Recently, the Supreme Court addressed the situation of daily wage employees who had served for decades in a public commission, performing essential ministerial and support functions. The key issue before the Court was whether the State could lawfully refuse to regularise these workers, citing financial constraints, and thereby keep them in a perpetual state of temporary employment despite their continuous involvement in permanent functions.
Brief Facts:
The appellants were employed between 1989 and 1992 as Class-IV staff, including peons, attendants, and one as a driver. They were initially paid daily wages and later given a consolidated monthly honorarium while performing duties during regular office hours. The Commission itself acknowledged the necessity of creating permanent posts and passed a resolution in 1991 to establish fourteen such posts, forwarding proposals to the State on multiple occasions. The State, however, rejected the proposals in 1999 and again in 2003, citing financial constraints and a ban on the creation of new posts. The appellants challenged these refusals before the High Court, seeking the quashing of the State’s orders and a direction for the creation of posts and their regularisation. Both the Single Judge in 2009 and the Division Bench in 2017 dismissed their claims, relying on the Constitution Bench judgment in and holding that there were neither vacancies nor rules for regularisation. Aggrieved, the employees approached the Supreme Court.
Contentions of the Appellants:
On behalf of the appellants, it was argued that they had worked uninterruptedly for decades in essential roles and that the Commission itself had proposed their regularisation. They pointed out that other similarly placed workers in the same office had been regularised and that denial of the same benefit to them was arbitrary and discriminatory. It was further submitted that the blanket plea of financial constraint could not justify exploitation and that Articles 14, 16 and 21 of the Constitution guaranteed fairness in public employment.
Contentions of the Respondents:
The State, in reply, contended that there were no sanctioned vacancies and that the rules did not provide for regularisation. Reliance was placed on Umadevi to contend that regularisation was impermissible in the absence of statutory rules. It was also argued that outsourcing had since been adopted as a policy to meet Class-IV requirements, making the creation of new posts unnecessary.
Observations of the Court:
The Court found the approach of the High Court erroneous and observed that both the Single Judge and the Division Bench had reduced the matter to a mere plea for regularisation, ignoring the real issue, which was the legality of the State’s repeated refusal to sanction posts despite acknowledged need.
The Court noted that the State’s justification of financial constraints was unsustainable, holding that “a non-speaking rejection on a generic plea of ‘financial constraints’, ignoring functional necessity and the employer’s own long-standing reliance on daily wagers to discharge regular duties, does not meet the standard of reasonableness expected of a model public institution.”
The Court clarified that the reliance was misplaced, remarking that “unlike Umadevi, the challenge before us is not an invitation to bypass the constitutional scheme of public employment. It is a challenge to the State’s arbitrary refusals to sanction posts despite the employer’s own acknowledgement of need and decades of continuous reliance on the very workforce.”
The Court also cautioned against exploitation through outsourcing, observing that “outsourcing cannot become a convenient shield to perpetuate precariousness and to sidestep fair engagement practices where the work is inherently perennial.” The Court stressed that the State is not a mere market player but a constitutional employer which cannot balance its finances “on the backs of those who perform the most basic and recurring public functions.”
The decision of the Court:
Allowing the appeal, the Court quashed the State’s refusals of 1999 and 2003. It directed that all the appellants be regularised with effect from 24 April 2002, the date on which the High Court had first directed reconsideration of the proposal. The State was ordered to create supernumerary posts for them, fix them in regular pay scales, and release arrears with interest. Retired appellants were directed to be given recalculated pension and terminal benefits, while legal heirs of deceased appellants were held entitled to arrears. The Court also mandated strict timelines for compliance and required an affidavit of execution. In conclusion, the Court reiterated that fairness in engagement and transparency in administration are not matters of grace but obligations under Articles 14, 16 and 21 of the Constitution.
Case Title: Dharam Singh & Others v. State of U.P. & Another
Citation: 2025 Latest Caselaw 802 SC
Case No.: Civil Appeal No(s). 8558 of 2018
Coram: Hon’ble Mr. Justice Vikram Nath and Hon’ble Mr. Justice Sandeep Mehta
Read Judgment @LatestLaws.com
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