A. Manjula Bhashini & Ors. Vs. M.D., A.P. Women's Co.op. Fin. Corpn. Ltd & ANR [2009] INSC 1135 (6 July 2009)
Judgment
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.
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 development programmes 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 from next 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 Selection Committees 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 and Establishments 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 2nd 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 set- off 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 High Court 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 a proposition 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 22nd 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 23rd 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 th 28 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 25th November, 1993 having completed a continuous minimum period of five years of service on or before 25th 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 22nd 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 placing reliance 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 cutoff date 25.11.1993 is so arbitrary as to attract the wrath of Article 14 of the Constitution.
68. Fixing a cutoff 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 cutoff date. Such a cutoff 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 dependent 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 a direct 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 on temporary 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 was reiterated 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 is enacted. 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."
