http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12

CASE NO.:

Appeal (civil) 7744 of 1997

PETITIONER:

Dr. (Mrs.) Chanchal Goyal

RESPONDENT:

State of Rajasthan

DATE OF JUDGMENT: 18/02/2003

BENCH:

SHIVARAJ V. PATIL & ARIJIT PASAYAT.

JUDGMENT:

J U D G M E N T

ARIJIT PASAYAT J.

The only point involved in this appeal is whether the

appellant's termination from service is in order. Factual

scenario which is almost undisputed is as follows:-

The appellant was appointed by the Local Self-

Government Department, Government of Rajasthan by order of

appointment dated 27.11.1974, and posted as Lady Doctor

under the Municipal Council, Ganganagar. There was a

stipulation in the order of appointment that she was being

posted purely on temporary basis for the period of six

months or till the candidate selected by the Rajasthan

Public Service Commission (hereinafter referred to as 'the

Service Commission') is available, whichever is earlier.

The working period of the appellant continued to be

extended. The appointment was made in exercise of powers

conferred under Section 308 of the Rajasthan Municipalities

Act, 1959 (in short 'the Act) read with Rules 26 and 27 of

the Rajasthan Municipal Service Rules, 1963 (in short 'the

Rules'). Though the appellant was selected by the Service

Commission in October 1976 and August 1982 she did not join

pursuant to such selection and continued on the basis of the

orders of extension issued by the Local Self-Government

Department of the Government. On 1.10.1988 appellant's

services were terminated on the ground that the candidate

selected by the Service Commission was available.

Challenging such dismissal, appellant filed a writ petition

bearing no. 3739 of 1988 before the Rajasthan High Court.

Interim order of stay was passed on 12.10.1988 by the High

Court with the direction that the appellant was not to be

relieved from her post if she was not already relieved.

Subsequently the interim order was made absolute by order

dated 21.3.1989. By judgment dated 5.3.1993, learned Single

Judge held that termination of appellant's services was

illegal since order was passed ignoring of the fact that she

had put in 14 years of service. The authorities were

directed to adjudge her suitability within a period of one

month and regularize her services with all benefits

available to a substantively appointed member of the

service. The State of Rajasthan filed appeal before the

Division Bench of the Rajasthan High Court. In terms of

interim orders, the appellant was allowed to continue in the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12

service. But by the impugned judgment dated 11.4.1997, it

was held by the Division Bench that the appellant continued

merely as a temporary employee on the basis of appointment

made under Rule 27 as she had not been selected by the

Service Commission in accordance with the Rules. She had no

right to hold the post. As noted supra the judgment is

under challenge in this appeal.

Learned counsel for the appellant submitted that by now

she had put in 28 years of service; 14 years by the time the

order of termination was passed and 14 years on the basis of

interim directions given by the High Court and this Court.

Though her appointment initially was conditional, in view of

the long period of service rendered by her, it had assumed

permanency and learned Single Judge was justified directing

regularization of appointment on a substantial basis. The

Division Bench overlooked the salient features and held that

the temporary appointment originally made continued to hold

field. Reliance was placed on Director, Institute of

Management Development, U.P. vs. Pushpa Srivastava (Smt.)

(1992 [4] SCC 33), Ashwani Kumar & Ors. vs. State of Bihar &

Ors. (JT 1997 [1] SC 243), Daily Rated Casual Labour

Employed under P&T Department through Bhartiya Dak Tar

Mazdoor Manch vs. Union of India and Ors. (1988 [1] SCC

122), Narender Chadha and Ors. vs. Union of India and Ors.

(1986 [2] SCC 157), State of Haryana and Anr. vs. Ram Diya

(1990 [2] SCR 431), State of U.P. and Ors. vs. Dr. Deep

Narain Tripathi and Ors. (1996 [8] SCC 454) to substantiate

the plea. It was contended that in all these cases this

Court took note of the long period of service rendered and

the consequences and the benefits available to the concerned

employee who had rendered such service without any blemish.

It was also submitted that the principles of legitimate

expectation are squarely applicable.

Residually it was submitted that the appellant has been

given the privileges available under the Gratuity and

Pension Fund Benefit Schemes available under Rajasthan

Municipal Services (Pension) Rules, 1989 (in short 'Pension

Rules'). She has applied for voluntary retirement nearly two

years back and no final decision has been taken. These

benefits cannot be denied to her.

Learned counsel for the respondent on the other hand

submitted that the appointment admittedly was on temporary

basis with a clear condition that if a candidate selected by

the Service Commission was available then even before the

expiry of the period indicated, service would be terminated.

Appellant cannot take advantage of the fortuitous

circumstance that she continued for 14 years. She has, for

reasons best known to her, not joined when she was selected

twice; once in 1976 and again in 1982 by the Service

Commission. Merely because she has continued for a long

time, that has not crystalised into any enforceable right.

She cannot claim lien over the post.

Before we advert to the legal issues, it is necessary

to take note of Rules which undisputedly are applicable.

Part VI of the Rules relates to Appointment, Probation and

Confirmation. Power of appointments is indicated in Rule

26. Rule 27 deals with temporary or officiating

appointments. It reads as follows:

"Temporary or officiating appointments (1)

[A vacancy in the service may be temporarily

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12

filled] by the Appointing Authority by

appointing thereto in an officiating capacity

an officer whose name is included in the list

prepared under Rule 21 or in the lists under

Rule 25:

Provided that till the preparation of

the first list or in case the list is

exhausted, a vacant post may be filled by the

Appointing Authority by appointing thereto a

[person] eligible for appointment to the post

by promotion or by appointing thereto

temporarily a person eligible for appointment

by direct recruitment to the service under

the provision of these Rules;

[Provided further that if all the

officers in the grade or category from which

appointment by promotion can be made under

these rules, have already been promoted and

no Officer is available from that grade or

category the appointing authority may fill

such vacancy by promotion from the grade or

category next below such grade.]

(2) No appointment made under sub-rule (1)

shall be continued beyond a period of [one

year] without referring it to the Commission

for their concurrence and shall be terminated

immediately on their refusal to concur."

Rule 29 and 31 deal with Probation and Confirmation

respectively. As the initial order of appointment dated

27.11.1974 shows appellant was appointed in terms of Rules

26 and 27. It was clearly indicated that the appointment was

made on a temporary basis with further condition that if

candidate selected by the Service Commission is available,

the employment was to come to end automatically. Sub-rule

(2) of Rule 27 is of considerable importance. It

specifically lays down no appointment made under sub-rule

(1) shall be continued beyond a period of one year without

referring to the Commission for their concurrence and shall

be terminated immediately on their refusal to concur.

Learned Single Judge was swayed by the fact that for a

longer period the concurrence was not sought for from the

Commission and held that the inaction gave an undefeatable

right to the appellant. The view was rightly set at naught

by the Division Bench. The nature of employment and the

authority with whose concurrence the continuation could be

made are clearly spelt out in sub-rule (2) of Rule 27. There

is no scope for taking a view that there is automatic

extension once the period of one year is over in case

reference was not made to the Commission. The appointment

to the post of Lady Doctor in the Municipal Council is

required to be made by selection through the medium of the

Service Commission. That undisputedly has not been done.

There is no scope of regularization unless the

appointment was on regular basis. Considerable emphasis has

been laid down by the appellant to the position that even

for temporary appointment there was a selection. That is

really of no consequence. Another plea of the appellant

needs to be noted. With reference to the extension granted

it was contended that a presumption of the Service

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12

Commission's concurrence can be drawn, when extensions were

granted from time to time. This plea is without any

substance. As noted above, there is no scope for drawing a

presumption about such concurrence in terms of sub-rule (2)

of Rule 27. After one year, currency of appointment is lost.

The extension orders operated only during the period of

effectiveness.

The decisions relied upon by the learned counsel for

the appellant were rendered in different factual background.

A decision is an authority for what it decides and not for

what could be inferred from the conclusion.

Unless the initial recruitment is regularized through a

prescribed agency, there is no scope for a demand for

regularization. It is true that an ad-hoc appointee cannot

be replaced by another ad-hoc appointee; only a legally

selected candidate can replace the ad-hoc or temporary

appointee. In this case it was clearly stipulated in the

initial order of appointment that the appellant was required

to make room once a candidate selected by the Service

Commission is available.

In fact, a candidate selected by the Service Commission

was to replace the appellant, even if it is accepted as

contended by the learned counsel for the appellant that the

selected candidate did not join. That is really of no

assistance to the appellant. The fact remains that a person

has been selected and the Service Commission has drawn up a

list of selected candidates. If the person, who was to

replace the appellant, did not join for some reason,

obviously another selected person can be posted. Non-joining

of the selected candidate does not confer any right on the

appellant. As the initial order dated 27.11.1974 shows, what

is required is the availability of a candidate selected by

the Service Commission, and not the joining of the selected

candidate.

In J & K Public Service Commission and Ors. vs. Dr.

Narinder Mohan and Ors.(1994 (2) SCC 630), it was, inter

alia, observed that it cannot be laid down as general rules

that in every category of ad-hoc appointment if the ad-hoc

appointee continued for longer period, rules of recruitment

should be relaxed and the appointment by regularization be

made. In the said case in paragraph 11 the position was

summed up as under:

"This Court in Dr. A.K. Jain v. Union of

India (1987 Supp. SCC 497) gave directions

under Article 142 to regularize the services

of the ad hoc doctors appointed on or before

October 1, 1984. It is a direction under

Article 142 on the peculiar facts and

circumstances therein. Therefore, the High

Court is not right in placing reliance on the

judgment as a ratio to give the direction to

the PSC to consider the cases of the

respondents. Article 142 power is confided

only to this Court. The ratio in Dr. P.P.C.

Rawani v. Union of India (1992) 1 SCC 331 is

also not an authority under Article 141.

Therein the orders issued by this Court under

Article 32 of the Constitution to regularize

the ad hoc appointments had become final.

When contempt petition was filed for non-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12

implementation, the Union had come forward

with an application expressing its difficulty

to give effect to the orders of this Court.

In that behalf, while appreciating the

difficulties expressed by the Union in

implementation, this Court gave further

direction to implement the order issued under

Article 32 of the Constitution. Therefore,

it is more in the nature of an execution and

not a ratio under Article 141. In Union of

India v. Dr. Gyan Prakash Singh 1994 Supp.

(1) SCC 306 this Court by a Bench of three

Judges considered the effect of the order in

A.K. Jain case (supra) and held that the

doctors appointed on ad hoc basis and taken

charge after October 1, 1984 have no

automatic right for confirmation and they

have to take their chance by appearing before

the PSC for recruitment. In H.C. Puttaswamy

v. Hon'ble Chief Justice of Karnataka 1991

Supp. (2) SCC 421, this Court while holding

that the appointment to the posts of clerk

etc. in the subordinate courts in Karnataka

State without consultation of the PSC are not

valid appointments, exercising the power

under Article 142, directed that their

appointments as a regular, on humanitarian

grounds, since they have put in more than 10

years' service. It is to be noted that the

recruitment was only for clerical grade

(Class-III post) and it is not a ratio under

Article 141. In State of Haryana v. Piara

Singh (1992) 4 SCC 118 this Court noted that

the normal rule is recruitment through the

prescribed agency but due to administrative

exigencies, an ad hoc or temporary

appointment may be made. In such a

situation, this Court held that efforts

should always be made to replace such ad hoc

or temporary employees by regularly selected

employees, as early as possible. The

temporary employees also would get liberty to

compete along with others for regular

selection but if he is not selected, he must

give way to the regularly selected

candidates. Appointment of the regularly

selected candidate cannot be withheld or kept

in abeyance for the sake of such an ad hoc or

temporary employee. Ad hoc or temporary

employee should not be replaced by another ad

hoc or temporary employee. He must be

replaced only by regularly selected employee.

The ad hoc appointment should not be a device

to circumvent the rule of reservation. If a

temporary or ad hoc employee continued for a

fairly long spell, the authorities must

consider his case for regularization provided

he is eligible and qualified according to the

rules and his service record is satisfactory

and his appointment does not run counter to

the reservation policy of the State. It is

to be remembered that in that case, the

appointments are only to Class-III or Class-

IV posts and the selection made was by

subordinate selection committee. Therefore,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12

this Court did not appear to have intended to

lay down as a general rule that in every

category of ad hoc appointment, if the ad hoc

appointee continued for long period, the

rules of recruitment should be relaxed and

the appointment by regularization be made.

Thus considered, we have no hesitation to

hold that the direction of the Division Bench

is clearly illegal and the learned Single

Judge is right in directing the State

Government to notify the vacancies to the PSC

and the PSC should advertise and make

recruitment of the candidates in accordance

with the rules."

In Union of India and Ors. vs. Harish Balkrishna

Mahajan (1997 [3] SCC 194), the position was again

reiterated with reference to Dr. Narain's case (supra).

Therefore, the challenge to the order of dismissal on the

ground of long continuance as ad hoc/temporary employee is

without substance.

What remains to be considered is the plea of legitimate

expectation. The principle of 'legitimate expectation' is

still at a stage of evolution as pointed out in De Smith

Administrative Law (5th Edn. Para 8.038). The principle is

at the root of the rule of law and requires regularity,

predictability and certainty in governments' dealings with

the public. Adverting to the basis of legitimate expectation

its procedural and substantive aspects, Lord Steyn in

Pierson v. Secretary of State for the Home Department (1997

(3) All ER 577, at p.606)(HL) goes back to Dicey's

description of the rule of law in his "Introduction to the

study of the Law of the Constitution" (10th Edn. 1968

p.203) as containing principles of enduring value in the

work of a great jurist. Dicey said that the constitutional

rights have roots in the common law. He said:

"The 'rule of law', lastly, may be used

as a formula for expressing the fact that

with us, the law of constitution, the rules

which in foreign countries naturally form

part of a constitutional code, are not the

source but the consequence of the rights of

individuals, as defined and enforced by the

courts; that, in short, the principles of

private law have with us been by the action

of the courts and Parliament so extended as

to determine the position of the Crown and

its servants; thus the constitution is the

result of the ordinary law of the land".

This, says Lord Steyn, is the pivot of Dicey's discussion of

rights to personal freedom and to freedom of association and

of public meeting and that it is clear that Dicey regards

the rule of law as having both procedural and substantive

effects. "The rule of law enforces minimum standards of

fairness, both substantive and procedural". On the facts in

Pierson, the majority held that the Secretary of State could

not have maintained a higher tariff of sentence that

recommended by the judiciary when admittedly no aggravating

circumstances existed. The State could not also increase the

tariff with retrospective effect.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12

The basic principles in this branch relating to

'legitimate expectation' were enunciated by Lord Diplock in

Council of Civil Service Unions and Ors. v. Minister for the

Civil Service (1985 AC 374 (408-409) (Commonly known as CCSU

case). It was observed in that case that for a legitimate

expectation to arise, the decisions of the administrative

authority must affect the person by depriving him of some

benefit or advantage which either (i) he had in the past

been permitted by the decision-maker to enjoy and which he

can legitimately expect to be permitted to continue to do

until there has been communicated to him some rational

grounds for withdrawing it on which he has been given an

opportunity to comment; or (ii) he has received assurance

from the decision-maker that they will not be withdrawn

without giving him first an opportunity of advancing reasons

for contending that they should not be withdrawn. The

procedural part of it relates to a representation that a

hearing or other appropriate procedure will be afforded

before the decision is made. The substantive part of the

principle is that if a representation is made that a benefit

of a substantive nature will be granted or if the person is

already in receipt of the benefit that it will be continued

and not be substantially varied, then the same could be

enforced. In the above case, Lord Fraser accepted that the

civil servants had a legitimate expectation that they would

be consulted before their trade union membership was

withdrawn because prior consultation in the past was the

standard practice whenever conditions of service were

significantly altered. Lord Diplock went a little further,

when he said that they had a legitimate expectation that

they would continue to enjoy the benefits of the trade union

membership, the interest in regard to which was protectable.

An expectation could be based on an express promise or

representation or by established past action or settled

conduct. The representation must be clear and unambiguous.

It could be a representation to the individual or generally

to class of persons.

The principle of a substantive legitimate expectation,

that is, expectation of favourable decision of one kind or

another, has been accepted as part of the English Law in

several cases. (De Smith, Administrative Law, 5th Ed.)

(Para 13.030), (See also Wade, Administrative Laws, 7th

Ed.) (pp. 418-419). According to Wade, the doctrine of

substantive legitimate expectation has been "rejected" by

the High Court of Australia in Attorney General for N.S.W.

vs. Quin (1990) 93 ALL E.R. 1 (But see Teon's case referred

to later) and that the principle was also rejected in Canada

in Reference Re Canada Assistance Plan (1991) 83 DLR (4th

297, but favoured in Ireland: Canon vs. Minister for the

Marine 1991(1) I.R. 82. The European Court goes further and

permits the Court to apply proportionality and go into the

balancing of legitimate expectation and the Public interest.

Even so, it has been held under English law that the

decision maker's freedom to change the policy in public

interest, cannot be fettered by the application of the

principle of substantive legitimate expectation.

Observations in earlier cases project a more inflexible rule

than is in vogue presently. In R. v. IRC, ex p Preston

(1985 AC 835) the House of Lords rejected the plea that the

altered policy relating to parole for certain categories of

prisoners required prior consultation with the prisoner,

Lord Scarman observed:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12

"But what was their legitimate

expectation. Given the substance and purpose

of the legislative provisions governing

parole, the most that a convicted prisoner

can legitimately expect is that his case be

examined individually in the light of

whatever policy the Secretary of State sees

fit to adopt provided always that the adopted

policy is a lawful exercise of the discretion

conferred upon him by the statute. Any other

view would entail the conclusion that the

unfettered discretion conferred by statute

upon the minister can in some cases by

restricted so as to hamper or even to prevent

changes of policy."

To a like effect are the observations of Lord Diplock

in Hughes vs. Department of Health and Social Security (HL)

1985 AC 776 (788):

"Administrative policies may change with

changing circumstances, including changes in

the political complexion of governments. The

liberty to make such changes is something

that is inherent in our constitutional form

of government."

(See in this connection Mr. Detan's article "Why

Administrators should be bound by their policies" (Vol. 17)

1997 Oxford Journal of Legal Studies, p. 23). But today the

rigidity of the above decisions appears to have been

somewhat relaxed to the extent of application of Wednesbury

rule, whenever there is a change in policy and we shall be

referring to those aspects presently.

Before we do so, we shall refer to some of the

important decisions of this Court to find out the extent to

which the principle of substantive legitimate expectation is

accepted in our country. In Navjyoti Co-op. Group Housing

Society vs. Union of India (1992 (4) SCC 477), the principle

of procedural fairness was applied. In that case the

seniority as per the existence list of co-operative housing

societies for allotment of land was altered by subsequent

decision. The previous policy was that the seniority amongst

housing societies in regard to allotment of land was to be

based on the date of registration of the society with the

Registrar. But on 20.1.1990, the policy was changed by

reckoning seniority as based upon the date of approval of

the final list by the Registrar. This altered the existing

seniority of the societies for allotment of land. This Court

held that the societies were entitled to a 'legitimate

expectation' that the past consistent practice in the matter

of allotment will be followed even if there was no right in

private law for such allotment. The authority was not

entitled to defeat the legitimate expectation of the

societies as per the previous seniority list without some

overriding reason of public policy as to justify change in

the criterion. No such overriding public interest was

shown. According to the principle of 'legitimate

expectation', if the authority proposed to defeat a person's

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12

legitimate expectation, it should afford him an opportunity

to make a representation in the matter. Reference was made

to Halsbury's Laws of England (p.151, Vol.1 (1) (4th Ed.

re-issue) and to the CCSU case. It was held that the

doctrine imposed, in essence, a duty on public authority to

act fairly by taking into consideration all relevant

factors, relating to such legitimate expectation. Within

the contours of fair dealing, the reasonable opportunity to

make representation against change of policy came in.

The next case in which the principle of 'legitimate

expectation' was considered is the case in Food Corporation

of India vs. M/s Kamdhenu Cattle Feed Industries, (1993 (1)

SCC 71). There the Food Corporation of India invited tenders

for sale of stocks of damaged food grains and the

respondent's bid was the highest. All tenderers were

invited for negotiation, but the respondent did not raise

his bid during negotiation while others did. The respondent

filed a writ petition claiming that it had a legitimate

expectation of acceptance of its bid, which was the highest.

The High Court allowed the writ petition. Reversing the

judgment, this Court referred to CCSU case and to R. v. IRC

ex p Preston (1985 AC 835). It was held that though the

respondent's bid was the highest, still it had no right to

have it accepted. No doubt, its tender could not be

arbitrarily rejected, but if the Corporation reasonably felt

that the amount offered by the respondent was inadequate as

per the factors operating in the commercial field, the non-

acceptance of bid could not be faulted. The procedure of

negotiation itself involved the giving due weight to the

legitimate expectation of the highest bidder and this was

sufficient.

This Court considered the question elaborately in Union

of India and Ors. vs. Hindustan Development Corporation and

Ors. (1993 (3) SCC 499). There tenders were called for

supply of cast-steel bogies to the railways. The three big

manufacturers quoted less than the smaller manufacturers.

The Railways then adopted a dual pricing policy giving

counter offers at a lower rate to the bigger manufacturers

who allegedly formed a cartel and a higher offer to others

so as to enable a healthy competition. This was challenged

by the three big manufacturers complaining that they were

also entitled to a higher rate and a large number of bogies.

This Court held that the change into a dual pricing policy

was not vitiated and was based on 'rational and reasonable'

grounds. In that context, reference was made to Halsbury's

Laws of England (4th Ed.) (Vol.1 (I) p.151), Schmidt vs.

Secretary to State for Home Affairs (1969 (2) Ch 149) which

required an opportunity to be given to an alien if the leave

given to him to stay in UK was being revoked before expiry

of the time and to Attorney-General of Hong Kong. vs. Ng

Yuen Shiu (1983 (2) AC 629) which required the Government of

Hong Kong to honour its undertaking to treat each

deportation case on its merits, and CCSU's case (supra)

which related to alteration of conditions relating to

membership of trade unions and the need to consult the

unions in case of change of policy as was the practice in

the past, and to Food Corporation of India's case (supra)

and Navjyoti Co-op. Group Housing Society's case (supra). It

was then observed that legitimate expectation was not the

same thing as anticipation. It was also different from a

mere wish to desire or hope; nor was it a claim or demand

based on a right. A mere disappointment would not given

rise to legal consequence. The position was indicated as

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12

follows:

"The legitimacy of an expectation can be

inferred only if it is founded on the

sanction of law or custom or an established

procedure followed in regular and natural

sequence. Such expectation should be

justifiably legitimate and protectable."

After quoting Wade/Administrative Law (6th Ed.) (p.424,

522), reference was also made to the judgment of the

Australian High Court in Attorney General for New South

Wales vs. Quin (1990) 64 Aust. LJR 327) in which the

principle itself, according to Wade, did not find

acceptance. In that case a Stipendiary Magistrate incharge

of a Court of Petty Sessions under the old court system was

refused appointment to the system of local courts which

replaced the previous system of Petty Sessions Courts. In

1987, the Attorney General who was hitherto recommending

former magistrates on the ground of 'fitness' for

appointment to the new local courts, deviated from that

policy and decided to go by assessment of merit of the

competing applicants. The Court of Appeal had directed that

the case of Mr. Quin must be considered separately and not

in competition with other applicants, but it was reversed by

the majority of the High Court of Australia (Mason, CJ,

Brennan & Dawson, JJ.) (Deans and Toobey, JJ dissenting).

Mason, CJ held that the Court could not fetter the executive

discretion to adopt a different policy which was better

calculated to serve the administration of justice and make

it more effective. The grant of substantive relief in such

a case would effectively prevent the executive from giving

effect to the new policy which it wished to pursue in

relation to the appointment of magistrates. Brennan, J.

observed very clearly that the notion of legitimate

expectation (falling short of a legal right) was too

nebulous to form a basis for invalidating the exercise of

power. He said that such a principle would "set the courts

adrift on a featureless sea of pragmatism." Dawson, J.

held that the contention of the respondent exceeded the

bound of procedural fairness and intruded upon the freedom

of the executive. In Hindustan Development Corporation's

case (supra) R. vs. Secretary of State for the Home

Department ex parte Ruddock (1987 2 All E.R. 518) and

Findlay vs. Secretary of State for the Home Department

(1984) 3 All E.R. 801) and Breen vs. Amalgamated Engineering

Union, (1971) 1 All. E.R. 1148 were considered. It was

accepted that the principle of legitimate expectation gave

the applicant sufficient locus standi to seek judicial

review and that the doctrine was confined mostly to a right

to fair hearing before a decision which resulted in

negativing a promise or withdrawing an undertaking, was

taken. It did not involve any crystallized right. The

protection of such legitimate expectation did not require

the fulfillment of the expectation where an overriding

public interest required otherwise. However, the burden lay

on the decision maker to show such an overriding public

interest. A case of substantive legitimate expectation

would arise when a body by representation or by past

practice aroused expectation which it would be within its

powers to fulfill. The Court could interfere only if the

decision taken by the authority was arbitrary, unreasonable

or not taken in public interest. If it is established that

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12

a legitimate expectation has been improperly denied on the

application of the above principles, the question of giving

opportunity can arise if failure of justice is shown. The

Court must follow an objective method by which the decision-

making authority is given the full range of choice which the

legislature is presumed to have intended. If the decision is

reached fairly and objectively, it cannot be interfered with

on the ground of procedural fairness. An example was given

that if a renewal was given to an existing licence holder, a

new applicant cannot claim an opportunity based on natural

justice. On facts, it was held that legitimate expectation

was denied on the basis of reasonable considerations.

The next case in which the question was considered is

Madras city Wine Merchants' Association vs. State of Tamil

Nadu, 1994 (5) SCC 509. In that case the rules relating to

renewal of liquor licences were statutorily altered by

repealing existing rules. It was held that the repeal being

the result of a change in the policy by legislation, the

principle of non-arbitrariness was not invocable.

In M.P. Oil Extraction vs. State of M.P. (1997 (7) SCC

592) the question was again considered. In that case, it

was held that the State's policy to extend renewal of an

agreement to selected industries which came to be located in

Madhya Pradesh on invitation of State, as against other

local industries was not arbitrary and the said selected

industries had a legitimate expectation of renewal under

renewal claims which should be given effect to according to

past practice unless there was any special reasons not to

adhere to the practice. It was clearly held that the

principle of substantive legitimate expectation was accepted

by the Court earlier. Reference was made to Food

Corporation's case (supra), Navjyoti Co-op. Group Housing

Society's case (supra) and to Hindustan Development

Corporation's case (supra).

Lastly we come to the three judge judgment in National

Building Construction Corporation vs. S. Raghunathan &

Others. (1998 (7) SCC 66). This case has more relevance to

the present case, as it was also a service matter. The

respondents were appointed in CPWD and they went on

deputation to the NBCC in Iraq and they opted to draw, while

on deputation, their grade pay in CPWD plus deputation

allowance. Besides that, the NBCC granted them Foreign

Allowance at 125% of the basic pay. Meanwhile their Basic

Pay in CPWD was revised w.e.f. 1.1.1986 on the

recommendation of the 4th Pay Commission. They contended

that the abovesaid increase of 125% should be given by NBCC

on their revised scales. This was not accepted by NBCC by

orders dated 15.10.1990. The contention of the respondents

based on legitimate expectation was rejected in view of the

peculiar conditions under which NBCC was working in Iraq.

It was observed that the doctrine of 'legitimate

expectation' had both substantive and procedural aspects.

This Court laid down a clear principle that claims on

legitimate expectation required reliance on representation

and resultant detriment in the same way as claims based on

promissory estoppel. The principle was developed in the

context of 'reasonableness' and in the context of 'natural

justice'. Reference was made to IRC exp. Preston's case

(supra); Food Corporation's case (supra); Hindustan

Development Corporation's case (supra); the Australian Case

in Quin (1990) 64 Aust. IJR 327; M.P. Oil Extraction's case

(supra), CCSU's case (supra) and Navjyoti's case (supra).

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12

On the facts of the case delineated above, the

principle of legitimate expectation has no application. It

has not been shown as to how any act was done by the

authorities which created an impression that the conditions

attached in the original appointment order were waived.

Mere continuance does not imply such waiver. No legitimate

expectation can be founded on such unfounded impressions.

It was not even indicated as to who, if any and with what

authority created such impression. No waiver which would be

against requisite compliances can be countenanced. Whether

an expectation exists is, self-evidently, a question of

fact. Clear statutory words override any expectation,

however, founded. (See Regina v. Director of Public

Prosecutions, Ex parte Kebilene and Ors. (1999) 3 WLR 972

(H.L.).

The inevitable conclusion is that Division Bench

judgment is on terra firma and needs no interference.

However, one factor needs to be noted before we part with

the case. The appellant has already put in 28 years of

service, has participated in the provident fund, pension and

gratuity schemes, and additionally she has applied for

voluntary retirement. We hope that the Government would

appropriately consider the prayers made by her for extending

the benefits of the schemes and accepting the prayer for

voluntary retirement in the proper perspective early,

uninfluenced by the dismissal of the appeal.

Appeal dismissed. Costs made easy.