IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SERVICE MATTER. Order Reserved on: Date of Decision: November 21, 2006 WP(C) No3070/2002

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1 IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SERVICE MATTER Order Reserved on: Date of Decision: November 21, 2006 WP(C) No3070/2002 Management of Power Grid Corporation of India Ltd.... Petitioner Through: Mr. P.P. Malhotra, ASG with Mr.Shashi B. Upadhyay & Pawan Upadhyay, Advocates versus The Presiding Officer & Ors... Respondents Through: Mr.Sanjay Ghose, Advocate CORAM: JUSTICE SHIV NARAYAN DHINGRA SHIV NARAYAN DHINGRA, J 1. By This writ petition, the petitioner challenged the Award dated passed by the Industrial Tribunal III directing the petitioner to absorb 64 workmen on regular basis in proper pay scale and allowances in the establishment. These 64 workmen were employees of respondent No.3, a security agency, engaged by the petitioner for security of its building and plants. 2. The undisputed facts are that all the 64 workmen who sought absorption and regularization, were engaged by respondent No.3 Sentinal Securities Services Limited (hereby after called the 'Contractor') to work as security guards at the premises of the petitioner for watch and ward and for fire protection and vigilance. These workmen raised industrial dispute alleging that the work being done by them was of a perennial nature and the contract entered into between the petitioner and the Contractor was a camouflage and they were entitled for regularization in the petitioner's organization. They pleaded that administrative control and supervision over them (security guards) was that of petitioner and therefore for all intents and purposes, the security guards engaged by the Contractor should be considered as employees of the petitioner. 3. The dispute was referred by the Government of NCT of Delhi to the Tribunal and the Tribunal came to the conclusion that contract between the petitioner and the contractor was not a genuine contract, it was merely a camouflage. The Tribunal therefore gave directions for absorbing all 64 workmen by the petitioner on regular basis.

2 The Tribunal came to the conclusion about the contract being sham and camouflage on the following basis:- (i) the petitioner was not registered under Section 7 of the Contract Labour (Regulation and Abolition) Act The Contractor had valid license under the Act only for a period of one year and five months. He was without license from 1994 till (ii) There was non-compliance of provisions of the Act like providing facilities of canteen, rest room etc and the workmen were not issued employment cards. (iii) Though the contract entered into between the petitioner and the Contractor was for watch and ward but clause 4.1 of the contract provided that work was not limited to watch and ward and workmen could be given such other duties as may be assigned to them from time to time. Therefore, the contract was uncertain and vague and contract was hit by section 29 of the Indian Contract Act. (iv) Clause 4.1 shows that management had overriding power and every activity was to be done as per directions of the management from time to time so management had administrative control and supervision over the workmen. The strength of security guards could be increased or decreased as per the discretion of the management. The Contractor was not at liberty to render the security services as per his skill and it was management/ petitioner who was to instruct the Contractor how the guards were to be used from time to time. (v) The physical standards of the security guards to be provided by the Contractor were laid down by the petitioner. (vi) When the workmen of Power Grid i.e petitioner, were on strike and dharna these security guards had shown higher degree of devotion and loyalty and had not gone on strike. 4. The Tribunal held that all the employees of the Contractor were to be treated as employees of the Power Grid Corporation in view of the law laid down by the Supreme Court in Steel Authority of India & Ors. Vs. National Union Waterfront Workers 2001 (7) SCC The order of the Tribunal has been challenged by the petitioner on the following grounds:- (i) That the Award suffers from the legal infirmity and is contrary to the material brought on record. The evidence led by the management showed that the petitioner and the Contractor had entered into a genuine and real contract. The contract was for a limited duration and there was no direct relationship between the petitioner and the security personnels deployed at the organisation. All payments were made to the contractor. The Contractor was to comply with all labour laws during the currency of the contract. The Contractor was to substitute the personnels deployed in case any one of them was absent or on leave. The strength of the contract labour increased or decreased as per the exigency of the services required. The contractor was to provide to the Contract labour, all material, accessories, equipments, uniforms, kits, arms, ammunition etc. The traveling expenses was to be borne by the Contractor. (ii) The scope of the Contract was to provide security coverage services i.e to protect the property from theft, burglary and damage and there was no prohibition under the

3 Contract Labour (Regulation & Abolition) Act 1970 for engaging Contractor for such services. The judgment of the Tribunal was contrary to the principals laid down by the Supreme Court in Steel Authority of India (Supra). (iii) Tribunal fell into error of law in holding that clause 4.1 of the contract made it a vague contract. The words 'but not be limited' and such other duties do not make contract vague. These phrases/words are to be interpreted and understood in the context in which used and they cannot be read in isolation. iv. The reference made by Government of NCT was without jurisdiction since Delhi government was not the appropriate government in respect of the petitioner. Only the central government was the appropriate government in respect of petitioner since the petitioner was engaged in the job of power transmission, maintenance of transmission lines and their installment through out India. This work was carried out under the authority of Ministry of Power and subject to the jurisdiction of the Central Government which was the appropriate government in this case. The reference was therefore invalid and did not confer any jurisdiction on the Industrial Tribunal to adjudicate the matter. v. There was no prohibition on employment of contract labour in terms of section 10 of the Contract Labour (Regulation & Abolition) Act, 1970, for securing service as no notification was in existence under Section 10 of CLRA Act. vi. The Tribunal erred in holding that the Contractor had no power of taking independent decisions. vii. The Tribunal failed to consider that the Contractor had been paying wages to the 64 workmen after deducting and depositing the contributions towards ESI, PF etc. The Contractor had been paying bonus to the workmen and providing uniforms, shoes etc. The Contractor had its own ESI and PF Codes allotted by the concerned authorities. viii) In Steel Authority of India Ltd.(supra), the Supreme Court had prospectively quashed the notification dated that prohibited the employment of Contract labour for watch and ward of the buildings occupied by an establishment, in respect of which appropriate government was the Central Government. 6. In the counter affidavit filed by the respondent union, it is stated that the petitioner had, for the first time, before this court raised the issue that the government of NCT was not the appropriate government. This issue was never raised before the Industrial Tribunal. The petitioner is now estopped from raising this plea. The Contractor, engaged by the petitioner, had its affiliation with government of NCT and had obtained license under Section 12 of the Contract Labour (Regulation and Abolition) Act The Government of NCT therefore was the appropriate government. It is also submitted that the question of appropriate government is finally settled after a notification dated issued by Central Government transfering its authority to government of NCT in this regard. The Industrial Tribunal, therefore, had jurisdiction to entertain the case. 7. The workmen denied all other averments and grounds taken by the petitioner for challenging the validity of the Award. It is denied that all kits etc. were provided by the Contractor to the workmen. 8. The respondent workmen had in counter relied upon the reasons given in Tribunal's judgment in support of their case.

4 9. In Steel Authority of India case (supra), the Supreme Court had considered the question of the appropriate government and after surveying the entire case law, Supreme Court held as under: The upshot of the above discussion is outlined thus: (1)(a) Before , the determination of the question whether the Central Government or the State Government is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression appropriate government as stood in the CLRA Act, on the answer to a further question, is the industry under consideration carried on by or under the authority of the Central Government or does it pertain to any specified controlled industry, or the establishment of any railway, cantonment board, major port, mine or oilfield or the establishment of banking or insurance company? If the answer is in the affirmative, the Central Government will be the appropriate Government; otherwise in relation to any other establishment the government of the State in which the establishment was situated, would be the appropriate government. 10 In view of the law laid down by the Supreme Court, in order to determine the appropriate government for an industry it is to be seen whether industry is carried on by or under the authority of the Central Government or not? It is not disputed by the respondent union/ workmen in the counter affidavit that the petitioner corporation was carrying on business under the authority of the Central government. Its business was of power transmission through out the country, installation of transmission lines and their maintenance through out the country. It was working under the authority of Central government, under the Ministry of Power. Thus in view of SAIL judgment the appropriate government for the petitioner would be Union of India and not Delhi Government. Merely because the Contractor had obtained a license under the Contract Labour (Regulation and Abolition) Act 1970 from Delhi Government, the appropriate government for the petitioner corporation would not become Government of NCT. In order to be an appropriate government for a particular industry, the test as laid down by the Supreme court in SAIL(supra) is to be satisfied. 11. The respondent in its counter affidavit stated that there was a notification dated by which the Central government delegated its power to the Government of NCT, but no such notification has been placed on record either with the counter affidavit or at the time of the arguments. The notification which has been filed along with counter affidavit is a notification dated which prohibits employment of contract labour from for sweeping, cleaning, dusting and watching of building on or occupied by establishment in respect of which appropriate government under the act was Central Government. This notification itself provided that the notification was not applicable to out side cleaning and for maintenance operations of multistoried buildings where such maintenance can not be carried out except by specilised experts. 12. The other plea raised by the respondent is that the petitioner cannot take the plea of appropriate government for the first time before the High court, since the petitioner had not taken this plea before the Tribunal. I consider that this argument must fail. The Tribunal had no jurisdiction to go beyond the reference. The jurisdiction of labour

5 Tribunal emanates from the order of the reference and it cannot go beyond the terms of reference. In 2006 II (LLJ) page 1046, Supreme Court held as under:- 14. In the instant case, the Award of the Labour Court suffers from an illegality, which appears on the face of the record. The jurisdiction of the Labour Court emanated from the order of the reference. It could not have passed an order going beyond the terms of the reference. While passing the Award, if the Labour Court exceeds its jurisdiction, the Award must be held to be suffering from a jurisdictional error. It was capable of being corrected by the High court in exercise of its power of judicial review. The High court, therefore, clearly fell in error in refusing to exercise its jurisdiction. The Award and the judgment of the High Court, therefore, cannot be sustained. Consequently, the appeal is allowed and the judgment of the High Court is set aside. The Award is set aside to the extent of order of reinstatement with back wage. The writ petition filed by the appellant in the High court is, thus, allowed. 13. Tribunal could not have decided its own jurisdiction and Tribunal had only limited jurisdiction to decide the reference made to it. The Tribunal had to assume jurisdiction once a reference is made. The issue therefore can be raised only before the High Court by way of a writ petition. 14. I hold that appropriate government in this case was Central government since the petitioner corporation was doing the work of transmission of power and maintenance and laying of transmission lines under the authority of Central Government. The reference made by the government of NCT was, therefore, illegal and did not confer any jurisdiction on the Tribunal to decide the issue. 15. The next question which arises is under what circumstances a contract can be held to be camouflage or sham. In an industry there are three categories of employees:- (i) those who are engaged directly by an employer, (ii) those who are employed through the agency of a contractor, the said Contractor being a purely a labour contract who contracts to bring the labour to be engaged by or on behalf of employer. In such a case the Contractor brings a relationship of master and servant between the employer and the labour, whom he has brought. (iii) those who are engaged by a contractor who is not an ordinary labour contract but is an independent contractor and himself is the master for the employees he engages. 16. Where an industry in order to escape the obligations under beneficial legislations such as PF & M.P Act, Factory Act, ESI Act etc. does not engage the employees directly but engages employees through contractor, though the employees are working for the business of the industry in the main stream, the contract has to be held a sham and camouflage, because the purpose of the establishment is to keep its strength low and to deprive its own employees as well as employees of the Contractor from the obligation of beneficial legislation. The contract can also be considered to be sham where some of the operations which are integral part of the business of the industry, are entrusted to Contractor, instead of employing direct employees, and the employees of contractor work within the industry in the main stream business. The main stream business does include all ancillary and necessary jobs which are essential to run the business. But where a

6 Contractor is employed to provide those services which are not part of the main stream business of the establishment like fire fighting, vigilance, security of the factory or the contractor is to provide finished products etc, the contract cannot be considered to be a sham contract. 17. The decision to employ a contractor for security of the buildings and installations can be actuated by law and order condition of the place where the establishment is situated. If the establishment is situated in a disturbed area, security of higher grade may be necessary and if the establishment is in a peaceful area, no security may be necessary at all. Necessity of security may keep on changing along with change in the circumstances. Say an establishment is in peaceful area and suddenly that area gets disturbed due to riots. Establishment may engage security agency due to riots and may continue the service of Contractor till the situation gets normal. Once the situation becomes normal there may be no necessity of engaging security guards and the contract can be terminated. Engagement of security guards and vigilance persons for guarding the establishment may arise due to terrorist activities. If a Contractor is engaged by an establishment due to such threats as are prevalent in India where the sensitive establishments may be on the targets of the terrorist, such a contract cannot be considered as camouflage or sham contract. It is possible that such security may be required for considerable long time but it cannot be said that it has to be a permanent feature for all the times to come. 18. The Tribunal herein was supposed to consider the nature of the services being provided by the contractor and then decide whether the contract was sham or camouflage. Had the contract been for some kind of services connected with the business of the petitioner, the conclusion arrived at by the Tribunal could have been understood. The Tribunal has placed reliance on Secretary, HSEB Vs. Suresh and Others (3) SCC 601. In that case the contractor was engaged by Haryana Electricity Board for doing the work connected with the main business of Haryana State Electricity Board and not for providing security to the establishment. It is settled law that every case decided by the High Court and the Supreme court is to be considered keeping in view the facts of the case and unless a case lays down law for general application, it is not to be applied blindly in all cases. 17. One of the reasons of holding the contract as sham and camouflage, given by the Tribunal is exercise of contract by the management. In Silver Jublee case 1973 II LLJ 495, Supreme Court pointed out that the test of control was no longer an exclusive test to decide employer-employee relationship vis-a-vis contractors' employees. There can be no magic formula for all cases and the court must perform a balancing operation weighing up factors which point in one direction and balancing them against those pointing in an opposite direction. The control test is not decisive. The Tribunal in this case relying on the provisions of the contract has held that petitioner was having overriding power and every activity was to be done as per directions of the petitioner from time to time, therefore, there was total administrative control and supervision of the petitioner. The Tribunal also came to the conclusion that the contract was vague and uncertain. It may

7 be beneficial to go through the relevant provisions of the contract relied upon by the Tribunal: SCOPE OF WORK. 4.1 The scope of services to be provided by Security Agency shall include but not to limited to, the following: Providing security coverage to protect the property of Power Grid at all times against theft, burglary, damage by unwanted elements, unauthorized removal of documents and property etc., from inside or outside the premises Providing safety cover to protect the office premises/complex and their contents from damage by fire or water and prevent waste of material Providing assistance to Power Grid in case of strikes, riots and labour unrest Manning security posts identified by Power Grid round the clock for performing watch and ward duties and such other duties as allocated by Power Grid management Assisting and actively participating in respect of unauthorized occupants/encroachments from the premises of the Power Grid Attending Guard Punching in Time Machine/Signing of attendance register to prevent and detect unauthorized punching/signing Maintaining liaison/with civil and police authorities of the Area/District where security coverage is being given Ensuring entry of the employees of the Power Grid/VIPs etc. into the Premises under all conditions including hindrance, dharnas, strikes and gherao etc., caused by any individual or group of persons Providing armed guards/escort for cash and or VIP as required Controlling the movement of employees and visitors in the office premises To take charge of keys for locking and unlocking of office premises wherever required Checking all incoming and outgoing goods and vehicles and maintaining their record Ensuring compliance of safety regulations including smoking restrictions and to assist as directed by Power Grid in prevention of accidents Recording all occurrences concerning the security in the Log Book for the information of Powergrid Ensuring that all fire fighting equipments are in the designated locations and in usable conditions Any other duty as may be assigned from time to time and as the need arises. 4.2 You will be providing round the clock security services at all duty points as instructed by our Officer-in-charge You will follow all Labour Regulation Acts including applicability of Minimum Wages, Provident Fund etc., as declared by Delhi State Government from time to time It has been agreed that you will rotate the security guards at a fixed intervals of time about after six(6) months or as advised by Officer-in-Charge from time to time and authority for such decisions would be Manager(Admn.) Corporate Centre, New Delhi. 4.5.Your responsible officer will always be available at New Delhi who will have sufficient financial and administrative power to tackle the day to day problems. 4.6.(i) If your performance during the next 6(six) months is not found satisfactory, Powergrid shall have the right to terminate the contract without assigning any reasons.

8 4.6(ii) If the contractor commits default in complying with any terms and conditions, Powergrid shall be at liberty to terminate the contract and Powergrid shall be entitled to recover any damage, loss caused to it because of the acts of omission or the contract. 18. A perusal of the above provisions of the contract would show that the main and principal job of the guards was to protect the properties of the petitioner from theft, burglary, damage and from riots etc. Contractor was to provide safety cover to office premises and complex of the petitioner, not only from physical violation but also from fire and water. Guards were also supposed to help the petitioner/ management in case of riots, labour unrest, strike. It is obvious that the petitioner could not take such services from its regular employees engaged in generation, transmission of electricity. If petitioner had employed persons for such services as its own regular employees, they obviously could join hands with other employees at the time of strikes or riots and would not be able to protect the property, office furniture and other important documents of the petitioner from unruly labour. At the time of riots, the employees working in the establishment of the petitioner for the purpose of running its office and for the purpose of maintenance of transmission equipment would not like to risk their life and act like guards and protect the property from rioters or from terrorists activities. Only a specialized security agency can do this work. 19. The Tribunal miserably misguided itself by only reading two phrases in the contract in isolation. In clause 4.1 words but not be limited were used. A perusal of clause 4.1 above would show that these words were used as a precautionary words, while enumerating the different duties so that any duty which could not be conceived at that time connected with security, the same was also to be done by the Contractor. It is settled principal of interpretation of documents and deeds that phrases and words cannot be lifted out of context. Each phrase and word has to be interpreted keeping in view the entire contract and in the context of the entire contract. The management could not have asked the Contractor's employees to run its office or to maintain the equipments installed in the office or to clean the office by taking shelter of the clause 4.1. The management could have only assigned another work which was akin to the work of security. 20. The other clause relied upon by the Tribunal is which provides that any other duty as may be assigned from time to time to the Contractor as the need arises. This clause has also to be read ejusdem generis to the contract and cannot be read out of the context. Any other duty here only means duty connected with main object of the contract. 21. Another important fact which has been ignored by the Tribunal is that the Contractor was supposed to follow all labour laws concerning PF, ESI, minimum wages etc and the Contractor was actually following all these labour laws. It cannot be said that the contract was entered into to flout the labour laws or to deprive the workmen of the beneficial legislations enacted by the Parliament. 22. In Haldia Refinery Canteen Employees' Union vs. I.O.C.L. 2005(4) Scale 487, the appellants had approached the Supreme Court against the decision of the High Court,

9 denying regularization. The appellants/workmen were employed in a canteen being run through a contractor and claimed regularization. The Supreme Court observed as under : No doubt, the respondent management does exercise effective control over the contractor on certain mattes in regard to the running of the canteen but such control is being exercised to ensure that the canteen is run in an efficient manner and to provide wholesome and healthy food to the workmen of the establishment. This however does not mean that the employees working in the canteen have become the employees of the management. (para 14) A free hand has been given to the contractor with regard to the engagement of the employees working in the canteen. There is no clause in the agreement stipulating that the canteen contractor unlike in the case of Indian Petrochemicals Corporation Ltd. & Another (supra) shall retain and engage compulsorily the employees who were already working in the canteen under the previous contractor. There is no stipulation of the contract that the employees working in the canteen at the time of the commencement of the contract must be retained by the contractor. The management unlike in Indian Petrochemicals Corporation Ltd. case(supra) is not reimbursing the wages of the workmen engaged in the canteen. Rather the contractor has been made liable to pay provident fund contribution, leave salary, medical benefits to his employees and to observe statutory working hours. The contractor has also been made responsible for the proper maintenance of register, records and accounts so far as compliance of any statutory provisions/obligations are concerned. A duty has been cast on the contractor to keep proper records pertaining to payment of wages etc. and also for depositing the provident fund contributions with authorities concerned. Contractor has been made liable to defend, indemnify and hold harmless the employer from any liability or penalty which may be imposed by the Central, State of local authorities by reason of any violation by the contractor of such laws, regulations and also from all claims, suits or proceedings that may be brought against the management arising under or incidental to or by reason of the work provided/assigned under the contract brought by employee of the contractor, third party or by Central or State Government Authorities. (para 15) The management has kept with it the right to test, interview or otherwise assess or determine the quality of the employees/workers with regard to their level of skills, knowledge, proficiency, capability etc. so as to ensure that the employees/workers are competent and qualified and suitable for efficient performance of the work covered under the contract. This control has been kept by the management to keep a check over the quality of service provided to its employees. It has nothing to do with either the appointment or taking disciplinary action or dismissal or removal from service of the workmen working in the canteen. Only because the management exercises such control does not mean that the employees working in the canteen are the employee of the management. Such supervisory control is being exercised by the management to ensure that the workers employed are well qualified and capable of rendering the proper service to the employees of the management.(para 16) In Indian Petrochemicals Corporation Ltd.(supra) this Court after analyzing the earlier judgment on the same point has held that the workmen working in the canteen becomes

10 the workers of the establishment for the purposes of Factories Act only and not for any other purpose. They do not become the employees of the management for any other purpose entitling them for absorption into the service of the principal employer. Factors which persuaded this Court in Indian Petrochemicals Corporation Ltd. case(supra) to take the view that the workmen in that case were employees of the management are missing in the present case. No power vests in the management either to make the appointment or to take disciplinary action against the erring workmen and their dismissal or removal from service. the management is not reimbursing to the contractor the wages of the workmen. On these facts, it cannot be concluded that the contractor was nothing but an agent or a manager of the respondent working completely under the supervision and control of the management. (para 17) 23. In the present case also, the management had kept with it only those controls which were necessary to maintain the quality of all the persons employed by the contractor and to see that all security jobs are discharged efficiently. It is not a case that the workmen were being paid salaries by the management. No power was vested with the management either to make appointments of the persons to be employed by the contractor or to determine their service conditions, to dismiss them or remove them from service. The management was not reimbursing to the contractor the wages of the workmen but the management was giving to the contractor only the amount as per the contract. Rather the management had taken from the contractor security money for performance of the contract. On all these facts, it cannot be concluded that the contractor was only an agent of the petitioner and the contractor was working completely under the supervision and control of the petitioner. 25. In State of Haryana Vs. Pyara Singh (1992) 4 SCC 118, Supreme Court observed that the creation and abolition of posts was prerogative of the executive. The executive has to lay down the conditions of service, subject of course to the the law made by the appropriate legislature. The court comes into picture only to ensure observance of fundamental rights, statutory provisions, rules and other instructions, if any, governing the conditions of service. The main concern of the Court in such matters is to ensure the rule of law and to see that the executive acts fairly. 26. In Mahender L. Jain v. Indore Development Authority, 2005 (1) SCC 639, the Supreme Court observed that regularization cannot be claimed as a matter of right and illegal appointments cannot be regularized by taking recourse to regularization. What can be regularized is an irregularity and not an illegality. The constitutional scheme, which the country had adopted, does not contemplate any back door entry. 27. In Uma Devi(3)'s case 2006(4) SCC 1, the Supreme Court observed as under : While directing that appointments, temporary or casual, be regularized or made permanent, courts are swayed by the fact that the concerned person has worked for some time and in some cases for a considerable length of time. It is not as if the person who accepts an engagement either temporary or casual in nature, is not aware of the nature of his employment. He accepts the employment with eyes open. It may be true that he is not in a position to bargain-not at arms length since he might have been searching for some

11 employment so as to eke out his livelihood and accepts whatever he gets. But on that ground alone, it would not be appropriate to jettison the constitutional scheme of appointment and to take the view that a person who has temporarily or causally got employed should be directed to be continued permanently. By doing so, it will be creating another mode of public appointment which is not permissible. If the court were to void a contractual employment of this nature on the ground that the parties were not having equal bargaining power, that too would not enable the court to grant any relief to that employee. A total embargo on such casual or temporary employment is not possible, given the exigencies of administration and if imposed, would only mean that some people who at least get employment temporarily, contractually or casually, would not be getting even that employment when securing of such employment brings at least some succor to them. After all, innumerable citizens of our vast country are in search of employment and one is not compelled to accept a casual or temporary employment if one is not inclined to go in for such an employment. It is in that context that one has to proceed on the basis that the employment was accepted fully knowing the nature of it and the consequences flowing from it. In other words,even while accepting the employment, the persons concerned knows the nature of his employment. It is not an appointment to a post in the real sense of the term. The claim acquired by him in the post in which he is temporarily employed or the interest in that post cannot be considered to be of such a magnitude as to enable the giving up of the procedure established, for making regular appointments to available post in the services of the State. The argument that since one has been working for some time in the post, it will not be just to discontinue him, even though he was aware of the nature of the employment when he first took it up, is not one that would enable the jettisoning of the procedure established by law for public employment and would have to fail when tested on the touchstone of constitutionality and equality of opportunity enshrined in Article 14 of the Constitution of India. (para 36) When a person enters a temporary employment or gets engagement as a contractual or casual worker and the engagement is not based on a proper selection as recognized by the relevant rules or procedure, he is aware of the consequences of the appointment being temporary, casual or contractual in nature. Such a person cannot invoke the theory of legitimate expectation for being confirmed in the post when an appointment to the post could be made only by following a proper procedure for selection and in concerned cases, in consultation with the Public Service Commission. Therefore, the theory of legitimate expectation cannot be successfully advanced by temporary, contractual or casual employees. It cannot also be held that the State has held out any promise while engaging these persons either to continue them where they are or to make them permanent. The State cannot constitutionally make such a promise. It is also obvious that the theory cannot be invoked to seek a positive relief of being made permanent in the post. (para 38) It was then contended that the rights of the employees thus appointed, under Articles 14 and 16 of the Constitution, are violated. it is stated that the State has treated the employees unfairly by employing them on less than minimum wages and extracting work from them for a pretty long period in comparison with those directly recruited who are getting more wages or salaries for doing similar work. The employees before us were engaged on daily wages in the concerned department on a wage that was made known t o

12 them. There is no_case that the wage agreed upon was not being paid. Those who are working on daily wages formed a class by themselves, they cannot claim that they are discriminated as against those who have been regularly recruited on the basis of the relevant rules. No right can be founded on an employment on daily wages to claim that such employee should be treated on a par with a regularly recruited candidate, and made permanent in employment, even assuming that the principle could be invoked for claiming equal wages for equal work. There is no fundamental right in those who have been employed on daily wages or temporarily or on contractual basis, to claim that they have a right to be absorbed in service. As has been held by this Court, they cannot be said to be holders of a post, since, a regular appointment could be made only by making appointments consistent with the requirements of Articles 14 and 16 of the Constitution. The right to be treated equally with the other employees employed on daily wages, cannot be extended to a claim for equal treatment with those who were regularly employed. That would be treating unequals as equals. It cannot also be relied on to claim a right to be absorbed in service even though they have been selected in terms of the relevant recruitment rules. The arguments based on Articles 14 and 16 of the Constitution are therefore overruled. (para 39)...In the guise of upholding rights under Article 21 of the Constitution of India, a set of persons cannot be preferred over a vast majority of people waiting for an opportunity to complete for State employment. The acceptance of the argument on behalf of the respondents would really negate the rights of the others conferred by Article 21 of the Constitution, assuming that we are in a position to hold that the right to employment is also a right coming within the purview of Article 21 of the Constitution. The argument that Article 23 of the Constitution is breached because the employment on daily wages amounts to forced labour, cannot be accepted. After all, the employees accepted the employment at their own volition and with eyes open as to the nature of their employment. The Governments also revised the minimum wages payable from time to time in the light of all relevant circumstances. It also appears to us that importing of these theories to defeat the basic requirement of public employment would defeat the constitutional scheme and the constitutional goal of equality. (para 41) 28. It is obvious that the Supreme Court has come heavily on back door entry into State service in contravention to the recruitment rules and constitutional scheme causing injustice to the vast majority of the general public. The practice of regularization of casual/daily wagers and contract employees, who were appointed arbitrarily without any rules and regulations at the whims and fancies of some officers, have been deprecated. Can it be said that the daily wagers/casual employee and contract employees, inducted into the services by the officers of the State or the Managers of the State instrumentalities, are less advantageous than the employees engaged through a contractor with whom the same officers and managers have entered into a shame contract. I consider that the employees engaged through the contractor with whom the State or its instrumentality has entered into a sham or camouflage contract, cannot have better rights than the employees directly engaged in violation of the recruitment rules and regulations. If the employees directly engaged as casual or daily wager or contract employees, cannot be regularized by Courts orders, the employees engaged similarly through contractor can

13 also not be regularized through Courts' orders. The employment through a contractor cannot be on a better footing than the employment of a worker directly. The Supreme Court in Steel Authority of India Ltd. 2001(7) SCC I, laid down that where a contract is declared shame and camouflage, the establishment can be given directions for absorptions of the employees. But in vie_ of the Judgment of Constitutional Bench in Uma Devi's case(supra), I consider that the fate of the employees of a contractor, whose contract is shame and camouflage, cannot be better than those employees, who are employed directly by the management without following any rules and regulations. The Courts cannot order closing of one door of back door entry and allow to keep open another door of back door entry and allow the arbitrariness whims and fancies of the managers to continue in another form. If this is allowed, a management can enter into a contract with a contractor in respect of even those services for which a notification under Section 10 of CLRA has been issued by the Government and the contractor would engage some persons of his choice or choice of the officers/managers without following any rules in pure arbitrary manner, and after a year or two, the employees would raise an Industrial Dispute that they should be regularized because the contract was sham and camouflage and in violation of the notification. By this devise, the managers or the officers can get their own persons inducted into the government services at the cost of the general public, in total contravention of the scheme of public employment as envisaged by the Constitution and in complete violation of Articles 14,16 and 309 of the Constitution of India, In my opinion, the legal position about the regularization of the workmen of the contractor, whose contract is declared shame and camouflage, cannot be better than that of the daily wagers, who have not been recruited as per recruitment rules and have worked for years. 29. After the contract of the contractor was over in this case, the Government engaged CISF for providing the necessary security and services which were being provided by the contractor. This makes it more clear that the services for which contractor was engaged were of specialized nature which could not be performed by the normal employees of the petitioner. The government resorted to proper recruitment as directed by Supreme Court in Uma Devi(3)'s case and engaged properly recruited personnels for the jobs. 30. For the reasons stated above, I find the award of the Tribunal being contrary to law, I hereby set aside the award. The writ petition is allowed. No orders as to cost. Sd/- SHIV NARAYAN DHINGRA,J