Supreme Court Directs Absorption of Long-Serving Employees: State of Bihar vs. Jawahar Lal Ram (2023)

Date of the Judgment: April 10, 2023

Citation: 2023 INSC 340

Judges: B.R. Gavai, J. and Aravind Kumar, J.

Can long-serving contract employees be absorbed into permanent positions? The Supreme Court of India addressed this critical question in a recent case concerning employees of the Bihar Intermediate Education Council. The court considered the unique circumstances of employees who had worked for nearly two decades and were terminated following a merger of the Council with the Bihar School Education Examination Board. This judgment highlights the Court’s willingness to exercise its extraordinary powers to ensure justice for employees facing job insecurity after years of service. The judgment was delivered by a bench of Justices B.R. Gavai and Aravind Kumar.

Case Background

The case revolves around employees who were initially hired by N.I.C.T. Computing System Private Limited and assigned to the Bihar Intermediate Education Council for computerization work starting in 1999. These employees worked for the Council until 2005. Following the termination of the contract between N.I.C.T. and the Council, the Council requested the government to create positions in its Computer Section. Subsequently, 63 posts were sanctioned, and the employees were appointed to these positions by the Chairman of the Council.

In 2007, the Bihar Intermediate Education Council was merged with the Bihar School Education Examination Board under the Bihar Intermediate Education Council (Repeal) Act, 2007. A committee was formed to create a scheme for regularizing the services of the Council’s employees. A scheme was formulated in 2012, but the employees were terminated on 18th August 2017. This led to a series of litigations, with the employees initially seeking absorption into permanent positions.

Timeline

Course of Proceedings

Initially, the employees filed a writ petition (CWJC No. 12242 of 2017) in the High Court of Judicature at Patna, which was partly allowed, directing the State Government to consider their absorption. However, the Education Department rejected their claim for regularization on October 9, 2018. Subsequently, another writ petition (CWJC No. 22943 of 2018) was filed, which was dismissed by the learned Single Judge on February 17, 2020. The Division Bench of the High Court reversed this decision in a Letters Patent Appeal (No. 180 of 2021), leading to the current appeals before the Supreme Court.

Legal Framework

The case primarily involves the interpretation and application of service law principles concerning the rights of contract employees and the process of regularization. The Bihar Intermediate Education Council (Repeal) Act, 2007, led to the merger of the Council with the Bihar School Education Examination Board, which necessitated the creation of a scheme for regularization. The Government Resolution dated 12th July 2012, framed the scheme for regularization of the services of the employees of the Council. The Supreme Court also considered the implications of its earlier judgment in Secretary, State of Karnataka and Ors. v. Uma Devi (3) and Others, [(2006) 4 SCC 1], which dealt with the issue of regularization of temporary employees.

Arguments

Arguments on behalf of the Appellants (State of Bihar):

• The State argued that the Division Bench of the High Court had given a perfunctory reasoning in reversing the order of the Single Judge.

• The Single Judge had passed a well-reasoned order, finding that the employees did not fulfill the conditions for absorption.

• The scheme for regularization required the fulfillment of four conditions, which the employees did not meet.

• The report of the Committee, which was the basis of the scheme, was accepted by the Cabinet of the State of Bihar, as evidenced by the affidavit of the Additional Chief Secretary.

• The Division Bench erred in reversing the Single Judge’s order based on the ground that the report of the Committee was signed by only one member.

Arguments on behalf of the Respondents (Employees):

• The employees had been working continuously since 1999, for a period of almost 18 years.

• The employees had complied with all four conditions stipulated in the 2012 scheme.

• The Single Judge, in the first round of litigation, had also found that the employees had complied with all four conditions.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue was whether the Division Bench of the High Court was justified in reversing the order of the Single Judge, and whether the employees were entitled to regularization given their long service.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authority:

Judgment

How each authority was viewed by the Court?

The Supreme Court considered the case of Secretary, State of Karnataka and Ors. v. Uma Devi (3) and Others [(2006) 4 SCC 1]*. The Court noted that the employees had been working since 1999, much before the judgment in Uma Devi, which dealt with the regularization of temporary employees. The Court did not use the Uma Devi judgment to deny the employees relief, but rather distinguished the facts of the present case, and used its powers under Article 142 of the Constitution to provide relief.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the following factors:

• Long and Continuous Service: The employees had been working continuously since 1999, which is a substantial period of service.

• Potential Devastating Effects: Uprooting the employees at this stage of their lives would have severe consequences for them and their families.

• Need for Equitable Relief: The Court felt that the peculiar facts and circumstances of the case warranted the exercise of its extraordinary powers under Article 142 of the Constitution to do complete justice.

• Perfunctory Reasoning by Division Bench: The Court was not satisfied with the manner in which the Division Bench had dealt with the matter, especially its failure to provide reasons for disagreeing with the Single Judge.

Logical Reasoning

Judgment

The Supreme Court, exercising its extraordinary powers under Article 142 of the Constitution of India, directed the absorption of the employees on the posts they were appointed to in 2005. The Court allowed them to rejoin with effect from 1st May 2023. The Court also stated that the employees would be entitled to continuity in service for all purposes, including retiral benefits, but would not be entitled to any back wages for the period during which they were out of employment. The Court emphasized that this decision was based on the peculiar facts and circumstances of the case and should not be treated as a precedent.

The Court noted, “The facts as recorded hereinabove would clearly show that the writ petitioners have been working since 1999 continuously in the said Council, may be initially from 1999 to 2005 they were working as employees of N.I.C.T. However, undisputedly they were working for the Council.”

The Court further observed, “Uprooting the writ petitioners at this stage of life would have devastating effects on them as well as on their families.”

The Court concluded, “We are, therefore, inclined to exercise our extraordinary powers under Article 142 of the Constitution of India and directed thus: ‘The writ petitioners shall be absorbed on the posts on which they are appointed in the year 2005. They would be permitted to rejoin with effect from 1st May 2023. Though the writ petitioners would be entitled to continuity in service for all the purposes including retiral benefits, they would not be entitled for any backwages for the period during which they were out of employment.’”

Key Takeaways

• Long-serving contract employees may be considered for absorption into permanent positions, especially when they have worked for a significant period.

• The Supreme Court can exercise its extraordinary powers under Article 142 of the Constitution to ensure complete justice in cases with unique facts and circumstances.

• Courts may consider the potential devastating effects of termination on employees and their families when deciding on matters of regularization.

• The judgment is not to be treated as a precedent and is specific to the facts of the case.

Directions

The Supreme Court directed that:

• The employees shall be absorbed on the posts they were appointed to in 2005.
• They would be permitted to rejoin with effect from 1st May 2023.
• They would be entitled to continuity in service for all purposes including retiral benefits.
• They would not be entitled to any back wages for the period during which they were out of employment.

Development of Law

The ratio decidendi of this case is that in cases where employees have worked for a long period of time, especially before the Uma Devi judgment, the Supreme Court can exercise its extraordinary powers under Article 142 to direct their absorption, even if the technical conditions for regularization are not fully met. This case carves out an exception to the general principles laid down in Uma Devi, and is specific to the facts of the case.

Conclusion

The Supreme Court’s judgment in State of Bihar vs. Jawahar Lal Ram provides significant relief to long-serving employees who were terminated after years of service. By exercising its extraordinary powers under Article 142 of the Constitution, the Court ensured that the employees were absorbed into permanent positions, recognizing their continuous service and the potential hardship caused by their termination. This case underscores the Court’s commitment to ensuring equitable outcomes in cases involving long-term contract employees.