Holding

Employees of a government company are not government servants and have no vested right to regularisation; courts cannot create posts or order regularisation of casual workers, so the High Court’s directions are set aside.

Summary

The petitioners, a union of daily‑rated gardeners employed by Hindustan Aeronautics Ltd., a government company, sought regularisation, continuance of service and equal pay, alleging that they had worked more than 240 days a year for several years and that artificial breaks were created to deny them permanence. The Allahabad High Court directed the company to absorb them as regular employees and pay regular wages. On appeal, the Supreme Court held that employees of a government company are not government servants and therefore do not enjoy the constitutional security of tenure accorded to civil servants. Completion of 240 days of work does not create a vested right to regularisation under the Industrial Disputes Act; regularisation can only be done in accordance with statutory rules. The Court emphasized that creation or abolition of posts and regularisation are executive functions and cannot be ordered by a court. Consequently, the High Court’s directions were set aside and the writ petitions dismissed.

Issues considered

The legal status of employees of a government company under the Constitution and whether they are government servants.
Whether completion of 240 days of work per year confers a right to regularisation under the Industrial Disputes Act.
Whether a court can direct the creation of posts and regularisation of daily‑wage workers.
Validity of the High Court’s order directing absorption of the petitioners as regular employees and payment of regular wages.

Legislation cited

Companies Act, 1956s. 617
Constitution of Indias. Article 226, s. Article 309, s. Article 311
Industrial Disputes Act, 1947s. 25-C, s. 25-F, s. 25-FF, s. 25-FFF
Minimum Wages Act
Trade Unions Act, 1926

Subjects

regularisationgovernment companyindustrial disputes actdaily wage workersjudicial restraintemployment securityconstitutional lawarticle 311article 309creation of postslabour law

Judgment

•/ HINDUSTAN AERONAUTICS LTD. A
v.
DAN BAHADUR SINGH AND ORS.

APRIL 27, 2007

(G.P. MATHUR AND A.K. MATHUR, JJ.] B

-J._ Labour Laws:

Regularisation-Workman is an industrial establishment like Appellant
Government company-Position of-Held: ls entirely different from that of a c
Government servant-Limited protection available to the former-He may
lose his employment in various contingencies provided under the Industrial
Disputes Act-Difference from type of tenure of service normally enjoyed by
a permanent employee in Government Service, namely, to continue in service
till the age of superannuation-Claim for permanency in an industrial D
establishment has to be judged from a different angle-Need for judicial
restraint-Court cannot create a post where none exists-Completion of 240
I days in a year does not confer any right on a workman to claim regularization
in service-Companies Act, 1956-Section 617-Constitution ofIndia, 1950-
Article 226.
E
Respondent workers were continuing as daily rated gardeners (malies)
in Appellant government company for number of years. They filed writ petition
claiming regularization of service and continuance in service without any beak
as well as equal pay for equal work.

) High Court issued a direction to absorb the Respondents as regular
F
employees or such of them as may be required to do the quantum of work
available on perennial basis and further direction that they be paid the wages
of regular employees. The Court further directed that such workers who are
not absorbed as regular employees shall not be disengaged and shall be allowed
to continue as per settlement entered with between workers and management G
)\·
of Appellant company and shall be regularized as and when the perennial work
is available.

In appeal to this Court it is contended by the appellant company that it
is a Government Company within the meaning of Section 617 of the Companies
923 H
924 SUPREME COURT REPORTS [2007] 5 S.C.R.

A Act and the persons employed in its factory are not government servants but
\'
are mainly governed by the provisions of Industrial Disputes Act and other
allied enactments; that a government servant enjoys a status on account of
constitutional provisions and rules framed under Article 309 of the
Constitution, which is not the case with the Respondent workers and that the
Trade Union having entered into settlements with the appellant can claim
B rights only on the basis of the said settlements and no claim for regularization
or permanency in service or grant of pay scale at par with those who are in
the regular es~ablishment of the appellant is maintainable.
j- ~

Respondents, on the other hand, contended that they had worked for more
c than 240 days in a year for more than 6-7 years before the filing of the writ
petition; that an artificial break of2-3 days was deliberately created twice or
thrice in a month in their service just to deprive them of continuity in service;
that they havir.g worked for a very long period and work being available, they
should be given permanent status and also the same pay scale which is being
given to those who are in the regular establishment of the appellant.
D
Allowing the appeal, the Court

HELD: 1.1. The position ofa government servant is entirely different
from that of a workman who is working in an industrial establishment like
the appellant Company, a government company within the meaning of Section
E
617 of the Companies Act A government servant enjoys a status and a security
of tenure on account of certain constitutional provisions. [Para 10) [931-FJ

1.2. An appointment in government may be on probation or in temporary
capacity or permanent in nature. A permanent government servant has a right
F to hold the post and he cannot be dismissed or removed or reduced in rank
'(
unless the requirements of Article 311 of the Constitution or the Rules
governing his service are complied with. [Para 111 (932-8, q

1.3. An employee working in an industrial establishment enjoys a limited
kind of protection. He may lose his employment in various contingencies which
G are provided under the Industrial Disputes Act such as lay off as provided in
Section 25-C, retrenchment as provided in Section 25-F, transfer of industrial {
establishment or management of an undertaking as provided in Section 25-
FF, closure of undertaking as provided in Section 25-FFF. He may be entitled
to notice or wages in lieu of notice and monetary compensation depending
H upon the length of service put in by him. But the type of tenure of service
HINll'USTAN AERONAUTICS LTD. 1·. DAN BAHADUR SINGH 925

normally enjoyed.J>y a permant'nt employee in Government Service, namely, A
-,' to continue in sen·ice till the 1age of superannuation, may not be available to
an employee or workman working in an industrial establishment on account
of various provisions in the Industrial Disputes Act where his tenure may be
cut short not on account of any disciplinary action taken against him, but on
account of a unilateral act of the employer. Therefore, the claim for B
permanency in an industrial establishment has to be judged from a different
angle and would have different meaning. (Para 12f (933-A, B, C, DI

Union Public Service Commission v. Girish Jayanti Lal Veghe/a & Ors.,
(2006J 2 SCC 482; Hem:i· Engineering Mazdoor Union v. State of Bihar and
Ors., (1969) I SCC 765 and A. K. Bindal v. Union of India, (2003) 5 SCC C
163, relied on.

B.N Nagarajan & Ors. v. State of Karnataka & Ors., (1979) 4 SCC
507 and Secretary, State ofKarnataka v. Uma Devi, (2006) 4 SCC I, referred
to.
D
2. Competition of 240 days' work does not confer the right to
regularization under the Industrial Disputes Act. It merely imposes certain
't ·i· obligations on the employer at the time of termination of the services. There
is no right vested in any daily wager to seek regularization. Regularization
can only be done in accordance with the rules and not de hors the rules. E
(Para 14) (933-G; 934-A-C)

Madhyamik Shiksha Parishad v. Anil Kumar Mishra & Ors., (2005) 5
SCC 122; MP. Housing Board & Anr. v. Manoj Shrivastava, (2006) 2 SCC
702 and Gangadhar Pillai v. Siemens Ltd., (2007) I SCC 533, relied on.
F
,. 3.1. Creation and abolition of posts and regularization are a purely
executive function. Hence, the court cannot create a post where none exists.
It is well settled that unless there exists some rule no direction can be issued
by the court for continuation in service or payment of regular salary to a
casual, ad hoc, or daily rate employee. Such directions are executive functions,
and it is not appropriate for the court to encroach into the functions of another G
organ of the State. The courts must exercise judicial restraint in this
connection. Judicial activism in some extreme and exceptional situation can
be justified, but resorting to it readily and frequently, as has lately been
happening, is not only unconstitutional, it is also fraught with grave peril for
the judiciary. If the court/tribunal directs that a daily rate or ad hoc or casual H
926 SUPREME COURT REPORTS [2007] 5 S.C.R.

A employee should be continued in service till the date of superannuation, it is
impliedly regularizing such an employee, which cannot be done.
!Para 1511935-8, D, E, Fl

3.2. In the present case, the direction issued by the High Court in effect
has two components i.e. creation of posts and also payment of regular salary
B as in absence of a post being available a daily wager cannot be absorbed as a
regular employee of the establishment. In view of the discussion above, the
judgment of High Court cannot be sustained and has to be set aside. The
Respondents are not entitled to the relief claimed by them. It is, however, made ,_
clear that in case there is any violation of the terms of the settlements on the /
C pr.rt of the appellant, the respondents will be entitled to enforce their rights
in accordance with law.
!Paras 15, 16 and 1711934-G, H; 935-A, G, H; 936-A, BJ

Indian Drugs and Pharmaceuticals Ltd. v. Workman, Indian Drugs &
Pharmaceuticals Ltd., (20071 l SCC 408, relied on.
D CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2195 of2007.

From the Final Judgment and Order dated 07.03.2005 of the High Court
of Judicature at Allahabad Lucknow Bench, Lucknow in Special Appeal Nos. ) 'i
436 (SB) and 437 (SB) of 1999.
E R.N. Trivedi, Nikhil Nayyar and Ankit Singhal for the Appellant.

Sandhya Goswami, H.C. Kharbanda, M.P.S. Tomar and Jaber Singh for
the Respondents.

The Judgment of the Court was delivered by
F
G.P. MA THUR, J. 1. Leave granted.

2. These appeals, by special leave, have been preferred against the
judgment and order dated 7.3.2005 of Allahabad High Court (Lucknow Bench),
by which the special appeals preferred by the appellant herein were dismissed
G and the judgment and order dated 31.8.1999 passed by a learned Single Judge
by which two writ petitions were disposed of was affirmed.

3. Hindustar. Aeronautics Ltd. Muster Roll Trade Union Congress,
Korwa, Sultanpur, filed Writ Petition No.! 0513 of 1990 against the appellant
Hindustan Aeronautics Ltd., Korwa Division, Sultanpur (hereinafter referred
H to as 'the Company') & Ors., wherein the main relief claimed was as under :-
HINDUSTAN AERONAUTICS LTD. v. DAN BAHADUR SINGH [G.P. MATHUR, JJ927

-, "Issue a writ, order or direction in the nature of mandamus commanding A
the opposite parties to regularize the services of the members of the
petitioner union fully described in Annexure No. I and place them in
the pay scale of the post of Mali and allow them and treat them as
continuing in service with all benefits without any break."

It was averred in the writ petition that the petitioner union is a registered B
trade union under the provisions of the Trade Unions Act, 1926 with the

-, Registrar, Trade Unions U.P., Kanpur, of daily rated Malies i.e. Muster Roll
employees (workmen within the meaning of the Industrial Disputes Act)
working in the establishment of the appellant herein. The petitioner union was
seeking regularization of services of its members and their continuance in
service without any break as well as equal pay for equal work. The members
c
of the petitioner union whose names figure at serial nos. I to 77 in Annexure
1, are land losers as their land was acquired for establishment of appellant and
the remaining persons are non land losers. The members of the petitioner
union were continuing as daily rated Malies for the last about 5 to 7 years
with 2-3 days break on 2 or 3 occasions in each month although the work and D
post continue to be available. There was a policy of the State Government
.. j
to provide employment to at least one member of the family whose land had
been acquired and several Government orders had been issued in this regard.
The daily rated Malies were getting much less amount as wages than those
Mali es who were in a regular scale of pay though there was no difference in
work. In spite of work and posts being available, artificial break in service was E
created with a view to deprive them of their continuity in service. The
members of the petitioner union had put in more than 240 days of continuous
service in each calendar year, yet their services had not been regularized.
They were entitled to not only regularization of their services but also the pay
scale of the post of Mali as there was no difference in the nature of work and F
\
dutie~ being performed by them from those who were in the regular pay scale.

4. The appellant herein filed a counter affidavit on the ground, inter
alia, that the list of members contained in Annexure I to the writ petition was
not within the knowledge of the appellant company. The writ petitioners were
being engaged as casual labourers in the appellant Company as per the G
){" settlement arrived at on 6.3. 1989 between the writ petitioners and the
management of the Company with the intervention of Deputy Labour
Commissioner, Faizabad. It was further averred that after acquisition of land
by the State Government for the purpose of setting up of Korwa Division of
the Hindustan Aeronautics Ltd., factory premises were established in 1983.
H
928 SUPREME COURT REPORTS [2007] 5 S.C.R.

A Since a new area had to be developed and the work had to be started from
scratch, initially a large number of workmen including Malies were engaged
for horticulture and land scape development work. However, at the present
juncture, the horticulture work was limited for maintenance ofland and garden
and thus the requirement of the labourers for this work had considerably
decreased and there was no continuous and full time work. The land losers
B whose land had been acquired were given preference for this type of work.
In the settlement arrived at on 6.3.1989 it was agreed that the land losers
would be engaged for 20 days in a month and non land losers would be
engaged for 15 days in a month on daily basis as casual unskilled labourers.
The writ petitioners were paid daily wages which was much higher than the
C minimum wages prescribed under the Minimum Wages Act but they could not
be paid wages like Malies employed in regular pay scale. The writ petitioners
cannot be given appointment on regular post as there is no continuous and
full time work of that nature in the company. It was further averred that the
company is already having surplus labour and, therefore, a ban has been
imposed on recruitment. The writ petitioners were being engaged essentially
D to fulfil the terms of the settlement arrived at on 6.3.1989. Lastly, it was
submitted that the basic object of the compaPy was to produce state of art
avionics equipment for aircrafts which was being manufactur.:d for use by the
Indian Air Force. The horticulture activities are in no way connected with the
production activities of the company. It was purely seasonal and intermittent
E in nature and there was not enough continuous and full time workload to
justify the employment of a large work force on permanent basis. A
supplementary counter affidavit was also filed wherein it was averred that at
the initial stage manpower was required for levelling of the land for gardening
purposes and for purposes related to horticulture development in factory
premises as well as in residential area of the establishment. In the establishment
F there was no post for gardeners (Malies) and the sanction for horticulture (
work is being given by the General Manager of the establishment on the basis
of man days ~equired for work every month. After assessing the requirement
of the establishment 2106 man days had been sanctioned in the establishment
for different categories of casual workmen. The sanction given for the month
G of December 1998 would show that there are 78 man days for skilled grade
and 2024 man days for unskilled casual workmen. The number of man days
of individual workman differ in every month. The excess (balance) number of
man days from land losers/skilled category was distributed every month
amongst the unskilled casual workmen. A settlement in this regard was arrived
l!t on 26. 7.1995 before the Assistant Labour Commissioner, Faizabad. After the
H settlement, a cogent scheme had been framed by the establishment based on
HINDUSTAN AERONAUTICS LTD. v. DAN BAHADUR SINGH [G.P. MA THUR, J J 929

reasonable classification for engagement of the casual labour for the purpose A
·'T} of meeting the requirement of horticolture work in the establishment. It was
further averred in the counter affidavit that a policy decision had been taken
by the Board of Directors on 19.5.1987 by which the induction of manpower
in the establishment has been frozen as on 30.5. 1987. Therefore, in view of
the policy decision and absence of any post, the writ petitioners could not
be engaged on regular basis nor could they be regularized on any post in the B
establishment. The said policy decision had been taken at the apex level
looking to the financial stringency and surplus manpower and also lean
supply of orders and the fact that the activity for which the writ petitioners
-\ are being engaged is only incidental.

5. Writ Petition No.10524of1990 was filed by few individuals claiming
c
the same relief as in Writ Petition No. I0513 of 1990 and was based on same
grounds.

6. The learned Single Judge, relying upon some decisions of this Court
and also of' the High Court, disposed of both the writ petitions by a common D
order and the operative part of the order is being reproduced below :-

"Admittedly, petitioners are engaged as daily rated workers in the
.. t factory and the factory is giving them work for 18-20 days and is
taking work for these days from the petitioners. Therefore, it cannot
be believed that there is not work and the respondents are only E
engaging the petitioners in order to provide them livelihood. If there
is no work, the respondents company could request the Labour
Commissioner to stop the engagement. No employer can pay his
workmen without work. It shows that the work is there.

In this background the contention of the petitioners that the F
) artificial break in service is being created by the respondents in order
to deny the regularization of petitioners who having completed 240
days and having rendered more than 8 years of services satisfactorily
are entitled for their regularization, and the artificial break is liable to
be ignored.
G
In view of the aforesaid facts these petitions are disposed of with
.~ a direction to the respondents to absorb the petitioners as regular
employees or such of them as may be required to do the quantum of
work which may be available on perennial basis may be absorbed if
they are otherwise found fit and they will be paid wages of regular H
930 SUPREME COURT REPORTS (2007] 5 S.C.R.

A employees. This shall be done within three months from the production
of certified copy of this order. 'r
However, the rest of the petitioners shall not be disengaged and
shall be allowed to continue as per settlement dated 26. 7.1995 and
ii'
shall be regularized as and when the perennial work is available. The
B question as to whether the work of perennial nature is available or not
shall be decided by the Deputy Labour Commissioner who shall
decide the same every year in order to facilitate the absorption of the
petitioners. No order as to costs."

7. Feeling aggrieved by the directions issued by the learned Single
;-
c Judge, the appellant herein preferred special appeals but the same were
dismissed by the impugned order dated 7.3.2005 on the finding that there was
no illegality or infirmity in the judgment and order of the learned Single Judge
by which the writ petitions were disposed of.

8. Before considering the contentions raised by learned counsel for the
D parties, it is necessary to set out the terms of the settlement which was
entered into by the parties before the Deputy Labour Commissioner, Faizabad.
Paras I to 3 of the settlement dated 6.3.1989 which are relevant for the
controversy in hand are being reproduced below :- J "
"I. The land losers shall be given preference in engaging for the
E work in Horticulture Department and they will be given the job
for 20 days a month as required.
2 Other casual workers (other than land losers) who have completed
240 days in a calendar year, shall be given the job for 15 days
a month as required.
F
3. Case of other casual labourers of Horticulture Department who
are not covered under above paras (I) or (2), efforts will be made
to engage them through other departments_ As regards their
work and condition of duty, H.A.L. Management will have no
responsibility."
G
Para 2 of the settlement dated 26.7.1995 which was arrived at by the
parties before the Assistant Labour Commissioner, Faizabad, which is relevant, .,_,
•. -
is being reproduced below :-

"2. Demand No.9 which is related to distribution of working days,
H both parties agreed that Employer will distribute all the available
HINDUSTAN AERONAUTICS LTD. v. DAN BAHADUR SINGH [G.P. MATHUR, J.] 93 J

-)'
and approved man days among all the labourers. 67 land losers A
and two skilled labourers will be given work every month from
available working days. In this way remaining man days after
utilization form 2106 man days will be equally distributed among
the other 20 non land loser labourers. Balance part or fraction of
the day will not be taken into account for this purpose."
B
9. Shri R.N. Trivedi, learned counsel for the appellant, has submitted

_, that Hindustan Aeronautics Ltd. is a Government Company within the meaning
of Section 617 of the Companies Act and the persons employed in the factory
of the appellant Company at Korwa are not government servants but are
mainly governed by the provisions of Industrial Disputes Act and other allied
enactments. A government servant enjoys a status on account of constitutional
c
provisions and rules framed under Article 309 of the Constitution, which is
not the case with the members of the respondent union. Learned counsel has
submitted that the respondent union having entered into settlements with the
appellant on 6.3.1989 and 26.7.1995 can claim rights only on the basis of the
said settlements and no claim for regularization or permanency in service or D
grant of pay scale at par with those who are in the regular establishment of
the appellant is maintainable. Learned counsel for the respondents has, on the
. i
other hand, submitted that the members of the respondent union had worked
for more than 240 days in a year for more than 6-7 years before the filing of
the writ petition. An artificial break of2-3 days was deliberately created twice
or thrice in a month in their service just to deprive them of continuity in E
service. He has further submitted that the concerned workmen having worked
for a very long period and work being available, they should be given
permanent status and also the same pay scale which is being given to those
who are in the regular establishment of the appellant.
F
IO. We have considered the submissions made by learned counsel for
' the parties. The position of a government servant is entirely different from
that of a workman who is working in an industrial establishment like the
appellant Company. A government servant enjoys a status and a security of
tenure on account of certain constitutional provisions. In Union Public
Service Commission v. Girish Jayanti Lal Veghela & Ors., [2006] 2 SCC 482 G
it was held as under:-
;:.,·
" .............. .In the case of a regular government servant there is
undoubtedly a relationship of master and servant but on account of
constitutional provisions like Articles 16, 309 and 311 his position is
quite different from a private employee. Thus, employment under the H
932 SUPREME COURT REPORTS (2007] 5 S.C.R.

A Government is a matter of status and not a contract even though the
acquisition of such a status may be preceded by a contract, namely, '{- .
an offer of appointment is accepted by the employee. The rights and
obligations are not determined by the contract of the two parties but
by statutory rules framed by the Government in exercise of power
conferred by Article 309 of the Constitution and the service rules can
B be unilaterally altered by it."

11. An appointment in government may be on probation or in temporary
capacity or permanent in nature. A permanent government servant has a right
to hold the post and he cannot be dismissed or removed or reduced in rank J-
C unless the requirements of Article 311 of the Constitution or the Rules
governing his service are complied with.

12. The appellant, Hindustan Aeronautics Ltd., is a government company
within the meaning of Section 617 of the Companies Act. What will be the
legal position of a Government Company and whether its employees can be
D treated to be government servants was examined in Heavy Engineering
Mazdoor Union v. State of Bihar and Ors., [1969] I SCC 765 and it was held
· as under in para 4 of the reports:

".... .It is an undisputed fact that the company was incorporated under
the Companies Act and it is the company so incorporated which
E carries on the undertaking. The undertaking, therefore, is not one
carried on directly by the Central Government or by any one of its
departments as in the case of posts and telegraphs or the railways ..... "

In A.K. Bindal v. Union of India, [2003] 5 SCC 163 the difference
between an employee of a government and an employee of a Government
F Company was pointed out and it was held :

"17. The legal position is that identity of the Government Company
remains distinct from the government. The Government Company is
not identified with the Union but has been placed under a special
system of control and conferred certain privileges by virtue of the
G provisions contained in Sections 619 and 620 of the Companies Act.
Merely because the entire share holding is owned by the Central
Government will not make the incorporated company as Central
Government. It is also equally well settled that the employees of the
Government Company are not civil servants and so are not entitled
H to the protection afforded by Article 311 of the Constitution (See
934 SUPREME COURT REPORTS (2007] 5 S.C.R.

A work does not confer the right to regularization under the Industrial Disputes
Act. It merely imposes certain obligations on the employer at the time of
termination of the services. In M.P. Housing Board & Anr. v. Manoj
Shrivastava, [2006] 2 SCC 702 (paragraph 17) after referring to several earlier
decisions it has been reiterated that it is well settled that only because a
B person had been working for more than 240 days, he does not derive any legal
right to be regularized in service. This view has been reiterated in Gangadhar
Pillai v. Siemens Ltd, [2007] I SCC 533. The same question has been examined
in considerable detail with reference to an employee working in a Government
Company in Indian Drugs and Pharmaceuticals Ltd. v. Workman, Indian ;-
Drugs & Pharmaceuticals Ltd., [2007] 1 SCC 408 and paragraphs 34 and 35
C of the reports are being reproduced below:-

34. Thus, it is well settled that there is no right vested in any daily
wager to seek regularization. Regularization can only be done in
accordance with the rules and not de hors the rules. In the case of
E. Ramakrishnan and Ors. v. State ofKera/a and Ors., [1996] 10 SCC
D 565 this Court held that there can be no regularization de hors the
rules. The same view was taken in Dr. Kishore v. State ofMaharashtra,
[1997] 3 SCC 209 and Union of India and Ors. v. Bishambar Dutt,
[ 1996] 11 SCC 341. The direction issued by the Services Tribunal for r ..
regularizing the services of persons who had not been appointed on
regular basis in accordance with the rules was set aside although the
E petitioner had been working regularly for a long time.

35. In Dr. Surinder Singh Jamwal and Anr. v. State of Jammu &
Kashmir and Ors., AIR (1996) SC 2775, it was held that ad hoc
appointment does not give any right for regularization as regularization
is governed by the statutory rules.
F (
15. In the judgment under challenge the High Court has issued a
direction to absorb the members of the respondent union as regular employees
or such of them as may be required to do the quantum of work which may
be available on perennial basis and has issued a further direction that they
G will be paid the wages of regular employees. It has also been directed that
such of the members of the respondent union who are not absorbed as
regular employees shall not be disengaged and shall be allowed to continue
as per settlement dated 26.7.1995 and shall be regularized as and when the
perennial work is available. The direction issued by the High Court in effect
has two components i.e. creation of posts and also payment of regular salary
H as in absence of a post being available a daily wager cannot be absorbed as
HINDUSTAN AERONAUTICS LTD. v. DAN BAHADUR SINGH [G.P. MATHUR, l.J 935

·-j a regular employee of the establishment. This very question has been A
considered in Indian Drugs & Pharmaceuticals Ltd (supra) and, therefore,
we do not consider it necessary to refer to the various reasons given and
decisions cited therein. Paras 37, 38 and 47 of the reports, wherein the Bench
recorded its conclusions read as under :-

"37. Creation and abolition of posts and regularization are a purely B
executive function vide P. U Joshi v. Accountant General, Ahmedabad
and Ors., [2003] 2 SCC 632. Hence, the court cannot create a post
-\ where none exists. Also, we cannot issue any direction to absorb the
respondents or continue them in service, or pay them salaries of
regular employees, as these are purely executive functions. This Court
cannot arrogate to itself the powers of the executive or legislature.
c
There is broad separation of powers under the Constitution, and the
judiciary, too, must know its limits.

38. The respondents have not been able to point out any statutory
rule on the basis of which their claim of continuation in service or
D
payment of regular salary can be granted. It is well settled that unless

... ~
there exists some rule no direction can be issued by the court for
continuation in service or payment of regular salary to a casual, ad
hoc, or daily rate employee. Such directions are executive functions,
and it is not appropriate for the court to encroach into the functions
of another organ of the State. The courts must exercise judicial restraint E
in this connection. The tendency in some courts/tribunals to legislate
or perform executive functions cannot be appreciated. Judicial activism
in some extreme and exceptional situation can be justified, but resorting
to it readily and frequently, as has lately been happening, is not only
unconstitutional, it is also fraught with grave peril for the judiciary.
F
>
47. We are of the opinion that if the court/tribunal directs that a daily
rate or ad hoc or casual employee should be continued in service till
the date of superannuation, it is impliedly regularizing such an
employee, which cannot be done as held by this Court in Secretary,
State of Karnataka v. Umadevi [2006] 4 SCC 1, and other decisions G
... of this Court."

16. In view of the discussion made above, the impugned judgment of
the learned Single Judge which was affirmed in appeal by the Division Bench
cannot be sustained and has to be set aside. The respondents are not entitled
to the relief claimed by them. H
936 SUPREME COURT REPORTS [2007) 5 S.C.R.

A 17. The appeals are accordingly allowed. The judgment and order dated •.........
•
31.8.1999 of the learned Single Judge and judgment and order dated 7.3.2005
of the Division Bench are set aside and the writ petitions filed by the
respondents herein are dismissed. It is, however, made clear that in case there
is any violation of the terms of the settlements on the part of the appellant
B herein, the respondents will be entitled to enforce their rights in accordance
with law. No order as to costs.

B.B.B. Appeal allowed.

(