OFFICIAL LIQUIDATOR v. DAYANAND AND OTHERS

The Judgment of the Court was delivered by E G.S. SINGHVI, J. 1. Leave granted in S.L.P. (C) Nos.12798/2005 and 13838/2006.

2Copy pinpoint2. These appeals are directed against the orders of f Calcutta and Delhi High Courts, whereby directions have been ~. j I

issued to the appellants herein to absorb the persons employed by the Official Liquidators attached to those High Courts under Rule 308 of the Companies (Court) Rules, 1959 (for short 'the 1959 Rules') against the posts sanctioned by the Government G of India, Department of Company Affairs.

FACTS

3Copy pinpoint3. For the sake of convenience, we have culled out the facts from the pleadings of Writ Petition No.1387 of 2001 filed H by Tapas Chakraborty and 109 others in Calcutta High Court,

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[G.S. SINGHVI, J.]

.. Writ Petition No.2728 of 2001 filed by Smt. Daya Dua and A- ·• --( others in Delhi High Court, the record of these appeals and documents filed/produced by the learned counsel for the parties during the pendency of the appeals. These are:

(i) There are two categories of employees in the B offices of the Official Liquidators attached to different High Courts. The first category comprises of the employees who are appointed against the: • ...,... posts sanctioned by the Government of India,· Department of Company Affairs. They are recruited in accordance with the procedure prescribed in the c rules framed under proviso to Article 309 of the Constitution and the doctrine of equality enshrined in Articles 14 and 16 and are paid salaries and allowances from the Consolidated Fund of India. The second category comprises of the;Persons D employed/engaged by the Official Liquidators pursuant to the sanction accorded by the concerned Court under Rule 308 of the 1959 Rules. The employees falling in this category are described as company paid staff. They are paid salaries and E allowances from the fund created by disposal of the assets of the companies in liquidation.

(ii) For Calcutta High Court, the Central Government .,,... had appointed a Court Liquidator under Section F I ~ 38A of the Banking Regulation Act, 1949, as amended in 1953. He used to employ staff under Rule 308 of the 1959 Rules in connection with liquidation of banking companies. The salaries of such staff were paid from the assets of the banking: G companies under liquidation.

(iii) In the year 1978, the Government of India, Ministry of Law, Justice and Company Affairs vide its letter dated 27.11.1978 circulateG a scheme (hereinafter 1

described as 'the 1978 Scheme') for absorption of H

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company paid staff against Group C posts in the subordinate offices of the Department of Company Affairs. That scheme envisaged consideration of the cases of company paid staff, who were in position on 31.3.1978 and who possessed the B educational qualifications prescribed for the post against which they were to be absorbed. It was also provided that absorption of the company paid staff will be limited to 50% vacancies in direct recruitment quota of Group C posts. c ."

4Copy pinpoint4. Sixty-three employees working under the Court Liquidator attached to Calcutta High Court filed writ petition for grant of the status of permanent Central Governrnent employee with effect from the date of completion of 360 days of service besides regular pay scales with avenues for promotion apart from pension, provident fund and other service benefits on the basis of their length of service.

5Copy pinpoint5. The learned Single Judge of Calcutta High Court -~( . allowed the writ petition in terms of the prayer made. The appeal preferred by the appellants herein was dismissed by the Division Bench, which noted that even though the writ petitioners had been working for last 20 to 25 years, neither their services were regularized nor they were paid at par with similar employees of other departments/offices and they were retired at the age of 58 years without any financial benefit. The Division Bench held that the appellants have failed to l \ substantiate their plea that the employees appointed by the Court Liquidator were not engaged for doing work of perennial nature and that there was no reasonable basis for G. discriminating the Court Liquidator's staff vis-a-vis the regular employees of the office of Official Liquidator.

6Copy pinpoint6. The company paid staff (Estate Clerks) engaged by the Official Liquidator attached to the High Court of Kera la also filed writ petition claiming parity with the government employees H appointed in the office of the Official Liquidator. The Division

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[G.S. SINGHVI, J.]

Bench of that High Court took cognizance of the fact that there A .~ ' were two sets of employees under the Official Liquidator - (1) employees appointed by the Central Government, and (2) employees (14 in number) appointed by the Official Liquidator between 1980 and 1989 under Rule 308 of the 1959 Rules; that all the employees were doing the same work but were B being paid different salaries and held that there was no rational basis for according unequal treatment to similarly situated employees. The Division Bench then referred to the 1978 r -,,.. Scheme, judgments of this Court in Narender Chadha v. Union of India [1986 (2) SCC 157], Dhirendra Chamoli v. State of c U.P. [1986 (1) SCC 637], Surinder Singh and Another v. Engineer-in-Chief, CPWD and Others [1986 (1) SCC 639], H.C. Puttaswamy v. Hon'ble Chief Justice of Karnataka High Court, Bangalore [1991 (2) Supp. SCC 421], Bhagwati Prasad v. Delhi State Mineral Development Corporation [1990 ( 1) D SCC 361], Jacob M. Puthuparambil v. Kera/a Water Authority [1991 (1) SCC 28], Delhi Development Horticulture Employees' Union v. Delhi Administration, Delhi [1992 (4) SCC 99], State of Haryana v. Piara Singh [1992 (4) SCC 118] and held that the petitioners are entitled to be absorbed as regular Lower Division Clerks in the office of the Official E Liquidator from the date of their initial appointment. Accordingly, a direction was issued to the respondents in the writ petition to absorb the Estate Clerks against the regular posts of Lower Division Clerks and pay them salary in the regular pay scale ~ with consequential benefits. F

7Copy pinpoint7. The Government of India and Official Liquidators I I appealed against the orders of Calcutta and Kerala High Courts by filing petitions for special leave to appeal, which were admitted and converted into Civil Appeal Nos.5642 of 1994 G (Government of India and others v. The Court Liquidator's Employees Association and others) and Civil Appeal No.5677 of 1994 (Union of India and others v. P.P. Bridget and others). During the pendency of those appeals, Writ Petition No.473 of 1998 filed by the company paid staff employed/engaged by the H

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t- A Official Liquidator of Delhi High Court claiming parity with the ' regular employees was also transferred to this Court. After >- 4 r hearing the arguments, the Court passed an interim order on 14.1.1998, which reads as under:

"In all these cases, the common question that arises for B consideration is whether the persons appointed by the Official Liquidator/Court Liquidator under the orders of respective High Courts under Rules 308/309 of the I Companies (Court) Rules, 1959 are entitled to equal pay ir ~ and regularisation as the employees appointed by the ~ c Ce11tral Government in the office of the Official Liquidator. " Learned Senior Counsel appearing for the appointees brought to our notice the findings of the High Coui:_ts rendered on the bas.is of the materials placed before them. They are broadly stated that the appointees were discharging identical duties and functions as that of regular employees in the office of the Official Liquidator; that they have been continuously without break working for a period ranging from 10 to 25 years; that they have been paid only a fixed salary without any benefit of pension, gratuity; that such employees appointed up to 1-7-1978 had been regularised by the Government; that though the Central Government appreciated the human problem involved in these matters and came forward before the Kerala High Court to amicably settle the issue ultimately has shown an unsympathetic attitude and that in the light of the several ~ judgments of the Supreme Court, the appointees are entitled to regularisation and salaries as paid to the regular employees in the office of the Official Liquidator at least from three years prior to the date of the judgment t G of the Single Judge of the Calcutta High Court and in the Kerala cases from the date of appointmoot.

On the other hand, Mr. Malhotra, learned Senior Counsel appearing for the Union of India submitted that the appointees were not appointed by the Government and H

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[G.S. SINGHVI, J.] \

~-( they were not paid salaries from the consolidated fund. On A the other hand, they were paid salaries from the companies concerned under liquidation. In certain High Courts, there are Official Liquidators and Court Liquidators appointed under Section 38-A of Banking (Regulation) Act. The banking companies under liquidation originally were 75, 8 now only there are 32 b~nking companies under liquidation. The appointment under court orders are not for " r-~ a permanent department like Official Liquidator's office and, therefore, the appointees cannot demand regularization and payment of equal salary as that of c salaries paid to regular employees in the office of the I

Official Liquidator.

The hard reality is that the appointees are continued on the basis of fixed salary without any retiral benefits such as pension and gratuity for more than 25 years and the D )"" functions they are discharging are similar to those discharged by the employees in the Office of the Official Liquidator without getting equal treatment. In the circumstances, before rendering a decision on merits by the Court, Mr Malhotra, learned Senior Counsel desired E that the Government be given an opportunity to consider the matter in the light of the findings rendered by the High Courts and to come forward with an acceptable solution. ,..,..

~ The matters are adjourned by four weeks." F I

8Copy pinpoint8. In furtherance of the aforementioned order, the Government of India considered various proposals. Thereafter an additional affidavit was filed incorporating therein the following three options: G (i) one option that was discussed was to repeat ~ scheme for absorption of company-paid staff as was done through the 1978 Scheme of Department of Company Affairs. There are certain practical problems in following this course of action. As per H

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A the 1978 Scheme such absorption is possible to >-- • the extent of 50% only under the direct recruitment quota in the appropriate grade. As the position obtains in the Department of Company Affairs, there is lack of adequate number of vacancies in B the aforesaid category (direct recruitment) for the purpose of facilitating absorption of all these company-paid staff in the Department of Company Affairs; '-('

(ii) the second alternative that was discussed was to c continue the present arrangement without absorption of these company-paid staff. In such a situation, their salaries and service conditions could suitably be revised by the Hon'ble Company Judges with reference to funds available with the D Ols in the various High Courts. According to information gathered, most of the Ols attached to various High Courts have annual surpluses. The balances in the funds maintained by many Ols are substantial; and E (iii) the third option that was discussed was to grant them age relaxation and ask them to sit in the open competitive examination as a one-time measure. This would give them a general opening not ~·

restricted to jobs in these two departments. F

9Copy pinpoint9. Although, the Government of India indicated its preference for option Nos.² and 3, this Court did not approve either of them and dismissed the appeals. The transferred writ petition was allowed in similar terms - Govt. of India and others G v. Courl Liquidator's Employees Association and others [1999 (8) SCC 560]. Paragraphs 21 to 24 of the judgment which have bearing on these cases read as under:

21. In view of the peculiar facts of these cases and the H positive findings of the High Courts with which we concur,

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[G.S. SINGHVI, J.] --( ,..- A I we are unable to agree with the contention of the learned Senior Counsel for the appellants that the company-paid staff cannot be absorbed/regularised as they were not employed by the Government in accordance with the rules; that they knew their appointments were only temporary and that their pay was not from the consolidated fund. B

22. Undoubtedly, counsel on both sides cited numerous >--.,.- authorities of this Court on earlier occasions sustaining the orders of absorption and setting aside the orders of absorption. We do not consider it necessary to refer to those decisions inasmuch as the facts presented before c us and the findings rendered by the High Courts speak for themselves. As a matter of fact, the Government had considered as one of the options to absorb the company- paid staff as was done through the 1978 Scheme of Department of Company Affairs. D

23. In the circumstances, we are satisfied that the orders of the High Court challenged in these appeals do not call for any interference having regard to the facts presented before the High Courts. Accordingly, we dismiss the E appeals with no orders as to costs.

24. In view of the above, the writ petition is allowed as the ,... relief prayed for is similar to the one claimed by the contesting respondents/company-paid staff in the connected civil appeals, without costs. F

10Copy pinpoint10. Notwithstanding its approval of the reasons and conclusions of Calcutta and Kerala High Courts, this Court gave an opportunity to the appellants to absorb the company paid staff working under the Court Liquidator in the Calcutta High G .. ~ Court and Official Liquidators in other High Courts by framing -4. a scheme modeled on the 1978 Scheme within six months. The Court also stayed the operation of the orders appealed against and the order passed in WrH Petition (Civil) No.473 of 1998 for a period of six months to enable the appellants to frame new H

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>- /' A scheme and implement the same. This is evident from ' paragraph 25 of the judgment which is reproduced below :

25. However, we want to give an opportunity to the appellants in the interest of justice and to balance the equities between the parties to come forward to accept and 8 act on the first option given in the additional affidavit, as extracted above, and absorb the company-paid staff 1 working both under the Court Liquidator in the Calcutta ~'

High Court and the Official Liquidator in other High Courts by framing a scheme modelled on the 1978 Scheme within c six months. In other words, we stay the operation of the judgment of the High Courts under appeal and the order in WP (C) No. 473 of 1988 for a period of six months to enable the appellants to frame the Scheme as suggested above and to give effect to it, failing which the judgments D under appeal and the order in WP (C) No. 473of1988 will stand confirmed." ' --.(

11Copy pinpoint11. Within thE? time limit of six months fixed by the Court, the Government of India framed and notified new Scheme E (hereinafter referred to as 'the 1999 Scheme') for absorption ' ' of the company paid staff against 50% vacancies in direct recruitment quota and also issued letter dated 1.10.1999 containing guidelines for implementation of the same. That letter reads as under :-"To ..- F 'To The Regional Director Department of Company Affairs Mumbai/Calcutta/Chennai/Kanpur. G Sub: Absorption of company paid staff of the offices of ,~

Official Liquidators against Group C posts in the ~

subordinate offices of the Department of >- Company Affairs on the lines of scheme devised in 1978 - Supreme Court's judgment - regarding. H "

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[G.S. SINGHVI, J.]

I am directed to refer to the Hon'ble Supreme Court's A ___., Judgment dated 27.⁸.99 (copy enclosed) on the subject mentioned above and to say that further action in the matter of absorption of the Company Paid Staff in regular Government service may please be taken on the following lines :- B (i) Only such Company Paid Staff of the offices of the Official Liquidators shall be eligible for regular absorption:

(a) Who were in position as on 27.⁸.99 and c (b) Who possess the requisite educational qualification laid down in the recruitment rules for the post against which they are to be absorbed. D The Regional Directors, in their capacity as Heads of Departments, may consider the relaxation of age limits in deserving cases in accordance with the general instructions existing in this regard. (ii) The Company Paid Staff can be absorbed against E only 50% of the existing and future vacancies in your region in Group 'C' posts which, a~ per recruitment rules fall under direct recruitment quota. For instance, there is hundred per cent direct recruitment to the posts of Lower Division Clerks; F '"?- accordingly, 50% of the existing and future ~ vacancies of Lower Division Clerks in your region can be utilized for absorbing Company Paid Staff. Further, the posts of Upper Division Clerks, as per recruitment rules, are to be filled up entirely by G promotion; therefore, there can be no possibility of absorbing Company Paid Staff in the grade of Upper Division Clerks. In the case of Junior Technical Assistants 50% of the vacancies,

- --4. according to the recruitment rules are to be filled H

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A up by promotion and the remaining 50% by direct recruitment. In this case, therefore 25% of the >- vacancies in the grade of Junior Technical Assistants can be utilized for absorbing Company Paid Staff. The proportion of vacancies in other B Group 'C' grades may similarly be worked out.

(Iii) The Company Paid Staff, who were in position on 27.⁸.99, will be screened by a Selection Committee consisting of the following:- '~

c (1) Regional Director - Chairman

2) Representative of the Staff Selection Commission -Member

(3) Official Liquidator of the office the company D paid staff of which is to be screened - Member

The Staff Selection Commission is also being requested to nominate different representatives for the different regions. The place, date and time of holding meeting(s) E of the Selection Committee may be finalized in consultation with them.

(iv) As in the scheme of 1978, there will be no test or examination for the purpose of assessing the suitability of the Company Paid Staff. The Selection F ..- Committee will make its recommendations on the basis of the qualification, experience etc. and personal interview of the candidates.

2. Immediate steps may please be taken for selection of G eligible members of Company Paid Staff for absorption against the existing vacancies in different grades and also the anticipated vacancies upto 31.12.2000 next. . Applications may be invited indicating separately the ~;

existing vacancies and the vacancies which may occur by ... H 31.12.2000 and making it clear that the question of

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[G.S. SINGHVI, J.] I

absorbing be persons recommended for the anticipated A ---""' vacancies will arise only if the vacancies actually occur by 31.12.2000 and that mere recommendation of the Selection Committee will not confer any right on any Company Paid Staff for being appointed in Government service. B

3. A quarterly report beginning with the quarter ended 31.12.99 may be sent to the Headquarters indicating the extent to which the Company Paid Staff has been -.,,., ~ absorbed in regular Government service." c

12Copy pinpoint12. Thereafter, the concerned authorities undertook exercise for absorption of the company paid staff in the regular cadres of the Department of Company Affairs. As a result of this, 295 out of 399 company paid staff who were in position on 27.⁸.1999 were adjudged suitable. Of them 130 have been absorbed and 141 are awaiting orders. 104 were not recommended for absorption. 23 of the company paid staff either refused absorption or resigned or retired from service.

13Copy pinpoint13. In the meanwhile, the company paid staff working under the Official Liquidators of Calcutta and Delhi High Courts filed writ petitions and prayed for issue of mandamus to the Union of India and others to absorb them in the regular cadres and to treat them at par with Central Government employees working in ·the office of the Official Liquidators. .,,.. F ~ Pleadings of the parties before the High Courts

Calcutta High Court

14Copy pinpoint14. Tapas Chakraborty and others filed Writ Petition (Civil) No.1387 of 2001 in Calcutta High Court for issue of a direction G to Government of India and Official Liquidator to absorb them

. ~ in· regular cadres with effect from the date of completion of 240 days' service and also for grant of benefits like pension, provident fund, gratuity, etc. calculated on the basis of total length of service. In the writ affidavit it was pleaded by the H

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\ '.. A petitioners that before appointing 'hem, the Official Liquidator use to take leave from the Hon'ble Judge hearing the company matter in the High Court; that they were appointed as a company paid staff with a stipulation that their services may be terminated at any time without assigning any reason; that all of B them have worked for more than 240 days in each and every year of their service; that although they are entitled to regularization of service, the respondents have not taken any acti~n in that direction; that their pay has not been fixed in the regular scale and they are required to retire at the age of 58 c year without any financial benefit; that on or around 30th November, 1999, the respondents asked them to appear in an ' i- interview for absorption against the post of Lower Division Clerk or Junior Technical Assistant in terms of letter dated 1.10.1999; that they were not party to the proceedings before the Supreme Court; that the scheme, if any, prepared by the 0 ~espondents is arbitrary and implementation thereof is afflicted by favoritism and that the respondents cannot take recourse to the order passed by the Supreme Court on 27 .⁸.1999 and deprive them of their legal right to get absorption on completion of 240 days of continuous service. For better appreciation of the case projected by the writ petitioners, paragraphs 5, 6, 7, 18 and 26 and Clauses a(ii) and (iii) of the prayer clause are reproduced below:

"5. The very common thing amongst the petitioners herein is that all of them are continuing their service in the office of the Official Liquidator for more than 240 days in each and every year of their service in the office of the Official Liquidator.

6. Although your petitioners are entitled to regularization of their service in terms of the Central Government employees, but the respondents and each of them neglected to give the petitioners all the service benefits as compared to a Central Government employee.

H 7. Although your petitioners have all requisite

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[G.S. SINGHVI, J.]

qualifications, experience, your petitioners were denied A ~ their right to work with utmost dignity and compelled to work in the office of respondent No.3 with a temporary status, without any service benefits as admissible to a Central Government employee in similarly situated conditions. In a society, where unemployment is curse, your petitioners B have had no other alternative but to accept the terms of service, as dictated by the respondents from time to time for running their office through your petitioners. ,Y

18. Your petitioners state that they were not a party in the c said proceedings, before the Hon'ble Supreme Court of India, hence the aforesaid order of the Hon'ble Supreme Court of India, is not applicable to your petitioners. Your petitioners further state that the words 'other High Courts' as referred by the Hon'ble Apex Court is not meant for all the High Courts all over India, but it referred to those two o High Courts, the staffs of the Official Liquidator of the Kerala High Court and/or of the Delhi High Court only.

26. Your petitioners state that purported scheme, if any, prepared by the respondent authorities is bad and arbitrary and without publishing the scheme for appointment and/or regularization, the respondent authorities indulged in the favouritism at the time of choosing the candidates for absorption in regular post. -.,. In absence of any scheme or modes of regularization, the respondents are taking recourse to pick and choose policy and doing gross discrimination among the temporary workers in the office of the respondent no.3.

[Emphasis added] .G Prayer Clause

r (a)(ii) absorb the writ petitioners in regular service under the Central Government 1.A.1ith an effective date i.e. soon after expiry of 240 days in their respective H

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A services in each continuous period of service; >- (iii) Furnish all the service benefits like pension, provident funds and gratuity and pay differences to the petitioners, calculating the service period of the petitioners with an effective date i.e. soon after B expiry of 240 days in their respective services, in each continuous period of service.

15Copy pinpoint15. During the pend ency of the writ petition, an application was filed on behalf of the petitioners for deleting the names of .....,, ;

c some of them and for adding additional grounds to challenge the 1999 Scheme. The respondents in the writ petition objected to the amendment to the writ petition, but the learned Single Judge overruled their objection and granted the prayer of the writ petitioners. D Delhi High Court

16Copy pinpoint16. Smt. Daya Dua and others, who belong to the category of company paid staff employed/engaged by the Official Liquidator of Delhi High Court filed Writ Petition No.2728 of E 200·1 for issue of a mandamus to the respondents (appellants herein) to regularize their services against Group 'C' post from the date of initial appointment. An alternative prayer made by the writ petitioners was to direct the respondents to frame a scheme for. absorption of all of them against Group 'C' posts and give them other benefits like pay and allowances at par -~

with regular Group 'C' employees working in the office of the '(

Official Liquidator. They pleaded that their work is of perennial nature and their duties and functions are identical to those of regular employees, but they are not being paid salary in the regular pay scale. They further pleaded that the direction given by the Supreme Court was not limited to the absorption of any particular category of company paid staff, but the 1999 Scheme is confined to Group 'C' posts and the employees who are eligible for absorptioh against Group 'D' posts are being - ~-

H discriminated. Anoth~r plea taken by the petitioners was that

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[G.S. SINGHVI, J.]

_....,_ only 11 of company paid staff have been absorbed/regularized A against Group 'C' posts and others have been left out in lurch. Clauses (a), (b) and (c) of the prayer clause of Writ Petition No.2728 of 2001 read as under:-

"(a) regularize the service of the petitioners in Group 'C' B Central Government posts from the date of their initial appointment;

(b) without prejudice to prayer (a) above, in the ...,.. . alternate, frame Scheme as directed by the Hon'ble Supreme Court for absorption of all the petitioners c in Group 'C' Central government posts giving therein due regard to their seniority as Group 'C' company paid staff and providing therein time bound regularization of all the petitioners which is the letter and spirit of the directions of the Hon'ble D Supreme Court dated 27.⁸.1999 in W.P. (C) No.473/1988; ...,,.. (c) pay the petitioners salary and allowances at par with the Central Government appointed regular group E 'C' staff in the office of the Official Liquidator attached to the Hon'ble High Court of Delhi from the date of their initial appointment."

17Copy pinpoint17. The claim of the writ petitioners (respondents herein) --,.. was controverted by the Union of India and Official Liquidators F ~ ·of the two High Courts. The salient features of the counter affidavits filed on their behalf were:

(i) Regular appointments against the posts sanctioned by the Government of India, Department of G Company Affairs are made after following the procedure prescribed in the statutory rules. As against this, the company paid staff is engaged/ ' -"-- employed by the Official Liquidators for fixed period after obtaining sanction from the Court under Rule H

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A 308 of the 1959 Rules. >- , (ii) The company paid staff are neither the government servants nor their conditions of employment are regulated by statutory rules like the Central Civil B Services (Conduct) Rules, which are applicable to the holders of civil posts under the Central Government.

(iii) The company paid staff cannot be equated with regular employees because the source and mode c of recruitment of the two categor,ies and their status are entirely different. Moreover, while the regular employees are paid from the budget sanctioned by the Government of India, the salaries and allowances of the company paid staff are drawn )

D from the company fund in terms of the order passed by the Court under Rule 308 read with Rule 309 of 1959 .Rules. ~· (iv) The 1999 Scheme was framed strictly in accordance with the judgment of the Supreme Court in Govt. of India and others v. Court Liquidator's Employees Association and others (supra). The same was modeled on the 1978 .. Scheme and 50% of direct recruitment quota posts have been filled by absorbing the company. paid staff. f 1

18Copy pinpoint18. In the counter filed in Delhi High Court, it was also pleaded that members of the company paid staff cannot claim absorption in Group 'D' post because the 1978 and 1999 G Schemes do not provide for such absorption.

Findings of the High Courts

W.P. No.13871/2001 (Calcutta High Court) _;.._

19Copy pinpoint19. The learned Single Judge briefly referred to the

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[G.S. SINGHVI, J.]

pleadings of the parties and held that relief deserves to be A granted to the petitioners because the findings and conclusions recorded by Calcutta and Kerala High Courts in the earlier round of litigation were approved by the Supreme Court. in Govt. of India and others v. Court Liquidator's Employees Association and others (supra), the learned Single Judge then prepared a B comparative table of the two schemes and held that the 1999 Scheme is illusory because all the company paid staff cannot be absorbed against 50% vacancies of the direct recruitment quota. On the issue of absorption of the company paid staff against Group 'D' posts, the learned Single Judge observed d that there is no rational reason to confine the benefit of the 1999 Scheme qua Group 'C' posts. He also delved into the legality of the absorption of respondent Nos.⁵ to 26 and held that the recommendations made by the Selection Committee de hors the seniority of the company paid staff has the effect of vitiating 0 the selection. He, however, declined to nullify the absorption of the private respondents on the ground of delay and laches and proceeded to direct the respondents to prepare fresh merit list strictly in the order of seniority. The learned Single Judge also directed respondents to consider the desirability of increasing EE the quota of 50% by creating supernumerary posts. The operative part of the order passed by the learned Single Judge reads thus:

"The State respondents shall consider their scheme 1999 after ascertaining whether all company paid staff in the F office of the Official Liquidator, Calcutta High Court can be absorbed as Group-C staff within three years reckoned from the date of coming into force of the said Scheme of 1999.

The aforesaid exercise shall be completed within a period of three months from date hereof. If all the company 9 paid staff cannot be absorbed as Group-C staff within the said period stipulated above, State respondents shall consider the increase in the quota of 50% or by creating H

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:>-- / A supernumerary posts so that, subject to the reservation policy of the State, all the eligible company paid staff could be absorbed as Central Government staff in Group-C.

The State respondents shall consider de novo the impugned panel with respect to eligible company paid staff B in Group-C strictly in the order of seniority and upon absorption of such company paid staff on the basis of such list which shall be prepared within a period of three months ...,.,.. from date hereof, the seniority in the cadre of Group-C .... shall be maintained ever with respect to the company paid c staff respondents 5 to 26 who have already been absorbed.

As regards Group-D staff, State respondents shall take steps for regularizing such of the petitioners as may D be eligible and qualified according to the rules to be absorbed as Group D staff within a period of three months ..,. from date hereof. Such regularization shall be made strictly in the order of seniority (length of service in the organization). Upon absorption/regularization such ~

E company paid staff shall be placed immediately below the last regularly appointed employees in that category, class and service, as the case may be. ,... Until the above directions as carried out there shall ..,.,,,. be a direction upon the respondents not to fill up any post by direct recruitment. i

It is clarified that such of the petitioners who did not participate in the interview conducted by the selection committee for the purpose of absorption, their cases shall not be considered."

20Copy pinpoint20. The Division Bench dismissed the appeal preferred by the appellants herein by recording the following observations: H "Since the matter regarding the right of the company paid

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[G.S. SINGHVI, J.] -...( staff of the office of the official liquidators has been A decided and confirmed upto the Hon'ble Supreme Court, all that needs to be worked out is that manner in which such employees are to be absorbed in the offices of the different Official Liquidators of the different High Courts. -i' B We are in agreement with the sentiments expressed by the learned Single Judge that no a section but all the -..,. company paid staff working in the office of the Official Liquidator upto the cut off date as provided in the 1999 Scheme are to be absorbed in the office of the Official Liquidator, High Court at Calcutta, even if it means by c creation of supernumerary post as observed by the learned Single Judge. Needless to say, such posts will be personal to those appointed and will cease to be in existence upon the incumbent attaining the age of superannuation." D W.P. No.272812001 (Delhi High Court}

21Copy pinpoint21. The learned Single Judge referred to the judgment in Govt. of India and Other<> v. Court Liquidator's Employees Association and Others (supra) and negatived the plea of the appellants herein that the company paid staff can be absorbed in the regular cadre only against Group 'C' posts to the extent of 50% of direct recruitment quota and held that the writ petitioners are entitled to be absorbed against Group 'C and -....... 'D' posts and their entire service upto the date of absorption l has to be counted for the purpose of fixation of seniority and grant of other benefits including promotion. The relevant portions of the order of the learned Single Judge are reproduced below:

"I do not find any force in the argument of the respondent that 1978 scheme was only with regard to Group 'C' G employees. The fact of the matter is that Group 'D' employees were appointed only in the year 1985. Therefore, there was no question of the respondent making a scheme in 1978 for Group 'D' employees. I do not find any force in the arguments of counsel for the H

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-.. A respondents that the direction of the Supreme Court was limited with regard to the absorption of Group 'C' employees. The Supreme Court has used the words 'company paid employees', the words 'Group 'C' and Group 'D' have not been used in the judgment of Supreme B Court. As discussed earlier Group 'D' employees were also petitioners before Supreme Court.

I do not find any substance in the arguments of counsel for ~ the respondents that the .Supreme Court has not given a ~

direction for giving seniority to the petitioners after their c absorption. If I agree with. the interpretation of the respondent that would mean a person who has worked for twenty or more years in the office of Official Liquidator and now he gets absorption his past services of twenty years or more will not be counted. The very proposition of the ~ D respondent is preposter9us. The Supreme Court in its judgment has not used the words 'new appointment' but ,. has used the word 'absorption'. The Supreme Court had categorically given a mandate to absorb all the company paid employees and not to give fresh appointment. ... E Therefore, the incident of seniority by implication is implicit I

in the judgment of the Supreme Court and respondents have to absorb the petitioners giving them fitment in the ~ their appropriate scales as well as other promotions, if anY., which has to be given as per law. ...,.. F 1 I issue a writ of mandamus to the respondents to absorb the petitioners in their appropriate scales with all b.enefits ./

such as fitment and promotions, if any, even if posts have to be created for the peti8oners. Illegality and discrimination cannot be allowed to perpetuate indefinitely. G They will also be entitled to pension, provident fund, gratuity and all benefits which are to be computed on the basis of their length of service. The petitioners shall be entitled to arrears of three years which shall be paid by the respondents to the petitioners within a period of six H

p. 371 Copy page pinpoint

[G.S. SINGHVI, J.]

...... months." A

[Emphasis supplied]

22Copy pinpoint22. Letters Patent Appeals preferred by the appellants were dismissed by the different Division Benches of the High Court. While deciding LPA No.808 & 809/2003, the Division B Bench took cognizance of the fact that during the pendency of contempt case filed in Calcutta High Court with the complaint ~ .,. that order dated 26.3.2001 passed by the Single Judge of that .. High Court in W.P. No.211/2001 has not been complied with, the Central Government created 51 posts of Group 'B', 'C' and c 'D' and absorbed the staff working in the office of the Court Liquidator with effect from the date of expiry of 360 days of their joining service and held that the direction given by the learned Single Judge for absorption of all Group 'C' and 'D' company paid staff does not call for interference. D

" r Particulars of the additional documents filed/produced during the course of hearing

23Copy pinpoint23. Learned senior counsel appearing for Tapas Chakraborty and others filed I.A. No.10/2008 in S.LP (C) E No.12798/2008 for placing on record the following documents:

(i) Letter No.OL-CAL/24/Staff/G-Part V/2600/G dated 13th June, 2005 sent by the Official Liquidator of ...,... Calcutta High Court to the Secretary, Government F t of India, Ministry of Company Affairs highlighting the factum of increase in the work load and necessity of providing additional manpower.

(ii) Letter No.12011 /3/2003-Admn. II dated 2nd September, 2005 issued by the Government of G India in the matter of "Optimization of Direct Recruitment to Civilian Posts" of Group 'C' and 'D' -'- for the years 2001-2002, 2002-2003 and 2003- 2004 and abolition of some such posts. H

372 SUPREME COURT REPORTS [2008] 15 S.C.R. I t- l ~ r• A (iii) Copy of order dated 28.².2008 passed by the Division Bench of Kerala High Court in Writ Petition (C) No.22810/2004 and 16471/2007.

(iv) Copy of letter No.RD/CLN1/717/1135 dated 3rd ""-'-

June, 2008, sent by Assistant Director (Inspection), B Government of India, Ministry of Corporate Affairs to the Official Liquidators of Calcutta, Cuttack, ,_ Guwahati, Patna and Ranchi asking them to send ""1" , comprehensive proposal for requirement of staff ~.

along with justification for the same. c (v) Letter No.OL/24/Staff/Part Vll/1875/G dated 30th June, 2008 sent by the Official Liquidator of Calcutta High Court to the Regional Director, Eastern Region, Kolkata reiterating the need for D additional staff to meet with the increased workload.

24Copy pinpoint24. Learned senior counsel also produced two charts ~-

containing the details of Group 'C' and Group 'D' posts lying vacant in four regions as on 1.1.2008 and the number of Group 'C' posts abolished during 2001-2002, 2003-2004. He E produced two more charts containing the details of the company paid staff as on 31.3.2008 in all the regions and particulars of 119 company paid staff employed/engaged by the Official Liquidator of Calcutta High Court. --"(

25Copy pinpoint25. Ms. Jyoti Mendiratta, learned counsel appearing for the ~ respondents in the appeals arising out of the orders passed by Delhi High Court filed I.A. (unnumbered) in S.L.P. (C) I, No.12798/2005 for placing on record the following documents:-

G (i) Copy of the details of posts with office of Official Liquidator of High Court of Bombay filed on t· 18.7.2008 along with tables consisting of names of _;,.__ the company paid staff and the date of absorption and table containing names of the 26 company paid staff from Group 'C' and Group 'D'. H ~

p. 373 Copy page pinpoint

[G.S. SINGHVI, J.] -41 (ii) Letter No.12011/3/2003-Admn.ll dated 2nd A September, 2005 sent by Under Secretary to the --i Government of India, Ministry of Company Affairs to the Regional Directors of Ministry of Company .. Affairs of Neida, Kolkata, Mumbai and Chennai in the matter of optimization of direct recruitment to s civilian posts of Group 'C' and 'D' posts in the Ministry for the years 2001-2002, 2002-2003 and r-< y 2003-2004 and abolition/filling up of some such ~ posts.

(iii) Letter No.OL/24/Staff/Part Vll/1875/G dated 30th c. June, 2008 sent by the Official Liquidator of Calcutta High C.ourt to the Regional Director, Eastern Region, Kolkata reiterating the need for increase of manpower. D (iv) Copy of order dated 19.⁹.2005 passed by the Division Bench of Delhi High Court in LPA Nos.808/ 2003 and 809/2003.

(v) Copy of order dated 5.⁵.2003 passed by learned E Single Judge of Delhi High Court in CW No.2728/ 2001 and CM No.4774/2001.

(vi) Copy of judgment dated 26.3.2001 passed by the ...,.. learned Single Judge of Calcutta High Court in W.P . t No.211 /2001. F

(vii) Letter No.A-12013/1 /99-Ad.ll dated 27.12.1999 sent by Shri D.P. Saini, Under Secretary to the Govt. of India to all the Regional Directors of Department of Company Affairs of Kanpur, Kolkata, G Mumbai and Chennai regarding clarifications/ -..i.. suggestions to facilitate the implementation of this .J Court's judgment dated 27.⁸.1999 for absorption ~

of company paid staff of the offices of Official Liquidators against Group 'C' posts. H

p. 374 Copy page pinpoint

26Copy pinpoint26. Shri P.P. Malhotra, Additional Solicitor General filed reply to I.A No.10/2008 in S.L.P. (C) No.12798/2005 along with following documents:-

(i) Copy of O.M. No.2/8/2001-PIC dated 16.⁵.2001 containing policy decision taken by the Government B of India on the issue of Optimization of Direct Recruitment to Civilian Posts and. lapsing of two- third of vacancies every year.

(ii) Copy of O.M. No.2/8/2001-PIC dated 30th August, c 2006, whereby the Government decided to continue the scheme of Optimization of Direct Recruitment ~····

to Civilian Posts upto 31.3.2009. ; ·~

(iii) Copy of O.M. No.A-12011/3/2002-Ad.ll dated D 14.3.2005 for convening meeting of the Screening Committee to consider the issue of reducing direct recruitment to civilian posts in the Ministry of Company Affairs along with background note.

27Copy pinpoint27. During the course of arguments, Shri Malhotra placed E before the Court xerox copy QLV\(rit Petition No.138712001 filed in Calcutta High Court along with annexed papers and the following documents:-

(i) ·Letter No. dated 22nd August, 2008 sent by Official. F Liquidator, High Court of Bombay to the Regional f . Director, Western Region, Mumbai on the issue of additional requirement of posts, and

(ii) Copy of additional affidavit of Shri D.P. Saini, Under Secretary to the Government of India, Ministry of G Finance, Department of Company Affairs filed in C.A. No.5677/1994.\

Arguments

28Copy pinpoint28. Shri P.P. Malhotra, learned Addi. Solicitor General

p. 375 Copy page pinpoint

[G.S. SINGHVI, J.]

~ placed reliance on paragraph 25 of the judgment in Govt. of A '""' India· and others v. Court Liquidator's Employees Association and others (supra) and submitted that even though this Court approved the reasoning and conclusions of Calcutta and Kerala High Courts, orders passed by those Courts were rendered ineffective because operation and implementation thereof was B stayed for.six months and in terms of opportunity given to it, the Government of India not only framed the 1999 Scheme for • y absorption of the company paid staff, but also implemented the same. Shri Malhotra argued that High Court committed serious error by issuing direction for absorption of all the company paid I c staff in the regular cadres ignoring the fact that the 1999 Scheme was confined to Group C posts and that too upto 50% vacancies in the direct recruitment quota. Learned counsel emphasized that the 1999 Scheme was modeled on the 1978 Scheme and argued that the same cannot be faulted on the ground that due to abolition of posts in the Department of Company Affairs, large number of company paid staff may not get absorbed in the regular cadres till their retirement. Shri Malhotra pointed out that as early as in 2001, the Government of India had taken a policy decision to substantially reduce direct recruitment to all the cadres and recommendations made by the Screening Committee for abolition of posts in various cadres were accepted by the Government. Learned counsel emphasized that the policy decision taken by the Government ~ of India on the issue of Optimization of Direct Recruitment to "" A Civilian Posts was not challenged by the writ petitioners and argued that in the absence of such challenge, the High Courts were not justified in mandating creation of supernumerary posts for absorption of the company paid staff and for grant of monetary benefits to them by applying the principle of equal pay for equal work with retrospective effect. In the end, he argued that the directions given by High Courts for wholesale absorption of the company paid staff are legally unsustainable because that would result in abrogation of the rules framed under proviso to Article 309 of the Constitution of India in terms of which the appointing authority is obliged to make direct recruitment to H

p. 376 Copy page pinpoint

A various cadres. .,...

29Copy pinpoint29. Shri Bhaskar P. Gupta, learned counsel appearing for the respondents in the appeal arising out of S.L.P. No.12798 of 2005 argued that the judgment of this Court in Government of India and others v. Court Liquidator's Employees B Association & Ors. (supra) is conclusive· on the issue of absorption to the company paid staff and the 1999 Scheme is liable to be quashed because the same is not only contrary to the judgment of this Court but is wholly unrealistic and ...,. impractical inasmuch as it does not provide for absorption of c the company paid staff who have completed more than 10 to 20 years of service. Learned counsel pointed out that after the promulgation of 1978 Scheme, there has been multifold · increase in the petitions instituted for liquidatinn of the companies and submitted that in order to meet the imperatives of the work relating to the companies in liquidation, the Official Liquidator was compelled to engage/employ additional staff and continue them after obtaining sanction from the Court under '"'( Rule 308 of the 1959 Rules. He then submitted that the respondents joined service as company paid staff with the fond hope that their services will be regularized and they may get opportunity of career advancement and retrial benefits but on account of unsympathetic attitude of the Government of India, their legal and constitutional rights have been violated. Learned counsel referred to letters dated 13.⁶.2005, 3.⁶.2008 F (Annexures A-D) and 30.⁶.2008 written by the Official ~ Liquidator and Assistant Director (Inspection), Kolkata as also ,,,.. ., letter dated 2.⁹.2005 written by the Under Secretary to the Government of India, Ministry of Company Affairs to the Regional Directors, NOIDA/Kolkata/Mumbai/Chennai on the G supject of Optimization of Direct Recruitment to Civilian Posts in Group C and D and submitted that even though in the assessment of officers at the ground level, there is a dire need for increasing the strength of different cadres, the Government o{ India has in the garb of implementing the policy decision H taken in 2001, abolished large number of posts ir the direct

p. 377 Copy page pinpoint

[G.S. SINGHVI, J.]

recruitment quota, which became available in 2001-02 to 2003- A • ~ 04 and, in this manner, the 1999 Scheme has been made redundant. Shri Gupta invited our attention to the charts and details produced by him to show that even after being recommended by the Selection Committee as many as 141 of the company paid staff, who were in position on 27.⁸.1999, B have not been absorbed till this day. He submitted that the Government of India cannot sit tight over the matter and frustrate the right of the company paid staff to be absorbed in the regular ..... cadres despite the fact that they were appointed after advertisement and as on date they have continuously worked c for 10 to 20 years and fulfill the conditions of eligibility prescribed for direct recruitment. Shri Gupta invoked the doctrine of legitimate expectation and argued that the High Courts did not commit any illegality by recognizing the validity of the claim made by the company paid staff and issuing direction for their absorption in regular cadres with consequential monetary benefits by creation of supernumerary posts. Learned senior counsel lamented that the manner in which the Government of India has acted in last nine years leave no room for doubt that majority of company paid staff, who were in position on 27.⁸.1999 may never get absorbed and may have to retire without any monetary benefits like pension, gratuity, etc. Lastly, Shri Gupta submitted that the ratio of the Constitution Bench judgment in Secretary, State of Karnataka v. Uma Devi [2006 (4) SCC 1] should not be applied to these .,. cases because the respondents had been employed/engaged F / ' after advertisement and due selection. He also relied on Randhir Singh v. Union of India [1982 (1) SCC 618], Dhirendra Chamoli v. State of UP. [1986 (1) SCC 637], Surinder$_ingh v. Engineer-in-Chief, C.P.WD. [1986 (1) SCC 639 and UP State Electricity Board v. Pooran Chandra G Pandey [2007 (11) SCC 92] and argued that the respondents cannot be deprived of their constitutional right to equality in the ..._.\ matter of regularization of service and payment of salary in the regular pay scales on the pretext of non-availability of posts. H

378 SUPREME COURT REPORTS [2008] .:15 S.C.R

30Copy pinpoint30. Ms. Jyoti Mendiratta referred to the pleadings of Writ 4 ~ Petition No.2728/2001 filed in Delhi High Court to show that as per the appellants' own case, the 1999 Scheme was a replica of the 1978 Scheme and argued that the same is liable to be quashed because while framing the new scheme, the B Central Government altogether ignored the factum of employment of a number of persons by the Official Liquidator from 1985 who are eligible for absorption against Group D posts. She further argued that the lackadaisical manner in which "'( the Central Government implemented the 1999 Scheme shattered the hopes of majority of the company paid staff and, c therefore, the High Court did not commit any error by removing the discrimination practiced by the Central Government against the company paid staff who.have not been absorbed even after 20 years service. She pointed out that the Official Liquidator of Delhi High Court employed/engaged company paid staff afte~ D due advertisement and selection and argued that non- availability of sanctioned posts cannot justify wholesale denial -., 1.- I of the right to equality guaranteed to the respondents under ,- I Articles 14 and 16 of the Constitution. Learned counsel heavily relied on the observations made by the Division Bench of E Kera la High Court in O.P. No.9732 of 1990 decided on 27.⁸.1993 and vehemently argued that in view unequivocal approval of that order in Government of India and others v. Court Liquidator's Employees Association & Ors. (supra), the learned Single Judge of the Delhi High Court had no choice # F but to issue mandamus for regularization of the services of the /

~ respondents herein with consequential benefits. Learned counsel invited the Court's attention to order dated 26.3.2001 passed by the Calcutta High Court in Writ Petition No.211 of ~ 2001 and submitted that after having sanctioned 51 posts for absorption of the staff working under the Court Liquidator of ~

Calcutta High Court, it is not opeh to the Central Government to challenge the direction given by Calcutta and Delhi High )._. ,.. ' Courts for regularization of company paid staff employed/ engaged by the Official Liquidators on the spacious ground of abolition of posts meant to be filled by direct recruitment.

p. 379 Copy page pinpoint

[G.S. SINGHVI, J.]

31Copy pinpoint31. Shri Colin Gonsalves, and Shri Ramesh Kumar, learned A counsel for the intervenors, adopted the theme of the arguments of Shri Bhaskar P. Gupta and Ms. Jyoti Mendiratta and submitted that in view of abolition of post meant to be filled by direct recruitment, the 1999 Scheme should be declared as unworkable and redundant and a direction be issued to the 8 appellants to regularize the services of company paid staff having regard to their length of services . ...,... Consideration by the Court

32Copy pinpoint32. At the outset, we consider it necessary to remove the c misgivings entertained by the respondents and the High Courts . that while dismissing the appeals filed by the appellants in the earlier round of litigation, this Court had endorsed the directions given by Calcutta and Kerala High Courts for absorption of company paid staff without any rider. A careful reading of paragraphs 20 to 25 of the judgment in Govt. of India and Others v. Court Liquidator's Employees Association and Others ' ' "' (supra) makes it crystal clear that while approving the re::tsons and conclusions recorded by the High Courts and dismissing the appeals, this Court not only gave an opportunity to the appellants to frame a new scheme modeled on the 1978 Scheme within six months and implement the same but also stayed the operation of the orders impugned in the appeals and < • ~ the one passed in Writ Petition (C) No.473 of 1988. The use of the words "failing which the judgments under appeal and the F -:' order in WP (C) No.473 of 1988 will stand confirmed" in ' paragraph 25 leaves no manner of doubt that the orders passed by the High Court and the one passed by this Court in WP (C) No.4 73 of 1988 were to become effective only if the Government of India had not framed new scheme modeled on G the 1978 Scheme. However, the fact of the matter is that • ___. Government of India not only framed and notified the 1999 Scheme within six months from the date of judgment, but also issued guidelines for implementation of the same. Therefore, the orders passed by Calcutta and Kerala High Courts and the H

380 SUPREME COURT REPORTS [2008] 15 S.C.R. l

A direction given by this Court in Writ Petition (C) No.473of1988 will be deemed to have become ineffective and inoperative and the respondents cannot derive any benefit from those ,• orders and direction.

33Copy pinpoint33. Now on merits. Rules 308 and 309 of 1959 Rules, B which were framed by this Court under Section 643 of the Companies Act, 1956 to facilitate employment of special or additional staff in any liquidation and payment of salaries and allowances to such staff read as under:- "(

c 308. Employment of additional or special staff - 1--

Where the Official Liquidator is of opinion that the employment of any special or additional staff is necessary r in any liquidation, he shall apply to the Court for sanction, and the Court may sanction such staff as it thinks fit on ' ~

I- D such salaries and allowances as to the Court may seem appropriate. ~·

309. Apportionment of expenses of common staff - Where any staff is employed to attend to the work of more "( t than one liquidation, or any establishment or other charges are incurred for more than one liquidation, the expenses incurred on such staff and the common establishment and t= other charges, shall be apportioned oy the Official Liquidator between the several liquidations concerned in such proportions as he may think fit, subject to the directions of the Judge, if any. ~· • r---

The above reproduced rules were framed with a view to ensure that the proceedings of liquidation are not hampered on account of shortage of staff. It was felt that if additional manpower is required for effectively dealing with liquidation cases, the Official Liquidator may apply to the Court and employ such staff after receipt of the sanction. The additional staff is paid from the company fund. If the staff employed under Rule >--- 308 is required to attend the work of more than one liquidation or any establishment or other charges are incurred for more

OFFICIAL LIQUIDATOR v. DAYANAND AND ORS. 381, [G.S. SINGHVI, J.]

~han one liquidation, then the Official Liquidator is required to A ..... apportion the expenses subject to the direction, if any, of the Judge concerned.

34Copy pinpoint34. It is not in dispute that the respondents were engaged/ employed by the Official Liquidators pursuant to the sanction B accorded by the Court under Rule 308 of the 1959 Rules and from the inception of their employment, they are being paid from the fund created by disposal of the assets of the companies in ~ liquidation. They were neither selected in accordance with the procedure prescribed under the rules framed under proviso to Article 309 of the Constitution nor they were appointed against c the posts sanctioned by the Government of India. It is thus clear that the company paid staff constitute a separate and distinct class. While deciding the appeals in the earlier round of litigation, this Court must have been alive to the aforementioned facts and this appears to be the reason why the directions given D by Calcutta and Kerala High Courts for absorption of all y company paid staff were stayed for six months and an opportunity was given to the Central Government to frame a new scheme within that period. E

35Copy pinpoint35. Although neither of the parties to the appeals nor the intervenors have placed before the Court advertisements issued by the Official Liquidators of Bombay, Calcutta, Delhi and Madhya Pradesh or any other High Court for employment ... of special or additional staff in accordance with the sanction F ' accorded by the concerned Court and we have not been ,, ... apprised of the specific terms and conditions, subject to which ~ the respondents were employed/engaged by the Official Liquidators but from the tenor of the pleadings and other records, it can be safely inferred that the respondents were G appointed on purely temporary basis for fixed period with a stipulation that they shall not be entitled to seek regularization or absorption in the regular cadre against the sanctioned post. -...-.\ Those who applied in response to the advertisements issued by the Official Liquidators must have been aware of the fact that H ...

p. 382 Copy page pinpoint

A they were being engaged/employed pursuant to the sanction ..... accorded by the Court under Rule 308 of the 1959 Rules in connection with liquidation proceedings; that their appointments will not be against the posts sanctioned by the Government; that they will have no right to claim absorption in the regular cadre B and that they will be paid salaries and allowances which may be fixed by the Court. They must have accepted the appointment/engagement knowing fully well that they will have fixed tenure without any right to continue in service or to seek ~ absorption against the sanctioned posts. It was neither the c pleaded case of the respondents before the High Courts nor Shri Bhaskar P. Gupta and other learned counsel appearing on their behalf argued before this .court that their clients viiere lured . into accepting employment as company paid staff by the Official ) Liquidators by promising absorption in future against the sanctioned posts or that they were coerced by some authority to accept such employment. Therefore, they cannot be heard to complain of the violation of Articles 14 and 16 of the .... Constitution on the ground that even after having worked for more than one decade, they have not been absorbed in the regular cadres under the Government. In our opinion, after having applied for and accepted employment/engagement as company paid staff with fixed tenure superimposed by a stipulation that they will have no right to continue in service or to be absorbed in the regular cadres, the respondents are estopped from seeking a direction for their absorption against -+ ' F the posts sanctioned by the Government of India and the High Courts committed a serious error in granting their prayer. l: (

36Copy pinpoint36. The argument of Shri Bhaskar P. Gupta and other learned counsel appearing for the reSP'iJfl.der;its and intervenors that the 1999 Scheme is arbitrary and unreasonable and the same should be treated as having become redundant on account of abolition of posts meant for direct recruitment, which },__ found favour with the High Courts, proceeds on the hypothesis that in the earlier round of litigation this Court, while endorsing the reasons and conclusions recorded by Calcutta and Kerala

p. 383 Copy page pinpoint

[G.S. SINGHVI, J.]

.... High Courts issued direction for absorption of all members of the company paid staff and the Government of India was bound to frame a scheme for that purpose. However, the very premise, on which this argument is based is incorrect. Admittedly, appointment to the service comprising sanctioned posts is, regulated by the rules framed under proviso to Article 309 of, the Constitution of India. The mode of recruitment and methodology of selection are prescribed under the rules. The' ; ...,. absorption of the company paid staff employed under Rule 308 , of the 1959 Rules is not one of the prescribed modes of recruitment. Therefore, it is extremely doubtful whether the · c Government of India could, without amending the statutory rules, . frame the 1978 Scheme for absorption of the company paid staff in the regular cadres. However, as this Court has not only indirectly approved the 1978 Scheme, but also directed the Government of India to frame new scheme, we do not consider D it necessary to dilate further on the subject. )'

37Copy pinpoint37. As mentioned above, while approving the reasons and conclusions recorded by the two High Courts and dismissing the appeals, this Court not only permitted the Government of India to frame a scheme modeled on the 1978 Scheme but E ?.lso stayed implementation of the orders impugned in the appeal and the one passed by itself in the transferred writ petition. If the Court intended that all members of the company paid staff working on the date of judgment i.e. 27.⁸.1999 should be absorbed in the regular cadres against Group 'C' and 'D' F posts, then a simple direction to that effect would have been sufficient and there was no occasion to stay the implementation of the orders of the High Courts for six months with liberty to the Government of India to frame a new scheme within the same period. The absence of such a direction shows that the .G Court was very much conscious of the fact that recruitment to the regular cadres is governed by the rules framed under Article '----4 • 309 of the Constitution and it would be highly detrimental to public interest to issue direction for wholesale absorption/ regularization of the company paid staff and thereby abrogate/ H

p. 384 Copy page pinpoint