Afr vs State Of Odisha & Others
2021 Latest Caselaw 12984 Ori

                       ORISSA HIGH COURT: CUTTACK

                         W.P(C) NO. 27367 OF 2020

          In the matter of an application under Articles 226 and
          227 of the Constitution of India.
                                ---------------

AFR Sucharita Mohanty @ Mohapatra & others ..... Petitioners

-Versus-

State of Odisha & others ..... Opp. Parties

For Petitioners : M/s. B.S. Tripathy-1, A. Tripathy and A. Sahoo, Advocates

For Opp. Parties : Mr. Pravakar Behera, Standing Counsel, Transport Department

P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI

Date of hearing: 07.12.2021 :: Date of judgment: 21.12.2021

DR. B.R. SARANGI, J. The petitioners, who are working as

Data Entry Operators/Computer Supervisors in the

establishment of opposite party no.2-State Transport

Authority, have filed this writ petition seeking direction

to the opposite parties to issue formal orders in their // 2 //

favour regularizing their services in the Pay Band-1-

5200-20,200+GP Rs.1900/-, as per G.A. Department

Resolution dated 17.09.2013, on completion of

satisfactory service as has been allowed to the similarly

outsourced Data Entry Operators in various State

Government Departments and other various

Government Establishments with all consequential

service and monetary benefits.

2. The factual matrix of the case, in brief, is

that in order to introduce e-Governance system in the

Road Transport Sector, Govt. of India in the Ministry of

Road Transport & Highways, in exercise of their powers

conferred under Sections 27, 64, 110 & 137 of the

Motor Vehicle Act, 1988, amended the Central Motor

Vehicle Rules, 1989 w.e.f. 31.05.2002, vide Ministry of

Road Transport & Highways Notification No.GSR-

400(E) dated 31.05.2002 . The said Rules were called

as the Central Motor Vehicle (Third Amendment) Rules,

2002. The said notification authorized both the State

Government and Union Territories to specify their // 3 //

respective notification. Basing on the said notification

of the Government of India, opposite party no.1 issued

guidelines dated 10.08.2004 to implement the

mandatory statutory provisions of Central Motor

Vehicle (Third Amendment) Rules, 2002 by inviting

private participation to carry out entire e-Governance

system in the Road Transport Sector including various

functions relating to issuance of Smart Card based

driving license, registration certificates and other

functions of the Transport Department in the State of

Odisha. Thereafter, Govt. of Odisha-opposite party no.1

invited proposals from successful bidders vide NIT

dated 15.09.2005 and finally accepted the bid of M/s.

Smart Chip Limited, New Delhi-M/s Smart Chip (P)

Ltd. by issuing letter of acceptance dated 01.05.2006

for implementation of the aforesaid project.

2.1. Opposite party no.1 made Registered

Concession Agreement on 29.07.2006 with M/s. Smart

Chip Ltd., New Delhi as the "Concessionaire" for

implementation of the specified services as defined in // 4 //

Schedule-II for a period of 15 years commencing from

the date of agreement, i.e 29.07.2006. The tenure of

the said agreement with M/s. Smart Chip Ltd. would

come to an end during 2021. The agreement dated

29.07.2006 defines the term "Govt. of Odisha Offices"

to mean Regional Transport Office (RTO) and office of

the Transport Commissioner, Odisha and further the

"Govt. of Odisha Receipts" has been defined to mean

the moneys for issuance/renewal/amendment/

providing other services, including penalties and other

incidental levies, in accordance with the Act in respect

of fees for driving licence, fees for Learner Licence, fees

for Registration Certificate, fees for Trade Certificate,

fees for Fitness Certificate, Motor Vehicle Tax and

Permit Fees.

2.2. Under Article-5 of the said agreement,

the Govt. of Odisha-opposite party no.1 was to provide

all reasonable assistance to the Concessionaire for

procuring electrical and water connections. Under

Article-6 of the agreement, the authority has been // 5 //

given to the Concessionaire for levying and collecting

appropriate service charges from users for rendering

special services in accordance with Schedule-IV of the

agreement. Perusal of the agreement would reveal that

the entire governmental work of the State of Odisha in

respect of e-Governance of the Transport Department

including Smart Card Based Driving License,

Registration Certificates and other functions of the

Department including collection of Govt. Fees and

Receipts under the Act, as defined in the agreement,

have been assigned to the said Concessionaire, namely,

M/s. Smart Chip Ltd., New Delhi. On behalf of State of

Odisha-opposite party no.1, the Principal Secretary to

Govt., Commerce & Transport Department had signed

the agreement. Instead of implementing the e-

Governance System in Transport Department by

appointing persons in its various offices of STA, RTO

and other Govt. Offices under the Transport

Department, opposite party no.1 had introduced the

aforesaid new device of implementing the e-Governance // 6 //

project through M/s. Smart Chip (P) Ltd. permitting

the said private opposite party to make contractual

appointment of IT Personnel on daily wage basis by the

process of "Walk-in-interview" as against the posts

sanctioned for each Govt. Offices of the STA and RTOs.

For such engagement of IT personnel, State

Government had prescribed modality for selection of

those IT Personnel through M/s. IDCOL Software Ltd.,

a State Govt. Agency for conducting a transparent

selection. Thereafter, opposite party no.2 in its letter

dated 13.02.2007 communicated to the MD, M/s.

IDCOL Software Ltd. the details regarding the role,

responsibility, educational qualification and experience

required for those IT Personnel, including the Assistant

Programmers.

2.3. M/s. Smart Chip (P) Ltd. notified for

"Walk-in-interview" for appointment of Computer

Operators with qualification of PGDCA. As a

consequence thereof, M/s. Smart Chip Ltd. in

consultation with M/s. IDCOL Software and with the // 7 //

permission of the State Govt. in Finance Department,

engaged IT Personnel, including petitioners, as Data

Entry Operators/Supervisors, having requisite

qualification of PGDCA, on being selected through

"Walk-in-interview", in the office of the Regional

Transport Officer, Rourkela on fixed term employment

basis in the aforesaid project as per "Offer of

Employment" with a consolidated amount per month

on and from the date of their joining. Petitioners joined

in their respective services in between 2008 and 2015.

After six months of their continuance, all of them were

confirmed in their services.

2.4. As the petitioners have completed 6

years of service, they claim for regularization of their

services. The issue of regularization of similarly

situated outsourced and contractual employees

engaged in various Tahasils of the State was the

subject matter of consideration by the State Govt. In

the Minutes of meeting held on 28.04.2012, it was

decided that Data Entry Operators engaged on // 8 //

contractual basis in Tahasils should continue and

should not be disengaged till a decision regarding

regularization is finalized, and that the Govt. was

contemplating to frame policy on regularization of

contractual Data Entry Operators in various

Departments.

2.5. During continuance of the petitioners

as contractual outsourced Data Entry Operators, the

Govt. of Odisha promulgated a policy for regularization

of services of existing outsourcing and direct

contractual Group-C and Group-D employees working

under the State Govt., vide G.A Department Resolution

No.26108 dated 17.09.2013. As per the said policy, for

regular appointment a gradation list of such

contractual employees shall be prepared by the

appointing authority on the basis of their date of

appointment and regular appointment of those

categories of contractual employees shall be made on

the date of completion of six years of service or from // 9 //

the date of publication of the resolution, whichever is

later.

2.6. The period of six years shall be counted

from the date of contractual appointment prior to

publication of the resolution. As per paragraph-2 of the

Resolution dated 17.09.2013, on the date of

satisfactory completion of six years of contractual

service or from the date of publication of the resolution,

whichever is later, they shall be deemed to have been

regularly appointed and a formal order of regular

appointment shall be issued by the appointing

authority. Consequent upon regular appointment

under the contractual post, if any, shall get re-

converted to regular sanctioned post. In case the

person concerned has crossed the upper age limit for

entry into Government service on the date of

contractual appointment for the corresponding regular

post, the appointing authority shall allow relaxation of

upper age limit. Subsequently, Government of Odisha

in G.A Department issued another resolution on // 10 //

16.01.2014 expressly clarifying the G.A Department

Resolution dated 17.09.2013 that proposal for

regularization of contractual appointments/

engagements as per resolution dated 17.09.2013 shall

be considered and approved by the High Power

Committee to be constituted under the Chairmanship

of the concerned Department. Departments of Higher

Education, Tourism & Culture and the Dean &

Principal, SCB Medical College & Hospital, Cuttack,

have implemented the G.A Department resolution for

the Data Entry Operators in their respective posts

w.e.f. 17.09.2013 in P.B.-1 Rs.5,200-20,200 with GP

Rs.1900 and/or Rs.2400/-. Similarly situated

outsourced employees like the petitioners, having been

regularized, as per resolution dated 17.09.2013, the

petitioners' claim for similar benefit should be extended

to them. Similarly, the Data Entry Operators working

under CT & GST Organization, who were initially

engaged on outsourcing basis in 2005-07 were brought

as direct contractual in February, 2008 had // 11 //

approached the Odisha Administrative Tribunal,

Cuttack by filing O.A. No.2172(C) of 2015 (Jatin

Kumar Das v. State) and batch for regularization of

their services, as per G.A Department Resolution dated

17.09.2013, and the Tribunal allowed their claim vidfe

judgment dated 17.05.2017. Aggrieved thereby, the

State approached this Court by filing W.P.(C) No.6661

of 2018 and this Court, vide judgment dated

10.05.2018, dismissed the said writ petition. The State

then carried the matter to the apex Court in SLP(C)

No.18642 of 2018, which was also dismissed vide order

dated 06.08.2018. Thereafter, all the Data Entry

Operators working in CT & GST Organization were

regularized, pursuant to the judgment dated

17.05.2017 passed in the case of Jatin Kumar Das

(supra). The petitioners' case being identical to the

Data Entry Operators in CT & GST, similar benefit

should be extended to them.

2.7. Basing upon G.A Department

Resolution dated 17.09.2013, all the Data Entry // 12 //

Operators, including the petitioners, submitted their

representations on 06.06.2015 to opposite parties no.1

& 2 and also to the Chief Secretary, Home Secretary,

Finance Secretary and Secretary, G.A. Department,

Govt. of Odisha seeking necessary action for

regularization of their services under opposite parties

no.1 & 2 with issuance of formal appointment order in

their favour, as they have completed more than 10

years of service. Thereafter, the petitioners' Union

made a detailed representation on 28.07.2017.

Accepting the request of the association, the Addl.

Commissioner of Transport, STA furnished all

necessary details of the Data Entry Operators

continuing on outsourcing basis, opposite party no.1

vide letter dated 25.02.2019 referred the matter to the

Special Secretary G.A. Department for needful action.

Since no action was taken, the petitioners approached

this Court by filing W.P.(C) No.29349 of 2019 and this

Court vide order dated 09.01.2020 in I.A. No.18563 of

2019 passed interim order directing that status quo as // 13 //

on date in respect of the petitioners be maintained till

the next date. In the meantime, Transport

Commissioner-cum-Chairman, STA issued letter dated

05.12.2019 approving the proposal of various Regional

Transport Officers for deployment of additional DEOs

and other staff in the financial year 2019-20 through

service provider on daily wage basis. Prior to the said

letter, steps were taken at the instance of opposite

party no.1 and instructions were issued by the

Transport Department with the intention to dispense

with the services of the petitioners working on

outsourcing basis. Consequentially, the petitioners

when met opposite party no.3 on 16.12.2019 to

ascertain about their claim in the context for

deployment of additional DEOs, in turn the said

opposite party stated that after such additional

deployment, the services of the outsourcing employees

would be dispensed with and to reaffirm the same,

opposite party no.2 issued letter dated 20.02.2020 by

directing the outsourcing agency not to deploy persons // 14 //

so engaged by it for more than 3 years at one place and

to take appropriate action in terms of Finance

Department OM No.37323/F dated 30.11.2018 and

Transport Department letter dated 13.11.2019 and

opposite party no.1 also accorded post facto approval

for engagement of 350 manpower on daily wage basis

by the service provider up to 30.09.2020. As a

consequence thereof, there is every reasonable

apprehension that the petitioners' services may be

dispensed with at any point of time by opposite party

no.2 even during pendency of their claim for

regularization.

2.8. The Finance Department has also

taken decision on austerity measure due to COVID 19

and issued office memorandum dated 07.07.2020

stating that the persons, who are engaged on

outsourcing basis, are to be paid their entitlement as

per the terms and conditions of the engagement till

contract period ends. If the contract period ends within

the lock down period, then the entitlements to be paid // 15 //

till the end of the contract period. Being aggrieved by

such action, the petitioners filed W.P.(C) No.9878 of

2020 seeking direction to the opposite parties to take a

final decision on the issue of regularization of the

petitioners in service as Data Entry

Operators/Computer Operators in the establishment of

STA in the scale of pay of Rs.5,200-20,200 + GP

Rs.2400/- with effect from the date of their completion

of six years of services with consequential benefits as

per resolution dated 17.09.2013. The said writ petition

was permitted to be withdrawn on 07.10.2020 granting

liberty to the petitioners to file a better application. It is

contended that the petitioners' cases are identical to

the case of the petitioners in W.P.(C) Nos.10190, 9968,

10240 and 10243 of 2019 and W.P.(C) No.27248 of

2019, who have been extended regularization of their

services. Therefore, the petitioners seek similar benefit

and lay emphasis that the petitioners having completed

six years of service on outsourced contractual basis, as

per G.A. Department resolution dated 17.09.2013, they // 16 //

are deemed to have been regularized. Hence this

application.

3. Mr. B.S Tripathy-1, learned counsel for the

petitioners admitting the fact that the petitioners were

engaged by outsourcing agency, emphatically urged

that they have been rendering service for opposite party

no.1-Transport Organization for more than 10 years

continuously and that though essentially they are

discharging the nature of duties assigned to

government service, but they are being paid by

outsourcing agency. Such an action is nothing but a

camouflaged approach made by the State authorities to

the service rendered by the petitioners just to deprive

them of the benefits of contractual employment, as per

resolution dated 17.09.2013 passed by the Government

in G.A. Department and subsequent Rules framed in

2013 called "Odisha Group-"C" and Group-"D" Posts

(Contractual Appointment) Rules, 2013". It is also

contended that even though the petitioners are

engaged on outsourcing basis, they are discharging // 17 //

their duties and responsibility of the State and,

therefore, they are entitled to get regularization in

terms of the Government resolution dated 17.09.2013

and rules framed in 2013, as have been referred to

above. It is further contended that the petitioners'

appointment may be considered to be irregular one,

but cannot be said to be illegal, as they have come

through the process of selection. Consequentially, they

are entitled to get the benefit of contractual

appointment in terms of G.A. Department resolution

dated 17.09.2013 and subsequent Rules framed in

2013. It is further contended that even though the

petitioners are employed through outsourcing agency,

there exists master-servant relationship between the

petitioners and the opposite parties, thereby, they are

entitled to get regularization. More so, if the services of

similarly situated persons have already been

regularized, the petitioners cannot be discriminated.

Therefore, their claim for regularization on contractual

basis has to be considered by the Government in // 18 //

proper perspective. It is further contended that similar

question had come up for consideration before this

Court in Rashmi Rekha Dash v. State of Odisha

(W.P.(C) No.16906 of 2020, disposed of on 23.11.2021),

wherein this Court, after dealing with a catena of

decisions, passed an elaborate order extending the

benefit. Therefore, the petitioners being stood on the

same footing, in terms of the said judgment, the benefit

should be extended to them.

4. Per contra, Mr. P. Behera, learned

Standing Counsel for Transport Department fairly

stated that the petitioners have been appointed

through the outsourcing agency and they are being

paid by outsourcing agency and as such, there is no

existence of master-servant relationship between the

petitioners vis-à-vis the State. By referring to various

provisions of the agreement executed between the State

and the outsourcing agency, he contended that though

the petitioners are being engaged by outsourcing

agency and are performing their duties and // 19 //

responsibility under the State authority, they cannot

claim regularization of their services or absorption on

contractual basis. It is further contended that there is

strong distinction between the contract of service and

contract for service. In support thereof, he has referred

to the provisions contained in offer of employment,

such as Clause-1, 2, 3, 4, 5 & sub-clause (iv), (v) & (vi)

of Clause-7. Thereby, he contended that since the

petitioners have been engaged by outsourcing agency

through an offer of employment, there is no existence

of master servant relationship so as to claim for

regularization of their services under the State

authority. He has also placed reliance on Clause-A,

Clause-2.1.1, sub-clause (iii) of Clause-2.1.2 of Article-

2, Clauses-5.1, 5.3, 5.3.2, 5.3.3, 5.3.4 of Article-5,

Clauses-11.1, 11.1.8 of Article-11, Clauses-14.2.2,

14.2.4, 14.02.5 of Article-14, Clauses-2, 3, 13, 15 of

Schedule-II and Schedule-IV of Concession Agreement

under Annexure-A/1.

// 20 //

To substantiate his contention, he has

relied upon the judgment of the apex Court in

Dharangadhara Chemical Works Ltd. v. State of

Saurashtra, AIR 1957 SC 264; Chintaman Rao v.

State of M.P., AIR 1958 SC 388; Punjab Land

Development Recreation Corporation v. Labour

Court, (1990) 3 SCC 682; Balwant Rai Saluja v. Air

India Ltd., (2014) 9 SCC 407 and the judgments of

this Court in Rashmi Rekha Dash v. State of Odisha

(W.P.(C) No.16906 of 2020, disposed of on 23.11.2021)

& Santosh Kumar Muduli v. State of Odisha

(W.P.(C) No.18877 of 2021, disposed of on 23.11.2021)

5. This Court heard Mr. B.S. Tripathy-1,

learned counsel for the petitioners and Mr. P. Behera,

learned Standing Counsel for Transport Department by

hybrid mode. Pleadings have been exchanged between

the parties and with the consent of learned counsel for

the parties, the writ petitions are being disposed of

finally at the stage of admission.

// 21 //

6. From the factual matrix and the rival

contentions as narrated above, it is unraveled that the

petitioners, having been undisputedly engaged by

outsourcing agency, are discharging their duties and

responsibility in different offices of the State Transport

Department as Data Entry Operators/Supervisors.

Essentially, the nature of work, as has been discharged

by the petitioners, is for the Government and of the

Government, and payments have been made to them

through outsourcing agencies by the Government.

Even if they are discharging their duty as Data Entry

Operators/Supervisors for the Government, of the

Government and by the Government, the benefit of

regularization on contractual basis also accrued to

them in terms of nature of duty discharged by them,

even though they have been engaged in a camouflaged

manner through service providers. More so,

recruitment rules have already been framed by the

Government bringing them into the fold of regular

contractual posts. But, in the name of financial crunch // 22 //

or by adopting some plea or the other, the Government

even though is a model employer, is not making their

appointment as regular contractual by following due

procedure or rules governing the field for recruitment

to the regular posts. Many a times, it is observed that

the Government is engaging the people through

outsourcing agencies and by paying a paltry sum of

money is extracting the work similarly to regular

employees of the Government. Thereby as a model

employer, the Government is exploiting the employees,

those who have been engaged by outsourcing agencies,

by depriving them of getting their legitimate dues in

terms of regular employment or in terms of contractual

employment as per rules applicable to them.

7. The Government in the name of

technological development depriving the manpower

utilization for its betterment. No doubt, technology has

got its own place for growth of the State, but that does

not mean it will not create any employment causing a

massive inconvenience to the youths of the country.

// 23 //

Consequentially, there is brain drain of multi-

laundering the persons to the country and outside the

country. Therefore, the Government should be careful

that the eligible persons are not denied employment in

the name of technological development. It is easy to

utilize the outsourcing agencies for supply of

manpower, but that itself amounts to exploiting the

young generations upon whom the future of the State

as well as the country rests. Once youth is exploited,

frustration grows up and ultimately it will have

tremendous adverse effect on the growth of the State,

resulting in creating disastrous conditions, which

should be taken care of by the Government as a model

employer. But instead of doing so, as it appears, steps

are being taken from time to time to cause harassment

to the youths by generating unemployment, which will

have grave repercussions on the State and at that time

the State cannot control the situation.

8. In a similar situation, in Rashmi

Rekha Dash (supra), this Court had occasion to // 24 //

consider the similarly placed persons by relying upon

various judgments of the apex Court, including the

judgments cited by the opposite parties herei, and

applying the piercing the veil, has come to a definite

finding that the petitioners are discharging the duties

and responsibilities of the government, for the

government and by the government. Though they have

been paid their remuneration through the outsourcing

agency, that ipso facto cannot be said that no master-

servant relationship exists between the petitioners and

the State opposite parties for whom they are rendering

the services.

9. So far as the contention raised by Mr. P.

Behera, learned Standing Counsel for Transport

Department, that the present case is distinguishable

from the judgment in Rashmi Rekha Dash (supra) is

not substantiated how the same is distinguishable and

more so, the contentions so raised by him referring to

various clauses of agreement, were also raised in

Rashmi Rekha Dash (supra). Thereby, the petitioners // 25 //

being stood in the same footing like the petitioner in

Rashmi Rekha Dash (supra), the benefit should be

extended to them in the light of the said judgment. As

such, the said judgment is fully applicable to the

present case.

10. Considering from other angle, if all the above

aspects borne in mind, it would apparently be made

clear that the petitioners are discharging the duty and

responsibility akin to the State Government employees,

though they are being paid through the outsourcing

agencies. Needless to say, similarly situated employees

like Jatin Kumar Das and Others, who were working

as DEOs, had approached the Tribunal in O.A. No.

2172 (C) of 2015 and batch, which were allowed vide

judgment dated 17.05.2017. The judgment so passed

by the Tribunal was challenged before this Court in

W.P.(C) No.6661 of 2018, which was dismissed by

judgment dated 10.05.2018. Although the said

judgment was assailed by the State in SLP No.18642 of

2018, but the same was dismissed on 06.06.2018.

// 26 //

Pursuant thereto, all the DEOs working under the CT

& GST Department having been regularized, the

petitioners cannot be discriminated from Jatin Kumar

Das & others, so as to deprive them of the benefit of

contractual appointment in terms of resolution dated

17.09.2013 or Rules, 2013, otherwise it will amount to

violative of Article 14 of the Constitution of India.

11. In view of the facts and circumstances, as

discussed above, this Court is of the considered view

that as the petitioners are discharging the duties and

responsibilities for the Government, of the Government

and by the Government, even though they have been

paid through outsourcing agencies, they are entitled to

get the benefit of contractual appointment, as per

resolution dated 17.09.2013 or they may be brought

over to the contractual establishment in view of the

2013 Rules governing the field, since they stand at par

with the employees those who have been absorbed in

CT&GST Department, pursuant to the judgment of the

Tribunal in Jatin Kumar Das (supra). Thereby, the // 27 //

ratio decided in Rashmi Rekha Dash (supra) is fully

applicable to the present case. As a consequence

thereof, such benefits should be extended to the

petitioners as expeditiously as possible, preferably

within a period of three months from the date of

communication of this judgment.

12. In the result, the writ petition is allowed.

However, there shall be no order as to costs.

..................................... DR. B.R. SARANGI, JUDGE

Orissa High Court, Cuttack The 21st December, 2021, Alok