judgement:
ivil Appeal No. 1372 of 1980.
From the Judgment and Order dated the 19.5.
1980 of the Punjab and Haryana High Court in C.W.P. No. 1378 of 1973.
G.L. Sanghi, Vivek Gambhir, Dhruv Mehta, S.K. Gambhir and Surender Karnail for the Appellants.
C.M. Nayar for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This appeal by special leave arises from the Judgment of the Punjab & Haryana High Court in Civil Writ Petition No. 1378 of 1973.
The appellants in the writ peti tion challenged the constitutionality of the East Punjab Molasses (Control) Amendment (hereinafter referred to as the "Amendment Act, 1973") on the ground that the said amendment had not re ceived the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved by the impugned amendment.
The Amendment Act.
1973 amended the provisions of the East Punjab Molasses (Control) Act.
1948 (East Punjab Act No. 11 of 1948) (hereinafter referred to as the "Principal Act").
as it stood at the relevant time.
The Principal Act had been earlier amended in 1950.
1964 and 1968.
It was subsequently amended in 1976.
The appellants have.
however.
challenged only the Amendment Act, 1973 and have significantly not challenged the earlier or subsequent amendments.
Rejecting the appellants ' contentions.
the High Court observed: .
We have very carefully gone through the petition and we have asked the learned counsel for the petitioners to point out any averment from the petition.
to show that the petitioners were dealing with molasses which were not covered under the definition of molasses given in the unamended Act.
but arc covered within the definition of molasses under the Amending Act.
No such averment has been made . .
The grievance of the petitioners that they have been made subject to the provisions of the Act in view of the Amending Act. thus does not stand substantiated from the averments made in the petition .
The appellants admitted before the High Court that, apart from the Principal Act, as enacted in 1948.
being an 'existing law '.
and therefore beyond challenge.
none of its provisions could be regarded as an unreasonable restriction on the freedom of trade.
commerce and intercourse.
The appellants, however. contended that the impugned provisions inserted in 1973 were null and void for the reason that the restrictions so introduced had not received the previous sanction of the President.
Section 2 of the Principal Act was amended in 1973 to define 'molasses ' as well as 'khandsari unit '.
By this amendment, a new definition of 'molasses ' was substituted in the place of the original definition [See Clause (c)].
Clause (f) of Section 2 was added to define a 'khandsari unit '.
502 Section 3 of the Principal 'Act empowered the Controller to "direct the owner or occupier of a sugar factory or any other person" to furnish returns of the stock of molasses in his possession.
This Section was amended in 1973 to bring a khandsari unit or distillery within the statutory ambit.
Section 3(A) had been added in 1964.
to empower the Control ler to direct the owner or occupier of a sugar factory or distillery, or any other person permitted to store and preserve molasses, to construct tanks for the storage of molasses.
This Section was amended in 1973 to bring a khand sari unit within its ambit.
Section 4 of the Principal Act says that no person shall, without a permit issued by the Controller, move molasses by road, rail, river or by any other means or sell or otherwise dispose of molasses to any person other than the Government or a person licensed by the Government in this regard.
It also authorises the Controller to direct the owner or occupier of a sugar factory to supply molasses of specified quantity and quality to such persons as the Con troller may direct.
This section was amended in 1964 to provide that no person shall store or preserve molasses without the Controller 's permit.
It was further amended in 1973 to bring a khandsari unit within the ambit of the controller 's power to direct supply of molasses.
Section 5 of the Principal Act empowers the Government to regulate prices from time to time and prescribes the manner in which molasses has to be graded, marketed, packed or stored for sale.
It was amended in 1976 in certain re spects which are not material.
Section 6 provides for the imposition of penalty in the event of contravention of any provision of the Act.
The Section was substituted in 1964 for the original Section.
It was amended in 1973 in certain respects.
Section 7 of the Principal Act refers to liability for breaches by corporation or company.
This Section has not undergone any change.
Section 8 of the Principal Act provid ed that no court should take cognizance of any offence punishable under the Act except on a report made by the Controller.
This section was substituted in 1964 to provide for the exercise of supervision and control by the Control ler over sugar factories through subordinates.
It was amend ed in 1973 by including a khandsari unit within its ambit.
Section 9 of the Principal Act provided for power of entry and seizure.
It was substituted in 1973 by a new section with certain changes which are immaterial.
Section 10 of the Principal Act provided for the procedure of seizure.
It was substituted by a new section in 1973, but the changes are not material.
Section 11 deals with the delegation of pow ers.
It has not undergone any change.
Section 12 of the Principal Act deals with the power of the Govern 503 ment to exempt any area or person from the provisions of the Act.
This Section was amended in 1973 to empower the Govern ment to exempt any kind of molasses from the provisions of the Act.
Section 13 of the Principal Act deals with the rule making power of the Government.
It was amended in 1973 to include khandsari unit or distillery within the scope of that Section.
These are the changes made in the Principal Act.
The substantial change introduced by the Amendment Act, 1973 is in the substituted definition of 'molasses ' so as to include within its meaning mother liquor produced in the final stage of manufacture of sugar or khandsari sugar.
The appellants being dealers in khandsari molasses are stated to be aggrieved by the expanded definition of 'mo lasses '.
'Molasses ' was defined under the unamended Section 2(c) of the Principal Act as follows: "2(c) 'Molasses ' means the heavy, dark coloured residual syrup drained away in the final stage of the manufacture of sugar by vacuum pans or in open pans in sugar factories either from sugarcane or by refining gur; when such syrup has a density of not less than 75 degrees brix and a for mentable sugar content (expresent as reducing sugars) 19 per cent. ' ' This definition was substituted by the Amendment Act, 1973 as follows: "2(c) 'molasses ' means the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar, by vacuum pans or in open pans, from sugarcane or gur, with or without the aid of power.
" The new definition of 'molasses ' under the amendment provi sion specifically refers to khandsari sugar, apart from sugar, while the unamended section 2(c) referred only to sugar.
Section 2(f), as introduced by the Amendment Act, 1973 defines 'khandsari unit ' as follows: "2(f) 'khandsari unit ' means any premises, including the land, godowns or out houses appurtenant thereto, wherein, or in any part of which a manufacturing process con 504 nected with the production of khandsari sugar from sugar cane or gur in open pans is carried on with or without the aid of power.
" The 'occupier of a khandsari unit ' is defined as "a person who has control over the affairs of a khandsari unit".
The definition of sugar factory ' has not undergone any change, and it reads as follows: "2(d) 'sugar factory ' means any premises, including the land, godowns or outhouses appurtenant thereto, whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans or in open pans is being carried on or is ordinarily so carried on, with the aid of power.
" The main object of the Amendment Act, 1973 is to clarify that the Principal Act applies in equal measure to a khand sari unit as it does to any other sugar factory.
The contention is that the provisions of the Amendment Act, 1973.
though not in themselves unreasonable restric tions, nevertheless bring the appellants under greater statutory control, and are, therefore.
invalid for want of previous sanction of the President in terms of the proviso to Article 304(b).
This challenge.
as seen above, has been rejected by the High Court for the reason that the appel lants ' business has been in equal measure controlled by the Principal Act itself.
The appellants being dealers in mo lasses.
the new definition of the term "molasses", which includes "khandsari sugar", does not subject their business to any greater control.
The appellants ' counsel.
Mr. G.L. Sanghi contends that the provisions of the Amendment Act.
1973 impose direct and immediate restrictions upon the appellants ' trade.
They are a burden on trade and they deter the appellants from trad ing.
They directly affect the freedom of trade and commerce.
They are not merely regulatory for the purpose of facilitat ing the free flow of trade and commerce.
They are restric tions hampering trade.
They may be justifiable as reasonable restrictions, but being restrictions unsupported by previous sanction of the President, they are nevertheless invalid.
Mr. C.M. Nayar, appearing for the respondents, on the other 505 hand.
contends that the impugned provisions of the Amendment Act, 1973 are regulatory measures enacted to facilitate trade and they do not come within the ban of the proviso to clause (b) of Article 304.
These provisions do not require the previous sanction of the President in terms of the proviso to Article 304(b).
Counsel on both sides.
in support of the respective contentions.
refer to the principle stated by this Court in Ariabari Tea Co., Ltd. vs State of Assam & Ors., ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 and State 0f Bihar & Ors.
vs Harihar Prasad Debuka & Ors. ; and other cases.
[1967] (21 SCR 361; [1971] (11 SCC 59; [1986](1) SCR 939;[1989] (31 SCC 211;[1990] (31 SCC 87; ; ; [1970] (11 SCR 400; [1955] (11 SCR 380; SCC 541.
It is not and cannot be.
disputed that if the impugned provisions are not merely regulatory with a view to facili tating trade.
but are in quality and substance restrictive.
though reasonable as restrictions can be.
and if they in effect constitute a hinderance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President.
The question, however is the Principal Act.
being an "existing law" and, therefore, beyond challenge.
do the impugned provisions.
introduced in 1973.
being additional provisions.
enlarge in substance and quality the scope and ambit of the Principal Act.
thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the provi so to clause (b) of Article 304? In other words. does the Amendment Act.1973.
restrict the appellants ' business to a greater extent or is it merely clarificatory in so far as.
at any rate.
the appellants are concerned? The point then really is.
has the amendment made the Act more stringent in so for as the appellants are concerned? If the answer is negative.
as the High Court has held.
the appellants are not aggrieved.
and cannot therefore.
success fully challenge the Amendment Act.
Referring to the principle of contemporanea exposition.
Mr. Sanghi says that the Act.
as it stood before the amend ment.
was not understood to apply to khandsari unit.
and consequently to the business of the appellants.
and it became applicable only as a result of the amendment.
We do not agree that this submission is right.
The High 506 Court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them.
The High Court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure.
This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari.
Even if it is true that persons who dealt with the statute under stood its provisions in a restricted sense, such mistaken construction of the statute did not bind the Court, so as to prevent it from giving it its true construction.
(see the observation of Lord Blackburn in The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670), as quoted in National & Grindlays Bank Ltd. vs The Municipal Corporation of Greater Bombay, ; We are of the view that the reasoning of the High Court was correct.
The Principal Act being an 'existing law ' within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarifica tory, the previous sanction of the President was not re quired.
See the principle stated in Syed Ahmad Aga vs State of Mysore, We do not, however, ex press any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic.
The appeal is dismissed with costs throughout.
P.S.S. Appeal dismissed.

dataset_name: IN-Abs

summary:
The East Punjab Molasses Control (Amendment) Act, 1973 substituted the definition of "molasses" in section 2(c) of the East Punjab Molasses (Control) Act, 1948 to mean "the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar".
The unamended section 2(c) had hitherto referred only to sugar.
Consequent changes were also made in other provisions of the Principal Act to give effect to the amendment.
The appellants dealers in khandsari molasses aggrieved by the expanded definition of molasses challenged the con stitutionality of the Amendment Act, 1973 on the ground that it had imposed direct and immediate restrictions upon their trade and commerce unsupported by the previous sanction of the President of India in terms of Article 304(b) of the Constitution.
The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved solely by reason of the amendment on the view that their business had been in equal measure controlled by the Principal Act itself.
In this appeal by special leave, the appellants reiter ated their contentions advanced before the High Court.
For the respondents it was contended that the provisions of the Amendment Act, 1973 were regulatory measures enacted to facilitate trade and therefore they did not come within the ban of the proviso to clause (b) of Article 304 to require the previous sanction of the President.
500 Dismissing the appeal, the Court, HELD: 1.
The main object of the Amendment Act, 1973 was to clarify that the Principal Act applies in equal measure to a khandsari unit as it does to any other sugar factory.
It was always well understood in trade that khandsari sugar was also sugar and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khand sari.
The Act did not become applicable to the appellants only as a result of the amendment.
Even though persons who dealt with the statute may have understood its provisions in a restricted sense, such mistaken construction of the stat ute did not bind the Court so as to prevent it from giving it its true construction.
[316A C] The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670 and National & Grindlays Bank Ltd. vs The Munic ipal Corporalion of Greater Bombay; , , re ferred to. 2.
The Principal Act being an "existing law" within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act being clarificatory, the previous sanction of the President was not required.
[316D E] Syed Ahmad Aga vs Stale of Mysore, , referred to.


judgement:
ivil Appeal No. 1213 of 1979.
583 From the Judgment and Order dated 24.4.
1978 of the Gujarat High Court in L.P.A. No. 97 of 1978.
Appellant in person.
H.S. Parihar for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The appellant, D.M. Bharati, challenges the validity of an order dated 30.9.
1976 passed by the Deputy Municipal Commissioner of the Municipal Corporation of the City of Ahmedabad.
By the said order, the Deputy Municipal Commissioner, consequent on the staff of the Municipal Corporation working in the Town Planning Estab lishment having to be absorbed in the Municipal Corporation, "reverted" the appellant from the post of junior draftsman in the Establishment and appointed him to act in the post of a tracer in the Town Development Department of the Corpora tion.
The High Court rejected his writ petition and hence the present appeal.
It is necessary to state the relevant facts.
The appel lant had been appointed as a tracer in the Estate Department of the Municipal Corporation on 26.6.
1955 and worked there till 18th February, 1957.
It appears that the Government appointed a Town Planning Officer under the provisions of section 31 of the Bombay Town Planning Act.
The Town Planning Officer had to be supplied with an establishment.
The establishment of the Town Planning Officer was admitted ly temporary.
An arrangement was entered into between the two authorities that the arbitrator in the planning office could select such persons from the Corporation for his establishment as he thought fit.
The Town Planning Officer demanded the services of the appellant and he was appointed as a tracer in the Town Planning Establishment on 22.2. 1957.
It is not clear whether the appellant went therein by way of transfer or by way of deputation as the original order dated 22.2.
1957 is not available with us.
However, the High Court and the appellant have proceeded on the footing that the appellant was deputed from the Municipal Corporation to the Town Planning Establishment.
Sometime later, the post of a junior draftsman fell vacant in the Town Planning Establishment.
The appellant tells us that he was asked to take charge of that post on 4.12.
It appears that Mr. Yevla (Respondent No. 6 in the W.P.) was posted to fill in that vacancy but, 584 on 21.4.
1960, his appointment was cancelled and the appel lant was appointed as junior draftsman in the Town Planning Establishment w.e.f.
The appellant tells us that he had also been subsequently recommended for appointment to the post of Surveyor cum Draftsman, which was a higher post and which had fallen vacant on 28.2.
But before this proposal could materialise the appellant was suspended on 5th December, 1962 by the Corporation and was removed from service on 13.5.64.
The Industrial Court granted approval to the removal of the appellant from service but made certain observations suggesting that he may be re appointed to the said post.
The appellant filed a writ petition against the order of the industrial court.
The High Court eventually, set aside the order of the industrial court on 1.2.
1969 and remanded the matter for fresh disposal to the industrial court.
The Municipal Corporation preferred S.L.P. 48/71 in this Court which was dismissed on 27.1.71.
The industrial court re heard the matter pursuant to the order of the High Court and declined approval to the order of removal of the appellant from service with the result that the order of removal dated 13.5.64 stood vacated and an order was passed on 3.3.71 by the Municipal Commissioner that the appellant was reappointed as a junior draftsman in the Town Planning Establishment.
In the meantime, on 16.8.
1965, consequent on the recom mendations of the industrial court, the appellant was ap pointed as junior draftsman in the Estates Department of the Municipal Corporation where he had been previously working.
This purported to be a fresh appointment and so the appel lant made a representation that he should be appointed in this post according to his seniority.
No orders were passed on this representation except a direction that the appellant should join service within a week of receipt of the memo and then represent his case for seniority, if he so desired.
Thereupon the appellant accepted the order re appointing him as junior draftsman in the Estates Department and took charge of his office.
The order of the High Court has found that the appellant was relieved from service on 1.10.1967 because of retrenchment.
When the above proceedings in the case of the appellant were taking place respondents 6 to 11 were directly selected as junior draftsmen by the Staff Selection Committee and promoted to the said post.
The appellant did not appear before the Staff Selection Committee perhaps because of the various proceedings above referred to, as a result of which he was under suspension from 5.12. 1962 to 13.5.
1964, when he was removed and then again till 16.8.65, when he was re 585 appointed as a draftsman.
Once the proceedings against the appellant came to a close, the Municipal Commissioner passed order on 3.3. 1971, cancelling the order dated 13.5.
1964 removing the appellant from service.
He was re appointed as a junior draftsman in the Town Planning establishment.
Subsequently, however, the Town Planning Establishment was abolished, and the appellant was served with the order dated 30.9.
1976, by which he was reverted to the services of the Municipal Corporation.
On such reverter, however, as we have seen, he was posted as a tracer and not as a junior drafts man.
The appellant filed an appeal against the said order before the Standing Committee but his appeal was rejected on 15.3.
1977 on the ground that in the Corporation direct recruits were already working as junior draftsmen, and that there was no post of junior draftsman vacant in the Corpora tion, to which the appellant could be appointed.
The appel lant thereupon filed a writ petition and, as already stated, he was unsuccessful therein and hence this present appeal.
The appellant 's contention before the High Court was two fold.
The first contention was that since he had been ap pointed as junior draftsman in the Town Planning establish ment by the order dated 21.4.
1960, he could not be repatri ated as a tracer in the Municipal Corporation, that is, to a lower post.
It was also contended that the order dated 30.9.
1976 has been passed by the Deputy Municipal Commissioner, who is a person lower in rank than the person who appointed him, namely, the Municipal Commissioner and that, therefore, the order dated 30.9.76 was passed by an officer without jurisdiction.
These two arguments have been reiterated before us also.
So far as the second contention is concerned it may at once be pointed out that if the order dated 30.9.76 is an order of reversion by way punishment, the appellant 's contention may be correct in view of the provi sions contained in sections 53 and 56 of the Bombay Provin cial Municipal Corporation Act.
However, if the order dated 30.9.76 has merely given effect to the abolition of the Town Planning establishment and restored the appellant to the post he can properly hold in the Municipal Corporation then no element of reversion would be involved and the Deputy Commissioner would be quite competent to pass the order in question.
The only question therefore that survives for consideration is regarding the validity of an order dated 30.9.76 in so far as it purported to appoint the appellant as a tracer in the Municipal Corporation instead of as a junior draftsman.
We may mention here that a point was also made that the appellant should not have been appointed as an "acting" tracer but it has been explained by the Corporation that it was a verbal inaccuracy and that the appointment 586 of the appellant in the Municipal Corporation is not an acting but a substantive one.
This point, therefore, does not survive.
We shall proceed on the assumption that the appellant went to the Town Planning establishment (which was a tempo rary one) by way of deputation from the Municipal Corpora tion.
There is some controversy as to whether the appellant was properly promoted as junior draftsman in the Town Plan ning establishment.
There is a suggestion that both the demand by the Town Planning establishment for the services of the appellant as well as his promotion therein were not acceptable to the Corporation and that they were the conse quence of undue favour shown to the appellant by the Arbi trator who was the appointing authority.
We do not think it is necessary to go into this controversy here because it is quite clear that the appellant 's promotion as junior drafts man and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpo ration and joined the Town Planning establishment he was a tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e., as tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post, that benefit cannot be denied to him.
In the present case, unfortunately, what happened was that when junior draftsmen were recruited by the Municipal Corporation in 1959 60 and in 1963 64, persons were selected and ap pointed to the said posts through the machinery of a Staff Selection Committee.
The appellant submits that he had been wrongly overlooked and that the respondents had been wrongly promoted as junior draftsmen.
He points out that, under the regulations, junior draftsmen had to be appointed by promo tion on the basis of seniority cure fitness and that the question of Staff Selection Committee did not at all arise.
According to him, the procedure for selecting by Staff Selection Committee would not come into force when the recruitment was restricted to persons in the municipal service.
In the present case, however, all the persons, who were appointed as junior draftsmen during the appellant 's absence were from the municipal service.
The appointment should, therefore, have been made directly by promotion without the intervening machinery of the Staff Selection Committee and the appellant being the seniormost tracer should have been appointed as junior draftsman in preference to respondents 6 to 11.
There are considerable difficulties in accepting this case of the appellant.
In the first place, what he is really attempting is to challenge 587 the appointments of respondents 6 to 11, which had been made in 1963 64, by a writ petition filed in 1978, more than a decade after the above selections and appointments had been made It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had disapproved the appellant 's removal from service by the order dated 13.5.
At least in 1971.
when the order was passed restoring him to the position of junior draftsman in the Town Planning establishment, he could and should have taken steps to obtain his "pro forma" promotion in the parent department.
The appellant says he was making some representations but this was not enough.
The fact is that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the writ petition or atleast upto 1.10.1976, when he made a represen tation against the order of reversion.
Quite apart from the above consideration, there is no material before us to show that the appointments of respond ents 6 to 11 were made irregularly and that the constitution of a Staff Selection Committee for selecting junior drafts men did not conform to the regulations and the provisions of the Bombay Provincial Municipal Corporations Act.
The Corpo ration has stated that they have been directly recruited.
The High Court has pointed out that the relevant regulation gave a discretion to the Commissioner to make the appoint ments by promotion or by direct recruitment.
section 54(2) of the Municipal Act, on which the petitioner relies, no doubt dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found as a fact at more than one place in the judgment that the respondents 6 to 11 had been directly selected as junior draftsmen after proper scrutiny by the Staff Selection Committee.
Even the appel lant stated before us that there was a circular among the municipal employees in regard to these appointments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appro priate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and not forward his claim for promotion as junior draftsman by virtue of his 588 seniority.
That he failed to do at the crucial time.
It may be that this was because he had certain difficulties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no imme diate steps to claim his rights in the parent department.
He was apparently satisfied with his restoration as junior draftsmen in the Town Planning establishment.
We are in agreement with the High Court that, having regard to the circumstances of the appointment of respondents 6 to 11, he was not entitled to any promotion in preference to them and that he cannot claim appointment as junior draftsman when there was no such post in 1976 to which he could be appoint ed.
It is not his case that any posts of junior draftsmen became vacant after his reversion to the parent department to which he could have been promoted.
The appellant contends that the fact that his eligibili ty for appointment as a junior draftsman in the parent department had been accepted by the order dated 16.8.1965 referred to earlier.
It is also pointed out that subsequent ly a question arose of the seniority as between the appel lant and one Kavadia.
This was gone into and the Municipal Corporation accepted the position that the appellant pos sessed qualifications required for the post of junior draftsman and that he was senior to Mr. Kavadia.
This was sometime in 1966.
We, however, find that this aspect of the matter does not help the appellant because the order dated 16.8.
1965 was passed in pursuance of the recommendation of the industrial court, while approving the appellant 's remov al, that he may be reconsidered for appointment.
In view of this order of the industrial court, the appellant had to be given a posting and since he had been discharged from serv ice when he was a junior draftsman, orders were passed appointing him as junior draftsman.
This again was made as an order of fresh appointment and the appellant 's represen tation that he should be given seniority was not accepted, rightly, for the reason mentioned above.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparent ly, no challenge to this order.
Moreover, these orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of seniority be tween appellant and Kavadia in 1966 do not help the appel lant 's case.
Learned counsel for the Municipal Corporation submitted to us that the appellant had not joined his post as a tracer in compliance 589 with the order dated 30.9.76 and that by now he has also reached the age of superannuation.
We are not here concerned in this appeal with the consequences of "non acceptance" of the order dated 30.9.76 by the appellant.
We are only con cerned with the question whether the appellant was rightly appointed as tracer on his reverter to the Municipal Corpo ration and that question we have answered in the affirma tive.
We do not express any opinion on the questions raised by the learned counsel for the respondent.
In the circumstances, we are of the opinion that there are no grounds to interfere with the order of the High Court.
We, therefore, dismiss this appeal but, in the cir cumstances, we make no order as to costs.
G.N. Appeal dis missed.

summary:
The appellant was appointed as a Tracer in the Municipal Corporation in 1955.
with the appointment of a Town Planning Officer in 1957.
the appellant came to be appointed as a Tracer in the Town Planning Establishment.
Later, the post of Junior Draftsman fell vacant in the Town Planning Estab lishment.
Respondent No. 6 was posted to fill the vacancy.
However, his appointment was cancelled shortly thereafter and the appellant was appointed as Junior Draftsman with effect from 4.12.
The next higher post of Surveyor cum Draftsman fell vacant in 1962.
Meanwhile, the appellant was suspended.
The Industrial Court granted approval for his removal from service, but suggested that he may be reappointed.
Accord ingly.
the appellant was appointed afresh as junior Drafts man in the Estates Department of the Municipal Corporation where he was previously working.
Aggrieved, the appellant filed a writ Petition before the High Court.
Setting aside the order.
the High Court remanded the matter to the Industrial Court for fresh dis posal.
The Special Leave Petition preferred by the employer, viz., the Municipal Corporation against the High Court 's order was dismissed.
The Industrial Court reheard the matter and declined approval for the removal of the appellant from service.
The appellant was reappointed as Junior Draftsman in the Town Planning Establishment which was abolished subsequently, and he was reverted to the service of the Municipal Corporation as a Tracer, and not as a Junior Draftsman.
The appellant filed an appeal against the said order.
but it was rejected on the ground that direct recruits were already working as Junior Draftsmen and that there was no vacancy against which the appellant could be appointed.
581 The appellant moved the High Court by way of a Writ petition.
contending that since he had been appointed as junior Draftsman in the Town Planning Establishment, he could not be repatriated to a lower post, viz. Tracer in the Municipal Corporation.
It was also contended that the Deputy Municipal Commissioner, was a person lower in rank than the appointing authority viz., the Municipal Commis sioner and hence the order passed by him was without juris diction.
The High Court proceeded on the footing that the appel lant was on deputation from Municipal Corporation to the Town Planning Establishment and dismissed the writ Petition.
The appellant has preferred this appeal against the High Court 's order dismissing his Writ Petition.
Dismissing the appeal, this Court.
HELD: 1.
I The appellant 's promotion as junior Draftsman and proposed promotion as Surveyor cum Draftsman in the Town Planning Establishment cannot confer any rights on him in his parent department.
When he left the Municipal Corpora tion and joined the Town Planning Establishment he was a Tracer and he can go back to the Estate Department or any other Department of the Municipal Corporation only to his original post i.e. as Tracer, subject to the modification that, if in the meantime he had qualified for promotion to a higher post.
that benefit cannot be denied to him.
1.2 The order dated 16.8.
1965 was passed in pursuance of the recommendation of the Industrial Court, while approv ing the appellant 's removal, that he may be reconsidered for appointment.
In view of this order of the Industrial Court, the appellant had to be given a posting and since he had been discharged from service when he was a Junior Draftsman.
orders were passed appointing him as junior Draftsman.
This again was made as an order of fresh appointment and the appellant 's representation that he should be given seniority was rightly not accepted.
There is also the further fact that the appellant was relieved from this post with effect from October 1, 1967.
There has been, apparently, no chal lenge to this order.
Moreover, theses orders lost their basis once the petitioner was restored to his post in the Town Planning Establishment.
In these circumstances the order dated 16.8.65 or the determination of his seniority in 1966 are of no relevance to the present case.
2.1 What the appellant is really attempting is to challenge the 582 appointments of Respondents 6 to 11, which had been made in 1963 64, by a Writ Petition filed in 1978, more than a decade after the above selections and appointments had been made.
It is true that, at that time the appellant, was under a cloud because he had been suspended and subsequently removed from service.
But all the same, if he had desired to challenge those appointments, he should have taken immediate steps.
Anyhow, these obstacles had disappeared when the tribunal, on remand by High Court, had and disapproved the appellant 's removal from service by the order dated 13.5.1964.
Atleast in 1971, when the order was passed re storing him to the position of Junior Draftsman in the Town Planning Establishment, he could and should have taken steps to Obtain his "pro forma" promotion in the parent depart ment.
The fact remains that he took no effective steps to challenge the appointment of respondents 6 to 11 from 1963 64 right upto 15.2.1978, when he filed the Writ Petition or atleast upto 1.10.1976, when he made a representation against the order of reversion.
2.2 section 54(2) of the Municipal Act, dispenses with the Staff Selection Committee when it is proposed to fill the appointment from among persons already in municipal service.
But the nature of the recruitment that took place is not known.
That apart, the constitution of a Staff Selection Committee to decide upon the selections cannot be said to be illegal even though not mandatory in the situation.
The High Court has found that respondents 6 to 11 had been directly selected as Junior Draftsmen after proper scrutiny by the Staff Selection Committee.
Admittedly there was a circular among the Municipal employees in regard to these appoint ments and selections.
The appellant should have made an application for selection at that time or, if he thought it more appropriate, should have challenged the constitution of Staff Selection Committee and the direct recruitment and put forward his claim for promotion as Junior Draftsman by virtue of his seniority.
That he tailed to do at the crucial time.
It may be that this was because he had certain diffi culties facing him by way of suspension and subsequent expulsion from service.
But even in 1971, after his original order of suspension and removal had been set aside, he took no immediate steps to claim his rights in the parent depart ment.
He.was apparently satisfied with his restoration as Junior Draftsman in the Town Planning Establishment.
Having regard to the circumstances of the appointment of respond ents 6 to 11, the appellant was not entitled to any promo tion in preference to them and he cannot claim appointment as Junior Draftsman when there was no such post in 1976 to which he could he appointed.


judgement:
tion (Civil) No. 112 of 1990 etc.
(Under Article 32 of the Constitution of India.) P.S. Poti.
E.M.S. Anam, V.J. Francis and M.N. PopIi for the Petitioners.
T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambi ar.
K.R. Kurup.
section Balakrishanan, Vijay Kumar, T.T. Kunhi Kannan.
section Vasudevan and P.K. Manohar for the Respond ents.
564 The Judgment of the Court was delivered by AHMADI, J.
In special leave petitions, leave granted.
An autonomous body called the Kerala Water and Waste Water Authority was constituted with effect from 1st April, 1984 under Section 3(1) of the Kerala Water and Waste Water Ordinance, 1984 (No, 14 of 1984) which Ordinance was brought into force w.e.f.
1st March, 1984.
This ordinance was re placed by similar Ordinances issued from time to time, the last being Ordinance No. 27 of 1986 which was in turn re placed by the Kerala Water Supply and Sewerage Act, 1986 (Act No. 14 of 1986), (hereinafter called 'the Act '); Sec tion 1(3) whereof provides that it shall be deemed to have come into force on 1st March, 1984.
This Act, besides pro viding for the establishment of an autonomous authority to be called the Kerala Water Authority, makes provision for the development and regulation of water supply and waste water collection and disposal and for matters connected therewith.
There is no dispute that the functions which were carried on by the Public Health Engineering Department (PHED) were transferred to the autonomous body on the enact ment of the Ordinance No. 14 of 1984.
After the enactment of the Act, every person working in the PHED became the employ ee of the Kerala Water Authority (for short 'the Authority ') by virtue of Section 19(1) of the Act, which reads as under: "Transfer of employees to the Authority Save as otherwise provided in this section, every person who was employed in the Public Health Engineering Department of the Government shall, on and from the appointed day become an employee of the Authority and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions, and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if this Act had not come into force and shall continue to do so until his employment in the Authority is terminated or until his remuneration or other terms and conditions of service are revised or altered by the Authority under or in pursuance of any law or in accordance with any provision which for the time being governs his service: Provided that nothing contained in this sub section shall apply to an employee in the cadres of the Administrative ? 565 Officers, Financial Assistants Divisional Accounts, Typists and Stenographers, who, by notice in writing given to the Government and the Authority within such time as the Govern ment may, by general or special order, specify, intimates his intention of not becoming an employee of the Authority: Provided further than an employee referred to in the preced ing proviso shall continue to be an employee under the Government and shall be provided elsewhere in any post or other service under the Government.
" Sub sections (3) and (6) of Section 19 make it clear that such transfer of service shall not entitle the employee to claim any compensation under the nor shall it amount to retrenchment or abolition of post under any extant rule, regulation or order applicable to Government servants.
Thus, the erstwhile staff of the PHED was by the thrust of Section 19(1) transferred on the establishment of the Authority.
This would naturally concern those persons only who were in the employment of the PHED before the establishment of the Authority w.e.f.
1st April, 1984.
The staff members employed by the Authority after its constitution were naturally appointed under the provisions of the concerned statute.
Since the Act has retrospective effect, reference may be made to Section 8(1) of the Act which reads thus: "Appointment of officers and staff Subject to the provi sions of sub section (2), the Authority may appoint for the purpose of enabling it to carry out its powers, duties and functions under this Act, a Secretary and such other offi cers and staff as may be required against posts duly sanc tioned by it: Provided that the Authority shall obtain the previous ap proval of the Government for the creation of post above the rank of the Executive Engineer.
" By virtue of Section 8(3), except as provided by sub sec tions (1) & (2), the appointment and conditions of service of the officers and employees of the Authority are to be governed by rules made by the Government from time to time.
Although the Act is deemed to have come into force w.e.f.
1st March.
1984, Section 69 became effective 566 from the date of publication of the Act in the Gazette i.e. 4th August, 1986.
That section reads as follows: "Amendment of Act 19 of 1970 With effect from the date of publication of this Act in the Gazette, the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 (19 of 1970) shall have effect subject to the following amendment, namely: in clause (a) of Section 2, the words and figures "or the Kerala Water Authority" established under section 3 of the Kerala Water Supply and Sewerage Act 1986;", shall be added at the end.
" Even though Act 19 of 1970 stood so amended by the force of Section 69, actual effect could be given after issuance of Notification No. G.O. (MS) No. 38/88/P & ARD dated 30th July, 1988 on which date item (LIII) was added to the rele vant rules as "Amendment of the Rules In the Kerala Public Service Com mission (consultation by Corporation and Companies) Rules, 1971, in Clause (d) of rule 2, after item (LII), the follow ing item shall be added, namely: (LIII) The Kerala Water Authority.
" This amendment was considered necessary with a view to bringing the Authority within the purview of PSC so that it may seek the advice of that body on matters relating to the methods of recruitment of its employees, etc.
From the above discussion it becomes clear that the employees of the Authority can be divided into four distinct groups, viz., (i) those who were in the employment of PHED before the constitution of the Authority and were trans ferred to the Authority (ii) those whom the Authority em ployed between 1st April.
1984 and 4th August, 1986 (iii) those who were appointed between 4th August, 1986 and 30th July, 1988 and (iv) those who were appointed after 30th July, 1988.
The petitioners in this batch of matters are serving in different capacities, such as, cleaners, pump operators, draftsmen, drivers, etc.
They claim that they were appointed through the Employment Ex 567 change between 1981 and 1988.
They contend that they have been compelled to approach this Court as their services are likely to be terminated as has been done in the case of a few of their colleagues.
They contend that till the issuance of the notification dated 30th July.
1988 amending the concerned PSC rule (amendment extracted earlier) there was no question of the Authority consulting the PSC and there fore, appointments made prior to that date cannot be termed as irregular or unauthorised and cannot be determined on that ground.
They contend that as in a few cases the High Court of Kerala failed to appreciate this true legal posi tion and refused to grant relief to employees whose services were threatened, the Managing Director of the Authority issued instructions to his subordinates to terminate the services of similarly placed employees, thereby compelling the present petitioners to approach this Court so that all such employees are uniformly governed by this Court 's order.
They point out that in Civil Appeals Nos. 472 to 478 of 1988 arising from the High Court decision.
and Writ Petitions (Civil) Nos. 857 and 1135 of 1987, this Court passed the following order on 1st February, 1988: "Special leave granted.
Heard counsel for the parties.
We are of the view that in the facts and circumstances of these cases the services of such of the appellants as pos sess the requisite qualifications should be regulated in accordance with the Kerala Public Service Commission (Addi tional functions as respects certain Corporations and Compa nies) Act, 1970 and until such regularisation is made, no appointment on similar posts from outside be made.
If there be any excess employees now in service employment, it will be open to the Authority to terminate their services on condition that as and when vacancies arise, they shall first be considered for appointment keeping the direction indicat ed above in view.
Recruitments in future will, however, be in accordance with the Kerala Public Service Commission (Additional functions as respects certain Corporations and Companies) Act, 1970 and the Kerala Water Supply and Sewerage Act, 1986.
" Thereafter in another batch of special leave petitions Nos. 4385 to 4387 of 1988 this Court passed the following order on 24th March, 1988: 568 "Heard learned counsel for parties.
The only direction which we can give in the facts and circumstances of the case will be in case after all those who have been regularly selected by the Public Service Commission are appointed and thereaf ter any vacancies are left, the same should be given to those who, like the petitioners, have already been in serv ice taking into consideration their seniority.
Every step should be taken by the Water Authorities to regularise the services of such people who can be appointed under our direction as indicated above.
There will be no further direction in this case.
The other person who may be thrown out of employment on account of the direction of the Water Authority which is impugned before us, may appear before the Public Service Commission in the next examination, The State of Kerala has informed us that age bar would be waived.
The petitions are disposed of accordingly.
" The Authority treated these orders as confined to the work men who had filed the proceedings and did not extend the ratio to others similarly placed.
Not only that, the Author ity, contend the petitioners, placed different interpreta tions on the aforesaid orders and continued to terminate the services of the employees.
Another group of writ petitions Nos.
525,527,528, and 503 of 1988 came up before this Court on 28th November, 1988 when this Court passed the following Order: "Mr. Krishna Murthy Iyer appearing for the Kerala Water Authority states that the claims of the petitioners can be divided into three categories, namely (1) those who had been employed by Public Health Engineering Department before the Kerala Water Authority was constituted, (2) those who get employed between 1.4.1984 and 1986 and (3) the persons appointed after 1986.
The Kerala Water Authority is given three months ' time to examine the individual cases of these groups and take its decision accordingly.
We direct the Authority to place its conclusions before the Court before giving effect to them.
Status quo as on today will continue until further orders.
" The grievance of the petitioners is that no action was taken by the Authority within the time allowed nor has it taken any action till today to implement the said order.
The petitioners also contend that the employees are compelled to knock at the doors of different courts as the Authority continues to terminate the services of the employees 569 not with standing the aforequoted orders passed by this Court.
Mr. P.S. Poti, the learned counsel for the petition ers, therefore, made a fervent appeal that this Court should pass an order laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that these low income group employees are not required to knock at the doors of differ ent courts to protect themselves from the threatened arbi trary action of the Authority terminating their services.
In other words he wants this Court to formulate a scheme for the regularisation of the services of all similarly placed employees which would put an end to all pending cases and future cases which are bound to arise if the Authority continues its present policy.
The claims made by the employees in this group of cases is contested mainly on the plea that their tenure and serv ice conditions were regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service Rules, 1958 (hereinafter called `the Rules ') which were statutory in character and were, therefore, binding on the Authority as well as the employees.
It is contended that the employees belonging to different categories were appointed on different dates by the PHED prior to 1st April, 1984 under this rule and, therefore, their services could only be regulated thereun der.
After the autonomous Authority was constituted w.e.f.
1st April, 1984 on the enactment of Ordinance 14 of 1984, the Authority passed a Resolution No. 8 on 25th April, 1984 adopting the aforesaid Rules and hence all appointments made after 1st April, 1984 also came to governed by Rule 9(a)(i) of the Rules till Section 69 of the Act came into force w.e.f.
4th August, 1986 and not 30th July, 1988 when the relevant rule was amended by the introduction of item (LIII) referred to earlier.
Appointments made after 4th August, 1986 are clearly subject to the requirement of Section 69 of the Act and the Authority cannot act in contravention there of.
Had it not been for Court orders restraining the Author ity from terminating their services, the services of all those who were governed by Rule 9(a)(i) would have been terminated on the expiry of 180 days.
The text of that rule may be noticed at this stage: "Where it is necessary in the public interest, owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the appointing authority may appoint a person, otherwise than in accordance with the said rules, temporarily.
" 570 The first proviso is not relevant for our purpose but reli ance was placed on the second proviso which reads as under: "Provided further that a person appointed under this clause by direct recruitment to a post other than teaching post and a post covered by the proviso to clause (iii) of rule 10(b)] shall not be allowed to continue in such post for a period exceeding three months." (i.e. one hundred eighty days) The rule further requires that a person appointed under clause (i) should be replaced as soon as possible by a member of the service or an approved candidate qualified to hold the post under the said rules.
Such replacement must take place in the order of seniority based on length of temporary service in the unit.
It is, therefore, the case of the Authority that appointments made under this rule were purely temporary, not to exceed three months, and had to be terminated on the expiry of the said period and it was not open to the Authority to continue their services even by reappointment unless fresh candidates were not available for reappointment through employment exchange.
Therefore, had it not been for the restraint orders issued by different Courts, the Authority contends it was under an obligation to act in conformity with the above rules.
However, as regards those who had joined service prior to 1st April.
1984 in different categories, the Authority passed a resolution on 30th January, 1987 to the following effect: "Resolved to recommend the Government the regularisation of the service of the employees recruited in the erstwhile PHED and still working in the Kerala Water Authority.
" The Government, it seems, has not taken any decision in this behalf as yet.
Since the counter filed on behalf of the State Government is silent on this point we inquired of the learned counsel for the State to clarify the position.
We were told that since the Authority was an autonomous body it was free to regularise the services of such employees, if it so desired, without the concurrence of the State Government.
While admitting the fact that appointments were made from the lists submitted by various District Employment Officers, the Authority contends that as the appointments were gov erned by Rule 9(a)(i) they could not ensure beyond three months and the termination of their employment did not fall within the ambit of `retrenchment ' as understood under the 571 .
In any case even otherwise the application of that law is specifically excluded by Section 19(3) of the Act and hence the benefit of that law cannot be extended to the employees of the Authority.
The contention that the action of the Authority to terminate the services is violative of Article 14 is repelled on the plea that acting in conformity with a statutory Rule 9(a)(i) can never be branded as arbitrary.
Lastly it is contended that the Authority was not directed to apply this Court 's orders passed in some of the proceedings referred to earlier to all similarly situated employees as the Court 's orders were based on `the fact and circumstances of these cases ' and were not intended to be of general application.
With refer ence to the order of 24th March, 1988 it is said that the Authority has moved a review application which is pending.
The Authority contends that as there is no infringement of any fundamental right, the writ petitions brought under Article 32 of the Constitution cannot be sustained.
The above is the stand taken by the Authority.
The State Govern ment has by and large supported this stand and, therefore, we need not restate the contentions raised in their counter.
The respondents, therefore, contend that the employees are not entitled to any relief whatsoever and the appeals/peti tions deserve to be dismissed with costs.
The question of regularisation in service must be exam ined keeping in mind the historical as well as the constitu tional perspectives.
During the colonial rule industrial growth in the country was tardy and most of the large sized industries were controlled by British interests.
These establishments employed Indian labour on wages far below the sustenance levels.
Men, women and even children were required to work for long hours in thoroughly unhygien ic conditions.
Because of large scale unemployment there was a surplus labour market which the employers could and did exploit.
This virtually forced the labour to accept employ ment on terms unilaterally dictated by the employers.
The relationship between the employer and the employee being purely contractual, the hire and fire rule governed.
Those were the days of laissez faire when contractual rights were placed above human rights.
The concepts of dignity of labour and fair remuneration for work done were wholly alien.
The workers had to work in appalling conditions and at low wages with no job security.
After we attained independence the pace of industrial growth accelerated.
Our Constitution makers were aware of the hardships and insecurity faced by the working classes.
The Preamble of our Constitution obligates the State to secure to all its citizens social and economic justice, besides political justice.
By the 42nd Amendment, the Pream 572 ble of the Constitution was amended to say that ours will be a socialistic democracy.
In furtherance of these promises certain fundamental rights were engrafted in Part 111 of the Constitution.
The Constitution guarantees `equality ', abhors discrimination, prohibits and penalises forced labour in any form whatsoever and extends protection against exploitation of labour including child labour.
After extending these guarantees, amongst others, the Constitution makers proceed ed to chart out the course for the governance of the country in Part IV of the Constitution entitled `Directive Princi ples of State Policy '.
These principles reflect the hopes and aspirations of the people.
Although the provisions of this part are not enforceable by any court, the principles laid down therein are nevertheless fundamental in the gover nance Of the country and the State is under an obligation to apply them in making laws.
The principles laid down therein.
therefore, define the Objectives and goals which the State must endeavour to achieve over a period of time.
Therefore, whenever the State is required to make laws It must do so consistently with these principles with a view to secur ing social and economic freedom so essential for the estab lishment of an egalitarian society.
This part, therefore, mandates that the State shall strive to promote the welfare of the people by minimising the inequalities in income and eliminating inequalities in status, facilities and opportu nities; by directing its policy towards securing, amongst others, the distribution of the material resources of the community to subserve the common good; by so operating the economic system as not to result in concentration of wealth; and by making effective provision for securing the right to work as also to public assistance in cases of unemployment, albeit within the limits of its economic capacities.
There are certain other provisions which enjoin on the State certain duties, e.g. securing to all workers work, a living wage, just and humane conditions of work, a decent standard of life.
participation in management, etc., which are aimed at improving the lot of the working classes.
Thus the Pream ble promises socio economic justice, the fundamental rights confer certain justiciable socio economic rights and the Directive Principles fix the socio economic goals which the State must strive to attain.
These three together constitute the core and conscience of the Constitution.
India is a developing country.
It has a vast surplus labour market.
Large scale unemployment offers a matching opportunity to the employer to exploit the needy.
Under such market conditions the employer can dictate.
I his terms of employment taking advantage of the absence of the bargaining power in the other.
The unorganised job seeker is left with no option but to accept employment on take it or 573 leave it terms offered by the employer.
Such terms of em ployment offer no job security and the employee is left to the mercy of the employer.
Employers have betrayed an in creasing tendency to employ temporary hands even on regular and permanent jobs with a view to circumventing the protec tion offered to the working classes under the benevolent legislations enacted from time to time, One such device adopted is to get the work done through contract labour, It is in this backdrop that we must Consider the request for regularisation in service.
Before we deal with the case on hand it would be advan tageous to refer to some of the decision bearing on the question of regularisation.
In Smt.
P.K. Narayani & Ors.
vs State of Kerala & Ors,, the petition ers who had been serving as employees of the State of Kerala or its public sector undertakings for the past few years challenged the action of the employer in terminating their services to make room for the candidates selected by the Kerala Public Service Commission.
This Court directed that the petitioners and all others similarly placed should be allowed to appear at the next examination that the Public Service Commission may hold without raising the age bar; till then the petitioners and others may be continued in service provided there are vacancies.
This, clarified the Court, will not confer any right on the employees to contin ue in service or of being selected by the Commission other wise than in accordance with the extant rules and regula tions.
These directions were given to resolve what this Court described as `a human problem which has more than one facet ', Again in Dr. A.K. Jain & Ors.
v, Union of India & Ors., ; the services of ad hoc Assistant Medical Officers who were initially appointed for six months but were continued for periods ranging upto four years, were sought to be terminated to accommodate the candidates se lected by the Union Public Service Commission.
The petition ers claimed that their services should be regularised and their seniority should be fixed from the date of their initial entry in service as ad hoc appointees.
In the coun ter, the Union of India contended that `ad hoc ' appointments were made by the General Managers of the Zonal Railways to tide over temporary shortages of doctors and their tenures were extended till regular selection was made by the UPSC and appointments were made by the President of India.
Since the appointing authority was the President of India such ad hoc appointments by the General Managers of the Zonal Rail ways could not be regularised.
It was further contended that the ad hoc appointees were granted age relaxation and were asked to appear at two special selections based on interview alone held by the 574 UPSC in 1982 and 1985.
The petitioners were those ad hoc appointees who had either failed to avail of the special benefit of selection or had appeared and failed to qualify.
In the circumstances it was contended that they could not be regularised in service.
Notwithstanding the same this Court directed regularisation of services of all doctors appointed upto October 1, 1984 in consultation with UPSC on the evalu ation of their work and conduct based on the confidential reports in respect of the period subsequent to October 1, 1982.
Such regularisation was to be from the dates from which they were continuously working.
The services of those not regularised were allowed to be terminated.
The petitions of those appointed after October 1, 1984 were however dis missed.
In the case of Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India & Ors., this Court, while dealing with the question of their absorption, referred to the State 's obligations (referred to as an individual 's rights) under Part IV of the Constitution and observed as under: "Of those rights the question of security of work is of utmost importance.
If a person does not have the feeling that he belongs to an organization engaged in production he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
It is for this reason it is being repeatedly observed by those who are in charge of economic affairs of the countries in different parts of the world that as far as possible security of work should be assured to the employees so that they may contribute to the maximisation of produc tion.
It is again for this reason that managements and the governmental agencies in particular should not allow workers to remain as casual labourers or temporary employees for an unreasonable long period of time." This Court emphasised that unless a sense of belonging arises, the worker will not give his best and consequently production will suffer which in turn will result in economic loss to the nation.
This Court, therefore, directed the department to prepare a scheme on a rational basis for absorbing those who have worked for a continuous period of one year.
575 Tested on the above and keeping in mind the constitu tional philosophy adverted to earlier, we may now proceed to consider the main plank of the contention raised by the Authority.
But before we do so we may dispose of the non controversial part of the case.
From the pleadings in this case one thing that clearly emerges is that the Authority had taken a decision on 30th January, 1987 to regularise the services of those who were employed by the erstwhile PHED and whose services stood transferred to the Authority by the thrust of the statute.
According to the resolution extracted earlier, the Authority recommended to the State Government that the services of the employees recruited in the erstwhile PHED and who continued to work on the establishment of the Authority should be regularised.
The learned counsel for the State Government contended that since these employees were now borne on the establishment of the Authority on the statutory transfer of their services, it was for the Authority to regularise their services, and it was quite unnecessary to make a recommenda tion to the State Government in that behalf.
To put it differently, the stand of the State Government through its counsel is that the question of regularisation of the serv ices of ex PHED employees now borne on the establishment of the Authority is exclusively within the purview of the Authority and the State Government has no role to play.
That means it was wholly unnecessary on the part of the Authority to make the recommendation it made by the resolution of 30th January, 1987 to the State Government for the regularisation of the ex PHED employees serving on its establishment on that date.
To us the position, therefore, appears crystal clear that it is for the Authority and the Authority alone to regularise the services of such employees without waiting for a nod from the State Government.
The sphinx like silence on the part of the State Government for now over three years from the date of the resolution is indeed disturbing and betrays total lack of concern for this pressing human prob lem.
The second batch of workers comprise those who were appointed between 1st April.
1984 and 4th August, 1986 by the Authority itself.
Under section 8(1) of the Act the power to appoint the Secretary and other officers and staff members vests in the Authority.
Only when a post above the rank of an Executive Engineer is to be created that the sanction of the State Government becomes necessary under the proviso.
Sub section (2) to which sub section (1) is subject expects the Authority to seek the previous sanction of the Government if it desires to employ a servant of the Central or State Government on deputation and not otherwise.
It is, therefore, clear beyond any manner of doubt 576 that the power to appoint the staff members with whom we are concerned, solely vests in the Authority.
Since the Act is brought into force w.e.f.
1st March, 1984 the question of regularisation of the services of staff members appointed after that date must be examined with reference to the power found in section 8(1) of the Act.
However, the contention of the Authority is based on Rule 9(a)(i) of the Rules, which it claims to have adopted under Resolution No. 8 dated 25th April.
The Authority contends that by the thrust of this rule the appointments were limited to 180 days only and since the said rules had statutory flavour the Authority was bound to act in accordance therewith.
We have extracted the relevant part of this rule earlier.
since these rules were framed in exercise of power conferred by the proviso to Article 309 of the Constitution they are undoubtedly statu tory in character but Mr. Poti was right in his contention that they do not retain that character in their application to the staff members of the Authority since they have been adopted by the Authority under a resolution.
These rules would undoubtedly be statutory in character in their appli cation to the members of the Kerala Subordinate services for whom they were enacted but when any other authority adopts them by a resolution for regulating the services of its staff, the rules do not continue to remain statutory in their application to the staff of that Authority.
They are like any other administrative rules which do not have statu tory force.
It was not contended, as indeed it could not That these rules derive statutory force from section 64 or 65 of the Act.
Section 64 confers the rule making power on the State while section 65 empowers the Authority to make regulations with the previous approval of the Government.
It is nobody 's case that these rules were adopted after obtain ing the previous approval of the Government.
If that be so.
we must accept Mr. Poti 's submission that these rule their application to the staff members of the Authority appointed after 1 st. April, 1984 have no statutory flavour or force.
Now to the text of Rule 9(a)(i) of the Rules.
It empowers the appointing authority to appoint a person temporarily otherwise than in accordance with the rule if (i) it is necessary in public interest and (ii) where an emergency has arisen to fill any particular post which has fallen vacant, immediately.
In the present case it is diffi cult to say that all appointments made after 1st April, 1984 were required to be filled immediately because of an emergency of the type contemplated by the said rule.
On the contrary it seems appointments were routinely made in purported exercise of power conferred by this rule.
The proviso on which reliance is placed , which we have extract ed earlier.
merely states that ordinarily such appointments will be of those persons who 577 possess the requisite qualifications for the post.
If any person who does not possess the requisite qualifications is appointed under the said clause, he will be liable to be replaced by a qualified person.
Clause (iii) of Rule 9 states that a person appointed under clause (i) shall, as soon as possible, be replaced by a member of the service or an approved candidate qualified to hold the post.
Clause (e) of Rule 9, however, provided for regularisation of service of any person appointed under clause (i) of sub rule (a) if he had completed continuous service of two years on December 22, 1973, notwithstanding anything contained in the rules.
This is a clear indication that in the past the Government also considered it just and fair to regularise the services of those who had been in continuous service for two years prior to the cut off date.
The spirit underlying this treat ment clearly shows that the Government did not consider it just, fair or reasonable to terminate the services of those who were in employment for a period of two or more years prior to the cut off date.
This approach is quite consistent with the spirit of the rule which was intended to be invoked to serve emergent situations which could not brook delay.
Such appointments were intended to be stop gap temporary appointments to serve the stated purpose and not long term ones.
The rule was not intended to fill a large number of posts in the service but only those which could not be kept vacant till regular appointments were made in accordance with the rules.
But once the appointments continued for long, the services had to be regularised if the incumbent possessed the requisite qualifications as was done by sub rule (e).
Such an approach alone would be consistent with the constitutional philosophy adverted to earlier.
Even otherwise, the rule must be so interpreted, if the language of the rule permits, as will advance this philosophy of the Constitution.
If the rule is so interpreted it seems clear to us that employees who have been working on the establish ment since long, and who possess the requisite qualifica tions for the job as obtaining on the date of their employ ment, must be allowed to continue on their jobs and their services should be regularised.
It is unfair and unreasona ble to remove people who have been rendering service since sometime as such removal has serious consequences.
The family of the employee which has settled down and accommo dated its needs to the emoluments received by the bread winner, will face economic ruination if the job is suddenly taken away.
Besides, the precious period of early life devoted in the service of the establishment will be wholly wasted and the incumbent may be rendered `age barred ' for securing a job elsewhere.
It is indeed unfair to use him, generate hope and a feeling of security in him attune his family to live within his earnings and then suddenly to throw him out of job.
Such behaviour would be an 578 affront to the concept of job security and would run counter to the constitutional philosophy, particularly the concept of right to work in Article 41 of the Constitution.
There fore, if we interpret Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
The third and fourth batches concern workers who were appointed between 4th August, 1986 and 30th July, 1988 and after 30th July, 1988, respectively.
Their appointments would be governed by Section 69 which became effective from 4th August, 1986.
By virtue of this section the Kerala Public Service (Additional Functions as respect certain Corporations and Companies) Act, 1970 (19 of 1970) came to be amended with effect from 4th August, 1968 on which date it came to be published in the Gazette.
Thereby in clause (a) of section 2 the "Kerala Water Authority" came to be added.
In law, therefore, the need to consult the PSC had arisen.
True it is that the consequential notification amending the 1971 Rules was issued on 30th July, 1988.
But on that account we do not think it would be proper to treat them differently.
We think it advisable to treat them as forming a single batch since the need to consult the PSC had arisen on Section 69 coming into effect from 4th August, 1986.
In the result we allow these appeals and writ petitions and make the rule absolute as under: "(1) The Authority will with immediate effect regularise the services of all ex PHED employees as per its Resolution of 30th January, 1987 without waiting for State Government approval.
(2) The services of workers employed by the Authority be tween 1st April, 1984 and 4th August, 1986 will be regula rised with immediate effect if they possess the requisite qualifications for the post prescribed on the date of ap pointment of the concerned worker.
(3) The services of workers appointed after 4th August, 1984 and possessing the requisite qualifications should be regu lated in accordance with Act 19 of 1970 provided they have put in continuous service of not less than one year, artifi cial breaks, if any, 579 to be ignored.
The Kerala Service Public Service Commission will take immediate steps to regularise their services as a separate block.
In so doing the Kerala Public Service Com mission will take the age bar as waived.
(4) The Kerala Public Service Commission will consid er the question of regularisation of the services of workers who possess the requisite qualifications but have put in less than one year 's service, separately.
In doing so the Kerala Public Service Commission will take the age bar as waived.
If they are found fit they will be placed on the list along with the newly recruited candidates in the order of their respective merits.
The Kerala Public Service Com mission will be free to rearrange the list accordingly.
Thereafter fresh appointments will issue depending on the total number of posts available.
If the posts are inade quate, those presently in employment will make room for the selected candidates but their names will remain on the list and they will be entitled to appointment as and when their turn arrives in regular course.
The list will enure for such period as is permissible under the extant rules.
(5) The Authority will be at liberty to deal with the serv ices of the workers who do not possess the requisite quali fications as may be it considered appropriate in accordance with law.
(6) Those workers whose services have been terminated in violation of this Court 's order in respect of which Contempt Petition No. 156 of 1990 is taken out shall be entitled to the benefit of this order as if they continue in service and the case of each worker will be governed by the clause applicable to him depending on the category to which he belongs and if he is found eligible for regularisation he will be restored to service and assigned his proper place.
This order will regulate the services not only of the par ties to the present petitions but also all others similarly situated including those who may be parties to other pro ceedings pending in different Courts.
If further directions are required in the matter of working out of the above order the High Court of Kerala may be approached for the same.
All the aforestated proceedings are disposed of accordingly with no order as to costs.
Y. Lal Appeals and petitions allowed.

summary:
Consequent upon the establishment of Kerala Water Au thority under the Kerala Water Supply and Sewerage Act, 1986, all the functions which were till then carried on by the Public Health Engineering Department (PHED) were trans ferred to the said Authority.
Contemporaneously with that every person working in the PHED became the employee of the Kerala Water Authority by virtue of Section 19(1) of the Act.
Though the said Act was given retrospective operation w.e.f.
1st March 1984, Section 69 thereof came into force from the date of publication of the Act in the Gazettee viz., 4.8.1986; actual effect could be given w.e.f. 30.7. 1988 on which date the necessary notification was issued where by the rule was amended and the Authority came within the purview of the Public Service Commission.
Thus the employees of the Authority fell into four different groups viz., (i) those who were in the employment of PHED before the constitution of the Authority and were transferred to the Authority, (ii) those whom the Authority employed be tween 1st April, 1984 and 4th August 1986, (iii) those who were appointed between 4th August 1986 and 30th July 1988, and (iv) those who were appointed after 30th July 1988.
The Authority it seems terminated the services of various em ployees.
The petitioners apprehending termination of their serv ices by the Authority filed petitions contending inter alia that they were recruited through the Employment Exchange and till the issuance of the notification dated 30.7.1988, amending the concerned PSC rule, there was no question of the Authority consulting the PSC and therefore, appointments made prior to that date could not be termed as irregular or unauthorised and could not be determined on that ground.
It is asserted by them that the High Court refused to grant relief to those employees whose services were threatened and despite favourable orders passed by this Court in cases that came before it, the Authority continued to terminate the services of employees similarly placed treating those 563 orders as having been passed in respect of only those em ployees who were before the Court.
It is, therefore, urged by them that this Court should pass orders laying down guidelines for the regularisation of the services of not only the petitioners but also all others similarly placed so that the low income employees are not required to knock at the doors of different courts for protection against the threatened arbitrary action of the Authority terminating their services.
The Authority has contested the cases on the plea that all the appointments made before or after April 1, 1984 were governed by Rule 9(a)(i) of the Rules till Section 69 came into force w.e.f. 4.8.1986 and 30.7.1988 when it was amended.
Appointments made after 4.8.1986 are clearly sub ject to the requirement of Section 69 of the Act and the Authority cannot act in contravention thereof.
Services of all those who were governed by Rule 9(a)(i) will have to be determinated on the expiry of 180 days.
Allowing the appeals as also writ petitions, this Court, HELD: Interpreting Rule 9(a)(i) consistently with the spirit and philosophy of the Constitution, which it is permissible to do without doing violence to the said rule, it follows that employees who are serving on the establish ment for long spells and have the requisite qualifications for the job, should not be thrown out but their services should be regularised as far as possible.
Since workers belonging to this batch have worked on their posts for reasonably long spells they are entitled to regularisation in service.
[388A B] P.K. Narayani & Ors.
vs State of Kerala and Ors.
, ; Dr. A.K. Jain & Ors.
vs Union of India and Ors.
, ; ; Daily rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch vs Union of India and Ors., , referred to.


judgement:
ivil Appeal No. 2840 of 1982.
From the Judgment and Order dated 5.12.
1979 of the Allahabad High Court in Second Appeal No. 82 of 1972.
R.K. Garg and H.K.Puri for the Appellant.
Satish Chandra, Pramod Swarup and A.K. Srivastava for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
In this appeal by grant of special leave, directed against judgment of the Allahabad High Court in second appeal arising out of a suit for arrears of rent and ejectment, the question is if the High Court committed any error of law in allowing the second appeal on the ground that the two courts below had erroneously held that finding recorded in an appeal, filed by one of the defendants who was sued as tenant in an earlier suit, could not operate as res judicata between plaintiff and respondents who were defendants nos.
2 and 3 in that suit.
Unfortunately for appellant equity may or may not be in his favour as his father too acted shrewdly while purchasing house of daughter in law 's father but law is certainly not in his favour.
How dispute arose between parties, who are closely related, is quite interesting.
Shiv Charan Das and Har Charan Das (respondents nos.
1 99 and 3 in this appeal) are first cousins.
Ravindra Kumar (respondent No. 2) is son of Shiv Charan.
His sister was married to son of Ganga Prasad who purchased the only house of Shiv Charan and Ravindra Kumar with condition of repur chase by sellers after five years.
He permitted them to remain in possession, but got a rent note executed by Har Charan.
Purpose of this became apparent later as immediately after expiry of five years when the house was not repur chased Ganga Prasad (referred hereinafter as plaintiff) filed suit for ejectment and arrears of rent against Har Charan, Shiv Charan and Ravindra (hereinafter referred as defendants nos.
1, 2 and 3) claiming that defendant No. 1 was in arrears of rent and defendant No. 2 and 3 were his sub tenants.
The suit was contested by defendants nos.
2 and 3 only.
The Trial Court decreed the suit for arrears of rent against defendant No. 1.
It was held that defendant No. 2 and 3 were not sub tenants.
Therefore suit for ejectment was dismissed.
The plaintiff submitted to this finding.
Ag grieved by the decree for arrears of rent defendant No. 1 filed appeal which was dismissed.
But the appellate court while observing that any evidence led by defendant nos.
2 and 3 could not be read against defendant No. 1 observed that it appeared that they being closely related to defend ant No. 1 were in possession on his behalf.
This furnished occasion for plaintiff to file second suit against three defendants with this change that defendants nos.
2 and 3 were claimed to be licensees of defendant No. 1.
The Trial Court relying on earlier judgment decreed suit for arrears of rent against defendant No. 1 and for ejectment against defendants nos.2 and 3 as they were licensees.
Both defend ant No. 1 separately and defendants nos.
2 and 3 jointly filed two appeals but without any success.
Both the sets approached the High Court also by way of separate appeals.
The appeal of defendant No. 1 came up for hearing earlier but it was dismissed.
The appeal of defendant nos.
2 and 3 came up for hearing before another Hon 'ble Judge who allowed it and held that the finding recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata and the suit for ejectment was dismissed.
It is the correctness of this finding that has been assailed in this Court.
Although long arguments were advanced but in our opinion the only question that arises for consideration is if the finding recorded in the appeal filed by defendant No. 1 in which it was held that defendants nos.
2 and 3 were in possession on his behalf was binding on them in the subse quent suit filed by the plaintiff.
In that suit issue No. 2 was if 100 defendant No. 2 and defendant No. 3 were sub tenants.
And issue No. 5 was if they were liable to be ejected.
The Trial Court while discussing these two issues held that there was no question of sub tenancy of these persons as despite sale there was never a break in their possession.
It was further held that they were not sub tenants nor they claimed to be in possession through defendant No. 1.
Therefore they were not liable to ejectment.
Against this finding plaintiff did not file any appeal.
The finding therefore between the plaintiff and defendants nos.
2 and 3 became final and binding.
The appeal was filed by defendant No. 1 as he was aggrieved by the decree of arrears of rent.
In that appeal it was observed that the evidence led by defendant nos.
2 and 3 could not be read against him.
But the Court while dismissing his appeal and upholding the decree of Trial Court observed that since they were close relations it appears that even though rent note was executed by defendant No. 1 the possession of defendants nos.
2 and 3 was on his behalf.
This finding could not be taken advantage of by the plaintiff for more than one reason.
This observation was unnecessary as the appeal was dismissed.
One could under stand if the appeal would have been allowed and the liabili ty for payment of rent would have been fastened on defendant No. 2 and 3 as they were in possession.
But since appeal was dismissed the order of Trial Court that liability to pay rent was of defendant No. 1 stood affirmed.
Therefore it was an observation which was not only off the mark but unneces sary.
It could not accordingly operate as res judicata between defendant No. 1 and defendants nos.
2 and 3 as much less between plaintiff and defendant nos.
2 and 3.
One of the tests to ascertain if a finding operates as res judicata is if the party aggrieved could challenge it.
Since the dismissal of appeal or the, appellate decree was not against defendants nos.
2 and 3 they could not challenge it by way of appeal.
Even assuming that defendant No. 1 could chal lenge the finding that liability of rent was of defendants nos.
2 and 3 as they were in possession he did not file any written statement in the Trial Court raising any dispute between himself and defendants nos.
2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither pleading nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
Reliance by the appellant on Keshardeo Chamria vs Radha Kissen Chamria, ; , is of no assistance as it only lays down the binding effect of a decision in a subsequent suit.
For the reasons stated above this appeal fails and is dismissed.
There shall be no order as to costs.
T.N.A. Appeal dis missed.

summary:
The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years.
He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1.
After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants.
The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants.
Defendant No. 1 filed an appeal against the decree for arrears of rent.
The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related.
Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1.
The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3.
Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed.
Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata.
Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3.
Hence this appeal.
Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it.
Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal.
Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
[100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable.