Supreme Court Upholds Termination of LARSGESS Scheme: Manjit & Ors vs. Union of India (29 January 2021)

Date of the Judgment: 29 January 2021

Citation: (2021) INSC 29

Judges: Dr Dhananjaya Y Chandrachud, J, Indira Banerjee, J, and Sanjiv Khanna, J

Can a government scheme providing for back-door entry into service be valid, especially when it bypasses the constitutional mandate of equal opportunity? The Supreme Court addressed this critical question in a case concerning the LARSGESS Scheme of the Indian Railways. The Court examined the validity of the scheme’s termination and the claims of those seeking appointment under it. The three-judge bench, consisting of Dr. Dhananjaya Y Chandrachud, J, Indira Banerjee, J, and Sanjiv Khanna, J, unanimously dismissed the petition, upholding the termination of the scheme.

Case Background

The case revolves around the LARSGESS (Liberalized Active Retirement Scheme for Guaranteed Employment for Safety Staff) Scheme, which was a policy of the Railway Administration. This scheme allowed wards of serving employees to enter service without undergoing the usual competitive selection process. The Punjab and Haryana High Court had previously raised concerns about the scheme’s validity, noting that it violated Articles 14 and 16 of the Constitution, which guarantee equality before the law and equal opportunity in public employment. The High Court directed the Union of India to reconsider the scheme. The Supreme Court, in an earlier order on 8 January 2018, directed the Union of India to take a conscious decision on the scheme within six weeks.

Timeline

Course of Proceedings

The Punjab and Haryana High Court had directed the Union of India to reconsider the LARSGESS Scheme, noting its inconsistency with Articles 14 and 16 of the Constitution. Following this, the Supreme Court directed the Union of India to take a conscious decision on the scheme. The Union of India then decided to terminate the scheme on 5 March 2019. Consequently, the Supreme Court disposed of a related application stating that since the scheme was terminated, nothing further needed to be done. However, in a subsequent order, the Court allowed petitioners in another case to approach the authorities with a representation. The present writ petition was filed seeking a writ of mandamus to appoint the petitioners under the terminated scheme.

Legal Framework

The judgment primarily concerns the interpretation and application of Article 16 of the Constitution of India, which guarantees equality of opportunity in matters of public employment. The Court noted that the LARSGESS Scheme, by allowing back-door entry into service, was fundamentally at odds with this constitutional provision. The judgment also references the earlier orders of the Punjab and Haryana High Court and the Supreme Court which had questioned the validity of the scheme. The court observed that the scheme was a form of back door entry into the service of the railways and that such a scheme is fundamentally at odds with Article 16 of the Constitution.

Arguments

The petitioners sought a writ of mandamus directing the Union of India to appoint them in their respective cadres, arguing that they had a legitimate expectation of being appointed under the LARSGESS Scheme. The Union of India, on the other hand, argued that the scheme was rightly terminated as it violated the principles of equal opportunity enshrined in the Constitution. The Union of India also submitted that the scheme was a form of back door entry into the service of the railways and that such a scheme is fundamentally at odds with Article 16 of the Constitution.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the petitioners were entitled to a writ of mandamus directing the Union of India to appoint them under the LARSGESS Scheme, which had been terminated. The court also considered whether the termination of the scheme was valid and whether the petitioners had any vested right or legitimate expectation under such a scheme.

Treatment of the Issue by the Court

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

Authorities

The Court did not cite any specific case laws or books. However, the Court referred to the previous orders of the Punjab and Haryana High Court and the Supreme Court which had questioned the validity of the scheme. The court also referred to Article 16 of the Constitution of India.

Judgment

The Supreme Court dismissed the writ petition, holding that the petitioners were not entitled to appointment under the LARSGESS Scheme. The Court upheld the decision of the Union of India to terminate the scheme, stating that it was inconsistent with Article 16 of the Constitution. The Court also held that the petitioners had neither a vested right nor a legitimate expectation under the scheme. The Court noted that the scheme provided for a back door entry into the service of the railways which is fundamentally at odds with Article 16 of the Constitution. The Court also stated that all claims based on the Scheme must now be closed.

How each authority was viewed by the Court?

✓ The orders of the Punjab and Haryana High Court* were viewed as the basis for the Union of India to reconsider the scheme.

✓ The earlier order of the Supreme Court of India* was noted as the basis for the Union of India to make a conscious decision on the scheme.

✓ Article 16 of the Constitution of India* was viewed as the constitutional basis for the termination of the scheme.

What weighed in the mind of the Court?

The Court was primarily influenced by the need to uphold the principles of equal opportunity in public employment, as enshrined in Article 16 of the Constitution. The Court was of the view that the LARSGESS Scheme was a form of back-door entry into service and that such a scheme could not be allowed to continue. The Court also emphasized that no one could claim a vested right or legitimate expectation under an unconstitutional scheme.

Fact:Law Ratio

The Court considered the alternative argument that the petitioners had a legitimate expectation of appointment under the scheme. However, the Court rejected this argument, stating that no such expectation could arise under an unconstitutional scheme. The Court also stated that the Union of India had correctly terminated the Scheme and that decision continues to stand. The Court also observed that the grant of reliefs to the petitioners would only enable them to seek a back door entry contrary to the orders of this Court.

The Court’s reasoning is encapsulated in the following quotes from the judgment:

“The Scheme provided for an avenue of a back door entry into the service of the railways. This would be fundamentally at odds with Article 16 of the Constitution.”

“The Union government has with justification discontinued the scheme.”

“The petitioners can claim neither a vested right nor a legitimate expectation under such a Scheme.”

Key Takeaways

• ✓ Government schemes that allow back-door entry into service are unconstitutional.
• ✓ Article 16 of the Constitution mandates equal opportunity in public employment.
• ✓ No one can claim a vested right or legitimate expectation under an unconstitutional scheme.
• ✓ The Supreme Court has upheld the termination of the LARSGESS scheme.

Directions

The Supreme Court directed that a certified copy of the order be forwarded to the Chairman of the Railway Board for intimation and compliance.

Development of Law

The judgment reinforces the principle that any scheme that bypasses the constitutional mandate of equal opportunity in public employment is invalid. The ratio decidendi of the case is that a scheme providing for back door entry into service is inconsistent with Article 16 of the Constitution. This judgment reaffirms the importance of competitive selection processes in public employment and clarifies that no one can claim a vested right or legitimate expectation under an unconstitutional scheme.

Conclusion

The Supreme Court’s decision in Manjit & Ors vs. Union of India upholds the termination of the LARSGESS Scheme, emphasizing the constitutional requirement of equal opportunity in public employment. The Court clarified that schemes allowing back-door entry into service are invalid and that no one can claim a vested right or legitimate expectation under such schemes. This judgment reinforces the importance of fair and competitive selection processes in public employment.