Holding

A person must be appointed in accordance with the statutory rules and to a clear vacant post; mere six months' service as a daily‑wage employee does not make him a permanent employee.

Summary

The respondent, Manoj Shrivastava, was engaged by the M.P. Housing Board as a daily‑wage Sub‑Engineer and worked for more than 240 days. He claimed permanent status under Clause 2(i) of the Standard Standing Orders, which provides that an employee who has completed six months' satisfactory service in a clear vacancy becomes permanent. The Labour Court accepted his claim, but the Board appealed. The Supreme Court held that a daily‑wage employee who is not appointed to a sanctioned vacancy in accordance with the statutory recruitment rules cannot be deemed a permanent employee, and that merely working for more than 240 days does not create a legal right to regularisation. Consequently, the Court set aside the Labour Court’s order and allowed the appeal.

Issues considered

Whether a daily‑wage employee appointed without a vacant post sanctioned by the statutory authority can be classified as a permanent employee.
Whether completion of more than 240 days of service confers a legal right to regularisation or permanent status.

Legislation cited

Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961s. Clause 2(i), s. Clause 2(vi)
Madhya Pradesh Industrial Relations Act, 1960s. 31(3), s. 3(3), s. 64-A

Subjects

daily wagerpermanent employeeregularisationstanding ordersstatutory appointmentvacancylabour lawindustrial relationsemployment lawMadhya Pradesh

Judgment

M.P. HOUSING BOARD AND ANR. A
v.
MANOJ SHRIVASTAVA

FEBRUARY 24, 2006

(S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.] B

Labour Laws:

Daily wager-Claim for permanent status--Entitlement-Held: Daily
wager is not entitled to status of permanent employee merely on ground of C
having worked for more than 240 days-Where appointment of daily wager
was not against a vacant post sanctioned by statutory aujhority nor made
upon following the statutory law, he had no legarnght to be accorded
permanent status-M.P. Grih Nirman Manda/ Adhiniyam, I972-Madhya
Pradesh Industrial Employment (Standing Orders) Act, I96I-Standard D
Standing Orders, Clause 2(i) and (vi)-Madhya Pradesh Industrial Relations
Act, I960-Section 3I(3) r/w 64A.

Appellant is a State Housing Board constituted under the M.P. Grih
Nirman Mandal Adhiniyam, 1972. Respondent was appointed by
Appellant as a daily wager. E
The questions which arose for consideration in the present appeal
are 1) whether Respondent could be accorded permanent status though
he was not appointed on any vacant post duly sanctioned by the statutory
authority nor his appointment was made upon following the statutory law
operating in the field and 2) whether Respondent derived a legal right to F
be regularised in service merely because he had worked for more than
240 days.

Allowing the appeal, the Court

HELD: 1.1. A person with a view to obtain th1e status of a 'permanent G
employee' must be appointed in terms of the statmtory rules. It is not the
case of the Respondent that he was appointed against a vacant post which
was duly sanctioned by the statutory authority or· his appointment .was
made upon following the statutory law operating in the field. The Labour
537 H
538 SUPREME COURT REPORTS (2006] 2 S.C.R.

A Court unfortunately did not advert to the said question and proceeded to
pass its award on the premise that as the Respondent had worked for more
than six months satisfactorily; in terms of clause 2(i) of the Standard
Standing Orders made under the Madhya Pradesh Industrial Employment
(Standing Orders) Act, 1961, he acquired the right of becoming permanent.
B For arriving at the said conclusion, the Labour Court relied only upon
the oral statement made by the Respondent. [541-·F-H; 542-AI

1.2. It is one thing to say that a person was appointed on an ad-hoc
basis or as a daily wager but it is another thing to :1ay that he is appointed
in a sanctioned post which was lying vacant upon following the due
C procedure prescribed therefor. It has not been found by the Labour Court
that the Respondent was appointed by the Appellant, which is a 'State'
within the meaning of Article 12 of the Constitution of India, upon
compliance of the constitutional requirements as also the provisions of the
M.P. Grih Nirman Manda! Adhiniyam, 1972 or th•! Rules and Regulations
framed thereunder. [542-A-CI
D
Mahendra L. Jain and Ors. v. Indore Development Authority and Ors .•
(2005) 1 SCC 639 and M.P. Vidyut Karamchari Sangh v. M.P. Electricity
Board, [20041 9 SCC 755, referred to.

2. A daily wager does not hold a post unless he is appointed in terms
E of the Act and the rules framed thereunder. He does not derive any legal
right in relation thereto. [543-F)

State of U.P. v. Neeraj Awasthi and Ors., (2006) I SCC 667, relied on.

-3. It is now well-settled that only because a person had been working
F for more than 240 days, he does not derive any legal right to be regularized
in service. 1544-D-EI

Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra and Ors.,
[20051 5 SCC 122; Executive Engineer, ZP Engg. Divn. and Anr. v.
Digambara Rao and Ors., [2004) 8 SCC 262; Dhampur Sugar Mills Ltd. v.
G Bhola Singh, 120051 2 sec 470 and Manager, Reserve Bank of India,
Bangalore v. S. Mani and Ors., [2005) 5 SCC 100., relied on.

4. The appointment made by a person who has no authority therefor
would be void. A fortiori an appointment made in violation of the
H mandatory provisions or the statute or constitutional obligation shall also
'r
M.P. HOUSING BOARD v. MANOJ SHRIVASTAVA [SINllA. J.] 539
,_
- be void. If no appointment could be made in terms of the statute, such A
appointment being not within the purview of the provisions of the .Act
would be void; he cannot be brought within the cadre of permanent
employees. The definitions of permanent employee' and 'temporary
employee' as contained in the rules must, thus, be construed having regard
to the object and purport sought to be achieved by the Act. (545-C-El
B
State of Punjab v. Jagdip Singh & Ors., [1964) 4 SCR 964, followed.
,II,

State of Karnataka and Ors. v. KGSD Canteen Employees Welfare
Association and Ors., (2006) 1 SCALE 85; Union Public Service Commission
v. Girish Jayanti Lal Vaghela and Ors., (2006) 2 SCALE 115 and State of
Madhya Pradesh and Ors. v. Onkar Prasad Patel, (2005) 10 SCALE 153,
c
relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1265 of2006.

From the Final Judgment and Order dated 9.9.2004 of the Madhya
Pradesh High Court in LP.A. No. 591 of 2004.
D

B.S. Banthia for the Appellant. .
T.L. Viswanath Iyer, Manoj Chandurkar and T.G. Narayannan Nair for
the Respondent.
E
The Judgment of the Court was delivered by

S.B. SINHA, J. Leave granted.

The Respondent was appointed on daily wages as a Sub-Engineer (Civil)
...._
on or about 7.4.1995. On the premise that his services may be terminated, he F
filed a writ petition whereupon by an order dated 25.4.2000, the High Court
directed the Appellant-Board to consider his case in the light of the purported
circulars issued by the State Government for scrutiny of the daily rated
employees. Upon the said direction, a scrutiny committee was appointed
which found that there had been rio vacancy nor there existed any sanctioned
G
post. The Committee prior to coming to the aforementioned opinion gave an
~ ' 'I
opportunity of hearing to the Respondent. He thereafter filed an application
before the Labour Court purported to be in terms of Section 31(3) read with
; Section 64-A of the Madhya Pradesh Industrial Relations Act, 1960 (for short
"the 1960 Act") praying that he be classified in the perma!lent category on
H
540 SUPREME COURT REPORTS [2006] 2 S.C.R.

A the ground that he had satisfactorily worked for more than six months and,
thus, became eligible therefor as provided under Clause 2(i) of the Standard
Standing Orders. The Labour Court by an order dated 22.1.2002 allowed the
said application holding:

"According to the discussion of issue No. I and 2 it has been decided
B that the applicant is entitled to be categorized in the permanent category
on the post of Sub-Engineer (Civil). Hence the non-applicant is ordered
from the date of submitting the application of applicant in this Court
from 10.5.2005 2 years prior from it the applicant be categorized in
permanent category.

c Because the applicant had been appointed ir daily wages hence in the
circumstances of the case and I do not consider it proper to give
benefit of salary of a permanent category to the applicant. But, the
applicant is entitled to claim pay scale of permanent category from
10.5.2000 the date of submitting application before this Court."
D An appeal was preferred thereagainst by the Appellants before the
Industrial Court, Jabalpur and by an order dated 16.10.2003, the same was
dismissed. A writ petition filed by the Appellant was also dismissed. By
reason of the impugned judgment, the Letters Patent Appeal filed by the
Appellant has also been dismissed.
E Mr. B.S. Banthia, learned counsel appearing on behalf of the Appellants
submitted that the Respondent having been appointed as a daily wager, he
could not have been declared as a permanent employee as there existed no
clear vacancy. It was further submitted that only b(:cause the Respondent had
worked for more than 240 days by itself could not have been a ground for
F issuance of a direction for the regularization in the service.

Mr. T.G. Narayanan Nair, learned senior counsel appearing on behalf
of the Respondent, on the other hand would draw our attention to a recent
decision of a Division Bench of this Court in State of Madhya Pradesh and
Ors. v. Onkar Prasad Patel, (2005) 10 SCALE 153 and on the basis thereof
G submitted that, in view of the definition of 'pennanent employee' as also
'temporary employee', the appointment of the Respondent would come within I
the purview thereof and, thus, on his completion of six months satisfactory
"
service, he would be entitled to either a temporary status or a permanent .
)..
status.
H
M.P" HOUSING BOARD v. MANOJ SHRIVASTAVA [SINHA. J.] 541

The Appellant-Board was constituted under M.P. Grih Ninnan Mandal A
Adhiniyam, 1972 (' 1972 Act'). Indisputably, the tenns and conditions of
employment of its employees are governed by a statute. The State of Madhya
Pradesh enacted the M.P. Industrial Relations Act, 1960 with a view to regulate
the relations of employers and employees in certain matters, to make provisions
for settlement of industrial disputes and to provide for matters connected B
therewith. In the year 1961, the State of Madhya Pradesh also enacted the
Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 (for
short "the 1961 Act") to provide for rules defining with sufficient precision
certain matters relating to the conditions of employment of employees in the
State of Madhya Pradesh.

'Pennanent employee' and 'temporary employee' have been defined in
c
Clauses 2(i) and (vi) of Standard Standing Order made under 1961 Act which
read as under:

"(i) A 'permanent' employee is one who has completed six months'
satisfactory service in a clear vacancy in one or more posts whether D
as a probationer or otherwise, or a person whose name has been
entered in the muster roll and who is given a ticket of permanent
employee;

(vi) 'temporary employee' means an employee who has been employed
for work which is essentially of a temporary character, or who is E
temporarily employed as an additional employee in connection with
the temporary increase in the work of a pennanent nature; provided
that in case such employee is required to work continuously for more
than six months he shall be deemed to be a permanent employee,
within the meaning of Clause (i) above."
F
A person with a view to obtain the status of a 'permanent employee'
must be appointed in terms of the statutory rules. It is not the case of the
Respondent that he was appointed against a vacant post which was duly
sanctioned by the statutory authority or his appointment was made upon
following the statutory law operating in the field.
G
The Labour Court unfortunately did not advert to the said question and
proceeded to pass its award on the premise that as the Respondent had worked
for more than six months satisfactorily; in tenns of clause 2(i) of the Standard
Standing Order, he acquired the right of becoming pennanent. For arriving
at the said conclusion, the Labour Court relied only upon the oral statement H
\

542 SUPREME COURT REPORTS (2006] 2 S.C.R.

A made by the Respondent.
It is one thing to say that a person was appointed on an ad-hoc basis
or as a daily wager but it is another thing to say that he is appointed in a
sanctioned post which was lying vacant upon following the due procedure
freedom prescribed therefor.
B
It has not been found by the Labour Court that the Respondent was
appointed by the Appellant herein, which is a 'State' within the meaning of
Article 12 of the Constitution of India, upon compliance of the constitutional
requirements as also the provisions of the I 972 Act or the rules and regulations
framed thereunder.
c
In Mahendra L. Jain and Ors. v. Indore Development Authority and
Ors. [2005] 1 SCC 639, this Court followed an earher decision of this Court
in M.P. Vidyut Karamchari Sangh v. M.P. Electricity Board, [2004] 9 SCC
755 wherein it was clearly held that when two statutory rules operate in the
D field unless the rules and regulations framed by the statutory authority are
inconsistent with the provisions of the 1960 Act and the Rules framed
thereunder, provisions of both the statute are required to be followed, holding

" ... The 1973 Act or the Rules framed thereunder do not provide for
E appointments on ad hoc basis or on daily wages. The 1961 Act itself
shows that the employees are to be classified in six categories, namely,
pennanent, pennanent seasonal, probationers, badlies, apprentices and
temporary. The recruitments of the appellants do not fall in any of the
said categories. With a view to become eligible to be considered as
a permanent employee or a temporary employee, one must be
F appointed in tenns thereof. Pennanent employee has been divided in
two categories (i) whu had been appointed against a clear vacancy in
one or more posts as probationers and otherwise; and (ii) whose
name had been registered both at muster roll and who has been given
a ticket of pennanent employee. A "ticket of pennanent employee"
G was, thus, required to be issued in tenns of Order 3 of the Standard
Standing Orders. Grant of such ticket was imperative before
pennanency could be so claimed. The appellants have not produced
any such ticket."

It was further held:
H
~·
'
i M.P. HOUSING BOARD v. MANOJ SHRIVASTAVA (SINHA. J.] 543
l
') "The Standing Orders governing the terms and conditions of service A
must be read subject to the constitutional limitations wherever
applicable. Constitution being the suprema lex, shall prevail over all
other statutes. The only provision as regards recruitment of the
employees is contained in Order 4 which merely provides that the
manager shall within a period of six months, lay down the procedure
for recruitment of employees and notify it on the notice board on B
which Standing Orders are exhibited and shall send copy thereof to
the Labour <;:ommissioner. The matter relating to recruitment is
governed by the 1973 Act and the 1987 Rules. In the absence of any
specific directions contained in the Schedule appended to the Standing
Orders, the statute and the statutory rules applicable to the employees c
of the respondent shall prevail."
)

It was furthermore held:

"For the purpose of this matter, we would proceed on the basis that
the 1961 Act is a special statute vis-a-vis the 1973 Act and the Rules D
framed thereunder. But in the absence of any conflict in the provisions
of the said Act, the conditions of service including those relating to
recruitment as provided for in the 1973 Act and the 1987 Rules
would apply. If by reason of the latter, the appointment is invalid, the
same ·cannot be validated by taking recourse to regularisation. For the
purpose of regularisation which would confer on the employee E
concerned a permanent status, there must exist a post. However, we
may hasten to add that regularisation itself does not imply permanency.
We have used the term keeping in view the provisions of the 1963
Rules."

A daily wager does not hold a post unless he is appointed in terms of F
_..,
the Act and the rules framed thereunder. He does not derive any legal right
in relation thereto.

The effect of such an appointment recently came up for consideration
in State of U.P. v. Neeraj Awasthi and Ors., [2006] 1 SCC 667 wherein this
G
Court clearly held that such appointments are illegal and void. It was further
held:
\ "The fact that all appointments have been made without following
the procedure or services of some persons appointed ,.have been
regularised in past, in our opinion, cannot be said to be a normal H
544 SUPREME COURT REPORTS 12006) 2 S.C.R.

A mode which must receive the seal of th1: court. Past practice is not
.
always the best practice. If illegality has been committed in the past,
it is beyond comprehension as to how such illegality can be allowed
to perpetuate. The State and the Board were bound to take steps in
accordance with law. Even in this behalf Article 14 of the Constitution
of India will have no application. Article 14 has a positive concept.
B No equality can be claimed in illegality is now well-settled. [See
State of A.P. v. S.B.P.V. Chalapathi Rao and Ors., [1995] I SCC
724, para 8, Jalandhar Improvement Trust v. Sampuran Singh, [1999]
3 SCC 494, para 13 and State of Bihar and Ors. v. Kameshwar
Prasad Singh and Anr., [2000] 9 SCC 94, para 30).
c In the instant case, furthermore, no post was sanctioned. It is now
well-settlea when a post is not sanctioned, normally, directions for
reinstatement should not be issued. Even if some posts were available,
it is for the Board or the Market Committee to fill-up the same in
terms of the existing rules. They, having regard to the provisions of
D the regulations, may not fill up all the posts."

It is now well-settled that only because a person had been working for
more than 240 days, he does not derive any legal right to be regularized in
service. [See Madhyamik Shiksha Parishad, U.P. v. Anil Kumar Mishra and
Ors.. [2005] 5 SCC 122, Executive Engineer, ZP Engg. Divn. And Anr. v.
E Digambara Rao and Ors., [2004) 8 SCC 262, Dhampur Sugar Mills Ltd v.
Bhola Singh, [2005) 2 SCC 470, Manager, Reserve Bank of India, Bangalore
v. S. Mani and Ors., [2005] 5 SCC 100 and Neeraj Awasthi (supra)]

In State of Karnataka & Ors. v. KGSD Canteen Employees Welfare
Association & Ors., (2006) I SCALE 85 it was held:
F
"The question which now arises for consideration is as to whether
the High Court was justified in directing regularization of the services
of the Respondents. It was evidently not. In a large number of
decisions, this Court has categorically held that it is not open to a
High Court to exercise its discretion under Article 226 of the
G Constitution of India either to frame E1 scheme by itself or to direct
the State to frame a scheme for regularising the services of ad hoc
employees or daily wages employees who had not been appointed in
terms of the extant service rules framed either under a statute or
under t~e proviso to Article 309 of th<: C~nstitution of India. Such a
H scheme, even if framed by the State, would not meet the requirements
<·

M.P. HOUSING BOARD v. MANOI SHRIVASTA VA [SINHA. J.] 545

r of law as the executive order made under Article 162 of the
Constitution of India cannot prevail over a statute or statutory rules
A

framed under proviso to Article 309 thereof. The State is obligated to
m_ake appointments only in fulfilment of its constitutional obligation
as laid down in Articles 14, 15 and 16 of the Constitution of India
and not by way of any regularization scheme. In our constitutional
schemes, all eligible persons similarly situated must be given B
opportunity to apply for and receive considerations for appointments
at the hands of the authorities of the State. Denial of such a claim by
)>..
some officers of the State times and again had been deprecated by
this Court. Jn any view, in our democratic polity, an authority
howsoever high it may be cannot act in breach of an existing statute c
or the rules which hold the field."

The appointment made by a person who has no authority therefor would
be void. A fortiori an appointment made in violation of the mandatory
provisions of the statute or constitutional obligation shall also be void. If no
appointment could be made in terms of the statute, such appointment being D
not within the purview of the provisions of the Act would be void; he cannot
--'. be brought within the cadre of permanent employees. The definitions of
'permanent employee' and 'temporary employee' as contained in the rules
must, thus, be construed having regard to the object and purport sought to be
achieved by the Act.
E
In State of Punjab v. Jagdip Singh & Ors., (1964] 4 SCR 964, a
Constitution Bench of this Court held that if no post was available at the time
when the respondent therein could be confirmed, such appointment would be
void. The effect of such void appointment has been held to be conferring no
legal right stating :
_..., Fl
" ... When an order is void on the ground that the authority which
made it had no power to make it cannot give rise to any legal rights,
and as suggested by the learned Advocatt:-General, any person could
have challenged the status of the respondents as Tahsildars by
instituting proceedings for the issue of a writ of quo warranto under G
Article 226 of the Constitution. Had such proceedings been taken it
would not have been possible for the respondents to justify their
• status as permanent Tahsildars and the High Court would have issued
"' a writ of quo warranto depriving the respondents of their status as
permanent Tahsildars" .
H
\
(

546 Slll'Rt:ME COURT REPOR rs [2006] 2 S.C.R.

A [See also Unum Public Sen·ice Commission v. uirish Jayanti Lal
Vaghela & Urs., (2006) 2 SCALE 115].

In Onkar Prasad Patel (supra), whereupon Mr. Nair placed strong
reliance, it was categorically held that an employee would not come within
the purview of definition of 'permanent employee' only because he has
B completed six months' satisfactory service. The other requirement was that
the service must be rendered in a clear vacancy in one or more posts which
was established. The conditions were held to be cumulative and not
independent of each other. The said decision, therefore, runs counter to the
submission of the learned counsel.
c For the foregoing reasons, the impugned judgment cannot be sustained
which is set aside accordingly. The appeal is allowed. The order of the
Labour Court will stand set aside. However, in the facts and circumstance of
the case, there shall be no order as to costs.

D B.B.B. Appeal allowed.