TaxTMI 
TaxTMI 
2005 (12) TMI 577
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....CT 2. The legislature of the State of Uttar Pradesh enacted The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (for short "the Act"). The Board has been established under Section 26-A of the Act. Section 26-B provides for the constitution of the Board. In exercise of its power conferred upon it by Section 25-A and 26-X of the Act, regulations have also been framed by the Board laying down the terms and conditions of the service of the employees of the Market Committees known as the Uttar Pradesh Agricultural Produce Market Committees (Centralised) Services Regulations, 1984 (for short "Services Regulations"). Similar regulations have also been framed by the Board in respect of its own employees being the Uttar Pradesh Agricultural Produce Markets Board (Officers and Staff Establishment) Regulations, 1984 (for short "Establishment Regulations"). BACKGROUND FACT 3. In the State of Uttar Pradesh, there are 244 Market Committees. 3395 posts were sanctioned but indisputably 5600 appointments have been made. We are herein concerned with the orders of appointments and orders of terminations issued in respect of about 1021 employees who were appointed between the period 1.4.19....
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....is thing also that after making intensive examination in respect of irregular appointments made in the Mandi Parishad and Mandi Samities before 1.4.96, kindly furnish clear report alongwith detailed statement by 20.2.99. (3) Kindly make available in each case by 18.2.99 your proposal with clear recommendation to the Govt. for action against the officers responsible for the said irregular appointments." Further directions were issued on 17.3.1999 in the following terms: "In regard to the appointed subject and Semi Govt. Letter No. Dire-Camp/99-468 dt. 8.3.99, I have been directed to say that keeping in view, the decision taken by Govt. in regard to irregular appointments made on the post of various categories in U.P. State Agricultural Production Marketing Board, there has been no requirement of prescribed procedure rules. In such circumstances, the proposal sent to Govt. vide letter 1418/Camp dt. 18.10.96 of Marketing Board Office is rejected by the Govt. after due consideration." Pursuant thereto or in furtherance of such directions, the services of a large number of employees were terminated on or about 20th March, 1999. 4. On 27.1.1998, the Director of....
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....any legal right to continue in the said posts. (iii) Such appointments having been made on a pick and choose method and on an adhoc basis, the judgments of the High Court cannot be sustained. (iv) Indisputably the provisions of U.P. Industrial Disputes Act and the rules framed thereunder relating to retrenchment of workmen were complied with and in that view of the mater it cannot be said that the orders of termination passed against the employees were illegal. (v) In any view of the matter, the remedy of the employees, if any, was to approach the industrial courts. (vi) It is not a case, it was urged, where principles of natural justice were required to be complied with. On behalf of the State 9. Mr. Uday Umesh Lalit, learned senior counsel appearing on behalf of the State of Uttar Pradesh submitted that from the records it would appear that the State adopted a known criterion for cancellation of appointment of such employees who were in the last slots, namely, 1.4.1996 to 30.10.1997. Such orders of termination ensured that the principles of last-come-first-go basis are followed and the employees are paid one month's salary in lieu of ....
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....h the constitutional norms. (viii) One set of adhoc employees and/ or daily wagers should not be replaced by another set of adhoc employees/ daily wagers. (ix) The Board having adopted a resolution to regularise the services of its employees, there was no need to obtain any approval from the State. (x) As admittedly no appointment whatsoever was made in terms of the statutory regulations since the inception of constitution of the Market Committees and Boards, the State could not have ignored the past practice particularly in a case of this nature where the employees concerned have requisite educational qualifications. (xi) The court in such a situation can be said to have the requisite jurisdiction in directing a State within the meaning of Article 12 of the Constitution of India to make a scheme of regularisation. 11. Mr. G.L. Sanghi, learned senior counsel appearing on behalf of another writ applicant submitted that institutions of the market committees and the Board having their activities principally in rural areas, the human problem should not be ignored as without such daily wagers or adhoc employees functions of the statutory body may h....
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.... such employees who have completed one thousand days of service was valid. As the writ petitioners have been working in various Committees for a long period ranging from six to nine years, termination of their services was arbitrary. (viii) The principles of natural justice have been ignored in terminating the services of such employees and, thus, the orders terminating the services of the writ petitioners were bad in law. It was directed: "Having regard to the discussions made above, I am inclined to hold that written and verbal termination orders of the petitioners issued by the authorities at the direction of the Government as contained in letter dated 12.2.99 are arbitrary, unreasonable and discriminatory and, therefore, all such termination orders along with the irrational impugned letter of source dated 12.2.99 are hereby quashed. A writ of certiorari is issued accordingly. Further, a writ of mandamus is also issued commanding the opposite parties to allow the petitioners to resume their duty with immediate effect. They shall be deemed to have continued in service and as such, they shall be relegated to their original position. However, they will not get ....
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....y it. Sub-section (2) of Section 23 envisages that every Committee shall have such number of Secretaries and such other officers as may be considered necessary by the Board for the effective discharge of the functions of the Committee, appointed by the Board on such terms and conditions as may be provided for in the regulations made by it. 20. Chapter V of the Act deals with external control. Establishment and constitution of the Board are envisaged under Sections 26-A and 26-B. Section 26-A empowers the Board to appoint such officers and servants as it considers necessary for efficient performance of its functions on such terms and conditions, as may be provided for in the regulations made by the Board. Section 26-L provides for the powers and functions of the Board. Functions of the Board are provided for in Sub-section (1) thereof stating: "(i) superintendence and control over the working of the Market Committees and other affairs thereof including programmes undertaken by such Committees for the construction of New Market Yards and development of existing Markets and Market Areas; (ii) giving such direction to Committees in general or any Committee in parti....
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....mmissioner or the Collector, or other person or persons, all facilities during inspection and for the proper conduct of the inquiry and shall produce any document or information in its possession, when so demanded for the purpose of such inspections or inquiry, as the case may be." 24. Section 39 of the Act provides for the bye-laws making power in the Market Committee. Proviso appended to Section 33 provides that no bye- law other than a bye-law made by adopting draft or model bye-law suggested by the Board shall be valid unless approved by it. Section 40 of the Act provides for rule making power. 25. The State Government framed rules known as "The U.P. Krishi Utpadan Mandi Niyamavali, 1965 (for short "the Rules") in terms of Section 40 of the Act. The functions, duties and powers of the Committees in terms of Sections 16 and 17 of the Act have been laid down in Rule 46. Rule 60 states that the qualification, designations, grades, salaries and allowance of the posts of officers and servants whose appointing authority is the Committee shall be approved by the Director. Such appointment made by the Committee under sub-section (1) of Section 23 of the Act for those posts wheref....
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....re. Regulation 10 lays down that recruitment may be made either from the open market or from promotion. Regulation 11 provides for reservation. Constitution of Selection Committee is contained in Regulation 12. Regulation 14 provides for determination of vacancies whereas Regulation 16 provides for the procedure of selection by direct recruitment. Chapter V of the said Regulations lays down the mode and manner in which the appointment, probation, confirmation and seniority would be made. LEGALITY OF THE APPOINTMENTS 28. The Board is a 'State' within the meaning of Article 12 of the Constitution of India. It was constituted in terms of the provisions of the said Act. The powers and functions of the Board as also the State in terms of the provisions of the statute having been delineated, they must act strictly in terms thereof. It is a statutory authority. Its powers, duties and functions are governed by the statute. It is responsible for constitution of the Market Committees for the purpose of overseeing that the agriculturists while selling their agricultural produce receive the just price therefor. It not only regulates sale and purchase of the agricultural produce b....
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....d whether contained in Section 23 or Section 26-F of the Act are statutory in nature. In absence of any provisions conferred upon them to appoint any employee de'hors the provisions of Sections 23 and 26-F and the regulations framed thereunder, indisputably would mean that such appointments are de'hors the Act and the rules. The Rules also provide that any appointment made by the Committee under Sub-section (1) of Section 23 shall be intimated within 30 days of such appointment to the Director or to such other officer as may be authorised by the Director in this behalf. It implies that although the Market Committee may have power to make appointments, such appointments can be made in relation to the posts created therefor by the Board wherefor requisite intimation has to be given to the Director or the officer authorised in this behalf. We may assume that for meeting the exigencies of situations it may be possible for the Committee or the Board to appoint a person on adhoc basis. Such adhoc employees, however, being not employee within the meaning of the provisions of the Act and the Regulations, a legal relationship between the employer and the employee would not come into....
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.... of Executive Business of the State framed under Article 166 of the Constitution of India. 37. In Punit Rai v. Dinesh Chaudhary, [(2003) 8 SCC 204], this Court held: "The said circular letter has not been issued by the State in exercise of its power under Article 162 of the Constitution of India. It is not stated therein that the decision has been taken by the Cabinet or any authority authorized in this behalf in terms of Article 166(3) of the Constitution of India. It is trite that a circular letter being an administrative instruction is not a law within the meaning of Article 13 of the Constitution of India. (See Dwarka Nath Tewari v. State of Bihar)" 38. However, it is not correct that the power of the State to issue directions must be confined to the matters enumerated in Sub-section (1) of Section 26-L of the Act. Section 26-L is subject to the provisions of the Act. The functions of the Board enumerated in Section 26-L of the Act are, therefore, not exhaustive. Appointment of servants and officers are also one of the functions of the Board. The Board also has right to supervise and control the activities of the officers and Market Committees. In that view of th....
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....4 SCC 55, para 16, Karnataka Public Service Commission and Others v. B.M. Vijaya Shankar and Others, (1992) 2 SCC 206, paras 4 and 5 and State of M.P. and Others v. Shyama Pardhi and Others (1996) 7 SCC 118, paras 4 and 5] 43. In Viveka Nand Sethi v. Chairman, J&K Bank Ltd. and Others [(2005) 5 SCC 337], it was held: "The principle of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply. [See Gurjeewan Garewal (Dr.) v. Dr. Sumitra Dash] The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case." 44. The High Court, therefore, must be held to have erred in law in holding that the principles of natural justice were required to be complied with. DIRECTIONS OF THE HIGH COURT 45. The directions of the High Court, in our opinion, were not justified. It may be that in implementing the advice of the State, some of the officers of the Board became overzealous i....
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....power to prescribe the conditions of service can be exercised either by making rules under the proviso to Article 309 of the Constitution or (in the absence of such rules) by issuing rules/instruct-ions in exercise of its executive power. The court comes into the picture only to ensure observance of fundamental rights, statutory provisions, rules and other instructions, if any, governing the conditions of service. The main concern of the court in such matters is to ensure the rule of law and to see that the Executive acts fairly and gives a fair deal to its employees consistent with the requirements of Articles 14 and 16" 50. A 3-Judge Bench of this Court upon taking into consideration a large number of decision in A. Umarani v. Registrar, Cooperative Societies and Others [(2004) 7 SCC 112] held that illegal appointments cannot be regularised. It was further held: "No regularisation is, thus, permissible in exercise of the statutory power conferred under Article 162 of the Constitution if the appointments have been made in contravention of the statutory rules." 51. The power to frame regulations is expressly conferred on the Board in terms of Section 26 of the Act. S....
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....ot be entitled to regularisation. (See State of U.P. v. Ajay Kumar and Jawaharlal Nehru Krishi Vishwa Vidyalaya v. Bal Kishan Soni.)" 55. In Manager, Reserve Bank of India, Bangalore v. S. Mani and Others [(2005) 5 SCC 100], Umarani (supra) was followed holding that in law 240 days of continuous service by itself give rise to permanence which reason has weight with the opinion of learned Single Judge of the High Court. 56. It is, therefore, not correct to contend that only because in the correspondences between the State and the Board the appointments of such persons have been described to be irregular, the same would not mean that they are not illegal. 57. In any event, no temporary or permanent status can be granted to an employee by way of regularisation. [See Union of India v. Gagan Kumar (2005) 5 SCC 70 and State of Maharashtra and Another v. R.S. Bhonde and Others (2005) 5 SCC 751]. PRECEDENTS 58. Mr. Chaudhary has relied upon a large number of decisions to contend that this Court has directed framing of such schemes. 59. In Surya Narain Yadav and Others v. Bihar State Electricity Board and Others [(1985) 3 SCC 38], the writ petitioners were appointed as tra....
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....gularisation of the appointment of a person would be a form of recruitment read with reference to power under Article 162 is unsound and unacceptable. The executive has the power to appoint. That power may have its source in Article 162. In the present case the rule which regularised the appointment of the respondent with effect from February 15, 1958, notwithstanding any rules cannot be said to be in exercise of power under Article 162. First, Article 162 does not speak of rules whereas Article 309 speaks of rules. Therefore, the present case touches the power of the State to make rules under Article 309 of the nature impeached here. Secondly when the Government acted under Article 309 the Government cannot be said to have acted also under Article 162 in the same breath. The two articles operate in different areas. Regularisation cannot be said to be a form of appointment. Counsel on behalf of the respondent contended that regularisation would mean conferring the quality of permanence on the appointment whereas counsel on behalf of the State contended that regularisation did dot mean permanence but that it was a case of regularisation of the rules under Article 309. Both the conte....
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....framed by the State in pursuance of the provisions of Clause (3) of Article 348 of the Constitution of India. Rule 4 of the said Rules reads, thus: "4. Regularisation of ad hoc appointments: (1) Any person who (i) was directly appointed on ad hoc basis on or before June 30, 1998 and is continuing in service as such on the date of commencement of the Uttar Pradesh Regularisation of Ad hoc Appointments (On Posts Outside the Purview of the Public Service Commission) (Third Amendment) Rules, 2001. (ii) possessed requisite qualifications prescribed for regular appointment as the time of such ad hoc appointment; and (iii) has completed or, as the case may be, after he has completed three years service shall be considered for regular appointments in permanent or temporary vacancy, as may be available, on the basis of his record and suitability before any regular appointment is made in such vacancy in accordance with the relevant rules or orders. (2) In making regular appointments under these rules reservations for the candidates belonging to the Scheduled Castes, Scheduled Tribes, Backward Classes and other categories shall be made in ....
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....egular employees. 71. The fact that all appointments have been made without following the procedure or services of some persons appointed have been regularised in past, in our opinion, cannot be said to be a normal mode which must receive the seal of the court. Past practice is not always the best practice. If illegality has been committed in the past, it is beyond comprehension as to how such illegality can be allowed to perpetrate. The State and the Board were bound to take steps in accordance with law. Even in this behalf Article 14 of the Constitution of India will have no application. Article 14 has a positive concept. No equality can be claimed in illegality is now well- settled. [See State of A.P. v. S.B.P.V. Chalapathi Rao and Others,(1995) 1 SCC 724, para 8, Jalandhar Improvement Trust v. Sampuran Singh (1999) 3 SCC 494, para 13 and State of Bihar and Others v. Kameshwar Prasad Singh and Another (2000) 9 SCC 94, para 30]. 72. In the instant case, furthermore, no post was sanctioned. It is now well-settled when a post is not sanctioned, normally, directions for reinstatement should not be issued. Even if some posts were available, it is for the Board or the Market Com....
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....has been raised by Mrs. Dixit that there was no material before the Government for issuing the impugned instructions insofar as the financial position vis-`-vis the strength of the employees had been taken into consideration. It is not necessary for us to go into the aforementioned question inasmuch as we are herein concerned with the legality and/ or validity of the impugned orders of termination of services and the same having not been done, the appointment of the concerned employees were wholly illegal and without jurisdiction and, thus, void and of no effect. CONCLUSION 75. The upshot of our aforementioned discussions is: (i) The Board and the Market Committees were bound by the Act, the Rules and Regulations framed thereunder in making appointments. Statutory provisions as also the constitutional requirements were required to be complied with. (ii) The Board had no jurisdiction to frame any scheme for regularization in the pith of the statutory regulations operating in the field. Any legislation involving appointment or laying down the conditions of service of the employees would require prior sanction of the State. (iii) The State of Uttar Pra....