Shri. Sanjay Shamrao Bhor & Ors. vs Pune Municipal Corporation & Ors.

19.

In this reference, the position emerging before us is similar. There is no conflict between the provisions of M.S.O. 4C and the provisions of the section 76 of the 1965 Act. In the event of the appointment having been made validly, it may be possible to invoke the provisions Cl. 4C of M.S.O.A. view to the contrary would result in regularizing/validating a void act. Cl. 4C neither permits nor contemplates the same. As held in the above judgments, if the appointment is not made in accordance with the constitutional scheme, it is void ab initio and, therefore, there can be no claim to its regularization or for grant of permanency in any manner. This is all the more so as Cl. 32 of the M.S.O. clarifies that the Standing Orders are not to operate in derogation of any other law i.e. section 76 of 1965 Act. Definitely any interpretation of Clause 4C conducive to defeating the Constitutional mandate is unwarranted. Violation of Clause 4C of the MSO may tantamount to an unfair labour practice under item 9 of Sch. IV of the 1971 Act but unless and until, other additional factors are proved on record, finding of indulgence in an unfair labour practice under Item 6 of Sch. IV thereof cannot be reached. As explained by the Hon'ble Apex Court in case of Maharashtra SRTC v. Casteribe Rajya Parivahan Karmchari Sanghatana, (supra), existence of a legal vacancy must be established and as discussed above, the power to recruit with the employer must also be demonstrated. In absence thereof, workman cannot succeed in proving the commission of unfair labour practice under Item 6 by the employer. These two ingredients, therefore, also must be established when benefit of Cl. 4C is being claimed. Unless availability of a vacancy is shown or then power with the employer to create the post and to fill it is brought on record, mere continuation of 240 days cannot and does not enable the workman to claim permanency by taking recourse to Cl. 4C read with Item 9 of Sch. IV of 1971 Act. Clause 4C does not employ word “regularisation” but then it is implicit in it as no “permanency” is possible without it. Conversely, it follows that when a statutory provision like section 76 disables the employer either from creating or filling in the posts, such a claim cannot be sustained. This also nullifies the reliance upon the judgment of learned Single Judge in case of Maharashtra Lok Kamgar Sanghatana v. Ballarpur Industries Limited (supra) where the employer was a private Company not subjected to such regulatory measures by any Statute and enjoyed full freedom to create the posts and to recruit. One of us (B.P. Dharmadhikari, J.) is party to the judgment of this Court in Raymond UCO Denim Private Ltd. v. Praful Warade (supra) which again needs to be distinguished for the same reasons. The judgment of learned Single Judge in case of Indian Tobacco Company Ltd. v. Industrial Court (supra), judgment of Hon'ble Apex Court affirming it or then judgment of Hon'ble Apex Court reported at Western India Match Company Ltd. and Workmen are all considered therein and are distinguishable as the same do not pertain to the province of public employment or consider inherent Constitutional restraints (the suprema lex-see Mahendra L. Jain v. Indore Development Authority (supra) and Cl. 32 of the MSO. For same reasons, law laid down by the Full Bench judgment of this Court in 2007 (1) Mh.L.J. (F.B.) 754 : 2007 (1) CLR 460Gangadhar Balgopal Nair v. Voltas Limited does not advance the cause of workmen. The Division Bench of this Court in May and Baker Ltd. v. Kishore Jaikishandas Icchaporia (supra) while construing section 10A(3) held that the expression “other law” would not refer to the Model Standing Orders or the Certified Standing Orders since they are laws made under the provisions of Parent Act itself and not under any other law. The Model Standing Orders and Certified Standing Orders, held the Division Bench, “are laws no doubt but they are laws made under the provisions of the Act”. They were held not to be provisions under any other law. This discussion therefore shows how these words “in derogation of any law for the time being in force” in Cl. 32 of MSO need to be understood and does not help Adv. Jaiswal or Adv. Khan.

20.

In Vice-chancellor, Lucknow University v. Akhilesh Kumar Khare (supra) relied upon by Adv. Parihar, Hon'ble Apex Court follows its Constitution Bench in Umadevi (III) and while rejecting relief of regularization to the daily wagers who were engaged in public employment without proper procedure, grants them compensation of ? 4 Lakh each by way of compassion. This judgment does not consider any welfare labour legislation and, therefore, cannot provide direct answer to the reference made. Judgment of this Court taking similar view in the light of 1971 Act in the case of Punjabrao Krishi Vidyapeeth, Akola v. General Secretary, Krishi Vidyapeeth Kamgar Union (supra) is already considered above. The Division Bench of this Court in State of Maharashtra v. Pandurang Sitaram Jadhav (supra) finds that the respondents before it were employed as daily wagers in the establishment of the Government Milk Dairy for a longer period of 12 to 20 years. There were no sanctioned posts and vacancies in existence in the concerned department. Respondents failed to demonstrate that their appointments were made in accordance with the procedure prescribed for selection. The Division Bench finds it wholly unjust to direct the appellant State Government to grant permanency to the respondents. It points out that the provisions of Model Standing Orders are subject to the Rules regulating selection and appointment so also subject to the constitutional scheme of public employment. Respondents daily wagers are declared to possess no legal right to claim permanency. Order passed by the learned Single Judge to the contrary have been quashed. State Government is held obliged to make appointments in adherence to the constitutional scheme of Public employment. Respondents Daily Wagers appointed without following the prescribed procedure for selection by passing public participation did not acquire any legal right to claim permanency. It is apparent that no inconsistency exists and cannot be worked out in State of Maharashtra v. Pandurang Sitaram Jadhav as also Pune Municipal Corporation v. Dhananjay Prabhakar Gokhale (supra) on one hand and Ballarpur Industries Limited v. Maharashtra Lok Kamgar Sanghatana (supra) on the other hand. Status of employer, nature of employment and inherent Constitutional limitation on public employer or absence of such fetters on any private employer or absolute freedom available to it to create post/s and recruit, are some of the distinguishing features which prohibit this exercise.

21.

Thus, in the light of this discussion, it follows that in absence of vacant sanctioned posts with the Municipal Council, a workman who has put in continuous service of 240 days or more in span of 12 months, cannot invoke Clause 4C of the MSO to claim either permanency or regularization. We accordingly answer the question referred. Registry to place the writ petitions before the learned Single Judge as per roaster assignment for further consideration.

43.

Thus, it is clear that adherence to the rule of equality in public employment is a basic feature of our Constitution and since the rule of law is the core of our Constitution, a Court would certainly be disabled from passing an order upholding a violation of Article 14 or in ordering the overlooking of the need to comply with the requirements of Article 14 read with Article 16 of the Constitution. Therefore, consistent with the scheme for public employment, this Court while laying down the law, has necessarily to hold that unless the appointment is in terms of the relevant rules and after a proper competition among qualified persons, the same would not confer any right on the appointee. If it is a contractual appointment, the appointment comes to an end at the end of the contract, if it were an engagement or appointment on daily wages or casual basis, the same would come to an end when it is discontinued. Similarly, a temporary employee could not claim to be made permanent on the expiry of his term of appointment. It has also to be clarified that merely because a temporary employee or a casual wage worker is continued for a time beyond the term of his appointment, he would not be entitled to be absorbed in regular service or made permanent, merely on the strength of such continuance, if the original appointment was not made by following a due process of selection as envisaged by the relevant rules. It is not open to the court to prevent regular recruitment at the instance of temporary employees whose period of employment has come to an end or of ad hoc employees who by the very nature of their appointment, do not acquire any right. High Courts acting under Article 226 of the Constitution of India, should not ordinarily issue directions for absorption, regularization, or permanent continuance unless the recruitment itself was made regularly and in terms of the constitutional scheme. Merely because, an employee had continued under cover of an order of Court, which we have described as 'litigious employment' in the earlier part of the judgment, he would not be entitled to any right to be absorbed or made permanent in the service. In fact, in such cases, the High Court may not be justified in issuing interim directions, since, after all, if ultimately the employee approaching it is found entitled to relief, it may be possible for it to mould the relief in such a manner that ultimately no prejudice will be caused to him, whereas an interim direction to continue his employment would hold up the regular procedure for selection or impose on the State the burden of paying an employee who is really not required. The courts must be careful in ensuring that they do not interfere unduly with the economic arrangement of its affairs by the State or its instrumentalities or lend themselves the instruments to facilitate the bypassing of the constitutional and statutory mandates. xxx

45.

While directing that appointments, temporary or casual, be regularized or made permanent, courts are swayed by the fact that the concerned person has worked for some time and in some cases for a considerable length of time. It is not as if the person who accepts an engagement either temporary or casual in nature, is not aware of the nature of his employment. He accepts the employment with eyes open. It may be true that he is not in a position to bargain -- not at arms length -- since he might have been searching for some employment so as to eke out his livelihood and accepts whatever he gets. But on that ground alone, it would not be appropriate to jettison the constitutional scheme of appointment and to take the view that a person who has temporarily or casually got employed should be directed to be continued permanently. By doing so, it will be creating another mode of public appointment which is not permissible. If the court were to void a contractual employment of this nature on the ground that the parties were not having equal bargaining power, that too would not enable the court to grant any relief to that employee. A total embargo on such casual or temporary employment is not possible, given the exigencies of administration and if imposed, would only mean that some people who at least get employment temporarily, contractually or casually, would not be getting even that employment when securing of such employment brings at least some succor to them. After all, innumerable citizens of our vast country are in search of employment and one is not compelled to accept a casual or temporary employment if one is not inclined to go in for such an employment. It is in that context that one has to proceed on the basis that the employment was accepted fully knowing the nature of it and the consequences flowing from it. In other words, even while accepting the employment, the person concerned knows the nature of his employment. It is not an appointment to a post in the real sense of the term. The claim acquired by him in the post in which he is temporarily employed or the interest in that post cannot be considered to be of such a magnitude as to enable the giving up of the procedure established, for making regular appointments to available posts in the services of the State. The argument that since one has been working for some time in the post, it will not be just to discontinue him, even though he was aware of the nature of the employment when he first took it up, is not one that would enable the jettisoning of the procedure established by law for public employment and would have to fail when tested on the touchstone of constitutionality and equality of opportunity enshrined in Article 14 of the Constitution of India.

53.

One aspect needs to be clarified. There may be cases where irregular appointments (not illegal appointments) as explained in S.V. Narayanappa, R.N. Nanjundappa and B.N. Nagarajan and referred to in para 15 above, of duly qualified persons in duly sanctioned vacant posts might have been made and the employees have continued to work for ten years or more but without the intervention of orders of the courts or of tribunals. The question of regularisation of the services of such employees may have to be considered on merits in the light of the principles settled by this Court in the cases abovereferred to and in the light of this judgment. In that context, the Union of India, the State Governments and their instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, who have worked for ten years or more in duly sanctioned posts but not under cover of orders of the courts or of tribunals and should further ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require to be filled up, in cases where temporary employees or daily wagers are being now employed. The process must be set in motion within six months from this date. We also clarify that regularisation, if any already made, but not sub judice, need not be reopened based on this judgment, but there should be no further bypassing of the constitutional requirement and regularising or making permanent, those not duly appointed as per the constitutional scheme.

35.

Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] is an authoritative pronouncement for the proposition that the Supreme Court (Article 32) and the High Courts (Article 226) should not issue directions of absorption, regularisation or permanent continuance of temporary, contractual, casual, daily wage or ad hoc employees unless the recruitment itself was made regularly in terms of the constitutional scheme.

36.

Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] does not denude the Industrial and Labour Courts of their statutory power under Section 30 read with Section 32 of the MRTU and PULP Act to order permanency of the workers who have been victims of unfair labour practice on the part of the employer under Item 6 of Schedule IV where the posts on which they have been working exist. Umadevi (3) [(2006) 4 SCC 1 : 2006 SCC (L&S) 753] cannot be held to have overridden the powers of the Industrial and Labour Courts in passing appropriate order under Section 30 of the MRTU and PULP Act, once unfair labour practice on the part of the employer under Item 6 of Schedule IV is established.

41.

Thus, there is no doubt that creation of posts is not within the domain of judicial functions which obviously pertains to the executive. It is also true that the status of permanency cannot be granted by the Court where no such posts exist and that executive functions and powers with regard to the creation of posts cannot be arrogated by the courts.

39.

On a harmonious reading of the two judgments discussed in detail above, we are of the opinion that when there are posts available, in the absence of any unfair labour practice the Labour Court would not give direction for regularisation only because a worker has continued as daily-wage worker/ad hoc/temporary worker for number of years. Further, if there are no posts available, such a direction for regularisation would be impermissible. In the aforesaid circumstances giving of direction to regularise such a person, only on the basis of number of years put in by such a worker as daily-wager, etc. may amount to back door entry into the service which is an anathema to Article 14 of the Constitution. Further, such a direction would not be given when the worker concerned does not meet the eligibility requirement of the post in question as per the recruitment rules. However, wherever it is found that similarly situated workmen are regularised by the employer itself under some scheme or otherwise and the workmen in question who have approached the Industrial/Labour Court are on a par with them, direction of regularisation in such cases may be legally justified, otherwise, non-regularisation of the left-over workers itself would amount to invidious discrimination qua them in such cases and would be violative of Article 14 of the Constitution. Thus, the industrial adjudicator would be achieving the equality by upholding Article 14, rather than violating this constitutional provision. (emphasis added)

82)

Permanency or regularization in service, which are concepts different and distinct from each other as observed by the Apex Court in Umdadevi after referring to its judgments in R. N. Nanjundappa vs T. Thimmiah & Anr 24 and B.N. Nagarajan Versus. State of Karnataka 25 are often used interchangeably by Courts and Tribunals. Permanency is more akin to making a temporary or badli worker permanent after completion of specified days of service. In various Standing Orders, such days are specified. The concept of permanency is applicable more in private employments, where there is no concept of creation of posts, payment of pension, need to continue the employee till retirement, etc. In services of Governments and State instrumentalities however the concept of permanency on completion of specified number of days cannot be made applicable as grant of permanent status not only requires existence of permanent posts, but also the liability to pay salaries, pension etc. In services of Governments and State instrumentalities, a regular/permanent employee cannot be retrenched unless a misconduct is proved against him/her, which is not the case in private employments. After following the procedure, even the permanent employee can be retrenched. Creation of posts in the establishments of Governments and State instrumentalities involves a comprehensive process as creation of post involves financial burden. The post is created not for any particular person but for the organisation as such. Once posts are created, the salaries are required to be revised as per pay commission recommendations. Governments and many of the State instrumentalities have pension schemes. Therefore, creation of posts in Governments and State instrumentalities is not an easy task. Creation of excess posts impairs the functions of the organisation which then becomes incapable of performing the duties for which the same is created. A classic example is of Municipal Corporations, created for civic governance and regulation of development. Several Municipal Corporations in the State are spending majority of their yearly revenues only on payment of salaries to the employees leaving small portion for performing the duties and functions for which they are created. The State Government is required to keep a tap on creation of posts by the Municipal Corporations so as to ensure that unnecessary posts are not created impairing performance of the statutory duties.

70)

Mr. Naidu has relied on judgments of the Apex Court in Jaggo Vs. Union of India, Vinod Kumar Vs. Union of India, Raj Karan Singh and Ors. Vs. Union of India and Ors., Dharam Singh Vs. State of U.P. and Shripal Vs. Nagar Nigam, Ghaziabad (supra) in support of his contention that the Apex Court has given directions for regularization of temporary/ casual employees who are found to have been engaged for several years. However, even in Jaggo Vs. Union of India, (supra) the Apex Court has referred to the judgment in Umadevi (supra) and the exception recognized in paragraph 53 of the judgment in relation to irregular employment. The Apex Court has held in paragraph 26 of the judgment in Jaggo Vs. Union of India as under:

26.

While the judgment in Uma Devi (supra) sought to curtail the practice of backdoor entries and ensure appointments adhered to constitutional principles, it is regrettable that its SLP(C) NO.5580 of 2024 ETC. Page 27 of 29 principles are often misinterpreted or misapplied to deny legitimate claims of long-serving employees. This judgment aimed to distinguish between “illegal” and “irregular” appointments. It categorically held that employees in irregular appointments, who were engaged in duly sanctioned posts and had served continuously for more than ten years, should be considered for regularization as a one-time measure. However, the laudable intent of the judgment is being subverted when institutions rely on its dicta to indiscriminately reject the claims of employees, even in cases where their appointments are not illegal, but merely lack adherence to procedural formalities. Government departments often cite the judgment in Uma Devi (supra) to argue that no vested right to regularization exists for temporary employees, overlooking the judgment's explicit acknowledgment of cases where regularization is appropriate. This selective application distorts the judgment's spirit and purpose, effectively weaponizing it against employees who have rendered indispensable services over decades.

71)

In Vinod Kumar Vs. Union of India (supra) the Apex Court has held that the true nature of employment is determined by how the job actually evolved and the length of continuous service, rather than the initial label or terms of the appointment letter. In that case, the Apex Court considered three factors of (i) continuous service (ii) performance of duties indistinguishable from those performed in permanent posts and (iii) selection through a process that mirrors that of regular recruitment. In the present case, the last test is clearly not fulfilled since the Respondents have not undergone a process which mirrors that of regular recruitment. Also, services of most of the employees are not long enough for this Court to record a positive finding that their service conditions have evolved over the time warranting their re-classification from temporary to regular status. Most importantly, the criteria of existence of vacant posts to accommodate all temporary employees is not fulfilled in the present case. Judgment of the Apex Court in Raj Karan Singh Vs. Union of India (supra) further builds upon the ratio of the judgment in Vinod Kumar Vs. Union of India (supra). The case involved denial of pensionary benefits on account of recognition of temporary status of the concerned employees. The Apex Court held that denying pensionary and service benefits to long-serving employees solely on the ground of a temporary or scheme-based classification is arbitrary and violates Articles 14 and 16 of the Constitution. It is held that even if employees are initially classified as temporary or attached to a contributory/scheme fund, evaluating their actual working conditions is mandatory. The employees therein had rendered over three decades of continuous service, were receiving regular pay scales, periodic increments, promotions, and Assured Career Progression benefits. The Apex Court therefore held that appellants therein were regular government servants.

72)

In Shripal Vs. Nagar Nigam, Ghaziabad (supra) the Apex Court has dealt with the issue of employment of workers through contractors in the light of ban imposed by the Government on fresh recruitment. Most of the contract employees in Shripal had worked for more than a decade. In Dharam Singh Vs. State of U.P. (supra) the Apex Court has dealt with daily wage employees in Uttar Pradesh Higher Education Services Commission. The Commission had employed the Appellants before the Apex Court in 1989 and 1992 on various posts such as peon, driver, etc. The Commission itself had resolved creation of 14 posts for regularization of daily wage employees and had sent a proposal to the State Government. The State Government had however refused to sanction the posts and what was challenged before the Apex Court was State’s arbitrary refusal to sanction posts despite Commission’s own acknowledgment of need of the work force, who had worked for several decades. It is in the context of these peculiar circumstances that the Apex Court referred to the judgments in Shripal and Jaggo and set aside refusals of the State Government to the Commission’s proposal for sanction /creation of class-III /class-IV posts and directed regularization of Appellant before it.

73)

Thus, in all the five recent judgments, the Apex Court has considered the factor of continuous service over a decade rendered by the concerned employees as an important factor for granting the benefit of regularisation. The judgments cannot be relied on in support of a proposition that continuation in service for a few years would make the temporary employee entitled for regularization, that too in absence of availability of sanctioned posts. In my view, therefore, the same yardstick of continuation in service of at least ten years needs to be applied in the present case for extending the benefit of regularization. (emphasis added)

viii) The petitioners shall be entitled to continuity of service only for the limited purpose of retiral and pensionary benefits, if otherwise admissible in law. However, such continuity shall not confer any right of permanency, regularisation, seniority, or promotional benefits;

“1.

Considering the reasons assigned in the Review Petitions and the order passed by the Coordinate Bench in Writ Petition No.9668 of 2016 dated 31 January 2023, and clause (viii) of the judgment of this Court dated 8 May 2026 is clarified as under:

"(viii)

The petitioners shall be entitled to continuity of service only for the limited purpose of retiral and pensionary benefits, if otherwise admissible in law. However, such continuity shall not confer any right of permanency, regularisation, seniority, or promotional benefits;"

2.

It is further clarified that it shall be open to the petitioner to apply for revival of Writ Petition No. 9668 of 2016. If such an application is filed, the concerned Court shall decide the same on its own merits and in accordance with law, uninfluenced by any observations made in the present order.

3.

The review Petitions stand disposed of.”

54.

Reliance by Mr. Naidu on judgment of this Court in Chief Officer, Sangli Municipal Council Vs. Dharamsingh Hiralal Nagarkar (supra) in support of his contention that continuation of temporary employment for two years constitutes fulfillment of requirement of expression “for years” is inapposite. The law has developed after the judgment in Chief Officer, Sangli Municipal Council Vs. Dharamsingh Hiralal Nagarkar. It is now well-established principle after the judgment of the Division Bench of this Court in Municipal Council Tirora and Another V/s. Tulsidar Baliram Bindhade 21 that an industrial adjudicator has no jurisdiction to direct creation of posts on establishment of a State instrumentality. Therefore, merely by reason of completion of 2 or 3 years of temporary service in a State instrumentality, an industrial adjudicator cannot make a declaration that unfair labour practice under Item 6 of Schedule IV of the M.R.T.U. & P.U.L.P. Act is committed with a view to claim benefit of permanency. If the argument of Mr. Naidu about continuance in temporary service for two years is accepted as continuation ‘for years’, the same would turn the ratio of Constitution Bench judgment in Umadevi on its head. Neither such interpretation can now be accepted nor Industrial Court can direct grant of permanency to temporary employees in establishment of State instrumentalities on completion of couple of years of service.