Supreme Court Upholds Termination of LARSGESS Scheme: No Backdoor Entry to Railway Jobs

Date of the Judgment: 25 January 2022
Citation: 2022 INSC 68
Judges: Dr. Dhananjaya Y Chandrachud, J and A S Bopanna, J

Can a scheme providing jobs to the wards of retiring railway employees be valid if it bypasses the standard recruitment process? The Supreme Court of India recently addressed this question, focusing on the validity of the LARSGESS scheme and the claims made under it after its termination. This judgment clarifies the position on backdoor entries into public employment and reinforces the principles of equal opportunity.

The Supreme Court bench comprised of Justice Dr. Dhananjaya Y Chandrachud and Justice A S Bopanna. The judgment was authored by Justice Dr. Dhananjaya Y Chandrachud.

Case Background

The case revolves around the Liberalized Active Retirement Scheme for Guaranteed Employment for Safety Staff (LARSGESS), introduced by the Railway Board. This scheme allowed railway employees in specific safety categories to seek voluntary retirement, with a provision for their wards to be employed by the railways. The scheme was initially introduced for Gangmen and Drivers and later extended to other safety categories. The core issue arose when the High Court of Punjab and Haryana questioned the scheme’s validity, leading to its termination by the Railway Board.

The appellants, The Chief Personnel Officer & Ors., challenged the judgments of the Madras High Court, which had favored the respondents’ claims for employment under the LARSGESS scheme. The respondents, A Nishanth George and another individual in a connected appeal, were seeking employment based on their fathers’ applications under the scheme.

Timeline

Course of Proceedings

The High Court of Punjab and Haryana, in Kala Singh v. Union of India, raised concerns about the LARSGESS scheme, stating it was a backdoor entry into public employment and violated Articles 14 and 16 of the Constitution. The High Court directed the Railway Board to revisit the scheme. The Supreme Court dismissed the Special Leave Petition (SLP) against this order, asking the Railways to take a conscious decision on the matter. Following this, the Railway Board terminated the scheme. However, the Madras High Court, in the cases of the respondents, directed the Railways to provide employment under the scheme, leading to the present appeals before the Supreme Court.

Legal Framework

The core legal issues revolve around the interpretation of Article 14 (equality before the law) and Article 16 (equality of opportunity in matters of public employment) of the Constitution of India, particularly in the context of public employment. The LARSGESS scheme, by providing employment to the wards of retiring employees, was seen as potentially violating these constitutional principles. The Supreme Court also considered the Railway Board’s notifications regarding the scheme and its termination.

The relevant legal provisions and notifications include:

• Article 14 of the Constitution of India: Guarantees equality before the law and equal protection of the laws within the territory of India.
• Article 16 of the Constitution of India: Ensures equality of opportunity in matters of public employment.
• Railway Board’s notification dated 2 January 2004: Introduced the Safety Related Retirement Scheme.
• Railway Board’s notification dated 11 September 2010: Extended the scheme and renamed it LARSGESS.
• Railway Board’s notification dated 26 September 2018: Terminated the LARSGESS scheme.
• Railway Board’s notification dated 28 September 2018: Allowed appointments in certain cases despite termination of the scheme.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

Appellants’ (Railways) Arguments:

• Validity of the Scheme: The LARSGESS scheme was inherently flawed as it provided a backdoor entry into public employment, violating the principles of equal opportunity under Articles 14 and 16 of the Constitution. The Punjab and Haryana High Court had rightly questioned the scheme’s validity.
• Termination of the Scheme: The Railway Board had consciously decided to terminate the scheme on 26 September 2018, with effect from 27 October 2017. The decision was taken after seeking legal opinion and in compliance with the directions of the High Court.
• Exception Clause: The exception clause in the notification dated 28 September 2018, which allowed for appointments in certain cases, was not applicable to the respondents. The clause was specifically for cases where employees had retired before 27 October 2017, but not on superannuation, and their wards’ appointments were pending due to formalities.
• Medical Unfitness: In one of the appeals, the respondent was found medically unfit for the post of Trackman, which was the category his father belonged to.
• Superannuation: The fathers of both respondents had retired on superannuation, not under the LARSGESS scheme, and thus did not qualify for the exception.
• No Vested Right: The respondents had no vested right or legitimate expectation under the terminated scheme.

Respondents’ Arguments:

• Pending Claims: The respondents argued that their claims were pending before various forums when the scheme was terminated. Therefore, they should not be penalized for the delay.
• Exception Clause: They contended that they fell within the exception clause of the notification dated 28 September 2018, as their fathers had applied under the scheme before its termination.
• Error in Application: In one of the appeals, the respondent argued that his father’s initial application was rejected due to a mistake in the date of birth, and the application was valid if the correct date was considered.
• Medical Fitness for Other Posts: In one of the appeals, the respondent argued that he was medically fit for other posts, even if not for the post of Trackman.

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether the claims of the respondents for appointment under the LARSGESS scheme were covered by the exception clause in the notification dated 28 September 2018.
2. Whether the respondents had any vested right or legitimate expectation under the LARSGESS scheme after its termination.
3. Whether the medical fitness of the respondent in SLP (C) No. 1417 of 2019 for a post other than Trackman could be considered under the scheme.
4. Whether the application of the respondent’s father in SLP (C) No. 906 of 2021 was valid, considering the discrepancy in the date of birth.

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

How each authority was viewed by the Court?

• The Court relied on the judgment of the Punjab and Haryana High Court in Kala Singh v. Union of India* to highlight the flawed nature of the scheme.
• The Court referred to State of Karnataka v. Uma Devi (2006) 4 SCC 1* to underscore the importance of equal opportunity in public employment.
• The Court cited its earlier order in Union of India v. Kala Singh* to emphasize that the scheme had been terminated and no further action was needed.
• The Court distinguished the case of Narinder Siraswal v. Union of India* from the present case.
• The Court heavily relied on the three-judge bench decision in Manjit v. Union of India* which held that the scheme was contrary to Article 16 and that all claims under the scheme must be closed.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following:

• The LARSGESS scheme was a backdoor entry into public employment, violating the principles of equal opportunity enshrined in Articles 14 and 16 of the Constitution.
• The scheme had been consciously terminated by the Railway Board after due consideration and legal consultation.
• The exception clause in the notification dated 28 September 2018, was not intended to cover cases where employees had retired on superannuation.
• The respondents had no vested right or legitimate expectation under the terminated scheme.
• The medical fitness of one of the respondents for a post other than the category of his father was irrelevant under the scheme.
• The application of one of the respondents’ fathers was not valid as it was made before the scheme was notified and the second application was made after he had crossed the age limit.

The Court emphasized that the scheme was fundamentally flawed and that allowing claims under it would be contrary to the principles of fair and equal opportunity in public employment.

The Supreme Court’s reasoning was heavily based on legal principles, with a focus on the constitutional validity of the scheme and the principles of equal opportunity in public employment. While the factual aspects of the cases were considered, the legal analysis and interpretation of the scheme and its termination played a more significant role in the Court’s decision.

Key Takeaways

• The Supreme Court has firmly upheld the termination of the LARSGESS scheme, emphasizing that it was a backdoor entry into public employment.
• Claims under the terminated scheme cannot be entertained, and no individual can claim a vested right or legitimate expectation under it.
• The judgment reinforces the importance of equal opportunity in public employment, as enshrined in Articles 14 and 16 of the Constitution.
• The Court has clarified that the exception clause in the Railway Board’s notification of 28 September 2018, is limited to specific cases and does not cover employees who retired on superannuation.
• The Court has reiterated that appointments under the scheme must adhere to the prescribed criteria, and medical fitness for other posts cannot be considered if the candidate is not fit for the category of the retiring employee.

Directions

The Supreme Court set aside the judgments of the Madras High Court and dismissed the writ petitions filed by the respondents. No further directions were issued.

Development of Law

The ratio decidendi of this case is that the LARSGESS scheme, which provided for employment to the wards of retiring railway employees, was a backdoor entry into public employment and was violative of Articles 14 and 16 of the Constitution. The Supreme Court upheld the termination of the scheme and clarified that no claims under the scheme can be entertained after its termination. This decision reinforces the principle of equal opportunity in public employment and clarifies that no individual can claim a vested right under a scheme that has been terminated due to its unconstitutionality. The Supreme Court also clarified the scope of the exception clause in the Railway Board’s notification of 28 September 2018, and held that it does not apply to employees who retired on superannuation. This judgment aligns with the Supreme Court’s previous stance in Manjit v. Union of India, where it was held that the scheme was contrary to Article 16 and all claims under the scheme must be closed.

Conclusion

The Supreme Court’s judgment in The Chief Personnel Officer & Ors. vs. A Nishanth George unequivocally upholds the termination of the LARSGESS scheme. The Court has clarified that the scheme was a backdoor entry into public employment and violated the principles of equal opportunity. The decision reinforces the importance of fair and transparent recruitment processes and closes the door on any claims under the terminated scheme. The judgment serves as a reminder that public employment must adhere to constitutional principles and that schemes that bypass these principles cannot be sustained.