Heard Sri M. Delhi Babu vs Services-I For The
2023 Latest Caselaw 3444 AP

Citation : 2023 Latest Caselaw 3444 AP
Judgement Date : 14 July, 2023

Andhra Pradesh High Court - Amravati

Heard Sri M. Delhi Babu vs Services-I For The on 14 July, 2023

      THE HON'BLE SRI JUSTICE RAVI NATH TILHARI
                         AND
      THE HON'BLE JUSTICE DR. V.R.K. KRUPA SAGAR

                  WRIT APPEAL No.467 of 2023


JUDGMENT:- (per Hon‟ble Sri Justice Ravi Nath Tilhari)

      Heard Sri M. Delhi Babu, learned counsel for the

petitioner/appellant      and   learned   Government      Pleader   for

Services-I for the respondent No.1 and Sri Abhay Jain, learned

counsel, representing Sri V. R. Reddy Kovvuri, learned counsel

for the respondent No.2.

2. This writ appeal has been filed challenging the

judgment/order dated 30.08.2022 passed by the learned Single

Judge in W.P.No.31107 of 2022.

3. The appellant filed writ petition questioning the

termination of his services by the notice dated 09.12.2021

issued by the respondent No.3, M/s. Sandeep Constructions

without conducting any enquiry and following due procedure of

law but on the direction of the respondent No.2 by letter dated

08.12.2021.

4. The writ petition has been dismissed, as there was no

relationship of employer and employee between the petitioner

and the respondent Nos.1 and 2. It was a dispute between the

official petitioner and the respondent No.3 (unofficial). It was

held that the petitioner cannot agitate his grievance in the writ

jurisdiction under Article 226 of the Constitution of India and

his remedy was elsewhere.

5. Learned counsel for the appellant submits that the

appellant was working under the official respondents for all

practical purposes and the payment was being made by the

respondent No.2; and consequently there was relationship of

employer and employee between the appellant and the

respondent No.2. The order was passed by the respondent No.3

in view of the letter dated 08.12.2021 of the respondent No.2.

6. Learned counsels appearing for the respondent Nos.

1 and 2 submitted that there was no relationship of employer

and employee between the official respondents and the

appellant. He was engaged by the contractor, respondent No.3.

He submits that the payment was being made in terms of the

agreement between respondent Nos.1 and 2 and the respondent

No.3 through an escrow account only to ensure that the

appellant and the workers like him are paid as previously some

grievances were raised for non-payment, to which the

contractors had no objection.

7. Learned counsels for the respondents have drawn the

attention of this Court to a previous judgment of this Court to

contend that the opening of the escrow account is for a specific

purpose by which the relationship of the employer and employee

is not established.

8. We have considered the submissions advanced and

perused the material on record.

9. Undisputedly there is no privity of contract between the

official respondents and the appellant. The recruitment was

done by the respondent No.3 the contractor. The petitioner was

not engaged by the respondent Nos.1 and 2.

10. With respect to the payment by the respondent No.2 out

of escrow account, in a similar matter, in W.P.Nos.12035,

12154 and 11898 of 2021, this aspect was elaborately dealt in

judgment dated 05.08.2021. It is apt to reproduce the relevant

part, as under:-

"Therefore, a reading of these clauses cumulatively leads to a conclusion that in order to ensure that the amounts/salaries due to the workers are paid to them this escrow account has been opened. The account was not opened for any other reason Normally, if a contractor is appointed he will raise a bill and collect the amounts, but as the payment of salaries to outsourced employees has become a matter of serious concern it was decided in the meeting held on 13.07.2018 to open these escrow accounts. The contractors stated that they have no objection if the operators are paid salaries directly through an escrow bank account.

As far as the other issues are concerned it is clear that the recruitment is done by the contractor. The attendance sheet is prepared by the contractor. It is sent to the vendor to raise a bill. Clause 2.3 and in 2.11 of Working Methodology clearly state as follows:

"2.3 Attendance Sheet shall be prepared each month separately for each sub-station. The attendance sheet shall be marked „P‟ for present and „A‟ for absence (pro-forma enclosed) and signed by the AE/or ADE of respective sub-stations and submit the same to the respective DE/Operation by 25th of every month, to admit the vendor bill for payment; a copy of attendance sheet shall be mailed to the vendor to raise the bill accordingly.

2.11 The salaries shall be paid to the outsourced employees on 1st of every month through contractors‟ escrow account by Pay office seeking LOC against the liability documents."

Therefore, it is clear that the opening of the escrow account is for a specific purpose and it does not establish and employer-employee relationship between the petitioner/ workmen and the official respondent. There is no privity of contract between the petitioners and the official respondents."

11. We are in agreement with the view taken by the learned

Single Judge in W.P.Nos.12035, 12154 and 11898 of 2021.

12. Simply because the payment is made out of the escrow

account, relationship of employer and employee between the

appellant and the official respondents is not established.

13. Learned Single Judge has rightly held that the writ

petition is not maintainable.

14. Writ Appeal is dismissed.

15. It is however clarified that the writ petition was dismissed

only on the ground that the writ petition was not maintainable.

Appellant is therefore at liberty to take recourse to such other

remedy as may be open under law and as may be advised.