has not been considered. He, therefore, submits that the Bank has to consider the request for regularise keeping in mind the principles laid down by the Apex Court in UMADEVI''s case and also subsequent decisions namely Nihal Singh & Others v. State of Punjab & Others , (2013) 14 scc 65 & Amarkant Rai v. State of Bihar & Others - , 2015 (8) SCC 265.

Learned Senior Counsel, inviting the attention of the Court to Annexure-AE dated 17.09.2014 which is in the nature of a note by the Deputy General Manager (HR), Hubballi Zone points out that services of the petitioner as Technical Officer (Farm Sector) was availed on contract basis for a period of 2 years from 31.03.2008 to 30.03.2010 and his term of contract was renewed thrice for a period of 3 years from 31.03.2010 to 30.03.2013 and for a period of 1 year from 31.03.2013 to 30.03.2014 and subsequently for a period of 1 year from 01.04.2014 to 31.03.2015; as the contract of the petitioner expired on 31.03.2015, it was directed to review the performance of the petitioner with recommendations for extension or otherwise of the contract period and forward the same with the required particulars. As per Annexure-AF dated 14.10.2014, recommendation has been made in paragraphs 4 & 5 of the said letter of recommendation which is also in the form of a note to the Deputy General Manager (HR) Head Office, Bengaluru, which states as under:

"4. It may not be out of place to state that Mr. Nagabhushana G.R. is a resource person involved in appraisal of high value proposals as well as in recovery efforts. He deserves all encouragement.

In view of the satisfactory performance, we recommend for continuing his services in the Bank on contract basis for a further period of one year from 01.04.2015 to 31.03.2016."

It is also stated at the Bar that currently petitioner is continued to discharge his duty as such official in view of the interim order granted by this Court.

Sri Harsh Desai, learned counsel appearing for respondents 4 and 5 has strongly supported the order under challenge. He has urged that as the petitioner was appointed on contract basis with a clear stipulation that he would not have any right to get permanently absorbed in the bank, his request for regularisation has been rightly rejected. He has invited the attention of the Court to the general instructions contained in the notification issued inviting application for contractual appointments and to the appointment order produced at Annexure-E wherein also the employee was informed that the appointment was purely on contractual basis and was subject to instruction/guidelines or other rules and regulations framed by the bank from time to time. It is his submission that in the decision rendered by the Apex Court in UMADEVI''S case - , (2006) 4 SCC 1, particularly at paragraph 43, it has been ruled that merely because a contractual employee had been continued by renewing his contract, he would not be entitled for regularisation. He has urged that in the said case, the Apex Court has, no doubt, directed regularisation of daily wage employees who had completed 10 years of service, but in the instant case, petitioner had not completed 10 years of service and his appointment was periodically renewed with a specific stipulation that appointment was need-based and would not clothe him with any right to get permanently absorbed in the bank. Reliance is placed on the judgment of this Court rendered in W.P. Nos. 24718 to 24720 of 2012 and connected petitions disposed of on 24th August 2012 in the case of Shri Sathyanarayan Shetty v. The Regional Manager, State Bank of India and Others and judgment of Delhi High Court in the case of Dr. Parmod Kumar Dhailwal v. GNCT of Delhi & Ors. (W.P.(C) 7942/2014 & CM APPL. 18623/2014 disposed of on 26th May 2015). Attention of Court is also invited to the judgment of the Apex Court in the case of State of Karnataka and Others v. M.L. Kesari and Others , (2010)9 SCC 247.

On consideration of the entire materials on record, I find that it is unnecessary to examine the matter on merits because impugned order passed by the respondent-bank refers to the advice tendered by the Ministry of Law and Justice with the approval of the Minster for Law and Justice, which reads as under:

".... that all the public authorities including SBI are bound by the law laid down by the Supreme Court keeping in view the provisions of Articles 141 of the Constitution and any submission made by the SBI or any public authority against the law laid down by the Apex Court cannot be supported. The ratio of Umadevi''s case is binding on the Government as well as the PSUs in the same way as it is binding on the courts."

In addition, the impugned order further makes a mention as under:

"The gist of the Supreme Court Ruling given in Umadevi''s case is annexed."

Having made reference to the advice given by the Ministry and the judgment in UMADEVI''S case, the Board proceeds to hold that as per terms and conditions of the contract, on expiry of the contract, the Officer on contractual basis will not have any right to get permanently absorbed in the bank service and hence the bank need not regularise such service. It also proceeds to observe that in case of further requirement, the contract would be renewed and there was no proposal for regularising their service. The impugned order further clarifies that advice given by the Ministry of Finance and the Ministry of Law and Justice has been noted and recorded.

The resultant position is that merits of the case pleaded by the petitioner stating that even as per UMADEVI''S case, as construed and clarified from time to time by different judgments, petitioner was entitled for regularisation and that other banks such as State Bank of India, State Bank of Indore and State Bank of Patiala had, in similar circumstances, regularised the services of the contractual employees and, therefore, his case was required to be considered for regularisation has not been examined.

It is true decision in Umadevi''s case lays down a binding precedent and it binds the bank as well as this Court. But, the ratio of the decision has to be applied to the facts of the given case by examining the merits of the case while passing the order. In fact, the advice of the ministry was also to that effect. Instead of undertaking such an exercise, the respondent bank has proceeded solely on the basis that because of contractual employment, he was not entitled for regularisation. The bank ought to have referred to the ratio of UMADEVI''S case and in the background of the said judgment ought to have appreciated the facts of the present case and thereafter passed an order. As the said exercise has not been done, I am of the view that bank has to reconsider the request for regularisation in the light of the binding precedent laid down by the Apex Court, insofar as the case of the petitioner is concerned.

In the judgment rendered in W.P. No. 25747/2015, as rightly contended by the learned Senior Counsel, this Court has proceeded on the basis that Finance Ministry had issued a clear direction that on expiry of the contract, Officer on contractual post will not have any right to get permanently absorbed in the bank service and bank need not regularise their service. In fact, it is fairly contended at the Bar that Ministry''s advice did not contain any such directive. Indeed the alleged directive attributed to the Finance Ministry as found in the order is the opinion of the bank and not the direction of the Ministry.

Therefore, in the present case, the matter is remitted for reconsideration only on the ground that bank did not consider the facts and circumstances of the present case in the light of the ratio laid down by the Apex Court in its judgment rendered in UMADEVI''S case and subsequent cases which are now brought to the notice of this Court. The Bank is directed to expedite consideration of the case and dispose of the matter and pass appropriate orders within three months from the date of receipt of a copy of the order. Writ Petition is accordingly disposed of.

The other judgments on which reliance is placed by Sri Harsh Desai, learned counsel for the bank having bearing on the merits of the given case need not be considered at length at this stage as the matter is kept open to be decided by the Bank.

Interim order already passed will continue till the final decision is taken in the matter by the bank.