Supreme Court Upholds Tenure-Based Appointment in CPRI: Union of India vs. N Murugesan (2021)

Introduction

Date of the Judgment: 07 October 2021

Citation: (2021) INSC 690

Judges: Sanjay Kishan Kaul, J. and M.M. Sundresh, J.

Can an employee, appointed on a tenure basis through direct recruitment, claim to be a regular employee entitled to continue till superannuation? The Supreme Court of India recently addressed this question in a case involving the Central Power Research Institute (CPRI). The core issue revolved around whether a tenure-based appointment, made through direct recruitment, is valid under the CPRI rules and whether the employee could claim to be a regular employee.

The Supreme Court bench, comprising Justices Sanjay Kishan Kaul and M.M. Sundresh, delivered the judgment, with Justice M.M. Sundresh authoring the opinion.

Case Background

The Central Power Research Institute (CPRI) is an autonomous body under the Ministry of Power, dedicated to research and development in the power sector. The respondent, N. Murugesan, initially joined CPRI on 05 July 1984 and voluntarily retired on 31 March 2008 while working as an Engineering Officer, Grade-IV.

On 16 May 2009, CPRI advertised the position of Director-General, to be filled either by direct recruitment or deputation. The respondent applied for the post through direct recruitment. The Ministry of Power sought approval from the Appointments Committee of the Cabinet (ACC) for the respondent’s appointment as Director-General, from the date of his joining until his superannuation on 31 May 2019, or until further orders.

The ACC approved the appointment for an initial tenure of five years, or until further orders, with eligibility for reappointment up to 31 May 2019. The respondent accepted the offer and joined on 26 March 2010.

After nearly five years, on 30 December 2014, the respondent claimed that his appointment was through direct recruitment, entitling him to continue as a regular employee until superannuation. This was followed by multiple representations.

A performance review, conducted as per rules, indicated that extending the respondent’s tenure was not in the institute’s interest. Consequently, the employer decided to initiate fresh recruitment. The private respondent was selected as the new Director-General following an advertisement on 22 February 2015.

The respondent then filed writ petitions in the High Court of Karnataka, challenging his relieving order, the report dated 05 February 2015, the advertisement dated 22 February 2015, and the recruitment of the private respondent.

Timeline:

Course of Proceedings

The Single Judge of the High Court dismissed the writ petitions, citing delay and laches, and holding that the case did not warrant the exercise of discretionary jurisdiction under Article 226 of the Constitution of India.

The Division Bench, however, allowed the appeals, but without reinstating the respondent. Instead, it ordered compensation. The other reliefs sought by the respondent were not considered.

Legal Framework

The Supreme Court discussed the following legal principles:

• The Indian Contract Act, 1872:
  • Section 3 deals with communication, acceptance, and revocation of proposals. An offer must be accepted to form a contract.
  • Section 7 states that an acceptance must be absolute and unqualified.
  • Section 8 states that performance of the conditions of a proposal or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal is an acceptance of the proposal.
  • Section 39 discusses the effect of a party’s refusal to perform a promise, noting that a promisee may end the contract unless there is acquiescence.
• Delay, Laches, and Acquiescence: These are common law principles based on estoppel. Delay is a broad concept, with laches and acquiescence being more specific forms. Laches involves unreasonable delay in pursuing a claim, causing prejudice to the other party. Acquiescence means tacit acceptance or passive assent to an act.
• Approbate and Reprobate: This principle, derived from Scottish law, prevents a party from accepting and rejecting the same thing. A party cannot take advantage of one part of a transaction while rejecting another.
• Article 226 of the Constitution of India: This article grants the High Court extraordinary discretionary power, which should be exercised cautiously, especially when delay, laches, and acquiescence are involved.

Arguments

Submissions of the Appellants:

• The respondent’s claim should be rejected due to delay, laches, and acquiescence. The principle of approbate and reprobate also applies.
• The CPRI rules do not prohibit tenure-based appointments.
• The respondent raised the issue of regular employment only towards the end of his tenure.
• The order was a relieving order, not a termination.
• Performance assessments during the tenure are different from assessments for re-appointment.
• The initial appointment was a re-employment, and the appointment order specified a five-year tenure or until further orders, with reappointment based on suitability.
• Rule 48 of the CPRI rules applies only to regular employees and does not apply to tenure-based appointees.
• The Search-cum-Selection Committee’s recommendation and the cabinet note are not binding regarding the respondent’s tenure.
• The decision to not extend the tenure was made at the highest level and was not arbitrary.
• The Division Bench did not correctly interpret the materials.
• The respondent’s superannuation period is over, and a new Director-General has been selected.

Submissions of the Respondents:

• The Division Bench correctly reviewed the files and findings.
• There was a violation of Articles 14 and 16 of the Constitution of India.
• The relevant materials were not considered when the decision was made not to extend the tenure, and the ACC was not informed of the adverse report.
• The adverse report was prepared by junior officers and should be disregarded.
• The relieving order was a termination, not just a relieving order.
• The respondent should have been treated as a regular employee because there are no statutory rules for tenure appointments.
• The respondent’s performance reports were “outstanding.”
• The President of CPRI-GC does not have the power to terminate; only the ACC, as the appointing authority, does.
• There was no inordinate delay because the respondent believed he would continue until superannuation since the rules do not allow for tenure-based appointments.
• The respondent made multiple representations to rectify the appointment terms.
• A mere delay does not constitute estoppel, especially when the terms are not in line with the rules, as per the judgment in Somesh Thapliyal Vs. HNB Garhwal University.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the court addressed the following key issues:

1. Whether the respondent’s claim for regular employment was valid despite his appointment being on a tenure basis?
2. Whether the principles of delay, laches, and acquiescence apply to the respondent’s case?
3. Whether the principle of approbate and reprobate applies to the respondent’s case?
4. Whether the relieving order was a termination?
5. Whether the employer has the discretion to make a tenure-based appointment through direct recruitment?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the respondent’s conduct, the explicit terms of his appointment, and the absence of any statutory bar on tenure-based appointments. The Court emphasized the importance of public interest and the employer’s discretion in such matters.

The court considered alternative interpretations, such as the respondent’s argument that direct recruitment implies a regular appointment, but rejected them based on the explicit terms of the appointment order and the absence of any prohibition in the rules. The court emphasized that the employer has the discretion to make tenure-based appointments, especially for top administrative posts, and that this discretion should not be interfered with unless there is evidence of arbitrariness.

The court’s decision was based on the following reasons:

• The respondent’s appointment was explicitly for a tenure of five years, and there was no automatic extension.
• The CPRI rules do not prohibit tenure-based appointments through direct recruitment.
• The respondent’s conduct, particularly the delay in claiming regular employment status, indicated acquiescence and was a violation of the principle of approbate and reprobate.
• The relieving order was not a termination but a consequence of the end of the tenure.
• The employer has the discretion to decide on the suitability of an employee for re-appointment, and this discretion should not be interfered with unless there is evidence of arbitrariness.
• The decision was made at the highest level, and there was no evidence to suggest that the authorities were misled.

The court quoted the following from the judgment:

“The conduct speaks for itself. Hence, on the principle governing delay, laches, and acquiescence, followed by approbation and reprobation, respondent no. 1 ought not to have been granted any relief by invoking Article 226 of the Constitution of India.”

“We are dealing with a post that stands at the top realm of the administration. There is an intended object and rationale attached to the post. It is the incumbent of the post who has to carry forward the object and vision in the field of research.”

“The Division Bench has misconstrued direct recruitment to mean an appointment to a permanent post. We are dealing with direct recruitment to a post of primary importance, i.e. Director-General, which is to be filled on a tenure basis.”

There were no dissenting opinions in this case.

The court’s decision could have implications for future cases involving tenure-based appointments in government and autonomous bodies. It clarifies that direct recruitment does not necessarily imply a regular appointment and that employers have the discretion to make tenure-based appointments, especially for high-level posts. The decision also reinforces the principles of delay, laches, acquiescence, and approbate and reprobate in service law matters.

Key Takeaways

• Tenure-based appointments through direct recruitment are valid, provided the rules do not prohibit them.
• Employees cannot claim regular employment status if their appointment is explicitly for a fixed tenure.
• Delay in raising concerns about the terms of appointment can weaken an employee’s case due to the principles of laches and acquiescence.
• Employees cannot approbate and reprobate; that is, they cannot accept the benefits of an appointment and then challenge its terms.
• Employers have the discretion to decide on the suitability of an employee for re-appointment, especially for high-level positions.
• Public interest is a significant factor in decisions regarding appointments in government and autonomous bodies.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

There was no discussion of specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that a tenure-based appointment made through direct recruitment is valid if not prohibited by the rules, and that an employee cannot claim regular employment status if their appointment is explicitly for a fixed tenure. This judgment reinforces the importance of the principles of delay, laches, acquiescence, and approbate and reprobate in service law matters. It also clarifies that direct recruitment does not necessarily imply a regular appointment and that employers have the discretion to make tenure-based appointments, especially for high-level posts.

This judgment does not overturn any previous positions but rather clarifies the application of existing principles in the context of tenure-based appointments. It emphasizes that while the employer has discretion, it should not be exercised arbitrarily. The decision underscores the need for employees to raise concerns about the terms of their appointment in a timely manner and to adhere to the principle of approbate and reprobate.