Notified Area Council And Anr. vs Gahar Mohammad And Anr.

Supreme Court14 February 2001D.P. Mohapatra · Brijesh Kumar

SCC(2003) 11 SCC 784

Ratio decidendi

The rule this decision rests on

An employer's decision to abolish posts or discontinue engagement of workers on a daily wage basis falls within the employer's power and is not subject to judicial interference unless vitiated by mala fide or arbitrariness; the High Court erred in quashing such a resolution without finding any material on record demonstrating mala fide or arbitrariness. Where an employee's regular appointment has been cancelled before the employer decides to abolish the post or engagement category, the employee's status at the time of the abolition decision must be considered as that of a daily wage worker, not a regular employee, and the question of regularisation does not arise upon abolition of the engagement.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

ORDER

1. Leave granted.

2. In this appeal filed by the Notified AreaCouncil, Pipili in the State of Orissa and itsExecutive Officer the judgment rendered by theOrissa High Court on August 25, 1998 inOriginal Jurisdiction Case Nos. 4419 and 4420of 1995, is under challenge. The writ petitionswere filed by the respondent No. 1 herein (in boththe appeals) who were engaged as octroi tax peonand cycle/vehicle guard respectively on dailywages basis. Subsequently, attempt was made tomake regular appointments to the said posts. Thelocal employment exchange was requested torecommend names. Names of the saidrespondents having been recommended, theywere issued appointment letters on March 22,1995 in which it was stated inter alia that theappointees should join the posts within three daysof receipt of the letter and produce thedocuments, like copies of certificates in supportof age, qualification, experience, medical fitness,character certificate and copies of passport sizephotographs. The respondents having failed toproduce certificates, their appointments came tobe cancelled on March 29, 1995 as evident fromthe letter issued by the Executive Officer of theNAC. Thereafter a resolution was passed by theNAC on October 27, 1995 in which a decisionwas taken to abolish the system of engagingworkers on daily wage basis including theengagement of the two respondents. Being'aggrieved by the said decision of the NAC, therespondents filed the writ petitions in the HighCourt, which were disposed of by the judgmentdated August 25, 1998, which is under challengein these appeals.

3. The High Court, in its judgment, has quashed the resolution dated October 27, 1995 terminating the services of the writ petitioners, respondents herein, and has directed the opposite parties in the writ petitions, the appellants herein, to allow the petitioners to join and discharge their duties in their respective posts within a period of sixty days. The High Court made it clear that the petitioners would not be entitled to any back wages, but would be deemed to be continuing

in service from the date of their respective appointments for the purpose of seniority and retirement benefits.

4. From the discussions in the judgment, it is manifest that the High Court "has not appreciated" the resolution of the NAC abolishing the engagement of daily wage workers and has also taken exception to the Executive Officer terminating the appointments of the respondents who were appointed by resolution passed by the Council, From the materials available on record, it is clear that on both the counts the High Court fell into error. The position is fairly well settled that continuance or abolition of posts is within the power of the employer and any decision in that regard is not available to be interfered with by the Court unless it is held to be vitiated by mala fide or arbitrary. From the discussions in the judgment under appeal, we do not find that the High Court took into consideration any material on record to come to the conclusion that the resolution passed by the NAC, dispensing with the engagement of daily wage workers, was vitiated on any count. If the employees could not continue as daily wage workers, then the question of their regularisation in the post did not arise. It is relevant to note here that the regular appointments purportedly made by the letter dated March 22, 1995 had been cancelled within a week, by the letter dated March 29, 1995. Therefore, when the matter was being considered by the High Court, the case of the respondents could only be considered as daily wage workers and not as regular employees.

5. On consideration of the entire matter, we have no hesitation to hold that the judgment/order passed by the High Court is unsustainable and should be set aside. But the respondents, who were working as daily wage workers under the NAC will be considered for ' any future vacancy as daily rated worker or regular employee according to law, on priority basis, by waiving age bar if any. The judgment/order dated August 25, 1995 is set aside. The appeals are allowed with the above observations/directions. No order for cost.

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