Page 1 Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1059 OF 2005

Nihal Singh & Others …Appellants

Versus

State of Punjab & Others …Respondents

WITH

CIVIL APPEAL NO. 6315 OF 2013

[Arising out of SLP (Civil) No. 12448 of 2009)

Bhupinder Singh & Others …Appellants

Versus

State of Punjab & Others …Respondents

J U D G M E N T

Chelameswar, J.

1.Leave granted in SLP (Civil) No.12448 of 2009.

2.Since both the appeals raise a common question of

law, the same are being disposed of by this common

judgment. For the sake of convenience, we shall refer to

the facts in Civil Appeal No.1059 of 2005.

1

Page 2 3.This appeal arises out of a judgment in CWP No.

13915 of 2002 of the High Court of Punjab and Haryana

dated 23

rd

January, 2003. 20 unsuccessful petitioners in

the above writ-petition are the appellants herein. The

High Court dismissed the writ petition following an earlier

judgment of a Division Bench in LPA 209 of 1992 dated 6

th

September, 1993, which in turn arose out of Civil Writ

Petition No. 5280 of 1988. The facts leading to all these

writ petitions as could be culled out from the material on

record are as follows:-

4.There was a large scale disturbance in the State of

Punjab in 1980s. State was not in a position to handle the

prevailing law and order situation with the available police

personnel. Therefore, the State of Punjab resorted to

recruitment under section 17

1

of the Police Act, 1861

(hereinafter referred to as ‘the Act’) which enabled the

1

Section 17, Police Act, 1861 – When it shall appear that any unlawful assembly, or riot or

disturbance of the peace has taken place, or may be reasonably apprehended, and that police force

ordinarily employed for preserving the peace is not sufficient for its preservation and for the

protection of the inhabitants and the security of property in the place where such unlawful assembly or

riot or disturbances of the peace has occurred, or is apprehended, it shall be lawful for any police

officer not below the rank of Inspector to apply to the nearest Magistrate to appoint so many of the

residents of the neighbourhood as such police officers may require to act as SPOs for such time and

within such limits as he shall deem necessary and the Magistrate to whom such application is made

shall, unless he sees cause to the contrary, comply with the application.

2

Page 3 State (police officers not below the rank of Inspector) to

appoint Special Police Officers.

5.The factual background in which persons such as the

appellants herein came to be appointed is recorded in the

judgment in LPA No. 209 of 1992 as follows:-

“I was at the meeting held on March 24, 1984 between

the Advisor to the Governor of Punjab and Senior

officers of the banks in the public Sector Operating in

Punjab that, after reviewing the security arrangements

for banks in Punjab, it was decided that SPOs be

appointed for the said purpose in terms of section 17

of the Police Act, 1861 (hereinafter referred to as the

Act). This step was taken as it was felt that it would

not be possible for the State Govt. to provide the

requisite police guards to banks and that, thereafter,

this additional force be raised, in order to do so, the

banks undertook to take over the financial burden of

the SPOs to be appointed, but it was clearly

understood that as per the provisions of the Act, such

Police Officers would be under the discipline and

control of the Senior Superintendent of Police of the

district concerned. As regards their remuneration it

was decided that SPOs would be paid an honorarium

of Rs. 15/- per day. This was, however, later

enhanced to Rs. 30/- per day. Relevant in the context

of the SPOs to be appointed, was the further decision”

6.The appellants herein assert that all the appellants

are ex-servicemen and registered with the employment

exchange. They were recruited as Special Police Officers.

2

2

Ground IV of SLP - …It was the Police Department which sent the intimation to the employment

exchange and thereafter all the ex-servicemen who were enrolled with the Employment Exchange

were called upon and got their option to be enrolled as Special Police Officer (SPOs) under section 17

of the Police Act, 1861. Those persons who were having armed licence were enrolled as SPOs and

this enrolment was made by the Superintendent of Police, Amritsar. Similar orders were passed by

the Superintendent of Police regarding all the petitioners between 1986 to 1994.

3

Page 4 7.The appointment order of the first appellant reads as

follows:

“Nihal Singh s/o Shri Nidhan Singh r/o Kallah PS Sadar 7-7

is hereby appointed as a Special Police Officer under

section 17 of the Police Act, 1961, in the rank of SPO and is

assigned special constabulary number 277. He shall be

entitled to all privileges under Police Act 1861 and shall be

under the administrative control of the undersigned in the

matter of discipline etc.

He shall be paid Rs.35/- per day by the concerned bank of

posting as honorarium from the date he actually takes over

charge of his duty.”

8.In the background of such appointments, various

persons who were appointed, including the appellants

herein, approached the High Court of Punjab & Haryana

from time to time seeking appropriate directions for

regularisation of their services. It appears that the

petitioners herein also had approached the High Court

earlier in CWP No.19390 of 2001 praying that their

services be regularized in the light of notification

No.11/34/2000-4PP-III/1301 dated 23.1.2001. The said

writ petition was dismissed by order dated 12.12.2001

directing consideration of the cases of the petitioners

therein (appellants herein) in accordance with the law and

pass a speaking order.

4

Page 5 9.Pursuant to the said directions, the Senior

Superintendent of Police, Amritsar (hereinafter referred to

as ‘the SSP’) purported to consider the cases of the

appellants herein and passed an order dated 23.4.2002

rejecting the claim of the appellants. The relevant portion

of the order reads as follows:

“In compliance with the aforesaid order dated 12.12.2001

passed by the Hon’ble High Court of Punjab and Haryana,

the joint legal notice dated 3.4.2001 (Annexure P-4)

submitted by the petitioners, has been examined by the

undersigned and it has been found that the petitioner is not

entitled to claim the relief of regularization of his services

as he was appointed as SPOs (Bank Guards) on daily wages

basis @ Rs.30/- per day by the SSP/Amritsar vide No.14477-

80/B dated 27.4.87 S.P.O. (Bank Guard), on the request of

the Bank Authorities which were increased later on from

time to time as per Govt. instructions. They were

appointed as SPO (Bank Guards) in order to provide them

power, privileges and protection of ordinary police official

as provided under section 18 of the Police Act 1861 due to

terrorism in the State at that time. The petitioners are still

working as guards with the Gramin Banks and daily wages

is being given by the Bank Authorities. No seniority of the

S.P.O. (Bank Guard) has been maintained in Amritsar

District. SPO (Bank Guard) is still working with the Gramin

banks in Amritsar district and he can lay his claim, if any, to

the bank authorities instead of the Police Department.

Keeping in view the above legal notice dated 3.4.2001

(annexure P.4) has been considered. The notification

No.11/34/2000-4PP-III/1301 dated 23.1.2001 is not

applicable in the case bank guard as their daily wages are

being paid by the bank. As such, the claim of the petitioner

(Bank Guards) SPO Ajit Singh No.247/ASR is not

maintainable against the State of Punjab or this Office.

Legal notice Annexure P-4 is devoid of any legal force and

is being rejected. The petitioner be informed personally.”

10.Challenging the said order, the appellants herein

once again approached the High Court of Punjab &

5

Page 6 Haryana in Civil Writ Petition No.13915 of 2002 which

came to be dismissed by the judgment under appeal.

11.As already noticed, the appellants’ writ petition was

dismissed on the basis of an earlier judgment of the High

Court of Punjab & Haryana passed in Letter Patent Appeal

No.209 of 1992. In the said Letter Patent Appeal filed by

the persons similarly situated as the appellants herein, the

High Court of Punjab & Haryana recorded a categoric

finding that there is a relationship of master and servant

between the State of Punjab and the SPOs:

“Such being the situation, there can be no escape from the

conclusion that the relationship of master and servant of

SPOs is with the State govt. and not with the banks.”

However, the claim of the SPOs for regularization was

refused holding:

“As regards regularization of the services of Special Police

Officers, by the very nature and purpose of their

appointment as such, no occasion arises to warrant such

regularization. As mentioned earlier, there is no regular

cadre for such posts, nor have any particular number of

posts been created for this purpose. These factors clearly

mitigate against such services being regularized.”

12.Relying on the said conclusion, the writ petition of the

appellants herein also came to be dismissed. Hence the

present appeal.

6

Page 7 13.We are required to examine the correctness of the

decision dated 23.4.2002 of the SSP as approved by the

judgment under appeal. The reason assigned by the SSP

for rejecting the claim of the appellants (the relevant

portion of which order is already extracted above) is that

the appellants are working as guards with various banks

and their wages are being paid by such banks and,

therefore, their claim for regularization, if any, lay only to

the concerned bank but not to the police department.

14.Learned counsel for the appellants Shri R.K. Kapoor

submitted that the conclusion of the SSP that appellants

cannot have any claim against the State of Punjab to seek

regularization of their services is clearly wrong in view of

the fact that the master and servant relationship exists

between the appellants and the State of Punjab. Coming

to the conclusion of the High Court that in the absence of

regularly constituted cadre or sanctioned posts,

regularization of the services of the appellants cannot be

guaranteed, Shri Kapoor argued that the authority to

create posts vests exclusively with the State. The State

7

Page 8 cannot extract the work from the persons like the

appellants for decades and turn back to tell the court that

it cannot regularize the services of such persons in view of

the fact that these appointments were not made against

any sanctioned posts.

15.On the other hand, Shri Kuldip Singh, learned counsel

appearing for the State submitted that in the light of the

Constitution Bench decision of this Court in Secretary,

State of Karnataka and Ors v. Umadevi (3) and Ors

(2006) 4 SCC 1, in absence of a sanctioned post the relief

such as prayed by the appellants cannot be given.

16.As can be seen from the order of appointment of the

1

st

appellant - which we take to be representative of the

orders of appointment of all the appellants (a fact which is

not disputed by the respondent), the appointment was

made by the SSP in exercise of the statutory power under

section 17 of the Act. It is categorically mentioned in the

said appointment order that the appellants are entitled to

all the privileges under the Act. The powers, privileges and

obligations of the SPOs appointed in exercise of the powers

8

Page 9 under section 17 of the Act are specified in section 18

which reads as follows:

“Every special police officers so appointed shall have same

powers, privileges and protection, and shall be liable to

perform the same duties and shall be amenable to the

same penalities and be subordinate to the same

authorities, as the ordinary officers of police.”

17.It is obvious both from the said section and also the

appointment orders, the appellants are appointed by the

State in exercise of the statutory power under section 17

of the Act. The appellants are amenable to the disciplinary

control of the State as in the case of any other regular

police officers. The only distinction is that they are to be

paid daily wages of Rs.35 (which came to be revised from

time to time). Further, such payment was to be made by

the bank to whom the services of each one of the

appellants is made available.

18.From the mere fact that the payment of wages came

from the bank at whose disposal the services of each of

the appellants was kept did not render the appellants

employees of those banks. The appointment is made by

the State. The disciplinary control vests with the State.

The two factors which conclusively establish that the

9

Page 10 relationship of master and servant exists between the

State and the appellants. A fact which is clearly recognized

by the division bench of the High Court in LPA No.209 of

1992. It may be worthwhile mentioning here that under

the law of contracts in this country the consideration for a

contract need not always necessarily flow from the parties

to a contract. The decision of the SSP to reject the claim of

the appellants only on the basis that the payment of

wages to the appellants herein was being made by the

concerned banks rendering them disentitled to seek

regularization of their services from the State is clearly

untenable.

19.Coming to the judgment of the division bench of the

High Court of Punjab & Haryana in LPA No.209 of 1992

where the claims for regularization of the similarly situated

persons were rejected on the ground that no regular cadre

or sanctioned posts are available for regularization of their

services, the High Court may be factually right in recording

that there is no regularly constituted cadre and sanctioned

posts against which recruitments of persons like the

appellants herein were made. However, that does not

10

Page 11 conclusively decide the issue on hand. The creation of a

cadre or sanctioning of posts for a cadre is a matter

exclusively within the authority of the State. That the State

did not choose to create a cadre but chose to make

appointments of persons creating contractual relationship

only demonstrates the arbitrary nature of the exercise of

the power available under section 17 of the Act. The

appointments made have never been terminated thereby

enabling various banks to utilize the services of employees

of the State for a long period on nominal wages and

without making available any other service benefits which

are available to the other employees of the State, who are

discharging functions similar to the functions that are

being discharged by the appellants.

20.No doubt that the powers under section 17 are meant

for meeting the exigencies contemplated under it, such as,

riot or disturbance which are normally expected to be of a

short duration. Therefore, the State might not have initially

thought of creating either a cadre or permanent posts.

11

Page 12 21.But we do not see any justification for the State to

take a defence that after permitting the utilisation of the

services of large number of people like the appellants for

decades to say that there are no sanctioned posts to

absorb the appellants. Sanctioned posts do not fall from

heaven. State has to create them by a conscious choice on

the basis of some rational assessment of the need.

22.The question is whether this court can compel the

State of Punjab to create posts and absorb the appellants

into the services of the State on a permanent basis

consistent with the Constitution Bench decision of this

court in Umadevi’s case. To answer this question, the

ratio decidendi of the Umadevi’s case is required to be

examined. In that case, this Court was considering the

legality of the action of the State in resorting to irregular

appointments without reference to the duty to comply with

the proper appointment procedure contemplated by the

Constitution.

“4. … The Union, the States, their departments and

instrumentalities have resorted to irregular appointments,

especially in the lower rungs of the service, without

reference to the duty to ensure a proper appointment

procedure through the Public Service Commissions or

otherwise as per the rules adopted and to permit these

irregular appointees or those appointed on contract or on

12

Page 13 daily wages, to continue year after year, thus, keeping

out those who are qualified to apply for the post

concerned and depriving them of an opportunity to

compete for the post. It has also led to persons who get

employed, without the following of a regular procedure or

even through the backdoor or on daily wages, approaching

the courts, seeking directions to make them permanent in

their posts and to prevent regular recruitment to the posts

concerned. The courts have not always kept the legal

aspects in mind and have occasionally even stayed the

regular process of employment being set in motion and in

some cases, even directed that these illegal, irregular or

improper entrants be absorbed into service. A class of

employment which can only be called “litigious

employment”, has risen like a phoenix seriously impairing

the constitutional scheme. Such orders are passed

apparently in exercise of the wide powers under Article 226

of the Constitution. Whether the wide powers under Article

226 of the Constitution are intended to be used for a

purpose certain to defeat the concept of social justice and

equal opportunity for all, subject to affirmative action in the

matter of public employment as recognised by our

Constitution, has to be seriously pondered over.”

(emphasis supplied)

23.It can be seen from the above that the entire issue

pivoted around the fact that the State initially made

appointments without following any rational procedure

envisaged under the Scheme of the Constitution in the

matters of public appointments. This court while

recognising the authority of the State to make temporary

appointments engaging workers on daily wages declared

that the regularisation of the employment of such persons

which was made without following the procedure

conforming to the requirement of the Scheme of the

13

Page 14 Constitution in the matter of public appointments cannot

become an alternate mode of recruitment to public

appointment. It was further declared that the jurisdiction

of the Constitutional Courts under Article 226 or Article 32

cannot be exercised to compel the State or to enable the

State to perpetuate an illegality. This court held that

compelling the State to absorb persons who were

employed by the State as casual workers or daily-wage

workers for a long period on the ground that such a

practice would be an arbitrary practice and violative of

Article 14 and would itself offend another aspect of Article

14 i.e. the State chose initially to appoint such persons

without any rational procedure recognized by law thereby

depriving vast number of other eligible candidates who

were similarly situated to compete for such employment.

24.Even going by the principles laid down in Umadevi’s

case, we are of the opinion that the State of Punjab cannot

be heard to say that the appellants are not entitled to be

absorbed into the services of the State on permanent basis

as their appointments were purely temporary and not

against any sanctioned posts created by the State.

14

Page 15 25.In our opinion, the initial appointment of the

appellants can never be categorized as an irregular

appointment. The initial appointment of the appellants is

made in accordance with the statutory procedure

contemplated under the Act. The decision to resort to such

a procedure was taken at the highest level of the State by

conscious choice as already noticed by us. The High Court

in its decision in LPA No.209 of 1992 recorded that the

decision to resort to the procedure under section 17 of the

Act was taken in a meeting dated 24.3.1984 between the

Advisor to the Government of Punjab and senior officers of

the various Banks in the public sector. Such a decision

was taken as there was a need to provide necessary

security to the public sector banks. As the State was not

in a position to provide requisite police guards to the

banks, it was decided by the State to resort to section 17

of the Act. As the employment of such additional force

would create a further financial burden on the State,

various public sector banks undertook to take over the

financial burden arising out of such employment. In this

regard, the written statement filed before the High Court

15

Page 16 in the instant case by respondent nos.1 to 3 through the

Assistant Inspector General of Police (Welfare & Litigation)

is necessary to be noticed. It is stated in the said affidavit:

“2.That in meeting of higher officers held on 27.3.1984

in Governor House Chandigarh with Shri Surinder Nath, IPS,

Advisor to Governor of Punjab, in which following decisions

were taken:-

i) That it will not be possible to provide police guard to

banks unless the Banks were willing to pay for the

same and additional force could be arranged on that

basis, it was decided that police guards should be

requisitioned by the Banks for their biggest branches

located at the Distt. and Sub Divisional towns. They

should place the requisition with the Distt. SSPs

endorsing a copy of IG CID. In the requisition, they

should clearly state that the costs of guard would be

met by them. It will then be for the police

department to get additional force sanctioned. This

task should be done on a top priority. In the

meantime depending upon the urgency of the need

of any particular branch, police Deptt. may provide

from police strength for its protection.

ii)For all other branches guards will be provided by

Distt. SSP after selecting suitable ex-servicemen or

other able bodied persons who will be appointed as

Special Police Officer in terms of Section 17 of the

Police Act. Preference may be given to persons who

may already be in possession of licence weapons.

All persons appointed as SPO for this purpose will be

given a brief training for about 7 days in the Police

Lines in the handling of weapons taking suitable

position for protection of branches. These SPOs will

work under the discipline and control and as per

Police Act, they will have the same powers,

privileges and protection and shall be amenable to

same penalty as an ordinary police personnel.”

26.It can be seen from the above that a selection

process was designed under which the District Senior

Superintendent of Police is required to choose suitable

ex-servicemen or other able bodied persons for being

16

Page 17 appointed as Special Police Officers in terms of section 17

of the Act. It is indicated that the persons who are already

in possession of a licensed weapon are to be given priority.

27.It is also asserted by the appellants that pursuant to

the requisition by the police department options were

called upon from ex-servicemen who were willing to be

enrolled as Special Police Officer (SPOs) under section 17

of the Police Act, 1861.

3

28.Such a procedure making recruitments through the

employment exchanges was held to be consistent with the

requirement of Articles 14 and 16 of the Constitution by

this Court in Union of India and Ors. v. N. Hargopal

and Ors. (1987) 3 SCC 308.

4

29.The abovementioned process clearly indicates it is

not a case where persons like the appellants were

3

Paragraph 4 of the Writ petition and at page 34 of the SLP Paperbook:

“That the Government made a policy to enrol the ex-servicemen to guard the life and

property of the Government employees as well as Government employees. All the petitioners being

ex-servicemen enrolled themselves in the employment exchange. The police department sent the

intimation to the employment exchange and thereafter all the ex-servicemen who were enrolled with

the Employment Exchange were called upon and got their option to be enrolled in as Special Police

Officer (SPOs) under section 17 of the Police Act, 1861 (hereinafter called as the SPOs). Those

persons who were having armed licence were enrolled as SPOs and this enrolment was made by the

Superintendent of Police, Amritsar.”

4

9. … We, therefore, consider that insistence on recruitment through Employment Exchanges

advances rather than restricts the rights guaranteed by Articles 14 and 16 of the Constitution. The

submission that Employment Exchanges do not reach everywhere applies equally to whatever method

of advertising vacancies is adopted. Advertisement in the daily press, for example, is also equally

ineffective as it does not reach everyone desiring employment.

17

Page 18 arbitrarily chosen to the exclusion of other eligible

candidates. It required all able bodied persons to be

considered by the SSP who was charged with the

responsibility of selecting suitable candidates.

30.Such a process of selection is sanctioned by law

under section 17 of the Act. Viewed in the context of the

situation prevailing at that point of time in the State of

Punjab, such a process cannot be said to be irrational. The

need was to obtain the services of persons who had some

experience and training in handling an extraordinary

situation of dealing with armed miscreants.

31.It can also be noticed from the written statement of

the Assistant Inspector General of Police (Welfare &

Litigation) that preference was given to persons who are in

possession of licensed weapons. The recruitment of the

appellants and other similarly situated persons was made

in the background of terrorism prevailing in the State of

Punjab at that time as acknowledged in the order dated

23.4.2002 of the SSP. The procedure which is followed

during the normal times of making recruitment by inviting

18

Page 19 applications and scrutinising the same to identify the

suitable candidates would itself take considerable time.

Even after such a selection the selected candidates are

required to be provided with necessary arms and also be

trained in the use of such arms. All this process is

certainly time consuming. The requirement of the State

was to take swift action in an extra-ordinary situation.

32.Therefore, we are of the opinion that the process of

selection adopted in identifying the appellants herein

cannot be said to be unreasonable or arbitrary in the

sense that it was devised to eliminate other eligible

candidates. It may be worthwhile to note that in

Umadevi’s case , this Court was dealing with

appointments made without following any rational

procedure in the lower rungs of various services of the

Union and the States.

33.Coming to the other aspect of the matter pointed out

by the High Court - that in the absence of sanctioned posts

the State cannot be compelled to absorb the persons like

the appellants into the services of the State, we can only

19

Page 20 say that posts are to be created by the State depending

upon the need to employ people having regard to various

functions the State undertakes to discharge.

“Every sovereign Government has within its own jurisdiction right

and power to create whatever public offices it may regard as

necessary to its proper functioning and its own internal

administration.”

5

34.It is no doubt that the assessment of the need to

employ a certain number of people for discharging a

particular responsibility of the State under the Constitution

is always with the executive Government of the day

subject to the overall control of the Legislature. That does

not mean that an examination by a Constitutional Court

regarding the accuracy of the assessment of the need is

barred. This Court in S.S. Dhanoa v. Union of India

(1991) 3 SCC 567 did examine the correctness of the

assessment made by the executive government. It was a

case where Union of India appointed two Election

Commissioners in addition to the Chief Election

Commissioner just before the general elections to the Lok

Sabha. Subsequent to the elections, the new government

5

42 American Jurisprudence 902 Para 31

20

Page 21 abolished those posts. While examining the legality of

such abolition, this Court had to deal with an argument

6

whether the need to have additional commissioners

ceased subsequent to the election. It was the case of the

Union of India that on the date posts were created there

was a need to have additional commissioners in view of

certain factors such as the reduction of the lower age limit

of the voters etc. This Court categorically held that “The truth

of the matter as is apparent from the record is that …….there was no need for the said

appointments…..”.

35.Therefore, it is clear that the existence of the need

for creation of the posts is a relevant factor reference to

which the executive government is required to take

6

“21. In the first instance, the petitioner and the other Election Commissioners

were appointed when the work of the Commission did not warrant their

appointment. The reason given by respondent 1 (Union of India), that on account

of the Constitution (61st Amendment) Act reducing the voting age and the

Constitution (64th Amendment) and (65th Amendment) Bills relating to election

to the Panchayats and Nagar Palikas, the work of the Commission was expected

to increase and, therefore, there was need for more Election Commissioners, cuts

no ice. As has been pointed out by respondent 2, the work relating to revision of

electoral rolls on account of the reduction of voting age was completed in all the

States except Assam by the end of July 1989 itself, and at the Conference of the

Chief Elecoral Officers at Tirupati, respondent 2 had declared that the entire

preparatory work relating to the conduct of the then ensuing general elections to

the Lok Sabha would be completed by August in the whole of the country except

Assam. Further, the Constitution (64th and 65th Amendment) Bills had already

fallen in Parliament, before the appointments. In fact, what was needed was

more secretarial staff for which the Commission was pressing, and not more

Election Commissioners. What instead was done was to appoint the petitioner

and the other Election Commissioner on October 16, 1989. Admittedly, further

the views of the Chief Election Commissioner were not ascertained before

making the said appointments. In fact, he was presented with them for the first

time in the afternoon of the same day, i.e., October 16, 1989.”

21

Page 22 rational decision based on relevant consideration. In our

opinion, when the facts such as the ones obtaining in the

instant case demonstrate that there is need for the

creation of posts, the failure of the executive government

to apply its mind and take a decision to create posts or

stop extracting work from persons such as the appellants

herein for decades together itself would be arbitrary action

(inaction) on the part of the State.

36.The other factor which the State is required to keep in

mind while creating or abolishing posts is the financial

implications involved in such a decision. The creation of

posts necessarily means additional financial burden on the

exchequer of the State. Depending upon the priorities of

the State, the allocation of the finances is no doubt

exclusively within the domain of the Legislature. However

in the instant case creation of new posts would not create

any additional financial burden to the State as the various

banks at whose disposal the services of each of the

appellants is made available have agreed to bear the

burden. If absorbing the appellants into the services of the

State and providing benefits at par with the police officers

22

Page 23 of similar rank employed by the State results in further

financial commitment it is always open for the State to

demand the banks to meet such additional burden.

Apparently no such demand has ever been made by the

State. The result is – the various banks which avail the

services of these appellants enjoy the supply of cheap

labour over a period of decades. It is also pertinent to

notice that these banks are public sector banks. We are of

the opinion that neither the Government of Punjab nor

these public sector banks can continue such a practice

consistent with their obligation to function in accordance

with the Constitution. Umadevi’s judgment cannot

become a licence for exploitation by the State and its

instrumentalities.

37.For all the abovementioned reasons, we are of the

opinion that the appellants are entitled to be absorbed in

the services of the State. The appeals are accordingly

allowed. The judgments under appeal are set aside.

38.We direct the State of Punjab to regularise the

services of the appellants by creating necessary posts

23

Page 24 within a period of three months from today. Upon such

regularisation, the appellants would be entitled to all the

benefits of services attached to the post which are similar

in nature already in the cadre of the police services of the

State. We are of the opinion that the appellants are

entitled to the costs throughout. In the circumstances, we

quantify the costs to Rs.10,000/- to be paid to each of the

appellants.

……………………………………… ..J.

(H.L. Gokhale)

………………………………… ..……J.

(J. Chelameswar)

New Delhi;

August 7, 2013.

24