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PETITIONER:

JACOB M. PUTHUPARAMBIL AND ORS. ETC. ETC.

Vs.

RESPONDENT:

KERALA WATER AUTHORITY AND ORS. ETC. ETC.

DATE OF JUDGMENT19/09/1990

BENCH:

AHMADI, A.M. (J)

BENCH:

AHMADI, A.M. (J)

REDDY, K. JAYACHANDRA (J)

CITATION:

1990 AIR 2228 1990 SCR Supl. (1) 562

1991 SCC (1) 28 JT 1990 (4) 27

1990 SCALE (2)588

CITATOR INFO :

D 1992 SC2070 (15,20,22)

RF 1992 SC2130 (10,11)

ACT:

Kerala Water Supply and Sewerage Act, 1986/Kerala State

Subordinate Service Rules, 1958--Section 19(1)/Rule

9(a)(i)--Kerala Water Authority-- Transfer of employees and

regularisation of service.

HEADNOTE:

Consequent upon the establishment of Kerala Water Au-

thority under the Kerala Water Supply and Sewerage Act,

1986, all the functions which were till then carried on by

the Public Health Engineering Department (PHED) were trans-

ferred to the said Authority. Contemporaneously with that

every person working in the PHED became the employee of the

Kerala Water Authority by virtue of Section 19(1) of the

Act. Though the said Act was given retrospective operation

w.e.f. 1st March 1984, Section 69 thereof came into force

from the date of publication of the Act in the Gazettee

viz., 4.8.1986; actual effect could be given w.e.f. 30.7.

1988 on which date the necessary notification was issued

where by the rule was amended and the Authority came within

the purview of the Public Service Commission. Thus the

employees of the Authority fell into four different groups

viz., (i) those who were in the employment of PHED before

the constitution of the Authority and were transferred to

the Authority, (ii) those whom the Authority employed be-

tween 1st April, 1984 and 4th August 1986, (iii) those who

were appointed between 4th August 1986 and 30th July 1988,

and (iv) those who were appointed after 30th July 1988. The

Authority it seems terminated the services of various em-

ployees.

The petitioners apprehending termination of their serv-

ices by the Authority filed petitions contending inter alia

that they were recruited through the Employment Exchange and

till the issuance of the notification dated 30.7.1988,

amending the concerned PSC rule, there was no question of

the Authority consulting the PSC and therefore, appointments

made prior to that date could not be termed as irregular or

unauthorised and could not be determined on that ground. It

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is asserted by them that the High Court refused to grant

relief to those employees whose services were threatened and

despite favourable orders passed by this Court in cases that

came before it, the Authority continued to terminate the

services of employees similarly placed treating those

563

orders as having been passed in respect of only those em-

ployees who were before the Court. It is, therefore, urged

by them that this Court should pass orders laying down

guidelines for the regularisation of the services of not

only the petitioners but also all others similarly placed so

that the low income employees are not required to knock at

the doors of different courts for protection against the

threatened arbitrary action of the Authority terminating

their services. The Authority has contested the cases on the

plea that all the appointments made before or after April 1,

1984 were governed by Rule 9(a)(i) of the Rules till Section

69 came into force w.e.f. 4.8.1986 and 30.7.1988 when it was

amended. Appointments made after 4.8.1986 are clearly sub-

ject to the requirement of Section 69 of the Act and the

Authority cannot act in contravention thereof. Services of

all those who were governed by Rule 9(a)(i) will have to be

determinated on the expiry of 180 days.

Allowing the appeals as also writ petitions, this Court,

HELD: Interpreting Rule 9(a)(i) consistently with the

spirit and philosophy of the Constitution, which it is

permissible to do without doing violence to the said rule,

it follows that employees who are serving on the establish-

ment for long spells and have the requisite qualifications

for the job, should not be thrown out but their services

should be regularised as far as possible. Since workers

belonging to this batch have worked on their posts for

reasonably long spells they are entitled to regularisation

in service. [388A-B]

P.K. Narayani & Ors. v. State of Kerala and Ors., [1984]

Suppl. SCC 212; Dr. A.K. Jain & Ors. v. Union of India and

Ors., [1987] Suppl. SCC 497; Daily-rated Casual Labour

employed under P & T Department through Bhartiya Dak Tar

Mazdoor Manch v. Union of India and Ors., [1988] 1 SCC 122,

referred to.

JUDGMENT:

ORIGINAL JURISDICTION: Writ Petition (Civil) No. 112 of

1990 etc. etc.

(Under Article 32 of the Constitution of India.)

P.S. Poti. E.M.S. Anam, V.J. Francis and M.N. PopIi for

the Petitioners.

T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambi-

ar. K.R. Kurup. S. Balakrishanan, Vijay Kumar, T.T. Kunhi

Kannan. Smt. S. Vasudevan and P.K. Manohar for the Respond-

ents.

564

The Judgment of the Court was delivered by

AHMADI, J. In special leave petitions, leave granted.

An autonomous body called the Kerala Water and Waste

Water Authority was constituted with effect from 1st April,

1984 under Section 3(1) of the Kerala Water and Waste Water

Ordinance, 1984 (No, 14 of 1984) which Ordinance was brought

into force w.e.f. 1st March, 1984. This ordinance was re-

placed by similar Ordinances issued from time to time, the

last being Ordinance No. 27 of 1986 which was in turn re-

placed by the Kerala Water Supply and Sewerage Act, 1986

(Act No. 14 of 1986), (hereinafter called 'the Act'); Sec-

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tion 1(3) whereof provides that it shall be deemed to have

come into force on 1st March, 1984. This Act, besides pro-

viding for the establishment of an autonomous authority to

be called the Kerala Water Authority, makes provision for

the development and regulation of water supply and waste

water collection and disposal and for matters connected

therewith. There is no dispute that the functions which were

carried on by the Public Health Engineering Department

(PHED) were transferred to the autonomous body on the enact-

ment of the Ordinance No. 14 of 1984. After the enactment of

the Act, every person working in the PHED became the employ-

ee of the Kerala Water Authority (for short 'the Authority')

by virtue of Section 19(1) of the Act, which reads as under:

"Transfer of employees to the Authority--Save as otherwise

provided in this section, every person who was employed in

the Public Health Engineering Department of the Government

shall, on and from the appointed day become an employee of

the Authority and shall hold his office or service therein

by the same tenure, at the same remuneration and upon the

same terms and conditions, and with the same rights and

privileges as to pension, gratuity and other matters as he

would have held the same on the appointed day if this Act

had not come into force and shall continue to do so until

his employment in the Authority is terminated or until his

remuneration or other terms and conditions of service are

revised or altered by the Authority under or in pursuance of

any law or in accordance with any provision which for the

time being governs his service:

Provided that nothing contained in this sub-section shall

apply to an employee in the cadres of the Administrative

?

565

Officers, Financial Assistants Divisional Accounts, Typists

and Stenographers, who, by notice in writing given to the

Government and the Authority within such time as the Govern-

ment may, by general or special order, specify, intimates

his intention of not becoming an employee of the Authority:

Provided further than an employee referred to in the preced-

ing proviso shall continue to be an employee under the

Government and shall be provided elsewhere in any post or

other service under the Government."

Sub-sections (3) and (6) of Section 19 make it clear that

such transfer of service shall not entitle the employee to

claim any compensation under the Industrial Disputes Act,

1947 nor shall it amount to retrenchment or abolition of

post under any extant rule, regulation or order applicable

to Government servants. Thus, the erstwhile staff of the

PHED was by the thrust of Section 19(1) transferred on the

establishment of the Authority. This would naturally concern

those persons only who were in the employment of the PHED

before the establishment of the Authority w.e.f. 1st April,

1984.

The staff members employed by the Authority after its

constitution were naturally appointed under the provisions

of the concerned statute. Since the Act has retrospective

effect, reference may be made to Section 8(1) of the Act

which reads thus:

"Appointment of officers and staff--Subject to the provi-

sions of sub-section (2), the Authority may appoint for the

purpose of enabling it to carry out its powers, duties and

functions under this Act, a Secretary and such other offi-

cers and staff as may be required against posts duly sanc-

tioned by it:

Provided that the-Authority shall obtain the previous ap-

proval of the Government for the creation of post above the

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rank of the Executive Engineer."

By virtue of Section 8(3), except as provided by sub-sec-

tions (1) & (2), the appointment and conditions of service

of the officers and employees of the Authority are to be

governed by rules made by the Government from time to time.

Although the Act is deemed to have come into force w.e.f.

1st March. 1984, Section 69 became effective

566

from the date of publication of the Act in the Gazette i.e.

4th August, 1986. That section reads as follows:

"Amendment of Act 19 of 1970--With effect from the date of

publication of this Act in the Gazette, the Kerala Public

Service Commission (Additional functions as respects certain

Corporations and Companies) Act, 1970 (19 of 1970) shall

have effect subject to the following amendment, namely:--

in clause (a) of Section 2, the words and figures "or the

Kerala Water Authority" established under section 3 of the

Kerala Water Supply and Sewerage Act 1986;", shall be added

at the end."

Even though Act 19 of 1970 stood so amended by the force of

Section 69, actual effect could be given after issuance of

Notification No. G.O. (MS) No. 38/88/P & ARD dated 30th

July, 1988 on which date item (LIII) was added to the rele-

vant rules as

"Amendment of the Rules--In the Kerala Public Service Com-

mission (consultation by Corporation and Companies) Rules,

1971, in Clause (d) of rule 2, after item (LII), the follow-

ing item shall be added, namely:--

(LIII)--The Kerala Water Authority."

This amendment was considered necessary with a view to

bringing the Authority within the purview of PSC so that it

may seek the advice of that body on matters relating to the

methods of recruitment of its employees, etc.

From the above discussion it becomes clear that the

employees of the Authority can be divided into four distinct

groups, viz., (i) those who were in the employment of PHED

before the constitution of the Authority and were trans-

ferred to the Authority (ii) those whom the Authority em-

ployed between 1st April. 1984 and 4th August, 1986 (iii)

those who were appointed between 4th August, 1986 and 30th

July, 1988 and (iv) those who were appointed after 30th

July, 1988.

The petitioners in this batch of matters are serving in

different capacities, such as, cleaners, pump operators,

draftsmen, drivers, etc. They claim that they were appointed

through the Employment Ex-

567

change between 1981 and 1988. They contend that they have

been compelled to approach this Court as their services are

likely to be terminated as has been done in the case of a

few of their colleagues. They contend that till the issuance

of the notification dated 30th July. 1988 amending the

concerned PSC rule (amendment extracted earlier) there was

no question of the Authority consulting the PSC and there-

fore, appointments made prior to that date cannot be termed

as irregular or unauthorised and cannot be determined on

that ground. They contend that as in a few cases the High

Court of Kerala failed to appreciate this true legal posi-

tion and refused to grant relief to employees whose services

were threatened, the Managing Director of the Authority

issued instructions to his subordinates to terminate the

services of similarly placed employees, thereby compelling

the present petitioners to approach this Court so that all

such employees are uniformly governed by this Court's order.

They point out that in Civil Appeals Nos. 472 to 478 of 1988

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arising from the High Court decision. and Writ Petitions

(Civil) Nos. 857 and 1135 of 1987, this Court passed the

following order on 1st February, 1988:

"Special leave granted. Heard counsel for the parties.

We are of the view that in the facts and circumstances of

these cases the services of such of the appellants as pos-

sess the requisite qualifications should be regulated in

accordance with the Kerala Public Service Commission (Addi-

tional functions as respects certain Corporations and Compa-

nies) Act, 1970 and until such regularisation is made, no

appointment on similar posts from outside be made. If there

be any excess employees now in service employment, it will

be open to the Authority to terminate their services on

condition that as and when vacancies arise, they shall first

be considered for appointment keeping the direction indicat-

ed above in view.

Recruitments in future will, however, be in accordance with

the Kerala Public Service Commission (Additional functions

as respects certain Corporations and Companies) Act, 1970

and the Kerala Water Supply and Sewerage Act, 1986."

Thereafter in another batch of special leave petitions Nos.

4385 to 4387 of 1988 this Court passed the following order

on 24th March, 1988:

568

"Heard learned counsel for parties. The only direction which

we can give in the facts and circumstances of the case will

be in case after all those who have been regularly selected

by the Public Service Commission are appointed and thereaf-

ter any vacancies are left, the same should be given to

those who, like the petitioners, have already been in serv-

ice taking into consideration their seniority. Every step

should be taken by the Water Authorities to regularise the

services of such people who can be appointed under our

direction as indicated above. There will be no further

direction in this case. The other person who may be thrown

out of employment on account of the direction of the Water

Authority which is impugned before us, may appear before the

Public Service Commission in the next examination, The State

of Kerala has informed us that age bar would be waived. The

petitions are disposed of accordingly."

The Authority treated these orders as confined to the work-

men who had filed the proceedings and did not extend the

ratio to others similarly placed. Not only that, the Author-

ity, contend the petitioners, placed different interpreta-

tions on the aforesaid orders and continued to terminate the

services of the employees. Another group of writ petitions

Nos. 525,527,528, and 503 of 1988 came up before this Court

on 28th November, 1988 when this Court passed the following

Order:

"Mr. Krishna Murthy Iyer appearing for the Kerala Water

Authority states that the claims of the petitioners can be

divided into three categories, namely (1) those who had been

employed by Public Health Engineering Department before the

Kerala Water Authority was constituted, (2) those who get

employed between 1.4.1984 and 1986 and (3) the persons

appointed after 1986. The Kerala Water Authority is given

three months' time to examine the individual cases of these

groups and take its decision accordingly. We direct the

Authority to place its conclusions before the Court before

giving effect to them. Status quo as on today will continue

until further orders."

The grievance of the petitioners is that no action was taken

by the Authority within the time allowed nor has it taken

any action till today to implement the said order. The

petitioners also contend that the employees are compelled to

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knock at the doors of different courts as the Authority

continues to terminate the services of the employees

569

not with standing the aforequoted orders passed by this

Court. Mr. P.S. Poti, the learned counsel for the petition-

ers, therefore, made a fervent appeal that this Court should

pass an order laying down guidelines for the regularisation

of the services of not only the petitioners but also all

others similarly placed so that these low income group

employees are not required to knock at the doors of differ-

ent courts to protect themselves from the threatened arbi-

trary action of the Authority terminating their services. In

other words he wants this Court to formulate a scheme for

the regularisation of the services of all similarly placed

employees which would put an end to all pending cases and

future cases which are bound to arise if the Authority

continues its present policy.

The claims made by the employees in this group of cases

is contested mainly on the plea that their tenure and serv-

ice conditions were regulated by Rule 9(a)(i) of the Kerala

State and Subordinate Service Rules, 1958 (hereinafter

called `the Rules') which were statutory in character and

were, therefore, binding on the Authority as well as the

employees. It is contended that the employees belonging to

different categories were appointed on different dates by

the PHED prior to 1st April, 1984 under this rule and,

therefore, their services could only be regulated thereun-

der. After the autonomous Authority was constituted w.e.f.

1st April, 1984 on the enactment of Ordinance 14 of 1984,

the Authority passed a Resolution No. 8 on 25th April, 1984

adopting the aforesaid Rules and hence all appointments made

after 1st April, 1984 also came to governed by Rule 9(a)(i)

of the Rules till Section 69 of the Act came into force

w.e.f. 4th August, 1986 and not 30th July, 1988 when the

relevant rule was amended by the introduction of item (LIII)

referred to earlier. Appointments made after 4th August,

1986 are clearly subject to the requirement of Section 69 of

the Act and the Authority cannot act in contravention there-

of. Had it not been for Court orders restraining the Author-

ity from terminating their services, the services of all

those who were governed by Rule 9(a)(i) would have been

terminated on the expiry of 180 days. The text of that rule

may be noticed at this stage:

"Where it is necessary in the public interest, owing to an

emergency which has arisen to fill immediately a vacancy in

a post borne on the cadre of a service, class or category

and there would be undue delay in making such appointment in

accordance with these rules and the Special Rules, the

appointing authority may appoint a person, otherwise than in

accordance with the said rules, temporarily."

570

The first proviso is not relevant for our purpose but reli-

ance was placed on the second proviso which reads as under:

"Provided further that a person appointed under this clause

by direct recruitment to a post other than teaching post and

a post covered by the proviso to clause (iii) of rule 10(b)]

shall not be allowed to continue in such post for a period

exceeding three months."

(i.e. one hundred eighty days)

The rule further requires that a person appointed under

clause (i) should be replaced as soon as possible by a

member of the service or an approved candidate qualified to

hold the post under the said rules. Such replacement must

take place in the order of seniority based on length of

temporary service in the unit. It is, therefore, the case of

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the Authority that appointments made under this rule were

purely temporary, not to exceed three months, and had to be

terminated on the expiry of the said period and it was not

open to the Authority to continue their services even by

reappointment unless fresh candidates were not available for

reappointment through employment exchange. Therefore, had it

not been for the restraint orders issued by different

Courts, the Authority contends it was under an obligation to

act in conformity with the above rules. However, as regards

those who had joined service prior to 1st April. 1984 in

different categories, the Authority passed a resolution on

30th January, 1987 to the following effect:

"Resolved to recommend the Government the regularisation of

the service of the employees recruited in the erstwhile PHED

and still working in the Kerala Water Authority."

The Government, it seems, has not taken any decision in this

behalf as yet. Since the counter filed on behalf of the

State Government is silent on this point we inquired of the

learned counsel for the State to clarify the position. We

were told that since the Authority was an autonomous body it

was free to regularise the services of such employees, if it

so desired, without the concurrence of the State Government.

While admitting the fact that appointments were made from

the lists submitted by various District Employment Officers,

the Authority contends that as the appointments were gov-

erned by Rule 9(a)(i) they could not ensure beyond three

months and the termination of their employment did not fall

within the ambit of `retrenchment' as understood under the

571

Industrial Disputes Act, 1947. In any case even otherwise

the application of that law is specifically excluded by

Section 19(3) of the Act and hence the benefit of that law

cannot be extended to the employees of the Authority. The

contention that the action of the Authority to terminate the

services is violative of Article 14 is repelled on the plea

that acting in conformity with a statutory Rule 9(a)(i) can

never be branded as arbitrary. Lastly it is contended that

the Authority was not directed to apply this Court's orders

passed in some of the proceedings referred to earlier to all

similarly situated employees as the Court's orders were

based on `the fact and circumstances of these cases' and

were not intended to be of general application. With refer-

ence to the order of 24th March, 1988 it is said that the

Authority has moved a review application which is pending.

The Authority contends that as there is no infringement of

any fundamental right, the writ petitions brought under

Article 32 of the Constitution cannot be sustained. The

above is the stand taken by the Authority. The State Govern-

ment has by and large supported this stand and, therefore,

we need not restate the contentions raised in their counter.

The respondents, therefore, contend that the employees are

not entitled to any relief whatsoever and the appeals/peti-

tions deserve to be dismissed with costs.

The question of regularisation in service must be exam-

ined keeping in mind the historical as well as the constitu-

tional perspectives. During the colonial rule industrial

growth in the country was tardy and most of the large-sized

industries were controlled by British interests.

These establishments employed Indian labour on wages far

below the sustenance levels. Men, women and even children

were required to work for long hours in thoroughly unhygien-

ic conditions. Because of large-scale unemployment there was

a surplus labour market which the employers could and did

exploit. This virtually forced the labour to accept employ-

ment on terms unilaterally dictated by the employers. The

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relationship between the employer and the employee being

purely contractual, the hire and fire rule governed. Those

were the days of laissez faire when contractual rights were

placed above human rights. The concepts of dignity of labour

and fair remuneration for work done were wholly alien. The

workers had to work in appalling conditions and at low wages

with no job security.

After we attained independence the pace of industrial

growth accelerated. Our Constitution makers were aware of

the hardships and insecurity faced by the working classes.

The Preamble of our Constitution obligates the State to

secure to all its citizens social and economic justice,

besides political justice. By the 42nd Amendment, the Pream-

572

ble of the Constitution was amended to say that ours will be

a socialistic democracy. In furtherance of these promises

certain fundamental rights were engrafted in Part 111 of the

Constitution. The Constitution guarantees `equality', abhors

discrimination, prohibits and penalises forced labour in any

form whatsoever and extends protection against exploitation

of labour including child labour. After extending these

guarantees, amongst others, the Constitution makers proceed-

ed to chart out the course for the governance of the country

in Part IV of the Constitution entitled `Directive Princi-

ples of State Policy'. These principles reflect the hopes

and aspirations of the people. Although the provisions of

this part are not enforceable by any court, the principles

laid down therein are nevertheless fundamental in the gover-

nance Of the country and the State is under an obligation to

apply them in making laws. The principles laid down therein.

therefore, define the Objectives and goals which the State

must endeavour to achieve over a period of time. Therefore,

whenever the State is required to make laws It must do

so consistently with these principles with a view to secur-

ing social and economic freedom so essential for the estab-

lishment of an egalitarian society. This part, therefore,

mandates that the State shall strive to promote the welfare

of the people by minimising the inequalities in income and

eliminating inequalities in status, facilities and opportu-

nities; by directing its policy towards securing, amongst

others, the distribution of the material resources of the

community to subserve the common good; by so operating the

economic system as not to result in concentration of wealth;

and by making effective provision for securing the right to

work as also to public assistance in cases of unemployment,

albeit within the limits of its economic capacities. There

are certain other provisions which enjoin on the State

certain duties, e.g. securing to all workers work, a living

wage, just and humane conditions of work, a decent standard

of life. participation in management, etc., which are aimed

at improving the lot of the working classes. Thus the Pream-

ble promises socio-economic justice, the fundamental rights

confer certain justiciable socio-economic rights and the

Directive Principles fix the socio-economic goals which the

State must strive to attain. These three together constitute

the core and conscience of the Constitution.

India is a developing country. It has a vast surplus

labour market. Large-scale unemployment offers a matching

opportunity to the employer to exploit the needy. Under such

market conditions the employer can dictate... I his terms of

employment taking advantage of the absence of the bargaining

power in the other. The unorganised job seeker is left with

no option but to accept employment on take-it-or-

573

leave-it terms offered by the employer. Such terms of em-

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ployment offer no job security and the employee is left to

the mercy of the employer. Employers have betrayed an in-

creasing tendency to employ temporary hands even on regular

and permanent jobs with a view to circumventing the protec-

tion offered to the working classes under the benevolent

legislations enacted from time to time, One such device

adopted is to get the work done through contract labour, It

is in this backdrop that we must Consider the request for

regularisation in service.

Before we deal with the case on hand it would be advan-

tageous to refer to some of the decision bearing on the

question of regularisation. In Smt. P.K. Narayani & Ors. v.

State of Kerala & Ors,, [1984] Suppl. SCC 212 the petition-

ers who had been serving as employees of the State of Kerala

or its public sector undertakings for the past few years

challenged the action of the employer in terminating their

services to make room for the candidates selected by the

Kerala Public Service Commission. This Court directed that

the petitioners and all others similarly placed should be

allowed to appear at the next examination that the Public

Service Commission may hold without raising the age bar;

till then the petitioners and others may be continued in

service provided there are vacancies. This, clarified the

Court, will not confer any right on the employees to contin-

ue in service or of being selected by the Commission other-

wise than in accordance with the extant rules and regula-

tions. These directions were given to resolve what this

Court described as `a human problem which has more than one

facet', Again in Dr. A.K. Jain & Ors. v, Union of India &

Ors., [1987] Suppl. SCC 497 the services of ad hoc Assistant

Medical Officers who were initially appointed for six months

but were continued for periods ranging upto four years, were

sought to be terminated to accommodate the candidates se-

lected by the Union Public Service Commission. The petition-

ers claimed that their services should be regularised and

their seniority should be fixed from the date of their

initial entry in service as ad hoc appointees. In the coun-

ter, the Union of India contended that `ad hoc' appointments

were made by the General Managers of the Zonal Railways to

tide over temporary shortages of doctors and their tenures

were extended till regular selection was made by the UPSC

and appointments were made by the President of India. Since

the appointing authority was the President of India such ad

hoc appointments by the General Managers of the Zonal Rail-

ways could not be regularised. It was further contended that

the ad hoc appointees were granted age relaxation and were

asked to appear at two special selections based on interview

alone held by the

574

UPSC in 1982 and 1985. The petitioners were those ad hoc

appointees who had either failed to avail of the special

benefit of selection or had appeared and failed to qualify.

In the circumstances it was contended that they could not be

regularised in service. Notwithstanding the same this Court

directed regularisation of services of all doctors appointed

upto October 1, 1984 in consultation with UPSC on the evalu-

ation of their work and conduct based on the confidential

reports in respect of the period subsequent to October 1,

1982. Such regularisation was to be from the dates from

which they were continuously working. The services of those

not regularised were allowed to be terminated. The petitions

of those appointed after October 1, 1984 were however dis-

missed.

In the case of Daily-rated Casual Labour employed under

P & T Department through Bhartiya Dak Tar Mazdoor Manch v.

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Union of India & Ors., [1988] 1 SCC 122 this Court, while

dealing with the question of their absorption, referred to

the State's obligations (referred to as an individual's

rights) under Part IV of the Constitution and observed as

under:

"Of those rights the question of security of work is of

utmost importance. If a person does not have the feeling

that he belongs to an organization engaged in production he

will not put forward his best effort to produce more. That

sense of belonging arises only when he feels that he will

not be turned out of employment the next day at the whim of

the management. It is for this reason it is being repeatedly

observed by those who are in charge of economic affairs of

the countries in different parts of the world that as far as

possible security of work should be assured to the employees

so that they may contribute to the maximisation of produc-

tion. It is again for this reason that managements and the

governmental agencies in particular should not allow workers

to remain as casual labourers or temporary employees for an

unreasonable long period of time."

This Court emphasised that unless a sense of belonging

arises, the worker will not give his best and consequently

production will suffer which in turn will result in economic

loss to the nation. This Court, therefore, directed the

department to prepare a scheme on a rational basis for

absorbing those who have worked for a continuous period of

one year.

575

Tested on the above and keeping in mind the constitu-

tional philosophy adverted to earlier, we may now proceed to

consider the main plank of the contention raised by the

Authority. But before we do so we may dispose of the non-

controversial part of the case.

From the pleadings in this case one thing that clearly

emerges is that the Authority had taken a decision on 30th

January, 1987 to regularise the services of those who were

employed by the erstwhile PHED and whose services stood

transferred to the Authority by the thrust of the statute.

According to the resolution extracted earlier, the Authority

recommended to the State Government that the services of the

employees recruited in the erstwhile PHED and who continued

to work on the establishment of the Authority should be

regularised. The learned counsel for the State Government

contended that since these employees were now borne on the

establishment of the Authority on the statutory transfer of

their services, it was for the Authority to regularise their

services, and it was quite unnecessary to make a recommenda-

tion to the State Government in that behalf. To put it

differently, the stand of the State Government through its

counsel is that the question of regularisation of the serv-

ices of ex-PHED employees now borne on the establishment of

the Authority is exclusively within the purview of the

Authority and the State Government has no role to play. That

means it was wholly unnecessary on the part of the Authority

to make the recommendation it made by the resolution of 30th

January, 1987 to the State Government for the regularisation

of the ex-PHED employees serving on its establishment on

that date. To us the position, therefore, appears crystal

clear that it is for the Authority and the Authority alone

to regularise the services of such employees without waiting

for a nod from the State Government. The sphinx-like silence

on the part of the State Government for now over three years

from the date of the resolution is indeed disturbing and

betrays total lack of concern for this pressing human prob-

lem.

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The second batch of workers comprise those who were

appointed between 1st April. 1984 and 4th August, 1986 by

the Authority itself. Under section 8(1) of the Act the

power to appoint the Secretary and other officers and staff

members vests in the Authority. Only when a post above the

rank of an Executive Engineer is to be created that the

sanction of the State Government becomes necessary under the

proviso. Sub-section (2) to which sub-section (1) is subject

expects the Authority to seek the previous sanction of the

Government if it desires to employ a servant of the Central

or State Government on deputation and not otherwise. It is,

therefore, clear beyond any manner of doubt

576

that the power to appoint the staff-members with whom we are

concerned, solely vests in the Authority. Since the Act is

brought into force w.e.f. 1st March, 1984 the question of

regularisation of the services of staff-members appointed

after that date must be examined with reference to the power

found in section 8(1) of the Act. However, the contention of

the Authority is based on Rule 9(a)(i) of the Rules, which

it claims to have adopted under Resolution No. 8 dated 25th

April. 1984. The Authority contends that by the thrust of

this rule the appointments were limited to 180 days only and

since the said rules had statutory flavour the Authority was

bound to act in accordance therewith. We have extracted the

relevant part of this rule earlier. since these rules were

framed in exercise of power conferred by the proviso to

Article 309 of the Constitution they are undoubtedly statu-

tory in character but Mr. Poti was right in his contention

that they do not retain that character in their application

to the staff-members of the Authority since they have been

adopted by the Authority under a resolution. These rules

would undoubtedly be statutory in character in their appli-

cation to the members of the Kerala Subordinate services for

whom they were enacted but when any other authority adopts

them by a resolution for regulating the services of its

staff, the rules do not continue to remain statutory in

their application to the staff of that Authority. They are

like any other administrative rules which do not have statu-

tory force. It was not contended, as indeed it could not

That these rules derive statutory force from section 64 or

65 of the Act. Section 64 confers the rule making power on

the State while section 65 empowers the Authority to make

regulations with the previous approval of the Government. It

is nobody's case that these rules were adopted after obtain-

ing the previous approval of the Government. If that be so.

we must accept Mr. Poti's submission that these rule their

application to the staff members of the Authority appointed

after 1 st. April, 1984 have no statutory flavour or force.

Now to the text of Rule 9(a)(i) of the Rules. It empowers

the appointing authority to appoint a person temporarily

otherwise than in accordance with the rule if (i) it is

necessary in public interest and (ii) where an

emergency has arisen to fill any particular post which has

fallen vacant, immediately. In the present case it is diffi-

cult to say that all appointments made after 1st April,

1984 were required to be filled immediately because of an

emergency of the type contemplated by the said rule. On the

contrary it seems appointments were routinely made in

purported exercise of power conferred by this rule. The

proviso on which reliance is placed , which we have extract-

ed earlier. merely states that ordinarily such appointments

will be of those persons who

577

possess the requisite qualifications for the post. If any

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person who does not possess the requisite qualifications is

appointed under the said clause, he will be liable to be

replaced by a qualified person. Clause (iii) of Rule 9

states that a person appointed under clause (i) shall, as

soon as possible, be replaced by a member of the service or

an approved candidate qualified to hold the post. Clause (e)

of Rule 9, however, provided for regularisation of service

of any person appointed under clause (i) of sub-rule (a) if

he had completed continuous service of two years on December

22, 1973, notwithstanding anything contained in the rules.

This is a clear indication that in the past the Government

also considered it just and fair to regularise the services

of those who had been in continuous service for two years

prior to the cut-off date. The spirit underlying this treat-

ment clearly shows that the Government did not consider it

just, fair or reasonable to terminate the services of those

who were in employment for a period of two or more years

prior to the cut-off date. This approach is quite consistent

with the spirit of the rule which was intended to be invoked

to serve emergent situations which could not brook delay.

Such appointments were intended to be stop-gap temporary

appointments to serve the stated purpose and not long term

ones. The rule was not intended to fill a large number of

posts in the service but only those which could not be kept

vacant till regular appointments were made in accordance

with the rules. But once the appointments continued for

long, the services had to be regularised if the incumbent

possessed the requisite qualifications as was done by sub-

rule (e). Such an approach alone would be consistent with

the constitutional philosophy adverted to earlier. Even

otherwise, the rule must be so interpreted, if the language

of the rule permits, as will advance this philosophy of the

Constitution. If the rule is so interpreted it seems clear

to us that employees who have been working on the establish-

ment since long, and who possess the requisite qualifica-

tions for the job as obtaining on the date of their employ-

ment, must be allowed to continue on their jobs and their

services should be regularised. It is unfair and unreasona-

ble to remove people who have been rendering service since

sometime as such removal has serious consequences. The

family of the employee which has settled down and accommo-

dated its needs to the emoluments received by the bread

winner, will face economic ruination if the job is suddenly

taken away. Besides, the precious period of early life

devoted in the service of the establishment will be wholly

wasted and the incumbent may be rendered `age barred' for

securing a job elsewhere. It is indeed unfair to use him,

generate hope and a feeling of security in him attune his

family to live within his earnings and then suddenly- to

throw him out of job. Such behaviour would be an

578

affront to the concept of job security and would run counter

to the constitutional philosophy, particularly the concept

of right to work in Article 41 of the Constitution. There-

fore, if we interpret Rule 9(a)(i) consistently with the

spirit and philosophy of the Constitution, which it is

permissible to do without doing violence to the said rule,

it follows that employees who are serving on the establish-

ment for long spells and have the requisite qualifications

for the job, should not be thrown out but their services

should be regularised as far as possible. Since workers

belonging to this batch have worked on their posts for

reasonably long spells they are entitled to regularisation

in service.

The third and fourth batches concern workers who were

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appointed between 4th August, 1986 and 30th July, 1988 and

after 30th July, 1988, respectively. Their appointments

would be governed by Section 69 which became effective from

4th August, 1986. By virtue of this section the Kerala

Public Service (Additional Functions as respect certain

Corporations and Companies) Act, 1970 (19 of 1970) came to

be amended with effect from 4th August, 1968 on which date

it came to be published in the Gazette. Thereby in clause

(a) of section 2 the "Kerala Water Authority" came to be

added. In law, therefore, the need to consult the PSC had

arisen. True it is that the consequential notification

amending the 1971 Rules was issued on 30th July, 1988. But

on that account we do not think it would be proper to treat

them differently. We think it advisable to treat them as

forming a single batch since the need to consult the PSC had

arisen on Section 69 coming into effect from 4th August,

1986.

In the result we allow these appeals and writ petitions

and make the rule absolute as under:

"(1) The Authority will with immediate effect regularise the

services of all ex-PHED employees as per its Resolution of

30th January, 1987 without waiting for State Government

approval.

(2) The services of workers employed by the Authority be-

tween 1st April, 1984 and 4th August, 1986 will be regula-

rised with immediate effect if they possess the requisite

qualifications for the post prescribed on the date of ap-

pointment of the concerned worker.

(3) The services of workers appointed after 4th August, 1984

and possessing the requisite qualifications should be regu-

lated in accordance with Act 19 of 1970 provided they have

put in continuous service of not less than one year, artifi-

cial breaks, if any,

579

to be ignored. The Kerala Service Public Service Commission

will take immediate steps to regularise their services as a

separate block. In so doing the Kerala Public Service Com-

mission will take the age bar as waived.

(4) The Kerala Public Service Commission will consid-

er the question of regularisation of the services of workers

who possess the requisite qualifications but have put in

less than one year's service, separately. In doing so the

Kerala Public Service Commission will take the age bar as

waived. If they are found fit they will be placed on the

list along with the newly recruited candidates in the order

of their respective merits. The Kerala Public Service Com-

mission will be free to rearrange the list accordingly.

Thereafter fresh appointments will issue depending on the

total number of posts available. If the posts are inade-

quate, those presently in employment will make room for the

selected candidates but their names will remain on the list

and they will be entitled to appointment as and when their

turn arrives in regular course. The list will enure for such

period as is permissible under the extant rules.

(5) The Authority will be at liberty to deal with the serv-

ices of the workers who do not possess the requisite quali-

fications as may be it considered appropriate in accordance

with law.

(6) Those workers whose services have been terminated in

violation of this Court's order in respect of which Contempt

Petition No. 156 of 1990 is taken out shall be entitled to

the benefit of this order as if they continue in service and

the case of each worker will be governed by the clause

applicable to him depending on the category to which he

belongs and if he is found eligible for regularisation he

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will be restored to service and assigned his proper place.

This order will regulate the services not only of the par-

ties to the present petitions but also all others similarly

situated including those who may be parties to other pro-

ceedings pending in different Courts.

If further directions are required in the matter of

working out of the above order the High Court of Kerala may

be approached for the same. All the aforestated proceedings

are disposed of accordingly with no order as to costs.

Y. Lal Appeals and petitions

allowed.

580