WP/29369/2015 of A Om Narayana Vs State of Andhra Pradesh, Rep by its Principal Secretary, on 31 December 2015

1. Whether Reporters of Local Newspapers may : Be allowed to see the Judgments ? :2. Whether the copies of judgment may be marked : YES To Law Reporters/Journals :3. Whether Their Ladyship/Lordship wish to : See fair Copy of the Judgment ? : YES

27278, 27288, 27291, 27293, 27306, 27321, 27373, 27377, 27397, 27400, 27405, 27410, 27432, 27434, 27435, 27442, 27459, 27463, 27466, 27482, 27584, 27590, 27595, 27616, 27618, 27620, 27626, 27627, 27629,27652, 27653, 27688, 27719, 27766, 27767, 27801, 27825, 27917, 27924, 27929, 27945, 27976, 27984, 27985, 27987, 27997, 28003, 28005, 28018, 28024, 28036, 28040, 28044, 28046, 28059, 28066, 28075, 28083, 28169, 28179, 28193, 28202, 28206, 28211, 28223, 28229, 28240, 28258, 28295, 28300, 28307, 28319, 28320, 28443, 28512, 28514, 28539, 28545, 28559, 28563, 28569, 28572, 28573, 28593, 28608, 28659, 28719, 28735, 28741, 28778, 28781, 28789, 28798, 28808, 28814, 28827, 28831, 28833, 28836, 28838, 28846, 28883, 28886, 28906, 28946, 28949, 28991, 28992, 29010, 29013, 29020, 29026, 29029, 29045, 29047, 29054, 29129, 29130, 29138, 29141, 29160, 29162, 29170, 29189, 29202, 29204, 29211, 29237, 29291, 29301, 29307, 29337, 29350, 29361, 29363, 29364, 29369, 29370, 29371, 29379, 29381, 29391, 29400, 29406, 29423, 29427, 29435, 29439, 29440, 29502, 29538, 29665, 29680, 29735, 29755, 29827, 29862, 29872, 29873, 29895, 29905, 29909, 29915, 29916, 29919, 29921, 29923, 29924, 29925, 29926, 29931, 29934, 29936, 29937, 29940, 29943, 29944, 29947, 29950, 29954, 29956, 29969, 29974, 29975, 29979, 29981, 29986, 29988, 29989, 29992, 29995, 30006, 30023, 30028, 30034, 30042, 30045, 30048, 30050, 30085, 30095, 30099, 30107, 30119, 30130, 30137, 30144, 30145, 30146, 30157, 30158, 30165, 30169, 30183, 30184, 30197, 30201, 30205, 30213, 30243, 30251, 30275, 30278, 30284, 30292, 30301, 30302, 30319, 30325, 30361, 30460, 30476, 30477, 30480, 30495, 30516, 30530, 30560, 30571, 30582, 30589, 30597, 30659, 30662, 30677, 30679,30689, 30694, 30740, 30754, 30774, 30814, 30961, 31056, 31216, 31217, 31251, 31259, 31387, 31425, 31652,

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W.P.No.27468 of 2015 :

Between :

Boggadi Rama Chandra Reddy, s/o. B.Narayana Reddy,Aged about 37 years, Pullampet Gramapanchayat,Pullampet Mandal, Kadapa District and others.

AndState of Andhra Pradesh, rep.by its Secretary,Panchayat Raj and Rural Development Department,Secretariat Buildings, Hyderabad and others.

This Court made the following :

…. Respondents

27278, 27288, 27291, 27293, 27306, 27321, 27373, 27377, 27397, 27400, 27405, 27410, 27432, 27434, 27435, 27442, 27459, 27463, 27466, 27482, 27584, 27590, 27595, 27616, 27618, 27620, 27626, 27627, 27629,27652, 27653, 27688, 27719, 27766, 27767, 27801, 27825, 27917, 27924, 27929, 27945, 27976, 27984, 27985, 27987, 27997, 28003, 28005, 28018, 28024, 28036, 28040, 28044, 28046, 28059, 28066, 28075, 28083, 28169, 28179, 28193, 28202, 28206, 28211, 28223, 28229, 28240, 28258, 28295, 28300, 28307, 28319, 28320, 28443, 28512, 28514, 28539, 28545, 28559, 28563, 28569, 28572, 28573, 28593, 28608, 28659, 28719, 28735, 28741, 28778, 28781, 28789, 28798, 28808, 28814, 28827, 28831, 28833, 28836, 28838, 28846, 28883, 28886, 28906, 28946, 28949, 28991, 28992, 29010, 29013, 29020, 29026, 29029, 29045, 29047, 29054, 29129, 29130, 29138, 29141, 29160, 29162, 29170, 29189, 29202, 29204, 29211, 29237, 29291, 29301, 29307, 29337, 29350, 29361, 29363, 29364, 29369, 29370, 29371, 29379, 29381, 29391, 29400, 29406, 29423, 29427, 29435, 29439, 29440, 29502, 29538, 29665, 29680, 29735, 29755, 29827, 29862, 29872, 29873, 29895, 29905, 29909, 29915, 29916, 29919, 29921, 29923, 29924, 29925, 29926, 29931, 29934, 29936, 29937, 29940, 29943, 29944, 29947, 29950, 29954, 29956, 29969, 29974, 29975, 29979, 29981, 29986, 29988, 29989, 29992, 29995, 30006, 30023, 30028, 30034, 30042, 30045, 30048, 30050, 30085, 30095, 30099, 30107, 30119, 30130, 30137, 30144, 30145, 30146, 30157, 30158, 30165, 30169, 30183, 30184, 30197, 30201, 30205, 30213, 30243, 30251, 30275, 30278, 30284, 30292, 30301, 30302, 30319, 30325, 30361, 30460, 30476, 30477, 30480, 30495, 30516, 30530, 30560, 30571, 30582, 30589, 30597, 30659, 30662, 30677, 30679,30689, 30694, 30740, 30754, 30774, 30814, 30961, 31056, 31216, 31217, 31251, 31259, 31387, 31425, 31652, 31713, 31867, 31891, 31964, 32009, 32336, 32355, 32655, 32728, 33005, 33093, 33099, 33113, 33152, 33212, 33253, 33257, 33267, 33309, 33455, 33471, 33710, 33810, 33898, 34135, 34607, 34611, 34746, 35531, 35346, 31488, 36382, 37256, 37296, 12650, 37871, 38263, 38637, 38673, 38750, 38793 and 27656 of 2015

COMMON ORDER:

In this batch of writ petitions, petitioners are challenging thetermination /non renewal of their contract for a further period as FieldAssistants under the National Rural Employment Generation Scheme on theground that they have not achieved the performance targets fixed to them. Since the issue for consideration in all these writ petitions being same, all thewrit petitions are being disposed of by common order.

2. Heard Sri C.V.Mohan Reddy, learned senior counsel,

Sri L.J.Veera Reddy, Sri Vedula Srinivas, Sri V.Maheshwar Reddy, Sri Tadi Nageshwar Rao, Sri Mohana Rami Reddy, Sri Jagdishwar, Sri K.Srinivas, Sri Ch.Srinivas, Sri Gade Venkateswara Rao, Sri N.AshwathaNarayana, Sri Koti Reddy Idamakanti, Sri P.Nagendra Reddy, SriP.V.Krishnaiah, Sri V.Surendra Reddy, Sri N Chandrashekar Reddy, SriV.Surendra Reddy, Sri T.V.S.Prabhakar Rao, Sri P.V.V.Satyanarayana, SriSyed Azmatullah, Sri Suresh Kumar Reddy Kalava, Sri Rama Rao Mavidi,Sri G.L.Narasimha Rao, appearing for petitioners in respective writ petitions,Sri MSR Chandra Murthy, learned Special counsel representing MahatmaGandhi National Rural Employment Guarantee Scheme (MGNREGS),learned Advocate General and learned Government Pleader respectively andwith their consent the writ petitions are disposed of by this common order. For the sake of convenience the documents as filed in W.P.No.27538 of 2015are reflected in the body of the order.

3. Leading the arguments on behalf of petitioners in the batch of writpetitions, learned senior counsel has taken through various provisions of the‘National Rural Employment Generation Act, 2005’

(for short the ‘Act, 2005’), A.P. Rural Employment Generation Scheme (for short, ‘the Scheme’), various circulars, model form of contract and Field Assistants Human Resources Policy. Learned senior counsel, contendedthat right is vested in the able bodied persons to demand work and whensuch a demand is made, it is mandatory to provide work. The person who isinterested to undertake work in the said manner has to enrol himself, obtainwage card and has to submit a demand for provision of work. He thereforecontended that it is voluntary on the part of the individual to demand work andno person can force on the person concerned to seek work. The impugnedcirculars and resultant decision not to renew the contract of employment isbased on illegal ground that the petitioners did not ensure enforcement ofwork from the able bodied persons and did not achieve the targets fixed forthem contrary to the object of the Act.

4. By referring to the provisions in Sections 12, 13 and 16 of theAct, 2005, learned senior counsel contended that two different mechanismsare created, one with reference to formulation of policy and second withreference to enforcement. Hierarchy of officers/authorities are created by theAct assigning individual responsibilities at various levels.

5. Learned senior counsel, further contended that as envisaged bySection 32 of the Act, the State of Andhra Pradesh formulated the schemeand for the first time the scheme envisages role to the Field Assistants whichwas not contemplated by the Act. However, as seen from Clauses 7 (2) and(16) of the scheme limited role is assigned to Field Assistants. They arerequired to assist the Gram Panchayat in identification of the works and intheir implementation.

6. Learned senior counsel further submitted that in terms of Section12 of the Act, a State Employment Guarantee Council has to be constitutedwhich is the apex body at the State level for implementation and coordinationunder the Act and admittedly no such council has been constituted by theState Government. Guideline No.6 (10) and (11) which confers power onCommissioner, Panchayat Raj and Rural Development to implement andcoordinate the scheme runs counter to Section 12 of the Act. Therefore,Guideline No. 6(10) and (11) are ultra virus the Act. As the Commissionerhas issued various circulars fixing targets in exercise of said power, theseguidelines are also illegal.

7. He contended that as implementing and coordinating authorityCommissioner can only implement the scheme formulated by the StateGovernment and cannot fix targets in purported exercise of the powerconferred on him under Guideline No.6(10) and (11) of the Scheme, in thesaid capacity.

8. Referring to these clauses and provisions of the Act, 2005,learned senior counsel contended that it is impermissible to terminate therelationship between the petitioners and the respondents on the ground of notachieving the targets, when such targets are not fixed by the Act, 2005 andscheme formulated there under. Alternatively, he contended that ashierarchy of authorities are vested with various responsibilities and ignoringtheir responsibility, Field Assistants alone cannot be blamed for not achievingthe targets, more so, when the gamut of scheme is otherwise. The questionof not renewing the contract does not arise as renewal is granted as a matterof course.9. By referring to Field Assistants Human Resources Policy (forshort FAHRP) more particularly para 3 –A (1), learned senior counsel alsocontended that the Field Assistant is required to provide work only if work isdemanded and subject to over all superintendence/control of GramPanchayat.

10. Learned senior counsel further contended that there is noconsistency with reference to the out-put of man-days required and claim ofrespondents varies from 15000 to 5000 as minimum man-days to beachieved. As a matter of fact the performance of most of the petitioners is farabove the minimum required i.e., 5000 man days and 75% of the Labourbudget. Thus, it was illegal not to renew contract and this shows clear nonapplication of mind and mechanical exercise of power.

11. Learned senior counsel contended that para 13 (6) of FAHRPprescribes penalties and one of the penalties is termination of service. As perthe Human Resources Policy, detailed procedure is envisaged before servicecan be terminated. Emphasising on the disciplinary provision of the HumanResources Policy and the terms used as‘Action can be taken on omission and commission’ by way of disciplinary control what is alleged against thepetitioners does amount to misconduct. He, therefore, submitted that sinceprocedure to terminate from the service is not followed, the impugned order isex facie illegal.

12. He submitted that all along as a matter of course renewal wasgranted, but for the impugned order, petitioners’ contract could have beenrenewed in ordinary course. There is requirement of work and documents onrecord would show that the respondent authorities are now taking steps to fillup the slots eitherto occupied by the petitioners. If it is the stand ofrespondents that tenure of the petitioners is over and renewal is notautomatic, there was absolutely no need for passing a formal order for notrenewing the contract and assigning reasons for not renewing the contract. Non-renewal of the contract is not a simplicitor decision, but is stigmatic. Byplacing reliance on the decision of the Supreme Court in SAMSHER SINGH Vs STATE OF PUNJAB AND ANOTHER[[1]], learned senior counsel contended that noorder which has an element of stigma being attached can be made withoutfollowing the due process.

13. Learned senior counsel emphasised that decision to dispensewith services of the petitioners is politically motivated. By referring to circulardated 2.7.2015, learned senior counsel contended that the party in powerintended to induct their own people and in order to accommodate them, theservices of the petitioners are dispensed with. He emphasised that if it is thecase of the respondents that petitioners have not achieved the target of 5000man-days, and / or 75 % of the Labour budget fixed, then the status of theconcerned village has to be relegated to the list II category of villages and toenlist the work hitherto undertaken by the Filed Assistants to Senior Mate.Whereas, the circular instructions would show that they continue to show thevillages in List-I and decided to provide Field Assistant. This would clearlyshow the intention of the Government and dispensing with services of thepetitioners is not bona fide.

14. Learned senior counsel placing reliance on the material availableon website of ‘Accountability Initiative’, an NGO, contended that there is drastic decree of funds provided by the Central Government andconsequently there is drastic decrease of able bodied persons enrolling forprovision of employment under the scheme resulting in drastic fall inachieving the targets. The NGO points out several deficiencies in theworking of the scheme. On account of the reduction of the funds, there is lessdemand having direct impact on the performance parameters. He, therefore,contended that there must be a holistic view of the issue and the performanceof the individual Field Assistants cannot be put in a straight-jacket formula offixing targets and not achieving the targets, without examining otherpossibilities.

15. Learned senior counsel pointed out that rural economy isagricultural based economy. If there are good rains, there will be gooddemand for agricultural activity and most of the rural youth will be involved inagricultural activity and in such an event, they will not be looking for analternative employment. If there are droughtconditions prevailing in an area,certainly there will be more demand for alternative employment.

16. Prompt payment of wage is a crucial factor for persons claimingemployment. When there is unemployment or no source for eking outlivelihood, the persons will do whatever work assigned, provided money ispaid to them promptly. Unless money is paid to him, it would be difficult forhim to attend to the daily requirements of the family. The statistics furnishedby the NGO as well as the statistics made part of the records of these cases,would show that there is inordinate delay in making payments, sometimes,the delay has gone up to six months. On account of inordinate delay inmaking payments coupled with the fact that, as disclosed in the NGO report,there is drastic fall in the financial commitments, certainly, there would bedrop in the able bodied men opting to work under the scheme.

17. By extensively analysing the budget released and identified man-days in Kadapa district, he contended that there was clear deficiency of fundsto a tune of about Rs.91 crores. Similarly, in Chittoor district, there is cleardeficiency of more than 107 crores. He further submitted that while assessingthe requirements of the work to be executed, no practical evaluation wasmade and Field Assistants were not involved in fixing the targets.

18. He submitted that the Minimum performance parameters cannot be relied since G.O.Ms.No. 316 dated 22.8.2008 is anexecutive order. It cannot run counter to the statutory scheme. OnlyGovernment can issue appropriate notification invoking its powers underSection 4(1) of the Act and no such notification on the fixation of targets isissued.

19. He further submitted that the list that is filed along with thecounter affidavits showing the persondays and labour budget achieved isprepared on the basis of approximate labour budget in Format-I available onthe website of the respondent and not basing on the actual labour budget. The actual labour budget is available in the statement which is uploaded onthe respondent website called R.1.4 Abstract Report. If actual labour budgetis taken note, there is no deficiency in achieving the targets.

20. Learned senior counsel placed reliance on the decision of theSupreme Court in KUMARI SHRILEKHA VIDYARTHI AND OTHERS Vs STATE OF U.P.

AND OTHERS[[2]] to contend that even in contractual matters, Article 14 of theConstitution of India is attracted and State or instrumentalities of the Statecannot exercise powers arbitrarily and in violation of the safeguards providedby Article 14 of the Constitution. Whenever there is breach of Article 14,Constitutional Court has jurisdiction to entertain and decide matters, eventhough, the relationship is one governed by contract.

21. By placing reliance on CENTRAL INLAND WATER TRANSPORT

CORPORATION LIMITED AND ANOTHER Vs BROJO NATH GANGULY AND ANOTHER[[3]],learned senior counsel contended that the Supreme Court held eventermination of contract employment by giving three months notice is illegaland unconstitutional. The Supreme Court held clause incorporated in theservice conditions giving such power as illegal. The constitutional Courtshave recognised that in matters of this nature, the un-employee being at thereceiving end, he has no option but to sign on the dotted lines agreeing towhatever terms fixed in the contract. Thus, pre-determined contractual termcannot be used against hapless employees and throw them out of service.

22. Learned senior counsel placed great emphasis on the decisionof the learned single Judge of this Court in K.LAXMANNA AND OTHERS Vs. GOVT

OF A.P.[[4]]to contend that in identical circumstances, this Court held thetermination as illegal. Case concerns termination of persons appointed as‘Adarsha Raitu’ under the scheme, which is analogous to the presentscheme.

23. He contended that as held by the Supreme Court in V.P.AHUJA

VS STATE OF PUNJAB AND OTHERS[[5]]termination of probation which attachesstigma is not valid in law and liable to be declared as illegal.

24. Sri L.J.Veera Reddy, learned counsel appearing for some of thepetitioners contended that according to Clause 20 of the Scheme,Administrative costs are paid at 6%; those administrative costs aredetermined based on the evolution of the work requirement and makingavailable required funds. There is no allegation of exceeding theadministrative costs in each of the petitioners’ centres. This would imply thatwithin the budgetary limits only the allowances are paid to the petitioners andthere was no drastic fall in the work allotted and achieved since it depends onthe total cost incurred. He, therefore, contended that what is alleged is onlyimaginary and not based on proper evaluation.

25. By referring to the averments contained in para 4 of the affidavitfiled in support of W.P.No.26953 of 2015, learned counsel contended thatmost of the petitioners in the said writ petition and in other writ petitions arelong standing appointees and as a matter of course have been continuedyear after year and it is illegal not to renew contract now.

26. Though certain exemptions are provided, exemption clause isalso arbitrarily extended only to few instances. There are employees whowere on leave, for genuine reasons placed under suspension and suchsuspension was for very long time but the exemption clause is not extendedto such persons. When a person is on leave on valid grounds or is placedunder suspension, it is not possible for him to achieve the targets as fixed. These issues ought to have been taken into consideration before evaluation of performance of the individual. He further submitted that period ofassessment as per the scheme is financial year whereas they have taken intoconsideration the period from 1.7.2014 to 30.6.2015 and no justification isshown as to why said period is taken into consideration.

27. Learned counsel further submitted that as seen from thestatement on record there was inordinate delay in making payments and suchinordinate delay in making payments was main factor in reduction of theexecution of works. The petitioners cannot be blamed for delayed paymentsdue and payable to the individuals concerned.

28. He further submitted that initially when petitioners wereappointed, the appointment was on temporary basis; unilaterally they haveconverted said appointments on contract basis; petitioners never signed thesaid contract and terms of contract cannot be enforced on the petitionerswithout their consent. No order of such appointment made on contract basisis served on the petitioners. As an example, he referred to one appointmentmade which is filed in the material papers to show that it was a temporaryappointment and not a contractual appointment. By referring to theaverments made in Para “F” of the counter affidavit, he submitted thatrespondents have accepted the condition that initial appointment was ontemporary basis.

29. By referring to the tabulated statement in the counter affidavit atpage 117, learned counsel contended that even though petitioners haveachieved 75% or more of the Labour budget, their contracts are not renewedonly on the ground that there was short fall of minimum person days. Hepointed out that even when targets are fixed at more than 20,000 also, thoughthere was high performance of achievement of target, but still on the groundthat target has not exceeded 75 % Labour budget the contracts are notrenewed. All this would show that non renewal of the contract is not on thebasis of the performance but weighed by political considerations. The partyin power trying to induct their own people by replacing the personsappointed.

30. Learned counsel further contended that no role is envisaged to

30. Learned counsel further contended that no role is envisaged to the Commissioner under the Act and scheme evolved by the StateGovernment. Even according to the notification issued in G O Ms No. 27{Rule 6 (8)}, Commissioner is only treated as a coordinator. Commissioner isthus not vested with the administrative powers to issue orders, guidelines. Thus, impugned orders are liable to be set aside on this ground alone. Hefurther submitted that no such guidelines are framed in any other Stateincluding Telangana State, though originally scheme was formulated whenthe combined State was in existence.

31. By referring to various instances, learned counsel contendedthat entire work carried under the supervision of the petitioners was not takeninto consideration. This information could not be shared with the authoritiesconcerned as there was no opportunity afforded to them. He has referred toas an example, the data of work out-put given by the third petitioner. If dueopportunity was given to the petitioners, the petitioners would havesubstantiated the amount of work carried out by them. After putting them onnotice and giving opportunity, appropriate action ought to have been taken,instead, a perfunctory exercise was undertaken and petitioners are thrownout.

32. By referring extensively to various correspondence, includingthe letter of the Assistant Project Director dated 27.8.2015, learned counselcontended that this would show that lot of obstacles were created inexecution of work, only to see that the performance targets are not achievedby the petitioners and on that excuse to throw them out of employment. Material filed on recordfurther highlights the involvement of local leaders tostop the work until incumbents are removed. The Assistant Project Directorwas emphatic in stating that he was instructed not to execute works tillexisting persons are removed. He further emphasised that the work outputalso depends on the proportionate work to be executed. Most of the workswhich hitherto could have been executed under the scheme were diverted to‘Janmabhoomi’ programme, which is the pet programme of party in power.

33. He further submitted that achieving of targets depends on theperformance of the officers also. If the officers do not cooperate or were notenthusiastic in achieving the targets, it would reflect on the performance of the Field Assistants. He, therefore, emphasised that it is not a simple case offixing targets and achieving; several factors influence the achievement of thetargets fixed and, therefore, blaming the Field Assistants only and throwingthem out is not a solution to achieve the objective of the scheme and FieldAssistants are made scape goats.

34. He placed reliance on the decisions of this Court in K.LAXMANNA(cited supra) and B.NANDESWAR RAO Vs A.P. TOURISM DEVELOPMENT CORP.LTD, HYDERABAD[[6]]and decision of Supreme Court in HARBANSLAL SAHNIAAND ANOTHER Vs. INDIAN OIL CORPN. LTD. AND OTHERS[[7]] to contend that thealternative remedy is not an efficacious and effective remedy and even ifthere is an alternative remedy, when there is violation of the principles ofnatural justice or authority taking the decisions lacks competency, writpetition is maintainable. The Supreme Court held that even when there is anArbitration clause, it does not preclude the writ Court to entertain the writpetition.

35. Sri Vedula Srinivas, learned counsel appearing for petitioner inW.P.No.29010 of 15 contended that though documents on record show thatpetitioner has achieved the targets fixed, even then her services aredispensed with. The specific allegations made in para 5 of the affidavit filedin support of the writ petition though denied in para 16 of the counter, but nobasis is shown.

36. Sri Maheshwar Reddy, learned counsel appearing for petitionersin W.P.No.27442 of 2015 submitted that petitioner was suspended for 10months and in balance 2 months of service has achieved 70% of the targetbut by taking the total year as a unit, the services of the petitioner weredispensed with. In W.P.No.27656 of 2015 concerning Kadapa district,learned counsel submitted that though petitioners have achieved the targets,their contracts are not renewed. By referring to clauses 3, 5 and 6 of thescheme, he submitted that the object is to provide livelihood to able bodiedpersons who volunteer to take the work. Achieving of the targets depends ondemand by the able bodied persons to do the work. He, therefore, submittedthat only if the persons come forward to do the work provided to them, the Field Assistants can achieve targets. Thus, motivation is significant aspect. Such motivation depends on the nature of work, the requirement of work bythe individuals and time taken for payment of amounts due on the workundertaken by them. Therefore, Field Assistants alone cannot be targeted, but the entire system has to be held responsible, if targets are not achieved.

37. Sri Tadi Nageshwar Rao, learned counsel appearing inW.P.Nos.27459 and 27766 of 2015 pertaining to Vizianagaram district,submitted that during September/October, 2014 entire area was affected byHud Hud cyclone, due to which entire administration has come to a standstill. People were evacuated and shifted to other places, due to which thescheme was paralysed and could not be implemented for a long time. Whiletaking into consideration the performance appraisal, these issues ought tohave been factored but only based on the original targets fixed, theassessment was made. A specific averment is made in para 6 of the affidavitfiled in support of the writ petition contending that there is deficiency inperformance of the Field Assistants on account of cyclone but same is notdenied in counter affidavit except being a general denial in para 17 at page67 of the counter. He further submitted that appointment of the petitionerswas not a contract appointment but was a temporary appointment.He furthersubmitted that no termination order is served on them and by virtue of interimorder, they continued to perform their duties and responsibilities but so far noallowances are paid. He further submitted that in spite of the effect of cycloneand other constraints, most of the petitioners have achieved the targets. Byreferring to the appointment issued in favour of Smt R.Kamalamma at page32, learned counsel contended that along with appointment order, job chartwas enclosed which do not contain conditions now relied upon in notrenewing the contract. Such action is ex facie illegal.

38. Sri Mohana Rami Reddy learned counsel appearing forpetitioners in W.P.No.29337 of 2015 contended that orders under challengeare cyclostyled orders. No individual performance assessment is reflected inthe order.

39. Sri Jagdishwar, learned counsel appearing for petitioner inW.P.No.29350 of 2015 contended that some of the work carried out by the

petitioner was not shown in the statement of work. The proceedings of theMandal Revenue Officer would show that petitioner has undertaken the workmentioned therein but this work is not taken into consideration. If said work istaken into consideration, petitioner is deemed to have achieved the target. With reference to petitioner in W.P.No.29364 of 2015, learned counselcontended that petitioner achieved more than 75% target but some of theestimates proposed were not sanctioned and on account of non sanction ofthe estimates proposed, the targets achieved are not correctly determined.With reference to the petitioner in W.P.No.29400 of 2015, learned counselcontended that estimates were not sanctioned. There was a proposal for bulkplantation which was sanctioned but subsequently, the same was deleted. These are also important factors to determine the parameters of achievementof the targets but mechanical decisions were taken without looking into thepractical aspects of the issues. He submitted that petitioner in W.P.No.29379of 2015 though achieved the target of 75 % still his contract is not renewed.

With reference to petitioner in W.P.No.29427 of 2015, learned counselcontended that on the issue of construction of toilets, there was lot of galataand commotion on the day when social audit was proposed; therefore,petitioner requested to postpone conducting of social audit so that he canexplain how work was conducted. Without considering the objections, socialaudit was conducted. Learned counsel further submitted that the disturbancein the village was also primary cause for not achieving the targets and theseaspects should have been considered.

40. Sri Ch. Srinivas, learned counsel appearing for petitioner inW.P.No.27373 of 2015 contended that though Mandal ParishadDevelopment Officer certified that petitioner achieved the target, his contractis not renewed. No reasons are assigned as to why contract is not renewedand specific averment made in support of the affidavit filed along with the writpetition was not denied. He submitted that in some of the villages, workswere not sanctioned and Field Assistants were asked to execute the works inother villages. Accordingly work was executed in other villages but whileassessing the quantum of the work executed by respective Field Assistants,the work executed under their supervision in other villages is not taken intoconsideration, which is also one of the reasons to show poor performance in achieving the targets. Learned counsel further contended that though thisCourt passed interim order, the same is not complied. Aggrieved thereby,respondent filed W.A.No.916 of 2015 but same was dismissed with adirection to pursue WVMP. Even though writ appeal was dismissed, interimorder is not complied and petitioner is not allowed to perform his work. Hefurther submitted that in many instances Field Assistants are deputed to doother works such as bill work, swatch-Bharath etc, but the works executed bythem were not accounted for the purpose of achieving the targets. He furthersubmitted that entire data of work executed by Field Assistants is notuploaded. Due to the lapses on the part of concerned persons in notpromptly uploading the data, petitioners cannot be penalised.

41. Mr Ch.Srinivas, learned counsel for petitioner further contendedthat according to Circular No.491 dated 30.11.2012, Field Assistants canwork in neighbouring villages. According to said circular, technicalAssistants and other employees including Mandal Parishad DevelopmentOfficers are also made equally responsible. When there is a collectiveresponsibility, the impugned action only against Field Assistant amountsarbitrary exercise of power and is also vindictive.

42. On behalf of respondents, Sri MSR Chandra Murthy, learnedSpecial counsel made submissions on facts and relevant orders on thesubject. According to Special counsel the regular Government Officers areassigned specific roles under the scheme. The Commissioner is StateProject Co-ordinator; at the District level, District Collector is District ProjectCoordinator and Project Director and District Panchayat Officer is AdditionalProject Director; at Mandal level, Mandal Parishad Development officer isProject Officer and at the village level, Panchayat Secretary is responsible forimplementation of the scheme. These are all regular government officers/employees.

43. In order to assist the hierarchy of officers/employees, certainstaff is engaged on contract basis, such as Engineering Consultants,Computer Operators, District Vigilance Officer, Ombudsman, Field Assistantsand Senior Mates. Various clauses notified in G.O.Ms.No.27, dated28.1.2006 and subsequent rules notified in G.O.Ms.No. 550 PR and RD

(RD.II) Department dated 6.12.2007 would clearly disclose that the FieldAssistant is assigned greater responsibilities. He is involved at every stagein implementation of the scheme starting from registration and issue of jobcards. In terms of clause 15.2 higher responsibility is assigned to FieldAssistant. Clause 15 deals with detailed procedure for settlement of wages. He states that the job chart of the Field Assistants clearly lays down the workthat is required to be undertaken by the Field Assistants. In G.O.Ms.No.316dated 22.8.2008 performance parameters are prescribed. The FieldAssistants are aware of the performance parameters. Field Assistants areentrusted with full responsibility, with reference to preparation of labourbudget.

44. Para 6 indicates the role of Field Assistants in planning. In thedeliberations during Grama Sabha, Field Assistants are required to play animportant role. Para 10 prescribes time schedule within which the entiregamut of the scheme should be adhered to. He further submitted that in everyvillage ‘Shrama Shakti Sangams’ are formed and each Sangam is assigneddistinct number. The data of their details and work done by them is compiledand made available to Filed Assistant. It is the responsibility of the FieldAssistant to consistently talk to Sharama Shakti Sangams, obtain from themthe details of work days they are willing to undertake the work and furnish thewillingness to the higher authorities. As seen from Circular No.1090 dated7.3.2014, targets are fixed. The circular also warns of taking action, if targetsare not achieved. These targets are fixed only after deliberating with theField Assistants. The Field Assistants Association, represented to theGovernment for enhancement of the remuneration. As seen from the memoNo. 5540 dated 3.4.2014, notification of the package was a result of theconsultations. While agreeing to enhance the remuneration as sought for bythe Field Assistants, the targets were fixed and the association of the FieldAssistants agreed to adhere to the targets. Several circulars and orders wereissued by the previous government and in continuation other circulars areissued. He therefore submits that the allegation of political motivation, isbaseless and unfounded. Such allegation is made only to divert the issued.

45. With reference to payment of wages, learned special counsel submitted that in order to ensure transparency and funds are not misused,elaborate procedure is envisages for payment of wages.

G.O.Ms.No.153, dated 6.7.2011 prescribes the time schedule for settlement ofamounts and failure to settle the amount within time fixed interest is payable. He further submitted that there is neither a fund crunch nor delayed payment,once works are property processed. Centralised fund management system isin place and after processing, money is directly gets credited to the account ofwage earner. He therefore submitted that there is no truth in the allegationthat there is inordinate delay in making payments. Even if there was delay, itmust be for the reasons of not conducting proper verification and not becauseof fund crunch.

46. Learned special counsel further submitted that circular No.241dated 21.4.2011 envisages detailed procedure for renewal. Thus, renewal islinked to performance and Field Assistants are very much aware of therequirement to achieve the targets to seek for renewal and that renewal is notautomatic. The performance criteria is determined based on the labourbudget. By referring to the statistics of Kadapa district for the year 2014-15,learned special counsel submitted that there are 895 Gram Panchayats andcontract of all the Field Assistants is reviewed and renewal is granted exceptwhere performance is poor and targets are not achieved. Non renewal of thecontract is marginal as compared to the number of Field Assistants working.

47. Learned special counsel submitted that immediately after thenotification of scheme and prior to 2008 appointments were treated astemporary. Later those appointments were converted into contractualappointments and renewed from time to time on assessment of theperformance. G.O.Ms.No.316, dated 22.8.2008 incorporates the modelcontract and it contains the terms and conditions of the contract such as fixedtenure, fixation of targets and scope of renewal. The contracts are enteredinto strictly in accordance with the model contract form. Clause-3 fixed thetenure and clause 4 provides for renewal. The contract appointment terms arefurther reviewed in the year 2012. An additional clause was introduced i.e.,Clause-13. This clause also fixes the targets and requires the Field Assistants to achieve the targets. Petitioners have signed the contract whichprescribes the tenure of contract. Having agreed for appointment on contractbasis and having knowledge of the fixation of the tenure, it is not open to thepetitioners to contend that initially some of the petitioners were appointed ontemporary basis and therefore conversion is illegal. Based on record,learned special counsel submitted that there is no truth in the contention thatpetitioners were not aware of the conversion of their appointments ascontractual appointment.

48. By referring to Government Memo No.15963/RD.II/A1/2009 dated28.8.2010, learned special counsel submitted that power to take disciplinaryaction is vested in the Project Director. Earlier to said memo, power wasvested in Mandal Parishad Development Officer. Separate circular wasissued regarding disciplinary action. He referred to the documents of renewalof contracts for the year 2013-14 and contended that Project Directorassigned the targets and that he is competent authority. By referring to letterNo.1090 dated 11.07.2014 and statistics, learned special counsel submittedthat the Director, Employment Guarantee Scheme, emphasised onachievement of target of 75% of Labour budget as mandatory. Following theguidelines of various authorities and parameters already set out, the ProjectDirectors of respective districts reviewed the performance of each of the FieldAssistants and only after assessing the performance, contract was notrenewed to such of those Field Assistants who have not crossed 75 % of thelabour budget and minimum of 5000 person days.

49. Learned special counsel further contended that the FieldAssistants were aware of the requirement to achieve the targets and theirentitlement for renewal of contract depended on the performance turned outby them for the relevant year, in this case 2014-15. The non renewal ofcontract for the year 2015-16 is in terms of the contract of appointment andvarious circular instructions and the decision does not amount to castingstigma. The entire data has been compiled. Initial estimates, person days,labour budgets were all determined with the full knowledge of FieldAssistants and their performance out-put is assessed based on thoseparameters only. There is no requirement of issuing a notice to a person whose tenure is already over and when the employer takes a consciousdecision not to renew on set parameters.

50. Refuting the allegations of the learned senior counsel that StateCouncil is not constituted and Act and the Scheme do not envisage any roleto the Commissioner of Rural Development and circulars issued byCommissioner which are challenged in the writ petition are not valid in law,learned special counsel contended that such allegation is baseless. Ordersin G.O.Ms.No. 550 dated 6.12.2007 (notified in gazette on 15.12.2007) woulddisclose implementation of the assignments. According to para 6.1.0 of thegovernment order, Commissioner is State Project Coordinator. In terms ofpara 6.1.1, State Project Coordinator is required to coordinate implementationof the scheme. The circulars impugned in the batch of writ petitions areissued in exercise of said power. Learned special counsel submitted that asa State Project Coordinator, the Commissioner, Rural Development hasnotified several other circulars including Human Resources policy. He furthersubmitted that those circular instructions are only to guide the ProjectDirectors in undertaking the review of performance before granting renewal ofthe contracts. The terms of contract, Human Resource policy and otherorders envisaged fixation of targets and achievement of those targets as a prerequirement of granting renewal. It is further submitted that merely becauseState Employment Guarantee Council (SEGC) is not established, does notvitiate various notifications issued by the officers of the State.

51. Learned special counsel further contended that the ordersimpugned do not amount to termination and therefore provisions of HumanResources policy are not attracted. Taking disciplinary action as envisagedin para 13 (6) of FAHRP would apply, if termination is resorted to by way ofpenal action on account of misconduct. The decision impugned in the writpetitions are with reference to non renewal of the contract for a further period. Therefore it is not a penal action. The decision not to renew the contractbased on the performance appraisal does not amount to stigma.

52. In continuation to submissions made by the learned specialcounsel, learned Advocate General (AP) appearing for respondents madeelaborate submissions on the legal aspects and on the scope of judicial review against decision not to renew the contracts of appointment by referringto several precedents of this Court and Supreme Court. Learned AdvocateGeneral contended that the relationship of the petitioners with the respondentState/ its instrumentality is governed by contract of appointment. The contractof appointment clearly stipulates the tenure. Once tenure is completed theyhave no right to insist that the tenure should be renewed. It is alwayspermissible for the employer to assess the performance of the employeebefore granting renewal. Each renewal is a new contract. Relationship isregulated by the terms of contract. Petitioners are aware of the parameters oftheir performance and they are also aware of the bench mark which they arerequired to achieve to seek renewal. Contracts of only those Field Assistantswere not renewed if they have not achieved the targets fixed to them. Once tenure is over, relationship does not subsist. Therefore continuation of suchcontract cannot be insisted upon. No mandamus can be issued directing therespondent authorities to renew the contract. At the most, if the termination isheld to be illegal, an individual may claim damages but direction to renew /continue contract, contrary to the terms of the contract cannot be granted.

53. By referring to provisions of the Act and the scheme learnedAdvocate General submitted that objective of the scheme is to ensureprovision of employment to rural youth at least for 100 days in a year, so thatthey can meet two square meal per day. In the process of providing suchemployment assurance, it is also intended to build infrastructure facilities inthe rural areas such as sanitation, provision of hygienic conditions, laying ofroads, drainage system, drinking water facility etc which all would help inover all development of infrastructure of the village. To achieve theseobjectives of the scheme, the Field Assistants have to play leading role andthis fact is known to Field Assistants. Therefore performance of the FieldAssistants is crucial and has direct proportion to the achievement ofobjectives of the scheme. The Field Assistants were informed of their rolesand responsibilities and targets fixed to them. All parameters of the targetswere taken care of, the data was compiled carefully, scheme deficiencieswherever necessary were taken note and only after detailed assessment,wherever it is found that the performance is not up to the mark, the contractwas not renewed. Thus, it cannot be alleged that there was arbitrary exercise of power by the competent authority.

54. The assessment of performance was made based on the labourbudget and the person days. Field Assistants are involved in identifying theable bodied persons willing to undertake the work; the person days arearrived by compiling the enrolment in the form of job charts and requisitionmade by the persons for undertaking the work. Based on the requisitionreceived for undertaking the work, works to be executed and identified, thebudget estimation is made and budget is determined. It is further submittedthat Field Assistants are also involved in certifying the work executed. Afterthey certify execution of the work, relevant documents go to TechnicalAssistant, who assesses the work executed and there on proposals aremoved for sanction of the wages. Thus, Field Assistants are aware of theprogress of the work made as per the targets. It is their responsibility tomotivate able bodied persons to undertake the work, to encourage them tocome out with better performance. Thus, achievement of targets is integralpart of the responsibility assigned to Field Assistants and if such persons donot achieve the targets, it would be detrimental to the very object of thescheme and will stultify the implementation process of the scheme. Thus,before granting renewal of the contracts, the performance of each FieldAssistant was assed based on the records.

55. Learned Advocate General placed reliance on followingdecisions:

U.P. STATE TEXTILE COMPANY LTD Vs. SURESH KUMAR[[8]], W.A.No. 780 OF2011 & BATCH, GOVERNMENT OF ANDHRA PRADESH Vs. [9]P.SULOCHANAMMA AND OTHERS, K.KANKARAJ Vs. INSTITUTE OF CHARTEREDFINANCIAL ANALYSTS OF INDIA (ICFAI), HYDERABAD[[10]], V.S.N MURTHY VsSAMATHA MAHILA COOPERATIVE URBAN BANK LTD, HYDERABAD AND[11][12]ANOTHER, P.DOKI Vs GOVERNMENT OF INDIA AND OTHERS, GRIDCO LTD [13]V s . SADANANDA DOLOI AND OTHERSand STATE OF KARNATAKA Vs. UMADEVI(3)[[14]].

56. The Act is made with principal objective to ensure that ruralpopulation get at-least assured employment in a given year and are

remunerated properly. The Act vests right in able bodied persons to insist forprovision of work and it shall be the endeavour of the State Governments toformulate scheme for provision of work and to provide work accordingly. Thescheme is funded to the extent of 90% by the Government of India and 10 %by the respective State Governments. As seen from the scheme of the Act,hierarchy of authorities are entrusted with the responsibility of formulating thescheme and policies to ensure the generation of work as mandated by theAct and its implementation mechanism. At the State level, policy guidelineshave to be laid down by the State Government and at the District level, thepolicy guidelines are to be formulated by respective district collectors. Thescheme of Sections 14 to 16 would show that implementation mechanism isvested in the District administration and down-below. The District Collector isthe District Programme Coordinator and the entire programme in therespective districts functions under his control and supervision. The ProjectDirector, District Water Management Agency, assists the District ProgrammeCoordinator. At the mandal level, the Mandal Development Officer is theProject Officer and it is his responsibility for enforcement of the objects of theAct. Sub Section 7 of Section 16 of the Act, 2005 emphasises the role of theGram Panchayats. At the gross-root level, the role is assigned to the GramPanchayats for the enrolment of the able bodied persons for work and forprovision of work. Gram Panchayat has to identify the projects which can beexecuted, ensure their execution and supervise the proper execution ofworks. Section 26 vests a residuary power in the form of delegation.

57. Act and the scheme create hierarchical structure down to theGram Panchayat at the grass root level for implementation of the objectives ofthe Act. Each of the authorities in the pyramid are assigned specific rolesand responsibilities. The scheme envisages elaborate exercise to identifydemand for work, identification of work, budget estimation and so on.

58. Though Act does not envisage post of Field Assistant, the postand several other posts are imported in to the structure, at the grass-root levelin the scheme formulated by the State Government. This additionalframework turns out to be the backbone of the scheme.

59. Scheme envisages pivotal role to the Field Assistants. He is involved from the stage of issuance of job cards, entitlement of demand forwork, identification of works that can be executed, preparation of labourbudget, motivation of groups formed to undertake the job, preparation of billsfor payment of wages and so on.

60. The object of the Act and the scheme is to ensure guarantee ofemployment to youths living in rural areas; to ensure infrastructuraldevelopment in the villages and to channlise the talent of youth in villages. Field Assistant has to act as a catalyst in achieving these objectives. Foreffective implementation of the objectives of the Act and scheme made thereunder, proper functioning of Field Assistants is very crucial. To effectivelyimplement the scheme performance parameters are fixed and FieldAssistants are put on notice of achieving the targets. They are involved atevery stage of planning and implementation and are aware of their targets.

are:

61. Points that arise for consideration in the batch of writ petitions

(1). Whether the decision not to renew contract is stigmatic andtherefore is vitiated ?therefore is vitiated ?

(2). Whether even if decision impugned in the writ petitions is held tobe stigmatic, can a mandamus be issued to renew thecontracts?be stigmatic, can a mandamus be issued to renew thecontracts?

(3). Whether not affording opportunity to petitioners before holdingthem as not meeting the targets is arbitrary?them as not meeting the targets is arbitrary?

62. Before answering the points in issue, a brief survey ofprecedents is necessary on the scope of right of a contract employee and thescope of judicial review in such matters.

63. In W.A.Nos.780 of 2011 and batch, the issue was non renewal ofcontract of Ombudsman after initial period. The said appointments wereunder same scheme as in these cases. Section 27 of the National RuralEmployment Guarantee Act (for short, ‘the NREGA’), envisages office ofOmbudsman. As per the scheme of appointment of Ombudsman, the grant ofextension was subject performance appraisal. The selection committee having appraised and assessed the performance found the candidates as notfit for extension of appointment for another year. This Court held:

“8. The nature of appointment of the party-respondents is contractual innature for a fixed period reserving liberty to the selection committee toextend the period subject to appraisal of performance of the candidates.When once the nature of appointment is contractual in nature, therespondents cannot seek for enforcement of contractual obligations tocontinue them in services as Ombudsmen beyond one year. Principlesof natural justice cannot be read into in matters of contractual obligations.Further, the party-respondents cannot approbate and reprobate as theydid not raise any objection at the time of appointment fixing the period oftenure to one year, though the term of office as stated in GO Ms.No.291,dated 10-8-2010 is at variance with what is stated in the instructions onOmbudsman in Clause 2.2.5 issued by the Joint Secretary (NREGA),vide order dated 7-9-2009. The party respondents could not demonstrateany violation of any indefeasible right, except pleading equity. Extensionof period of appointment by the selection committee depends uponvarious aspects and it is within their realm and it is not for this Court todecide the suitability and continuity of the candidates in the office foranother year when the selection committee after appraisal choose not toextend the period. We are of the considered view that the party-respondents are not entitled for the relief sought by them. If so advisedthe party-respondents can seek for damages under common lawremedy and not extension by one more year as a matter of right. In thecircumstances, the impugned orders passed by the learned single judgein the above noted WPs are set aside and the writ appeals areaccordingly allowed. No order as to costs.”

64. InP.SULOCHANAMMA AND OTHERS(cited supra), respondents wereappointed on contract basis for one year, in the vacancies earmarked forreserved categories, due to non availability of reserved category candidates. Their services were terminated after completion of one year tenure. In batchof Original Applications challenging termination the Andhra PradeshAdministrative Tribunal directed continuation of applicants. On a challengeby State Government, said orders of the A.P. Administrative Tribunal, thisCourt held:

“The said contract, admittedly, was for one year and by efflux oftime, automatically, the appointment comes to an end on expiry of oneyear period and as such even without the order of termination, which isimpugned herein also, when the contract is not renewed for furtherperiod, no legitimate right can be claimed by the applicant to continue inservice. The order of termination of the applicant, merely amounts toputting an end to the said contract in terms of the contract.”

65. K.KANKARAJ (cited supra) is also a case on the point. Petitionerswere appointed by Alpha Foundations, a department of ICFAI, to various positions initially for a period of one year. On assessment of theirperformance, by proceedings dated 30.10.2007, contract period wasextended till 31.12.2012. Vide proceedings dated 30.9.2008, petitionerswere transferred. Petitioners requested for retention. While so, videproceedings dated 25.10.2008, their services were terminated w.e.f.30.9.2008. The orders of termination are assailed in this Court. This Courtheld; “17. Be that as it is, the nature of language used in theappointment orders, issued by respondent No. 2 to the petitioners, woulddisclose that the appointment of the petitioners is not even temporary,but purely on contract basis, and that too for a limited period, which wasmutually renewable. The law is well settled that in matters relating to andarising out of contractual obligations, writ petition is not a remedy, andthe party seeking to enforce contractual obligations has to approach thecompetent civil Court having jurisdiction”

66. In V.S.N MURTHY (cited supra) petitioner was appointed on contractbasis in March, 1998. In December, 2000, employer noticed misuse of officialposition and misappropriation. Initially he was placed under suspension anddisciplinary enquiry was initiated. However, on 18.12.2001 his serviceswere terminated. Said termination was challenged as one of stigmatic and therefore illegal as no enquiry was conducted. This Court held:

“9. More importantly, it should be noted here that the petitionerwas appointed as a Manager in the 1st respondent bank admittedly on acontractual basis and in such a situation, the termination of his serviceswould amount to only breach of a contract which may give rise to a civilremedy for damages as no contract of service can be specificallyenforced. Thus apart from the above controversy relating to theapplicability or non-applicability of Article 12to the case, the nature ofthe petitioner's appointment being a contractual one, it follows that thepresent writ petition is not maintainable as several disputed questions offact would arise.

……

…….

11. ……… Thus it was terminable by the 1st respondent bankand it should also be noted that a contract of service can be terminatedeven for loss of confidence and no reasons need be assigned. It is truethat the bank has earlier placed the petitioner under suspensioncontemplating an enquiry and may even have commenced it. As theappointment of the petitioner is a contractual one, suspension pendingenquiry was not necessary as rules were not applicable to him and thecontract could be terminated for loss of confidence also. If the bank wasnot right in terminating the contract, that would at best give to thepetitioner a right to sue for damages for breach of contract and he couldnot have claimed for its specific performance and he could not havebeen reinstated for violation of any rules. Thus the mere fact that the 1st

respondent bank earlier initiated some enquiry after placing thepetitioner under suspension cannot estop it from terminating thecontract as it is terminable under law………”

67. In GRIDCO (cited supra) Supreme Court was considering thescope of judicial review of termination of contract appointment made for afixed tenure and also scope of renewal/extension of contract. On review of law on the subject, Supreme Court held; “26. A conspectus of the pronouncements of this Court and thedevelopment of law over the past few decades thus show that there hasbeen a notable shift from the stated legal position settled in earlierdecisions, that termination of a contractual employment in accordancewith the terms of the contract was permissible and the employee couldclaim no protection against such termination even when one of thecontracting parties happened to be the State. Remedy for a breach of acontractual condition was also by way of civil action fordamages/compensation. With the development of law relating to judicialreview of administrative actions, a writ court can now examine thevalidity of a termination order passed by public authority. It is no longeropen to the authority passing the order to argue that its action being inthe realm of contract is not open to judicial review. A writ court is entitledto judicially review the action and determine whether there was anyillegality, perversity, unreasonableness, unfairness or irrationality thatwould vitiate the action, no matter the action is in the realm of contract.Having said that we must add that judicial review cannot extend to theCourt acting as an appellate authority sitting in judgment over thedecision. The Court cannot sit in the armchair of the Administrator todecide whether a more reasonable decision or course of action couldhave been taken in the circumstances. So long as the action taken bythe authority is not shown to be vitiated by the infirmities referred toabove and so long as the action is not demonstrably in outrageousdefiance of logic, the writ court would do well to respect the decisionunder challenge.”

68. In UMA DEVI (3) ( cited supra) five Judge Bench of Supreme Courtheld; “47. When a person enters a temporary employment or getsengagement as a contractual or casual worker and the engagement isnot based on a proper selection as recognised by the relevant rules orprocedure, he is aware of the consequences of the appointment beingtemporary, casual or contractual in nature. Such a person cannot invokethe theory of legitimate expectation for being confirmed in the post whenan appointment to the post could be made only by following a properprocedure for selection and in cases concerned, in consultation with thePublic Service Commission. Therefore, the theory of legitimateexpectation cannot be successfully advanced by temporary, contractualor casual employees. It cannot also be held that the State has held outany promise while engaging these persons either to continue them where they are or to make them permanent. The State cannotconstitutionally make such a promise. It is also obvious that the theorycannot be invoked to seek a positive relief of being made permanent inthe post.”

69. In P.DOKI(cited supra), the scope of tenure appointment has fallen for consideration. ThisCourt reviewed the entire law on the subjectand held:

“22. The empirical principles governing a tenure appointment andthe precedents analysed supra applied to the facts of the case on hand,clearly ordain the conclusion that with the expiry of petitioner's tenure ofappointment by 16.10.2001 he had no right to continue thereafter absentan expressed order extending his tenure or appointing him afresh on afresh tenure of office”

70. The principles deducible from the precedents are summarized as under:

1. Once nature of appointment is contractual, there is nolegitimate right to seek to continue in service beyond period ofcontract.

2. Principles of natural justice cannot be read into matters ofcontractual obligations3.It is permissible to assess suitability before granting renewalof contract appointment.

4. Ordinarily matters arising out of contractual obligationsincluding termination of contract having stigma, writ petition isnot the remedy and may give rise to civil remedy.

5. A writ Court is entitled to judicially review the action anddetermine whether there was any illegality, perversity,unreasonableness, unfairness or irrationality that would vitiatethe action.

6. Power of judicial review cannot be extended to sit in the armchair of the administrator to decide whether a more reasonabledecision or course of action could have been taken in thecircumstances.

7. If it is claimed that termination of contract appointment isillegal, it may give rise to a right to sue for damages.

8. It is permissible for employer to impose special terms andemployee is bound by those terms.

POINT No.1:

71. To appreciate the point, it is necessary to note the languageemployed in the impugned decision. Proc.R.O.C.No.D2/H.R./3210/FA13/2015, dated 14.08.2015 issued to Smt k.Nagendra Mani (petitioner inW.P.No.26756 of 2015) is taken as example. The relevant portion reads asunder:

“1. మ����ం���య��ణఉ����పథకము ందసంవత ర ం����ప క ౖ 2014 - 15 ఆ కసంవత రము ఒకసంవత ర లమున 01.07.2014 నుం 30.06.2015 వర��తూ రు��, Chandragiriమండలము, Are Palle Rangampet “మపం”య నందు / మ K.Nagendra Mani ���వలను ం����త స య లు��దురు��నడ ౖన��� / “మ” K.Nagendra Mani ���ం�����30.06.2015 ము��న��

2. “ౖసూ”కలపరం Are Palle Rangampet “మపం”య నందు2014 – 15 ఆ కసంవత రము�� 01.07.2014 నుం 30.06.2015 వర�� / “మ” K.Nagendra Mani “రుక”సం 7500 ప���లుమ యుఆ��ంచబ న బ బ��ప���లకల నయందు 75 “తము”ౖ ల��ము��ంచవల ఉండ , ఆ��ంచబ న బ బ��ప���లకల నయందు 52��ము త��ం యు��రు����బ ఉ������ల పనులుక��ంచుట��ఫల ౖనటు���యచున���

౩���న /“మ” K.Nagendra Mani “త”స య లు Are PalleRangampet “మపం”య , Chandragiri మండలము���ం����30.06.2015 తదుప న కరణ (Renewal) “య”ద��రంచడ ౖన��ల���ధన��ఫల ౖన /“మ” K.Nagendra Mani “త”స య లు ArePalle Rangampet “మపం”య����ం���వలుఅవసరం నందున���ం��న కరణరదు పరచడ ౖన��

4. — / “మ” K.Nagendra Mani “త”స య లు Are PalleRangampet “మపం”య , Chandragiri మండలము రుఆ నము ఉన మ����ం���య��ణఉ����పథకము క సంబం త, ����, ��మ యుఅ�����నుం���రు లు రు��ర క మగంచబ నఇతరఆసు లుఅదన��ర క మఅ��� (ఇ���య��)Chandragiri మండలము���సమ��ం ర దు ందవ ను

5. మండలప ష అ వృ అ��� / “ర”క మఅ��� (ఇ���య��)Chandragiri మండలము రుఉతరు లుసంభం త త స య ల అంద���రుగుర దుఅదన��ర క మఅ��� (ఇ���య��) ��నుం��సు న���రు లుమ యు����, ���రు త తరముల���సు ఈ���లయమున నకలుపంపవల న��ఆ��ంచడ ౖన�� ”

72. The correspondence refers to completion of term of contract and decision not to renew further. Serious objection is raised on the words ‘failureto provide work’ and ‘failure in achieving targets’ used in the communicationgiven to the petitioners as amounting to stigma. It is further contended that thewords used amounts to misconduct and therefore procedure as required by Clauses 12 and 13 of FAHRP is required to be followed before dispensingwith the services of the serving Field Assistants.

73. Strong reliance is placed on Clauses 12 A(1), 12 (5), 12 P(1), 12(P) (2) and 13(B) (6)(b) (c ) of FAHRP to contend that the reason assigned inthe impugned proceedings is covered by above clauses and procedure asmandated therein ought to have been followed before deciding not to renewthe contract.

74. The relevant clauses read as under :“Clause 12

A(1). Every FA shall be devoted to his/her duty and shallmaintain absolute integrity, discipline, impartiality and sense ofownership/belongingness.

…..

A(5). he shall obey the orders of superiors given in writing. Where it is not practicable to obtain direction in writing, shall obtainwritten confirmation of the direction as soon as possible. It shall beincumbent on such official superior to confirm in writing the oraldirections given by her/him, and in any event, she/he shall not refusesuch written confirmation where a request is made by the FA to whomsuch direction was given. However, this shall not empower the FA toevade her/his responsibility by seeking instructions from, or approval of,an official superior where such instructions are not necessary under thescheme of distribution of powers and responsibilities.

P(1). Non collection of demand as laid down in unemploymentrules or to non allocation of work as per demand P(2). Willful insubordination or disobedience of instructionswhether alone or in combination with others or any lawful and reasonableorder of a superior;

………

Clause 13 (B) DISCIPLINARY AUTHORITY:

(1). The Addl. DPC/PD DWMA concerned is the disciplinaryauthority. Action against the Field Assistant can be initiated based on.

(a) . Report of social audit

(b) . Report of programme officer regarding any omission or commission.

(c ). Inspection by any other higher officials (d). Inspection by any special team by DPC or CRD

office

(e) . Violation of code of conduct and maintenance ofdiscipline.discipline.

(2). Once an act of omission/commission is noticed/reported,the Addl. DPC/ PD DWMA concerned shall keep the Field Assistantunder “Temporary out of contract employment”. The orders of“Temporary out of employment” to Field Assistant shall be followed byissuance of a Show Cause Notice containing the charges based onwhich action is proposed along with sufficient evidence.

…...

……

……

(6). The following penalties may be imposed on Field Assistant.

(a) . Written warning

(b) . Recovery from pay of the whole or part of any pecuniary loss caused by him to the Government orscheme, by negligence or breach of orders.scheme, by negligence or breach of orders.

(c ). Termination of the contract agreement from the servicethereon. Once terminated, the same shall ordinarily bea disqualification for further employment.thereon. Once terminated, the same shall ordinarily bea disqualification for further employment.

….

….

75. On a careful reading of these clauses, it is evident that theseclauses are attracted when employer intend to take disciplinary action whichmay result in premature termination of the employment during thesubsistence of contract of employment. In the instant cases the clauses ofcontract show that term of contract is one year and ends on 30/6 of the year.The contract was not subsisting after 30-06-2015. Thus, the above clauses ofFAHRP are not applicable to the cases on hand.

76. After the notification of Employment Guarantee scheme, initiallyField Assistants were appointed on temporary basis. On evaluation of thefunctioning of the scheme and role of Field Assistants, on consideration ofrepresentations of Field Assistants vide G.O.Ms.No.316 dated 22.8.2008,modified conditions of service are notified. Additional benefits are extended. Monthly remuneration is enhanced. Nature of appointment of FieldAssistants is converted to one of contract.

77. In the process of conversion into contract for employment theadministration has also evolved job chart, which lay down the role assignedto Field Assistant. The performance yardsticks are built into the contracts.

Field Assistants are told in clear terms the roles assigned and the necessityto achieve the targets determined for them. The message was perform orperish. The performance parameters are based on total demand for work-called as person days, labour budget, cost estimation for the works to beexecuted for the year determined on the basis of the person days of demand. Field Assistant should ensure completion of person days and should utilise75 % of labour budget. On both parameters the targets have to be achieved. It is perceived that the effective compliance of the mandate of the scheme isto achieve at-least these targets.

78. The villages are put into three groups, List-I, List-II and List-III. Villages shown in List-I are estimated to have higher demand for work. List-Ivillages shall have at-least one Field Assistant. In List-II villages, the similarnature of work is entrusted to Senior Mate, a post envisaged as a step belowField Assistant. A village to continue in List-I and Field Assistant to hold hisassignment, Field Assistant has to achieve the targets fixed. Otherwise, FieldAssistant loses his job and the village gets relegated to List-II.

79. It appears earlier, renewal was granted without strict evaluation ofperformance. Probably, having noticed that the objective of the Act andscheme is not achieved even though huge public funds are spent and lack ofcommitment to motivate rural youth to participate in taking up the employmentunder the scheme, Government desired to make assessment of performanceas a pre-condition before granting renewal of contract for the year 2015-16. This decision is followed by two circulars dated 29.7.2015 and 11.8.2015, which are assailed in these writ petitions. A serious effort to assess theperformance of Field Assistants was undertaken and axe has fallen onpetitioners as a consequence to review of assessment.

80. Reading of the scheme, various circular instructions, job chart,and determination of performance charts would show that Field Assistant isthe lubricant to the engine of the scheme and shall ensure achieving of theobjectives of the scheme. He must be a person who should motivate ruralyouth sitting idle, to enrol in the scheme, to encourage to form Sangams, todemand work and to undertake the work assigned competently, and toassess the amount payable. He must have determination to ensure that the targets are achieved. His continuation in the job depends on his performancein reaching the targets.

81. Appointment of petitioners as Field Assistant is for a fixed tenureand such appointment is governed by contract. When appointment is for fixedtenure, continuation in employment is by way of new contract. Thus, arenewal means, a fresh appointment. A tenure appointment per se signifiesthat it is not permanent but is for a fixed term. In tenure appointments, renewalclause assumes significance. The renewal clause, a fortiori vests in theemployer to assess the performance of the employee before grantingextension/renewal and necessity to grant such renewal/extension in thelarger interests of the organisation. Even if performance of individual is uptothe mark still position held by such employee may not be needed on accountof change of priorities of the organisation and revised employment strategy orfor any other reason in the best interests of the organisation and employermay refuse to renew the contract.

82. Several circulars are issued from time to time alerting the FieldAssistant that renewal of contract is only based on performance. VideCircular No.491/PA(PI)/2011 dated 30.11.2011 Field Assistants are asked toincrease the performance output. In Government Memo No.5540/RD.II/A1/12dated 3.4.2012 further instructions are issued. Subsequent to thisGovernment order, several circulars are issued. In circularNo.241/SRDS/HR/Extension of contract/2010 dated 3.12.2013 theCommissioner noted that targets are not achieved and Field Assistants arenot putting enough effort to achieve the targets even though betterremuneration is granted to them and in spite of repeated instructions. Unitofficers were called upon to exercise proper assessment before grantingrenewal of contracts. The two circulars issued in the year 2015, impugned inthese writ petitions onlyemphasise what is already required.

83. What is informed to petitioners individually is since employer isnot satisfied with the performance out-put of the persons during the contractperiod, he is not renewing the contract. The continuation of contract ofemployment is contingent upon confidence and satisfaction of the employer. It is for the employer to fix parameters of performance and assess the

continuous usefulness of a person as employee having regard to the natureof job and priorities of the employer. In the instant cases, the scheme isevolved to give effect to the objectives of the Act. Effective implementation ofthe scheme depends on the output given by the employee. Huge publicmoney is spent to provide guaranteed work to rural work force. It is thuspermissible for employer to fix targets and to impose conditions for renewal ofcontract to ensure that the objectives of the Act are achieved. Thus, non-renewal of contracts on the basis of performance during the previous contractperiod cannot be faulted. Even without the express terms of contract it ispermissible for the employer not to renew the contract/ not to continue theperson.

84. On analysis of various orders/circulars and terms of contract, it isevident that employer has expressed in clear terms that if Field Assistantdoes not achieve the targets fixed, his contract would not be renewed. In thecommunication to the petitioners, they are informed that they have notachieved the targets and therefore their performance is not satisfactory.Satisfaction of the employer for renewal of contract, in the context of thecases on hand, is based on assessment of fitness of person based onperformance in achieving the targets in the previous year. Contract terms andvarious orders/circular instructions fixed tasks to be achieved and renewal isconditioned upon achieving the targets. In the impugned communication,employer informed the petitioners that they have not achieved the targets andtherefore employer decided against renewal of contract. It is also to be notedthat the term of contract is over and there was no subsisting relationship ofemployer-employee by the time impugned communication was given topetitioners. Since contract has come to an end, employee can weigh theperformance of person worked as Field Assistant to continue him or look outfor someone available in open market.

85. It is not the case of petitioners that all Field Assistants are thrownout. The statistics placed before the Court would show that the review ofperformance resulted in displacement of few Field Assistants only.

86. Though extensive submissions are made on the scope of theAct, the scheme, the powers of Commissioner and contended that orders of

Commissioner are unsustainable as Commissioner is not vested with powerto deal with such conditions and fixation of parameters to Field Assistantsand under the Act the State Employment Guarantee Council alone iscompetent to issue orders fixing targets, what is relevant for consideration inthese cases is, whether there is any breach of contractual terms by employerand whether petitioners are entitled to seek reinstatement/continuation oftheir employment. Thus, non-constitution of State Employment GuaranteeCouncil is not relevant for the adjudication of the issue in these cases. Inthese cases the issue for consideration is whether the respondents erred innot renewing the contract of Field Assistants. It is necessary to note thatField Assistant is not a post created by the Act. It is a post created in theprocess of implementation of the scheme formulated under the Act. Therelationship between Field Assistant and respondents is contractual. Suchrelationship depends on the terms of contract. The job chart and terms ofappointment delineate the duties and responsibilities of Field Assistants. The circulars issued by the Commissioner seek to enforce terms of contract,which are binding on the petitioners. Furthermore, contract prescribesparticular targets to be achieved to get eligibility for renewal. The circularsunder challenge only reiterate government stand and terms of contractalready determined. No new conditions are stipulated.

87. I n SATISH CHANDRA ANAND Vs UNION OF INDIA[[15]], five judgebench of the Supreme Court held; “State can enter into contracts of temporaryemployment and impose special terms in each case, provided they are notinconsistent with the Constitution, and those who chose to accept those termsand enter into the contract are bound by them, even as the State is bound”(para 13)

88. InSBI Vs PALAK MODI[[16]]on review of law on the subject SupremeCourt held :

“25. The ratio of the above noted judgments is that a probationer hasno right to hold the post and his service can be terminated at any timeduring or at the end of the period of probation on account of generalunsuitability for the post held by him. If the competent authority holds aninquiry for judging the suitability of the probationer or for his furthercontinuance in service or for confirmation and such inquiry is the basis for taking decision to terminate his service, then the action of thecompetent authority cannot be castigated as punitive. However, if theallegation of misconduct constitutes the foundation of the action taken,the ultimate decision taken by the competent authority can be nullified onthe ground of violation of the rules of natural justice.”

89. Thus, in the peculiar facts of these cases the words used in thecommunication cannot be viewed as stigmatic and non-renewal of contract ofemployment cannot be held as illegal on that ground. What is informed topetitioners is in compliance of terms of employment and no exception can bemade to such decision.

POINT NO.2:

90. Assuming that the terms used in the correspondence wherebypetitioners were informed that their contract of employment is not renewedamounts to casting stigma, the question for consideration is, in exercise ofpower of judicial review under Article 226 of the Constitution of India can adirection be issued to employer to renew contract of appointment?

91. Learned senior counsel placed reliance on two decisions toemphasis that no order having stigma be made without following due process(1) SAMSHER SINGH and (2) V.P. AHUJA (cited supra).

92. In SAMSHER SINGH, Supreme Court held the termination of serviceof Samsher Singh and Ishwar Chand are by way of punishment andtherefore illegal as due process is not followed. Supreme Court held:

“67. An order terminating the services of a temporary servant orprobationer under the Rules of Employment and without anything morewill not attract Article 311. Where a departmental enquiry iscontemplated and if an enquiry is not in fact proceeded with, Article 311will not be attracted unless it can be shown that the order thoughunexceptionable in form is made following a report based on misconduct(see State of Bihar v. Shiva Bhikshuk Mishra[20]).

……

……

80…………….The form of the order is not decisive as to whether theorder is by way of punishment. Even an innocuously worded orderterminating the service may in the facts and circumstances of the caseestablish that an enquiry into allegations of serious and grave characterof misconduct involving stigma has been made in infraction of theprovision of Article 311. ………….”

93. In V.P.AHUJA, Supreme Court held

“7. A probationer, like a temporary servant, is also entitled to certainprotection and his services cannot be terminated arbitrarily, nor canthose services be terminated in a punitive manner without complyingwith the principles of natural justice.

8. The affidavits filed by the parties before the High Court as also inthis Court indicate the background in which the order, terminating theservices of the appellant, came to be passed. Such an order which, onthe face of it, is stigmatic, could not have been passed without holding aregular inquiry and giving an opportunity of hearing to the appellant.”

94. In both the decisions, Supreme Court was dealing with personswho were appointed substantively and while on probation their services wereterminated on the ground of misconduct. In the case on hand, petitioners arenot on probation. They have not attained status. They do not have theprotection of Article 311 of the Constitution of India. Their appointment isgoverned by contract and for fixed tenure. On completion of tenure, furthercontinuation is an independent contract and a fresh tenure appointment. Theperformance in previous tenure was assessed to ascertain the desirability tocontinue the relationship. It is not a case of termination.

95. In B.NANDESWARA RAO(cited supra), though petitioner was acontract employee, his termination was demonstrably on grounds ofmisconduct and therefore the Court struck down such termination. The sameis upheld by the Division Bench in the case reported in B.NANDESWAR RAO.

96. In A.P. STATE FEDERATION OF COOP SPINNING MILLS LTD VsP.V.SWAMINATHAN[[17]], Supreme Court held that termination was notsimplicitor but one of penalty.

97. In STATE OF ORISSA Vs. DR (MISS) BINAPANI DEI AND OTHERS[[18]], Supreme Court held unilateral determination of age and retirement ofpermanent servant on the ground of altering the age of superannuation basedon such determination is against concept of justice. It is held “An order by theState to the prejudice of a person in derogation of his vested rights may bemade only in accordance with the basic rules of justice and fair play” (para 9).

STATE OF HARYANA Vs PIARA SINGH[[19]]deals with claim for

98. regularization. The said decision is considered in UMADEVI

(cited supra) and held that PIARA SINGH cannot be said as laying down thelaw that all ad-hoc temporary and casual employees engaged withoutfollowing the regular recruitment procedure should be made permanent.

99. In CENTRAL INLAND WATER(cited supra), Supreme Court heldterms of service enabling employer to terminate the services of permanentemployee by giving three months notice as unconstitutional.

100. On a careful consideration of precedent decisions cited at the barand the facts of the cases on hand I am of the considered opinion that theabove decisions do not come to the rescue of petitioners.

101. The decision of learned single Judge in K.LAXMANNA(citedsupra) turns on its facts. Be that as it may, I am bound by two decision ofDivision Benches of this Court on the same subject. Thus, the decision inK.LAXMANNA do not come to the rescue of petitioners.

102. I n GRIDCO LTD(cited supra), Supreme Court createdsmallwindow of opportunity to seek judicial review on the parameters set outabove. However, those parameters may attract in case of prematuretermination of contract of appointment. In the cases on hand, petitioners arenot terminated. Their contract is not renewed further on assessment of pastperformance. It is the right of an employer to choose right person to do rightjob. If the employer found that employee has not reached to its expectations,he can dispense with his services. In the instant writ petitions, petitioners’appointment is one of contract, even if the stand of petitioners that theirappointment is one of temporary but not contractual is accepted, they are notholding permanent employment and have not acquired status to a publicpost. They are appointed in a scheme post. It is permissible to employer toassess past performance to continue the relationship further. According toemployer, on assessment of performance of all Field Assistants, appointmentis not renewed to only such of the employees who did not achieve the settargets.

103. Renewal is not automatic but termination of relationship oncompletion of tenure is automatic and unless renewal is granted therelationship of master and servant comes to an end after the period ofcontract. Renewal is at the sole discretion of the employer.

104. Furthermore, tenure of appointment is over and there is nomanner of right vested in petitioners to continue in employment after30.6.2015. Thus, petitioners cannot seek a mandamus in exercise of powerof judicial review to ask for renewal of contract, irrespective of fulfilment oftargets fixed. When relationship is determined by contract, no mandamus canbe issued to compel party to a contract to renew the contract. Therefore, evenif it is assumed that words employed in the communication impugned in thesewrit petitions informing the decision not to renew the employment is stigmaticat the most it may give rise to right to sue for damages but no direction torenew the contract and to employ the petitioners be granted on that ground.

POINT NO.3

105. With reference to short fall in achieving of targets, severalgrievances are projected. That certain works executed in other villages, asauthorised, are not accounted; certain works executed in the same village arenot updated; that there were certain physical/practical constraints whichought to have been noted before assessing the performance; that certainworks proposed were not approved or diverted to Janmabhoomi scheme;local leaders deliberately created obstacles for political and personalreasons. It was further contended that during the year 2014-15 Postal Biometric System was introduced, whereby payment is linked to Aadhar cardbut due to lack of internet connectivity at the Mandal Computer Centres,resulted in delay in generating payments; funds were not released on timeduring several months, by State as well as Central Government; in somevillages hud hud cyclone was also a cause for not achieving the targets; insome cases though execution of work was certified by Mandal ParishadDevelopment Officer, the same is not accounted; putting off duty for long timepending disciplinary action though H R policy fixed 30 days to complete thedisciplinary action; availing leave on genuine grounds, hindered achievingthe targets. It is therefore contended that if an opportunity was offered to them, they could have explained the genuine causes in their defence andplaced material to substantiate that target is achieved.

106. In support of said contention, reliance is placed on Clause 15 ofthe contract appointment order. Clause 15 reads as under:

“(15) That the performance appraisal of the Field Assistant willbe taken up on quarterly basis/ periodically and if found that his/herperformance is not upto satisfactory level, one week notice will be givento improve his/her performance. On his/her failure to improveperformance, his/her services will be terminated.”

107. It appears no such performance appraisal was made in thepresence of petitioners. Admittedly, no prior opportunity was given topetitioners. There may be some truth in the contentions urged by petitionerson individual grievances briefly referred to above. If only petitioners were puton notice they could have endeavoured to satisfy the competent authority thatthe targets set are achieved or for valid reasons targets could not beachieved, or certain material facts ought to have been taken note of beforeassessing the performance. Though it is for the employer to accept thedefence or reject, fairness required, more so in view of Clause 15 extractedabove to afford some kind of opportunity before deciding not to renewcontract. More particularly, having regard to Clause 15 of the contract, suchopportunity ought to have been given.

108. I n SHRILEKHA VIDHYARTHI(cited supra), Supreme Court wasconsidering mass termination of law officers in all the Districts of State of UPby one stroke, even though they did not complete the term of office, SupremeCourt held :

“22. There is an obvious difference in the contracts between privateparties and contracts to which the State is a party. Private parties areconcerned only with their personal interest whereas the State whileexercising its powers and discharging its functions, acts indubitably, asis expected of it, for public good and in public interest. The impact ofevery State action is also on public interest. This factor alone is sufficientto import at least the minimal requirements of public law obligations andimpress with this character the contracts made by the State or itsinstrumentality. It is a different matter that the scope of judicial review inrespect of disputes falling within the domain of contractual obligationsmay be more limited and in doubtful cases the parties may be relegatedto adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent,challenge is made on the ground of violation of Article 14 by alleging thatthe impugned act is arbitrary, unfair or unreasonable, the fact that thedispute also falls within the domain of contractual obligations would notrelieve the State of its obligation to comply with the basic requirements ofArticle 14. To this extent, the obligation is of a public character invariablyin every case irrespective of there being any other right or obligation inaddition thereto. An additional contractual obligation cannot divest theclaimant of the guarantee under Article 14 of non-arbitrariness at thehands of the State in any of its actions.

……….

48. In our view, bringing the State activity in contractual matters alsowithin the purview of judicial review is inevitable and is a logical corollaryto the stage already reached in the decisions of this Court so far. Havingfortunately reached this point, we should not now turn back or take a turnin a different direction or merely stop there. In our opinion, two recentdecisions in Dwarkadas Marfatia and Sons[13]and Mahabir AutoStores[14]also lead in the same direction without saying so in clear terms.This appears to be also the trend of the recent English decisions. It is inconsonance with our commitment to openness which implies scrutiny ofevery State action to provide an effective check against arbitrarinessand abuse of power. We would much rather be wrong in saying so ratherthan be wrong in not saying so. Non-arbitrariness, being a necessaryconcomitant of the rule of law, it is imperative that all actions of everypublic functionary, in whatever sphere, must be guided by reason andnot humour, whim, caprice or personal predilections of the personsentrusted with the task on behalf of the State and exercise of all powermust be for public good instead of being an abuse of the power.”

109. Guided by the principle of law in SHRILEKHA VIDHYARTHI, notgranting opportunity to petitioners prior to taking decision not to renewcontracts has to be held as failure to comply with the basic requirements ofArticle 14, arbitrary, unfair and unreasonable. Orders impugned are alsostereotyped orders.

110. Points 1 and 2 are answered against petitioners and point 3 isanswered in favour of petitioners. While holding that communicationimpugned in the writ petitions does not amount to stigma and that sincetenure of appointment having come to end on 30.6.2015 no positive directionto reinstate/ to renew contract can be granted, the writ petitions are disposedof with the following directions:

111. The respondent District Collectors shall form a committee of threeofficers consisting of Revenue Divisional Officer, any District level Officer,other than the District Panchayat Officer and Mandal Parishad Development

Officer of respective mandals. The Committee shall hold its sittings inrespective Mandal Parishad Development offices with advance intimation ofdate of holding of sitting to Field Assistants hithertoworking within theterritorial jurisdiction of concerned mandal, whose contract is not renewed,give them opportunity to explain the targets achieved by them which are notaccounted/reasons for not achieving the targets, other constraints. TheCommittee shall also make available the assessment record of respectiveField Assistants for perusal of concerned Field Assistants. The Committeeshall consider said explanations objectively and make appropriaterecommendations to the competent authority.

112. The competent authority shall consider the recommendations ofthe committee objectively and shall take decision for renewal of the contractsof petitioners having due regard to parameters set out while granting suchrenewal to others. Until the entire exercise is completed no fresh recruitmentshall be made.

113. It is to be noted that if the contract of any of the petitioners is notrenewed, they are entitled for consideration for fresh enlistment along withother candidates from open market, more so when the respondents alsocontend that the decision not to renew the contract of employment is not as ameasure of penalty nor intending to attach stigma. Thus, respondents shallpermit such of those petitioners whose contract is not renewed also tocompete along with open market candidates and consider their suitability forappointment as Field Assistants if they are otherwise eligible and withoutregard to previous assessment undertaken at the time of renewal of contract.

114. The Writ Petitions are disposed of accordingly. There shall beno order as to costs. Miscellaneous petitions if any pending in these writpetitions shall stand closed.

Date: 31.12.2015

__________________________

JUSTICE P.NAVEEN RAO

Note: L R Copy to be marked--YES

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27278, 27288, 27291, 27293, 27306, 27321, 27373, 27377, 27397, 27400, 27405, 27410, 27432, 27434, 27435, 27442, 27459, 27463, 27466, 27482, 27584, 27590, 27595, 27616, 27618, 27620, 27626, 27627, 27629,27652, 27653, 27688, 27719, 27766, 27767, 27801, 27825, 27917, 27924, 27929, 27945, 27976, 27984, 27985, 27987, 27997, 28003, 28005, 28018, 28024, 28036, 28040, 28044, 28046, 28059, 28066, 28075, 28083, 28169, 28179, 28193, 28202, 28206, 28211, 28223, 28229, 28240, 28258, 28295, 28300, 28307, 28319, 28320, 28443, 28512, 28514, 28539, 28545, 28559, 28563, 28569,

28572, 28573, 28593, 28608, 28659, 28719, 28735, 28741, 28778, 28781, 28789, 28798, 28808, 28814, 28827, 28831, 28833, 28836, 28838, 28846, 28883, 28886, 28906, 28946, 28949, 28991, 28992, 29010, 29013, 29020, 29026, 29029, 29045, 29047, 29054, 29129, 29130, 29138, 29141, 29160, 29162, 29170, 29189, 29202, 29204, 29211, 29237, 29291, 29301, 29307, 29337, 29350, 29361, 29363, 29364, 29369, 29370, 29371, 29379, 29381, 29391, 29400, 29406, 29423, 29427, 29435, 29439, 29440, 29502, 29538, 29665, 29680, 29735, 29755, 29827, 29862, 29872, 29873, 29895, 29905, 29909, 29915, 29916, 29919, 29921, 29923, 29924, 29925, 29926, 29931, 29934, 29936, 29937, 29940, 29943, 29944, 29947, 29950, 29954, 29956, 29969, 29974, 29975, 29979, 29981, 29986, 29988, 29989, 29992, 29995, 30006, 30023, 30028, 30034, 30042, 30045, 30048, 30050, 30085, 30095, 30099, 30107, 30119, 30130, 30137, 30144, 30145, 30146, 30157, 30158, 30165, 30169, 30183, 30184, 30197, 30201, 30205, 30213, 30243, 30251, 30275, 30278, 30284, 30292, 30301, 30302, 30319, 30325, 30361, 30460, 30476, 30477, 30480, 30495, 30516, 30530, 30560, 30571, 30582, 30589, 30597, 30659, 30662, 30677, 30679,30689, 30694, 30740, 30754, 30774, 30814, 30961, 31056, 31216, 31217, 31251, 31259, 31387, 31425, 31652, 31713, 31867, 31891, 31964, 32009, 32336, 32355, 32655, 32728, 33005, 33093, 33099, 33113, 33152, 33212, 33253, 33257, 33267, 33309, 33455, 33471, 33710, 33810, 33898, 34135, 34607, 34611, 34746, 35531, 35346, 31488, 36382, 37256, 37296, 12650, 37871, 38263, 38637, 38673, 38750, 38793 and 27656 of 2015

Date: 31.12.2015

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[1](1974) 2 SCC 831[2](1991) 1 SCC 212[3](1986) 3 SCC 156

[4]2010 (6) ALD 679[5]AIR 2000 SC 1080[6] 2014 (4) ALD 695[7]2003 (2) SCC 107[8]2011-LAWS (SC) -2-92[9]2010(2) ALD 174 DB[10]2009(3)ALD 434[11]2011 (5) ALD 739[12]2003(3)ALD 245[13]AIR 2012 SC 729

[14](2006) 4 SCC 1

[15]AIR 1953 SC 250

[16](2013) 3 SCC 607[17](2001)10 SCC 83[18]AIR 1967 SC 1269= (1967) 2 SCR 625[19](1992) 4 SCC 118