THE GOVERNMENT OF TAMIL NADU AND ANR. ETC. ETC. versus TAMIL NADU MAKKAL NALA PANIYALARGAL AND ORS. ETC. ETC on 11 April 2023

390

SUPREME COURT REPORTS

[2023] 3 S.C.R.

ATHE GOVERNMENT OF TAMIL NADU AND ANR. ETC. ETC.

v.

TAMIL NADU MAKKAL NALA PANIYALARGAL AND ORS.ETC. ETC.

B(Civil Appeal No(s). 10563-10569 of 2017)

APRIL 11, 2023

[AJAY RASTOGI AND BELA M. TRIVEDI, JJ.]

Service Law – Direction for creations of posts –Impermissibility of – Held: Courts cannot direct for creations ofCposts – In the present case, the respondents were not in employmentof the Government or holding a civil post or appointed against thecadre post in any of the Government establishment where the serviceconditions are governed/regulated by the statutory rules framedunder the proviso to Article 309 – In absence of sanctioned post,Dthe State cannot be compelled to create the post and absorb thepersons who are continuing in service of the State – Therefore, theimpugned direction of the High Court to reinstate after creating theposts and absorb the respondents based on their qualification isnot sustainable in law – Impugned judgment set aside – MahatmaGandhi National Rural Employment Guarantee Act, 2005 –EConstitution of India – Article 309.

Allowing the appeals, the Court

HELD: 1.1 Single Judge and Division Bench in theirimpugned judgments have concurred with the finding that suchFof the employees who were discontinued by passing of the orderdated 8th November, 2011 are not only entitled to reinstatementbut deserve to be regularised in service after creation of post.What is being observed by the Division Bench of the High Courtis not legally sustainable in law. The respondents were not inemployment of the Government or holding a civil post and alsoGnot appointed against the cadre post in any of the Governmentestablishment where the service conditions are governed/regulated by the statutory rules framed under the proviso toArticle 309 of the Constitution. In fact, the respondents wereengaged in a scheme and were paid honorarium and this CourtHdoes not find justification that as long as the scheme continues in the State of Tamil Nadu under the mandate of Mahatma GandhiNational Rural Employment Guarantee Act, 2005, at least thereappears no reason to discontinue such persons who are workingunder the respective schemes undertaken by the Governmentin fulfilment of the object of the Act, 2005 unless the later foundto be unsuitable for retention in service or has attained the ageof superannuation. [Paras 46, 49 and 50][406-F; 407-E-G]

1.2 Such employees are not entitled for reinstatement andfor regularization of service for the reason that if the order passedon 8th November, 2011 is not sustainable, the respondents andother similarly situated persons engaged could be restored onthe same terms as they were placed before passing of the orderdated 8th November, 2011. In other words, as their placementwas extended for two years by order dated 21 st May, 2010 w.e.f.1st June, 2010 to 31st May, 2012 at the best, such persons couldhave been allowed to continue upto 31 st May, 2012. In theabsence of any further extension been granted, at least therewas no right vested in favour of either of the person engaged toseek further continuance under the scheme thereafter. In absenceof sanctioned post, the State cannot be compelled to create thepost and absorb the persons who are continuing in service of theState. The direction of the High Court to reinstate after creatingthe posts and absorb the respondents based on their qualificationis not sustainable in law and deserves outright rejection. [Paras51, 54 and 57][408-A-C; 409-D; 410-D]

1.3 The justification has been tendered that such personswho have not been re-engaged by the State Government underits present policy dated 7th June, 2022 are entitled for theirhonorarium for the period from 1st December, 2011 to 31st May,2012, it is made clear that such of the employees who have notjoined pursuant to the scheme introduced by Government dated7th June, 2022, they are always at liberty to accept theirhonorarium for the period of 6 months but as the Governmenthas already offered them honorarium earlier, they are not entitledto any interest on the said principal amount. This Court isinformed that the total amount as per the honorarium of MNP(Makkal Nala Paniyalargal/Village Level Workers) fixed at that A

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Atime comes to Rs.25,851/-(1st December, 2011 to 31st May,2012). If an application is filed, the State Government may at leastremit the money into the bank account of the individual. It ismade clear that such persons who have joined pursuant to thescheme introduced by the Government dated 7th June, 2022 infulfilment of the object of the Act, 2005 shall remain co-terminousBwith the scheme and be allowed to continue as long as the schemeremain in force. At the same time, such persons who have notjoined pursuant to the scheme dated 7th June, 2022, they are atliberty to accept their payments for the intervening period of 6months from 1st December, 2011 to 31st May, 2012 of the principalCamount of Rs.25,851/- to the MNP. On such application beingfiled, the appellants shall make over the money to such MNPthrough RTGS or any other mode after due verification withinthree months. The judgment impugned is set aside. [Paras 59,60 and 62][411-C-G; 412-A]

DMalathi Das (Retired) now P.B. Mahishy and OthersVs. Suresh and Others (2014) 13 SCC 249 : [2014] 3SCR 637 – distinguished.

Nihal Singh and Others Vs. State of Punjab and Others(2013) 14 SCC 65 : [2013] 11 SCR 1 – heldEinapplicable.

Divisional Manager Aravali Golf Club and Another Vs.Chander Hass and Another (2008) 1 SCC 683 : [2007]12 SCR 1084; Maharashtra State Road TransportCorporation and Another Vs. Casteribe RajyaFParivahan Karamchari Sanghatana (2009) 8 SCC 556: [2009] 13 SCR 937 – relied on.

State of Gujarat and Others Vs. R.J. Pathan and Others(2022) 5 SCC 394; Secretary, State of Karnataka andOthers Vs. Umadevi(3) and Others (2006) 4 SCC 1 :G[2006] 3 SCR 953 – referred to.

Case Law Reference

[2006] 3 SCR 953[2013] 11 SCR 1

referred toPara 24held inapplicablePara 24

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THE GOVERNMENT OF TAMIL NADU v. TAMIL NADUMAKKAL NALA PANIYALARGAL

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 10563-10569 of 2017.

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From the Judgment and Order dated 19.08.2014 of the High Courtof Madras in WP Nos. 18163 of 2013, 18048 of 2014, WA No. 696 of2012, WP No.11937 of 2012, WA No.697 of 2012 and WP Nos. 11936and 22969 of 2012.

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With

Civil Appeal No.10570 of 2017.

Jaideep Gupta, V. Krishnamoorthy, Sr. Advs., D. Kumanan, ShaikhF. Kalia, Ms. Divya Singh, Vinodh Kanna B., Advs. for the Appellants.

P Wilson, Sr. Adv., Sureshan P., Deepak Joshi, Bhupender Singh,Joseph Sebastian, R. Nedumaran, Apoorv Malhotra, Ms. Sapna Pillai,Ms. Aishwarya Mishra, Ms. Arunima Dwivedi, P. C. Chandrashekhar,Ms. Pinky Pawar, Aakas Pathak, Naresh Kumar, S. Nandakumar, Ms.Deepika Nandakumar, Anand Murthi Rao, Rajeev Gupta, Mohd.Nizamuddin Pasha, Shivendra Pandey, Lzafeer Ahmad, A. Raja Rajan,Subham Kothari, Prashant Padmanabhan, Padam Priya, AkhileshwarJha, Ms. Kajal Kumari, Raja Sanoor P., K. S. Selvan, K. Paari Vendhan,Ms. Haripriya Padmanabhan, Raghunatha Sethupathy B, Ms. Priya R,Ms. Ishita Chowdhury, Ms. Pariksha, S. Sabari Bala Pandian, AvinashKumar, Advs. for the Respondents.

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The Judgment of the Court was delivered by RASTOGI, J.

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The Judgment of the Court was delivered by RASTOGI, J.

1. The instant appeals have been preferred at the instance ofState of Tamil Nadu assailing the impugned judgment and order passedby the Division Bench of the High Court dated 19[th] August, 2014affirmingorder of the learned Single Judge dated 23[rd] January, 2012 in itsjurisdiction under Article 226 of the Constitution directing the StateGovernment to create the posts under the designation “Village LevelWorkers” which is called as “Makkal Nala Paniyalargal” (hereinafterbeing referred to as “MNP”) or byany other name but shallaccommodate the persons who were on the rolls of MNP on the date of GH

Aissuance of G.O.M No. 86 dated 8[th] November, 2011 against any vacantpost in the State Government schools, village Panchayats, townPanchayats, Municipalities, Corporations, Collector Office, village officesor any other Government offices and undertakings of the Governmentof Tamil Nadu throughout the State of Tamil Nadu, according to thequalification possessed by each candidate, without reference to age inBtheir native, taluk or revenue District. It was further directed that if anyone of the MNP who could not be accommodated oris ineligible, theState Government shall pay last drawn salary for the period from1[st]December, 2011 to 31[st] May, 2012.

2. The brief facts of the case culled out from the record andCrelevant for the present purpose are that the Government of Tamil Naduintroduced a scheme dated 2[nd] September, 1989 through theRuralDevelopment Department in the Budget speech of 1989-1990 providingemployment to the educated youth in rural areas who have completed10[th]standard for various items of work in the village panchayat that can Dbe entrusted to the unemployed youth and took a decision to implementthe scheme at the village level andto engage at least two village levelworkers - one male and one female - who would be engaged in each ofthe village panchayats in the State. Thus, a total of 25,234 workers wereto be engaged throughout the State on a monthly honorarium of Rs.200/- and it entrusted separate responsibilities to male and female workers.EThe Government also adopted a mechanism to be implemented at thelocal area where the appointments are to be made for male/femaleworkers at village panchayat level for keeping the transparency whilemaking appointment of unemployed educated youth.

3. It manifests from the record that persons were appointed underFthe scheme introduced by the State Government under its policy dated2[nd] September, 1989. Later, the scheme was disbanded by theGovernment by order dated 13[th] July, 1991 on the premise that theappointments made of MNP are in no way helpful for the execution ofprogrammes at village level except causing additional expenditure ofGRs.6 crores per annum to the Government and left the execution ofvarious developmental activities concerned through extension officersat block level.

4. In consequence thereof, the persons who were engaged asMNP pursuant to policy decisions of the Government dated 2[nd]HSeptember, 1989, their services stood terminated/discontinued.

5. Again, by GO of the Rural Development and Panchayat RajDepartment (hereinafter referred to as “Department”) dated 24[th]February, 1997, the scheme was restored by the Government in theBudget for the year 1996-1997 for providing employment to 25,000 youthson the terms and conditions earlier introduced pursuant to Circular dated2[nd] September, 1989, on an honorarium of Rs.500/- per month for twoMNPs in each village panchayat(one male and one female) for assistingin the maintenance of village assets and libraries & implementation ofadult literacy programme in villages.

6. The policy decision of the Government which was earlierintroduced by Order dated 2[nd] September, 1989 for all practical purposesand later restored by the Government vide order dated 24[th] February,1997 was again disbanded with immediate effect by order dated 1[st] June,2001. The Government again revived the services of MNP and increasedthehonorarium from Rs.500/- per month to Rs.750/- per month with anaddition of Rs.50/- per month as travelling allowance by order dated 12[th]June, 2006 with a clear understanding that persons who are re-engagedas MNP will not be entitled for any payment from 1[st] June, 2001 to 31[st]May, 2006 as they were not in service.

7. At this point of time, in furtherance of order dated 12[th] June,2006, the Department vide its order dated 5[th] December, 2006 came outwith a scheme to appoint those who were appointed as PanchayatAssistants and Part Time Clerks working in village Panchayat and thatthey will be switched over to scale of pay with effect from 1[st]September,2006. The Department issued a G.O. dated 27[th] November, 2008 statingthat the Government will consider filling up 50% of vacant posts arisingin the cadre of Record Clerk/Office Assistant/Night Watchman andequivalent post from MNP. The District Collectors were directed toprepare the estimated available vacancies so that MNPs could beaccommodated to the extent possible.

8. It has come on record that in the interregnum period,approximately 600 MNPs were absorbed in the State of Tamil Nadu invarious village panchayats as Office Assistants/Night watchman.Pendingabsorption,by an order dated 21[st] May, 2010, the Departmentdirectedthe MNPsto continue for two years from 1[st] June, 2010 till 31[st] May,2012.

9. Before their term could expire, the Government again issuedorder dated 8[th] November, 2011 to disband MNPs with immediate effect AB

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Aon the premise that that there is surplus staff in panchayat units at villagepanchayat level to look after the works presently being looked after byMNPs and, therefore, a decision was taken to disband the post of MNPwhich will save approximately Rs.73 crores.

10. The order passed by the Government dated 8[th] November,B2011 pursuant to which the scheme was disbanded and in consequencethereof, MNPs who were working stood disengaged/terminated, cameto be challenged by the MNPs through their associations by filing ofa writ petition before the High Court under Article 226 of theConstitution.

C11. The learned Single Judge of the High Court allowed the writpetition by a common order dated 23[rd] January, 2012 and while quashingthe order dated 8[th] November, 2011 directed the State of Tamil Nadu toreinstate the members of the associations who have served as MNP.The order of the learned Single Judge came to be challenged by theappellants in writ appeal which came to be dismissed under the orderDimpugned by judgment dated 19[th] August, 2014 with the followingdirections:-

(i) The State Government is directed to consider creation ofposts either in the name of MNP or in any other name topropagate the evils of consumption of liquor as contemplatedEunder Article 47 of the Constitution of India read with Rule10(5) of the Tamil Nadu Liquor Retail Vending (in Shopsand Bars) Rules, 2003 for accommodating MNP.

(ii) If the same is not possible on any account, the StateGovernment shall accommodate the persons who were onFthe rolls of MNP on the date of issuance of G.O.Ms No. 86dated 8.11.2011 in any one of the vacant post in Governmentschools, village Panchayats, town Panchayats, Municipalities,Corporations, Village Offices, Taluk Offices and CollectorOffices and in various other Government Offices andGUndertakings of the Government of Tamil Nadu throughoutthe State of Tamil Nadu, or in any post as may be createdfor implementing the new schemes introduced in 2014-2015Budget and accommodate the MNP, according to thequalification possessed by each candidate, without referenceto age in their native Taluk or Revenue District.

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(iii) The said exercise shall be commenced immediately andAcompleted on or before 31.10.2014.

(iv) If any one of the MNP who could not be accommodatedwithin the said period as stated supra, though they are eligibleto be accommodated, the State Government shall pay lastdrawn salary, which they have lastly received, fromB1.11.2014 till they are accommodated in any of the vacantor newly created post.

12. At the same time, the finding recorded by the learned SingleJudge that the action of the State Government was per se malafide inpassing the order dated 8[th] November, 2011 as directed in Para 33 washeld to be unjustified and that became the subject matter of challenge inappeals before this Court.

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13. On the first date of hearing when the matter was listed, whileissuing notice on 23[rd] September, 2014, the operation of the judgmentand order dated 19[th] August, 2014 came to be stayed by this Court.

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14. It is brought to the notice of this Court that the StateGovernment has introduced the scheme dated 7[th] June, 2022 to provideemployment to the educated unemployed youth under the MahatmaGandhi National Rural Employment Guarantee Scheme to engage oneperson for one panchayat to fill up on certain conditions or such of theunemployed youth on priority who had discontinued as MNP pursuant toorder passed by the Government dated 8[th] November, 2011 on monthlywages of Rs.7500/- per month.

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15. It is informed to this Court that majority of the persons whowere discontinued pursuant to the order dated 8[th] November, 2011 andwho otherwise fulfil the conditions of eligibility have joined under thescheme introduced by the Government dated 7[th] June, 2022. Out of thetotal number of 13,500 MNPs, majority of them have joined and 489MNPs have not opted the new policy despite opportunity being affordedby this Court.

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16. Learned counsel for the appellants submits that creation andabolition of posts rests with the Government and is a matter of Governmentpolicy, which can always be exercised in the interest and necessity ofinternal administration and the Court would be the least competent in theface of scanty material to decide whether the Government actedbonafidely in creating a post or refusing to create a post or its decision H

Asuffers from malice(legal or factual) and as long as the decision to abolishthe post is taken in good faith, interference by the Court was notwarranted.

17. The abolition of post is not a personal penalty against theindividual who has served and is an executive decision and the DoctrineBof Estoppel will not be applicable against the State in its governmental,public or sovereign function and the only exception is that where it isnecessary to prevent fraud or manifest injustice.

18. Learned counsel further submits that these are not theappointments made under the establishment of the State GovernmentCagainst the cadre post whose service conditions are governed by theservice rules framed under proviso to Article 309 of the Constitution.Thepresent appointments are made only for the purpose of providingemployment to educated youth in rural areas to work as MNP inimplementation of various programmes at the village level on anhonorarium which has been revised from time to time.D

19. The appointments are although made through a process heldin the local area through the Committee constituted so that the largenumber of candidates who are inclined to seek an appointment, theremust be some mechanism in place by which candidates could beshortlisted to offer appointment. Such appointments made have no co-Erelation with the appointments made by the State Government under itsregular establishments in terms of the recruitment rules which areprescribed for various State/subordinate services. Thus, no right couldhave been conferred/vested in favour of the individual and that apart,the Government has reviewed the whole scheme by introducingFemployment scheme for rural educated mass, to meet the appointmentsearlier made and since they are discontinued by order dated 8[th]November, 2011, the present Government voluntarily came out with thescheme dated 7[th] June, 2022 to consider such of the unemployed youthwho had discontinued to work in the village panchayat as MNP, foralmost a decade by that time, be given priority and may be engagedGunder the Central Government scheme, which was framed under theMahatma Gandhi National Rural Employment Guarantee Act,2005(hereinafter being referred to as the “Act 2005”) on an honorariumof Rs. 7500/- per month and the State also voluntarily came forwardthat as their appointment was earlier discontinued, thus for a period of 6Hmonths, i.e. 1[st] December, 2011 to 31[st] May, 2012, each of the employee who discontinued and is not interested in seeking re-engagement underthe present scheme can always accept his 6 months’ wages for therespective period.

20. Learned counsel submits that majority of them have receivedtheir wages by this time but theminiscule of persons who are contestingtoday, either have not encashed or have repaid the money back to theGovernment and submits that those who are left out and have not joinedso far under the present scheme introduced by the Government dated7[th] June, 2022, although as per timelines introduced, no fresh engagementcan be made but earlier this Court permitted the persons who weredisengaged to join and become member of the scheme, still theGovernment has kept it open and the persons who would like to join,they are always at liberty to re-join in terms of the scheme introduceddated 7[th] June, 2022 and those who are not inclined, can always accepttheir 6 months’ wages for the period from 1[st] December, 2011 to 31[st]May, 2012 at any point of time from the Office of the District Collectorif they have not already received so far.

21. In support of the submissions, learned counsel has placedreliance on the recent judgment of this Court in State of Gujarat andOthers Vs. R.J. Pathan and Others[1]wherein taking note of the earlierjudgment, this Court has expressed that appointments which are madefor a fixed term and on a fixed salary in a temporary unit which wascreated for a particular project, they are not entitled to seek regularizationand if such a direction is issued by the High Court for absorption/regularization of the employees who were appointed in a temporary unitwhich was created for a particular project, are held not in conformitywith law and such orders passed by the High Court for regularization, inthe facts and circumstances, have not been countenanced by this Court.

22. Per contra, learned counsel for the respondents, whilesupporting the finding returned by the High Court under the impugnedjudgment submits that their fate of appointment has always beendependent upon elected Government in power. One Government camewith a scheme to provide employment the successive Government hasdisbanded the policy introduced by its predecessors which appears to beonly for political reasons.

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A23. The consistent policy which has come on record is in itself anindicator to show that as and when decision was taken to abandon orabolish the scheme, it was only for political reasons and not based onany substantial or valid reason on record. In the given facts andcircumstances, the decision of the High Court in setting aside the orderdated 8[th] November, 2011 was valid and justified and such impugnedBaction of Government was indeed in violation of Articles 14, 16 and 21of the Constitution of India and rightly interfered by the High Courtunder the impugned judgment.

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24. Learned counsel further submits that there are consistentjudgments of this Court where the employees have been allowed toCcontinue for sufficient long time without the intervention of the Court.This Court always comes forward to regularize such employees whohadworked uninterruptedly for sufficient long time and that can be tracedout from the judgment of this Court in the case of Secretary, State ofKarnataka and Others Vs. Umadevi(3) and Others[2] which has beenDlater followed by this Court in Nihal Singh and Others Vs. State ofPunjaband Others[3]and further reiterated by this Court in Malathi Das(Retired) now P.B. Mahishy and Others Vs. Suresh and Others[4].Taking assistance from the judgments of this Court, learned counselsubmits that the High Court has rightly, in the given facts andcircumstances, set aside the order dated 8[th] November, 2011 and inEconsequence thereof, such of the employees who discontinued becauseof the policy being disbanded/cancelled by the Government by orderdated 8[th] November, 2011 in sequel deserve to be regularized either onthe post of MNP or any other post subject to availability. The High Courtwas conscious of this fact that there are numerous number of posts Fwhere the respondent employees are eligible and they can easily beabsorbed and thus, to protect their services which they have renderedfor sufficient long time, they have rightly been considered forregularization. The finding which was recorded in the first place by thelearned Single Judge and confirmed on legal principles by the DivisionBench of the High Court, at least at this stage, needs no interference.G

25. Learned counsel further submits that during the interregnumperiod between June, 2009 and November, 2011 until the order impugned 2 2006(4) SCC 13 2013(14) SCC 65H4 2014(13) SCC 249

came to be passed, the Government earlier came up with a scheme thatsuch of the employees who are serving as MNPs may be absorbed intoa regular post of Record Clerk/Office Assistant/ Night watchman orany other equal cadre post against 50% of regular vacancies and by anorder dated 1[st] June, 2009 approximately 600 MNPs were absorbed onvarious posts and since this has been discontinued/disbanded bysuccessive Government by order dated 8[th] November, 2011, therespondents who were in queue and waiting for their absorption weredeprived of their legitimate right of fair consideration and no reason wasassigned by the Government while passing the order dated 8[th] November,2011 and merely because there was a change of guards, that in itselfwould not be a ground to abandon the scheme which was in vogue for along time.

26. The Division Bench of the High Court took a consciousdecision to protect the rights, interests and service conditions of such ofthe employees who have served for sufficient long time but discontinuedbecause of the policy of the rival political groups. But the fact is that theemployees became its victim and that appears to be the reason for whichthe impugned order dated 8[th] November, 2011 came to be passed andafter they have been contesting their rights for almost more than a decade,at least, this Court in the interest of justice, may not interfere, in thepeculiar facts and circumstances of the case.

27. Learned counsel, in alternative, submits that if this Court isnot inclined to consider their submission, at least the employees whohave not been able to take employment so far, may be permitted toaccept their 6 months’ honorarium for the period between 1[st] December,2011 and 31[st] May, 2012 which comes to principal amount of Rs.25,851/- per MNP, at least, with a reasonable interest, as may be considered tobe appropriate, in the facts and circumstances of the case.

28. We have heard learned counsel for the parties and perusedthe material available on record.

29. If we look into the scheme originally introduced by theGovernment by Order dated 2[nd] September, 1989, the object of thescheme was to provide employment to the educated youth in rural areaswho have completed 10[th] standard in implementing several programmesof the Government at the village level which require continuous effortfor successful completion. After Government has identified suchprogrammes, they can be entrusted to a village work force of unemployed AB

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Aeducated youth for better implementation. The Government took a decisionthat there should be two village level workers-one male and one female-who will be engaged in each of the village panchayat. They will becalled Makkal Nala Paniyalargal (MNP) and be engaged on anhonorarium of Rs.200/- per month in the first instance.

B30. As far as how the appointment has to be made, a mechanismwas put in place that such employees who are in the age bracket of 18to 30 years with educational qualification of 10[th] standard (and thosewho are working in hill/tribal areas, their educational qualification can berelaxed to 8[th] standard),their recruitment shall take place through anadvertisement in the local area and be considered by a Committee forCshortlisting the candidates to be considered for appointment. Themechanism which was put in place in the first instance, by order dated2[nd] September, 1989 has looked into various rough weather. It revealsfrom the record that as and when there was change of political scenario,the successive political party always disbanded/cancelled the policyDdecision of its earlier Government in power which had introduced a schemefor offering employment to the educated unemployed youth.

31. This can very well be noticed from the records that theSchemewhich was introduced by the Government for providingemployment to educated unemployed youth in rural areas dated 2[nd]ESeptember, 1989 came to be disbanded by the successive Governmentby order dated 13[th] July, 1991 in consequence discontinued the servicerendered by such unemployed youth. Immediately thereafter, thesuccessive elected Government restored its policy by order dated 24[th]February, 1997 and provided employment to the educated youth for ruraldevelopment programmes in various schemes at the village panchayat,Fbe it for assisting in the maintenance of village assets and libraries,implementation of adult literacy programme in villages, for their socialwelfare and also to work for anti-liquor campaign. Such of the youthwhich put in place to get themselves involved in the scheme introducedin the village panchayat came to be disbanded by order dated 1[st] June,G2001. Later, it was again introduced by order dated 12[th] June, 2006 andtheir honorarium stood increased at later stages and their services stoodextended by order 21[st] May, 2010 for the period from 1[st] June, 2010 to31[st] May, 2012. But it appears that there was a change of guard in theinterregnum period and immediately thereafter, the policy was disbandedby order dated 8[th] November, 2011 which was the subject matter ofH

challenge before the High Court under Article 226 of the Constitution onbehalf of the respondents.

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32. It has to be noticed that for rural development, major focus ofplanning had been productive absorption of underemployed and surpluslabour force of the rural sector. In order to provide direct supplementarywage-employment to the rural poor, the Central Government came witha legislation, namely, Act 2005, with salient features as follows:- B

(i) The objective of the legislation is to enhance the livelihoodsecurity of the poor households in rural areas of the countryby providing at least one hundred days of guaranteed wageemployment to every poor household whose adult membersCvolunteer to do unskilled manual work.

(ii) The State Government shall, in such rural areas in the Stateand for such period as may be notified by the CentralGovernment, provide to every poor household guaranteedwage employment in unskilled manual work at least for aperiod of one hundred days in a financial year in accordancewith the provisions made in the legislation.

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(iii) Every State Government shall, within six months from thedate of commencement of this legislation, prepare a schemeto give effect to the guarantee proposed under thelegislation.

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(iv) The one hundred days of employment under the legislationwill be provided at the wage rate to be specified by theCentral Government for the purpose of this legislation. Untilsuch time a wage rate is specified by the CentralGovernment for an area, the minimum wage rate fixed bythe State Government under the Minimum Wages Act, 1948for agricultural labourers shall be considered as the wagerate applicable to that area.

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(v) If an eligible applicant is not provided work as per theprovisions of this legislation within the prescribed time limit,it will be obligatory on the part of the State Government topay unemployment allowance at the prescribed rate.

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(vi) A Central Employment Guarantee Council at the Centrallevel and State Employment Guarantee Councils at the State H

level in all States where the legislation is made applicablewill be constituted for review, monitoring and effectiveimplementation of the legislation in their respective areas.

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(vii) The Standing Committee of the District Panchayat, DistrictProgramme Coordinator, Programme Officers and GramBPanchayats have been assigned specific responsibilities inimplementation of various provisions of the legislation atthe Gram Panchayat, Block and District levels.

(viii) The Central Government shall establish a fund to be called‘National Employment Guarantee Fund’ for the purposesCof this legislation. Similarly, the State Governments mayconstitute State Employment Guarantee Funds.

(ix) Provisions for transparency and accountability, audit,establishment of grievance and redressal mechanisms andpenalty of noncompliance are also envisaged.

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(x) Provisions for Minimum features of Rural EmploymentGuarantee Scheme and conditions for guaranteed RuralEmployment under a scheme and minimum entitlements oflabourers have been laid.

33. Finally, the Act was introduced to provide for the enhancementEof the livelihood and security of the poor households in rural areas of thecountry by providing at least one hundred days of guaranteed wageemployment in thefinancial year to every poor household whose adultmembers volunteer to do unskilled manual work and for matters connectedtherewith or incidental thereto under the Act 2005. The State of TamilFNadu is also included in the Schedule appended to the Act, 2005.

34. Such applicant who is the head of the household or its otheradult members who have applied for employment under the scheme betermed as an applicant to join in the projects for the purpose of providingemployment to the applicants for the work taken up under a project asdefined under Section 2(n) of the Act, 2005. The expression ‘scheme’Ghas been defined under Section 2(p) which means a scheme notified bythe State Government under sub-section (1) of Section 4.

35. Chapter II provides guarantee of employment in rural areas.Section 3 refers to guarantee of rural employment to households, theState Government has to provide to every household whose adultH

members volunteer to do unskilled manual work not less than one hundreddays of such work in a financial year. It further provides that everyperson who had done the work given to him under the Scheme shall beentitled to receive wages at the wage rate for each day of work onweekly basis or in any case not later than a fortnight after the date onwhich such work is done.

36. Chapter III takes note of employment guarantee schemesand unemployment allowance.

37. Section 4 provides that as for the purposes of giving effect tothe provisions of Section 3, every State has to issue a notification tointroduce a scheme for providing not less than one hundred days ofguaranteed employment in a financial year to every household in therural areas covered under the Scheme and whose adult members, byapplication, volunteer to do unskilled manual work.

38. What will be the conditions for providing employment arereferred to under Section 5 of the Act, 2005. The wage rate is to befixed by the Central Government from time to time in terms of Section6. If an applicant for employment under the Scheme is not providedsuch employment within fifteen days of receipt of the application seekingemployment, he shall be entitled to a daily unemployment allowance inaccordance with Section 7.

39. Chapter IV notifies implementing and monitoring authoritiesat the central level by Central Employment Guarantee Council and atthe State level, by State Employment Guarantee Council as referred tounder Sections 10 and 12 of the Act, 2005.

40. After the Act, 2005 came into force, such States which arenotified in the Schedule as referred to under Section 1(3) of the Act,2005 which includes the State of Tamil Nadu, the same was offered tothe educated unemployed youth primarily under the Act, 2005.

41. It has not been disputed that the scheme undertaken by theState of Tamil Nadu under the Act, 2005 isstill in force.

42. The practice adopted by the Government in the past of whicha detailed reference has been made from 1989 onwards and to be morespecific, after the introduction of Scheme for providing employment tothe educated unemployed youth to work in the village panchayat byorder dated 2[nd] September, 1989, it has undergone a change at variousstages and forms.

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A43. We cannot afford to lose democracy in our country by permittingthe political parties empowered to overrule the wisdom of their politicalopponents with the use of State machinery.

44. So far as the object behind the scheme is concerned, it appearsto be very laudable and at least in the interest of poor unemployedBeducated youth by providing them to serve on the wages certified by theGovernment from time to time by providing employment under the Schemeintroduced by the State Government, at least for not less than one hundreddays guaranteed in a financial year who volunteered to do unskilledmanual work. At the same time, while the policy decision of theGovernment is always open to judicial reviewon the anvil of Article 14Cof the Constitution and is ordinarily not to be interfered unless that isattached with legal or factual malice of the Government,however, in theinstant case, the Division Bench of the High Court has set aside thefinding so far as the malice which was imputed by the learned SingleJudge in passing order dated 8[th] November, 2011 is concerned. AfterDgoing through the records, weare of the view that the order dated 8[th]November, 2011 might have been passed as a policy decision of theGovernment but the seriatim of facts which have come on recordatleast cannot be countenanced by this Court.

45. The question which emerges for our consideration is whetherEthe order dated 8[th] November, 2011 is untenable in the eyes of law,suchemployees who were discontinued are eligible for reinstatement andregularization of service?

46. Learned Single Judge and Division Bench in their impugnedjudgments have concurred with the finding that such of the employeesFwho were discontinued by passing of the order dated 8[th] November,2011 are not only entitled to reinstatement but deserve to be regularisedin service after creation of post. In our considered view, what is beingobserved by the Division Bench of the High Court is not legally sustainablein law.G47. There cannot be a quarrel with the proposition that the Courtscannot direct for creations of posts. In the case of Divisional ManagerAravali Golf Club and Another Vs. Chander Hass and Another[5], ithas been held as under:- “15. The court cannot direct the creation of posts. Creation andsanction of posts is a prerogative of the executive or legislativeauthorities and the court cannot arrogate to itself this purelyexecutive or legislative function, and direct creation of posts inany organisation. This Court has time and again pointed out thatthe creation of a post is an executive or legislative function and itinvolves economic factors. Hence the courts cannot take uponthemselves the power of creation of a post. Therefore, thedirections given by the High Court and the first appellate court tocreate the posts of tractor driver and regularise the services ofthe respondents against the said posts cannot be sustained andare hereby set aside.”

48. Later, in Maharashtra State Road Transport Corporationand Another Vs. Casteribe Rajya Parivahan KaramchariSanghatana[6], this Court held as under:-

“41. Thus, there is no doubt that creation of posts is not withinthe domain of judicial functions which obviously pertains to theexecutive. It is also true that the status of permanency cannot begranted by the Court where no such posts exist and that executivefunctions and powers with regard to the creation of posts cannotbe arrogated by the courts.”

49. The respondents were not in employment of the Governmentor holding a civil post and also not appointed against the cadre post inany of the Government establishment where the service conditions aregoverned/regulated by the statutory rules framed under the proviso toArticle 309 of the Constitution.

50. In fact, the respondents were engaged in a scheme and werepaid honorarium and we do find justification that as long as the schemecontinues in the State of Tamil Nadu under the mandate of Act, 2005, atleast there appears no reason to discontinue such persons who areworking under the respective schemes undertaken by the Governmentin fulfilment of the object of the Act, 2005 unless the later found to beunsuitable for retention in service or has attained the age ofsuperannuation.

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A51. But as already observed, such employees are not entitled forreinstatement and for regularization of service for the reason that if theorder passed on 8[th] November, 2011 is not sustainable, the respondentsand other similarly situated persons engaged could be restored on thesame terms as they were placed before passing of the order dated 8[th]November, 2011. In other words, as their placement was extended forBtwo years by order dated 21[st] May, 2010 w.e.f. 1[st] June, 2010 to 31[st]May, 2012 at the best, such persons could have been allowed to continueupto 31[st] May, 2012. In the absence of any further extension been granted,at least there was no right vested in favour of either of the person engagedto seek further continuance under the scheme thereafter.C

52. So far as the impugned direction to the State Government fortheir reinstatement and regularization is concerned, in our consideredview, it is completely misplaced and not sustainable in law.

53. The Judgment of this Court relied upon in Secretary, State ofDKarnataka and Others Vs.Umadevi (3) and Others (supra) is inreference to such of the employees who were illegally/irregularlyappointed in the establishment of the Government and their serviceconditions are governed under the statutory Rules framed but they havenot gone through the process of selection as provided under their respectiverules and were allowed to continue on ad-hoc basis for almost moreEthan a decade. This Court deprecated such practice but as one timemeasure permitted the Government to regularize such employees whoare working against the sanctioned post and permitted by the governmentwithout intervention of the Court as referred to under Para 53 of thejudgment. The same is reproduced hereunder:-F

“53. One aspect needs to be clarified. There may be cases whereirregular appointments (not illegal appointments) as explained inS.V. Narayanappa [(1967) 1 SCR 128] , R.N. Nanjundappa[(1972) 1 SCC 409] and B.N. Nagarajan [(1979) 4 SCC 507]and referred to in para 15 above, of duly qualified persons in dulyGsanctioned vacant posts might have been made and the employeeshave continued to work for ten years or more but without theintervention of orders of the courts or of tribunals. The questionof regularisation of the services of such employees may have tobe considered on merits in the light of the principles settled by thisCourt in the cases above-referred to and in the light of this judgment.H

In that context, the Union of India, the State Governments andtheir instrumentalities should take steps to regularise as a one-time measure, the services of such irregularly appointed, whohave worked for ten years or more in duly sanctioned posts butnot under cover of orders of the courts or of tribunals and shouldfurther ensure that regular recruitments are undertaken to fill thosevacant sanctioned posts that require to be filled up, in cases wheretemporary employees or daily wagers are being now employed.The process must be set in motion within six months from thisdate. We also clarify that regularisation, if any already made, butnot sub judice, need not be reopened based on this judgment, butthere should be no further bypassing of the constitutionalrequirement and regularising or making permanent, those not dulyappointed as per the constitutional scheme.”

54. At the same time, this Court further observed that in absenceof sanctioned post, the State cannot be compelled to create the post andabsorb the persons who are continuingin service of the State.

55. In Nihal Singh and Others (supra) on which heavy reliancehas been placed, it was a case where appointments were made by theState Government under Section 17 of the Police Act, 1861. Since theirappointments were under the Act, 1861 and were allowed to continuefor sufficient long time, which was not considered to be illegal or irregularappointment, this Court considered it appropriate to observe that as theyare allowed to continue for such a long term, they deserve regularizationof service. In the instant case, the respondents were never appointed inthe establishment of the Government against a regular sanctioned post,inthe absence whereof, judgment may be of no assistance.

56. The later judgment in Malathi Das (Retired) Now P.B.Mahishy (supra) which has been relied upon, it was a case where theemployees were working on daily wage basis serving in differentdepartments which are indeed Government establishments. At one stage,the employees approached the High Court claiming regularization ofservice and the High Court of Karnataka came to their rescue anddirected the State Government to regularize service of such employeeswho are serving on a daily wage basis in Government departments andfinally the SLP was dismissed by this Court. Thereafter, contemptpetitions were filed before the High Court and in two phases, the AB

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Aemployees were regularized, in the first and second phase of filingcontempt petition by the incumbents concerned. But few of theincumbents filed contempt petition which appears to be the third phase,they were not considered for regularization despite the order of the HighCourt being confirmed by this Court on dismissal of the special leavepetition on the premise of the judgment of this Court in Secretary, StateBof Karnataka and Others Vs. Umadevi (3) and Others (supra). ThisCourt was of the view that once the judgment of the High Court hasbeen affirmed and in two phases on filing contempt petitions, employeeshave been regularized, there appears no reason to deviate and takeawaythe claim of rest of the employees who are covered by the judgment ofCthe High Court, may be the reason that there was a change in law on thesubject after passing of the judgment of this Court in Secretary, State ofKarnataka and Others Vs. Umadevi (3) and Others (supra) and thisis not the factual matrix in the instant case.

57. We are of the considered view that the direction of the HighDCourt to reinstate after creating theposts and absorb the respondentsbased on their qualification is not sustainable in law and deserves outrightrejection.

58. This Court, in a recent judgment in State of Gujarat andOthers (supra) has considered the view expressed by usin paras 10 andE11 as follows:-

“10. The Division Bench has also not appreciated the fact and/orconsidered the fact that the respondents were initially appointedfor a period of eleven months and on a fixed salary and that too, ina temporary unit — “Project Implementation Unit”, which wasFcreated only for the purpose of rehabilitation pursuant to theearthquake for “Post-Earthquake Redevelopment Programme”.Therefore, the unit in which the respondents were appointed wasitself a temporary unit and not a regular establishment. The postson which the respondents were appointed and working were notthe sanctioned posts in any regular establishment of theGGovernment.

11. Therefore, when the respondents were appointed on a fixedterm and on a fixed salary in a temporary unit which was createdfor a particular project, no such direction could have been issuedby the Division Bench of the High Court to absorb them inH

THE GOVERNMENT OF TAMIL NADU v. TAMIL NADUMAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

Government service and to regularise their services. The HighCourt has observed that even while absorbing and/or regularisingthe services of the respondents, the State Government may createsupernumerary posts. Such a direction to create supernumeraryposts is unsustainable. Such a direction is wholly without jurisdiction.No such direction can be issued by the High Court for absorption/regularisation of the employees who were appointed in a temporaryunit which was created for a particular project and that too, bycreating supernumerary posts.”

59. The justification has been tendered that such persons whohave not been re-engaged by the State Government under its presentpolicy dated 7[th] June, 2022 are entitled for their honorarium for the periodfrom 1[st] December, 2011 to 31[st] May, 2012, we make it clear that suchof the employees who have not joined pursuant to the scheme introducedby Government dated 7[th] June, 2022, they are always at liberty to accepttheir honorarium for the period of 6 months but as the Government hasalready offered them honorarium earlier, they are not entitled to anyinterest on the said principal amount. We are informed that the totalamount as per the honorarium of MNP fixed at that time comes toRs.25,851/-(1[st] December, 2011 to 31[st] May, 2012). If an application isfiled, the State Government may at least remit the money into the bankaccount of the individual.

60. We make it clear that such persons who have joined pursuantto the scheme introduced by the Government dated 7[th] June, 2022 infulfilment of the object of the Act, 2005 shall remain co-terminus withthe scheme and be allowed to continue as long as the scheme remain inforce. At the same time, such persons who have not joined pursuant tothe scheme dated 7[th] June, 2022, they are at liberty to accept theirpayments for the intervening period of 6 months from 1[st] December,2011 to 31[st] May, 2012 of the principal amount of Rs.25,851/- to theMNP. On such application being filed, the appellants shall make over themoney to such MNP through RTGS or any other mode after dueverification within three months.

61. In our considered view, the judgment passed by the DivisionBench of the High Court for the reasons afore-stated is not sustainableand deserves to be set aside.

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A62. Consequently, the appeals succeed and are allowed. Thejudgment impugned dated 19[th] August, 2014 is hereby set aside with theobservation afore-stated. No costs.

63. Pending application(s), if any, shall stand disposed of.

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Divya Pandey

(Assisted by : Shevali Monga, LCRA)

Appeals allowed.

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