Holding

The High Court’s direction to regularize conductors from the date of their initial daily‑wage appointment is unsustainable; regularization must be based on the actual date of regular appointment unless a specific service rule provides otherwise.

Summary

The Andhra Pradesh State Road Transport Corporation (APSRTC) recruited conductors on a daily‑wage basis and later regularized them, counting seniority from the date of regularization. The conductors filed writ petitions under Article 226 seeking to have their regular appointment deemed effective from the date of their initial appointment and to receive corresponding service benefits. The High Court granted relief, conditioning it on the completion of one year of continuous service as defined in Section 258 of the Industrial Disputes Act, 1947. On appeal, the Supreme Court held that the High Court’s criterion was legally unsustainable because it misapplied Section 258 and because the employees had been regularized within a reasonable time without any service rule supporting retroactive regularization. While the Court affirmed that the respondents could not claim seniority from the initial appointment, it modified the relief to ensure parity for any junior conductors who had been granted seniority and regularization in final judgments. The civil appeals were consequently disposed of without costs.

Issues considered

The appropriate effective date of regular appointment and seniority for employees initially appointed on daily‑wage terms and later regularized.
Whether Section 258 of the Industrial Disputes Act, 1947 can be used to determine continuous service for the purpose of regularization.
Whether writ petitions filed under Article 226 after regularization can disturb the settled seniority position.
Whether the High Court’s direction to grant retroactive regularization is legally sustainable in the absence of a service rule.

Legislation cited

Industrial Disputes Act, 1947s. 12(3), s. 258, s. 25B

Subjects

regularizationseniorityIndustrial Disputes ActSection 25BSection 258Article 226service lawconductorsdaily‑wage employeesappellate court

Judgment

r >' THE DIVISIONAL MANAGER, APSRTC AND ORS. A
v.
P. LAKSHMOJI RAO AND ORS.

JANUARY 22, 2004

[S. RAJENDRA BABUAND P. VENKATARAMA REDD!, JJ.] B

j. Industrial Disputes Act, 1947:

Section 25B-Regular appointment and seniority-Effective date-State
Road transport selecting conductors and appointing them on daily wages- c
Subsequently, regularizing them-Their seniority to be counted from the date
of regularization-Claim for regularization from date of initial appointment-
High .Court granting relief subject· to a condition that employee must have
completed one year of continuous service as defined in section 25B-
Sustainability of-Held: Not sustainable as wrong criterion based on Section D
258 applied-The employees approached the Court under Article 226 of the
't
Constitution long after their regularization-Services regularized within a
\ reasonable time-No rule cited to claim regularization from the date of their
initial appointment as daily wage employees-Employer failed to challenge
the decision in time and allowed it to become final-Relief granted by High
Court moulded-Constitution of India, 1950-Artic/e 226. E

.. Appellant-Corporation issued advertisement for appointment for the
post of Conductors. Respondents were selected as conductors and
appointed on daily wages initially for a certain period of time. Thereafter,
they were regularized after a year or two. They were placed on time scale
~
J.
of pay and their seniority was counted from the date of regularization.
F
After nationalization of routes, certain persons employed by private bus
operators were absorbed into Corporation service and were shown as
seniors to the respondents in the seniority list. Respondents then filed writ
petitions seeking regularization from the date of their initial appointment
on daily wage basis and service benefits. High Court allowed the writ G
petitions subject to the condition that they should have completed one year
< of continuous service as defined in Section 258 of the Industrial Disputes
')
Act. Appellants filed an appeal. Division Bench of High Court dismissed
the same. Hence the present appeal.

929 H
930 SUPREME COURT REPORTS [2004] I S.C.R.

A Disposing of lhe appeals, the Court

HELD: I.I. The law laid down or the directions given in various writ
petitions/writ appeals are not legally sustainable as wrong criterion based
on Section 258 of Industrial Disputes Act was applied in case after case;
B that the respondents and other similarly situated employees approached
th.e-Court under Artitle 226 long after their regularization, thereby
I
upsetting the settled position; and that on the facts it is evident that the Ii

services of the employees who were recruited as Conductors were
regularized within a reasonable time, therefore, they were treated fairly.
Furthermore, the respondents could not point out any service rule or
C regulation or any other principle of law into service to claim regularization
from an anterior date i.e. right from the date of their initial appointment
as daily wage employees. [938-B-CI

1.2. In the normal course, the judgments under appeal should have
been set aside and writ petitions be dismissed. However, the fact that the
D appellants failed to question the adverse decisions by filing appeals at the
appropriate time and that they allowed many judgments to become final
though they related to employees of the same Region/Division, come in
the way of these appeals being allowed in toto. [938-D-Ef
r
E 1.3. In view of the peculiar situation and in order to avoid the
anomalies that might otherwise ensue, while holding that the respondent-
employees have failed to establish their legal right to get the status of
regular employees right from the date of their initial appointment on daily
wage basis and the respective dates of regularization ~ssigned to the
respondents cannot be legally faulted, the relief is moulded in modification
F llf the directions given in the judgments under appeal that if any of the
Conductors, junior to the respondents in the relevant seniority list of the
concerned Division/Region, have got the benefit of seniority and
regularization or are entitled to get the same by virtue of the judgments
that have become final, then the respondents who are seniors to them, shall
G be given the same benefit on the same principle. [938-G-H; 939-A-Bf

APSRTCv. P. T Rao, (1998) 2 ALT 447 and State of Ha1ya11a v. Piara
Singh [1992[ 4 SCC 118 =AIR (1992) SC 2130, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2455 of
H 1999.
.~..

DIVISIONAL MANAGER, APSRTC v. P.L. RAO [REDD!, J.] 931
From the Judgment and Order dated 2.3.98 of the Andhra Pradesh High A
' ). Court in W.A.No. 218 of 1998.

WITH

C.A. Nos. 3017, 5881 and 4855 of 1999.
B
L. Nageswara Rao, G. Ramakrishna Prasad, Jayanth Muthraj, Mohd.
Wasay Khan and K.C. Sudarshan for the Appellants.

P.S. Narasimha, V.G. Pragasam and D. Mahesh Babu for the
Respondents.

The Judgment of the Court was delivered by
c
P. VEN KAT ARAMA REDDI, J. These cases involving the issue as
to the effective date of regular appointment and seniority unfold certain
disturbing features-non application of mind by the High Court to the crucial
aspects of the case, vagueness of the directions issued, the deficiency of D
pleadings and material placed on record by the contending parties and above
all the default of the appellant-Corporation in allowing other similar orders
becoming final while contesting certain others including the present matters.

The undisputed facts common to all these cases may be noticed:
E
Pursuant to the advertisements made by the appellant-Corporation
(hereinafter referred to as 'APSRTC'), the respondents were selected as
conductors and appointed on daily-wages initially for a certain period of time
and thereafter their services were extended on the same terms and ultimately
regularized after a year or two. They were placed on time scale of pay and
their seniority was counted from the date of such regularization. Long F
afterwards, the respondents filed writ petitions contending that their services
ought to have been regularized from an anterior date i.e., from the date of
their initial appointment on daily-wage basis and the service benefits should
be granted accordingly. This prayer was practically granted by the High
Court with a rider that they should have completed one year of continuous G
service as defined in Section 258 of the Industrial Disputes Act. There was
practically no discussion on the merits in any of these cases either in the
)
judgments under appeal or the earlier judgments which were followed in the
instant cases. All the writ appeals were disposed of at the admission stage
itself. One more fact to be noticed is that no averment has been made nor any
material placed before us to establish that the judgments which were followed H
932 SUPREME COURT REPORTS [2004] I S.C.R.

A in these cases or similar judgments in certain other cases have been contested
by APSRTC by filing LPAs or SLPs. l_ •

Now, we will advert briefly to the facts in each of these appeals.

Civil Appeal No. 2455 of 1999
B
Pursuant to the advertisement issued by APSRTC calling for the
application_s for the posts of Conductors in Visakhapatnam, Vizianagaram
and Srikakulam regions, the respondents were selected and appointed as
Conductors on daily-wage basis in October, 1987. They joined the service on
various dates between 16.10.1987 and 12.12.1987. The services of the
C respondents were regularized with effect from 15.2. 1989. It is to be mentioned
that the order appointing them on daily-wages and on regular basis is not on
record. The respondents filed writ petition in the year 1997 in the High Court
of A.P. alleging that certain persons employed by the private bus operators
and absorbed into Corporation service after nationalization of the "OUtes,
D though appointed later on i.e., after 12.12.1987, were shown as seniors to the
respondents in the seniority list (the date of which is not mentioned). Thus,
according to the respondents, they were made juniors to the displaced
employees who were appointed subsequently. It does not appear that any
counter-affidavit was filed in the Writ petition. The stand of the appellant as
seen from the grounds in the Writ appeal is that the respondents were appointed
E on daily-wage basis after selection in order to cope up with the peak season
demands between January and July and their services were regularized as and
when vacancies arose. The details of the vacancies that had arisen were
however not spelt out. The reason for offering appointment to the respondents
on regular basis with effect from 15.2.1989 is not specifically mentioned
F either in the memorandum of Writ appeal or the SLP. The learned single
Judge allowed the writ petition of the 50 respondents directing regularization
in the posts of Conductors "reckoning continuous service of the writ petitioners
as envisaged in Section 25B of the Industrial Disputes Act for the purpose
of benefits of service". On appeal by APSRTC, the Division Bench dismissed
the same on the ground that "on the appellants' own showing, the matter is
G covered in terms of the earlier order in writ appeal No. 705of1995''. We will
be adverting to the order in W.A. 705 of 1995 a little later.

Civil Appeal Nos. 3017 and 5881 of 1999

There are three respondents in these appeals. The two respondents in
H Civil Appeal No. 3017 of 1999 were appointed as casual Conductors on
DIVISIONAL MANAGER, APSRTC v. P.L. RAO [REDD!, J.] 933
~ .l 15.12.1983 on daily-wage basis after due selection in Cuddapah region of A
APSRTC and they reported for duty on 19.12.1983. Their services were
regularized with effect from 6.4.1985. The respondents filed the writ petitions
in the year 1998 seeking regularization with effect from 19.12.1983 instead
of 6.4.1985 and praying for all benefits of service with reference to the said
date of their initial appointment. The respondent in Civil Appeal No. 5881 of B
1999 was appointed on 3.4.1984 as ~ casual Conductor in Cuddapah region
after due selection and his services were regularized with effect from 21.3.1986.
He prayed for a similar direction to treat the effective date of regularization
as 3.4.1984 instead of 21.3.1986. The learned single Judge dismissed both
the writ petitions (filed in the year 19?8) on the ground of unexplained delay
in approaching the Court and nonjoinder of necessary parties whose seniority C
was likely to be affected. On appeal by the writ petitioners, the Division
Bench set aside the order of the learned single Judge and directed the
Corporation to consider the cases of the writ petitioners for regularization
"notionally, with effect from the date they were entitled to" with a further
observation; "it is made clear that the appellant should be given the same
benefits which have been granted by the respondents in respect of similarly D
situated persons". The learned Judges of the Division Bench noticed that in
writ petition No. 26111 of 1998, which was disposed of by another learned
single Judge, there was no opposition by the Corporation and therefore it was
not fair on the part of the Corporation to raise the technical ground of latches
in respect of similarly situated employees. It may be mentioned that in W.P.No. E
26111 of 1998, the learned single Judge directed regularization with effect
from the date of initial appointment purportedly following the decision of
Division Bench in APSRTC v. P. T. Rao (1998) 2 ACT 447. There was in fact
no concession on merits in that case. It is not known whether any writ appeal
was filed against the order in W.P.No. 26111 of 1998.
F
Civil Appeal No. 4855 of 1999

The four respondents in this appeal were recruited on daily-wage basis
as casual Conductors after due selection and offered appointment in Governor
pet depot of Vijayawada region in june/July, 1991. Their services were G
regularized in January/August, 1994. Claiming regularization on completion
of 240 days of continuous service and placing reliance on the decision in
Writ Appeal No. 705 of 1995, they filed writ petition in the year 1997. The
writ petition was disposed of on I. I0.1997 with a direction to the respondents
to consider the case of the petitioners for regularization as per the judgment
in W.A. No. 705 of 1995. On appeal to the Division Bench, the writ appeal H
934 SUPREME COURT REPORTS [2004] I S.C.R.

A was dismissed Ill limine by a non-speaking order. In the writ appeal, an
affidavit was filed by the Chief Law Officer of APSRTC. It is stated therein
.L. '
that on account of large scale nationalization of bus routes between 1986 and
1990 and the heavy passenger traffic during the peak season, the APSRTC
resorted to recruitment of Conductors and Drivers on daily-wage basis in the
hope of absorbing them on regular basis later on depending on the availability
B of the sanctioned posts. Keeping the anticipated regularization in view, they
were chosen on the basis of selection. It is further stated that the regularization
is done according to the prescribed norms envisaged in the memorandum of
settlement dated 28.4.1994 entered into under Section 12(3) of the l.D. Act.
For those employed between December 1991 and December 1994, the agreed
c date of regu Iarization as per the settlement, falls between 31.12.1995 and
31.7.1997. The deponent of the affidavit also relied on the provisions of A.P.
Act 2 of 1993 which seem to place restrictions on regularization of certain
categories of employees. It was then pointed out that regularization from the
date of initial appointment on daily-wages would cause administrative problems
and upset the settled seniority.
D
It is seen from various judgments placed on record that the genesis of
this litigation relating to the correct date of regularization is traceable to writ
petition No. 12132 of 1984. That writ petition was filed by the daily-wage f
Drivers appointed in June, 1983 after a process of selection. Their services
were terminated on 30th June, 1984 but they were reappointed in July, 1984 "
E on the same terms. Then they filed the said writ petition in which they sought
for a direction that they must be treated as Drivers on regular basis from the ...
dates of their initial appointment. Evidently, the services of the petitioners
therein were actually not regLilarized. A learned single Judge disposed of the
writ petition on 20.6.1988 with a direction to the respondents to "declare the
F petitioners to be in service on regular basis from the dates of their joining
duty and give consequential benefits". The only reason given by the learned -',
Judge is contained in the following paragraph which we quote:

"The petitioners were selected by a Committee on the basis of their
eligibility and they have been appointed on June 10, 1983. Therefore,
G though there appears the term "on temporary basis" "on daily wages"
the fact remains that they have been discharging the duties on regular
basis."

Thus, the performance of duties carried out by regular employees, was
taken to be the basis for directing regularization. The fact that they underwent
H a process of selection was also relied on. Insofar as the decision purports to
DIVISIONAL MANAGER, APSRTC v. P.L. RAO [REDD!, J.) 935

• ..:.. lay down a proposition of service law that the employees selected on aaily- A
wage basis after selection automatically become regular employees from day
one if they perfonn the duties similar to regular employees, it is utterly
untenable. In the absence of any service rule entitling the employees recruited
on daily-wages to get the status of regular employees with pay-scale from the
very date of joining, it would be difficult to countenance such proposition B
especially when there is no finding that the daily-wage employment was a
ploy or a colourable device to postpone regularization indefinitely. In State
of Haryana v. Piara Singh, (1992] 4 SCC 118 this Court set aside the direction
of the High Court to regularize the services of the ad hoc/temporary employees
who have worked for more than one year and observed that there can be no
rule of thumb in such matters and in any case, service for one year does not C
by itself confer a right of regularisation.

The next phase of litigation is writ petition No. 8070 of I 990. The
order in W.P.No. 12232 of 1984 (referred to supra) was followed by another
learned single Judge and a direction was issued to declare the petitioners as
having been regularly appointed from the respective dates of their joining the D
post for which they were selected with all consequential benefits. It is not
,,._ known whether the services of the three writ petitioners therein were
regularized by the date of filing the writ petition and whether they wanted the
benefit of retrospective regularization.

The APSRTC filed writ appeal against the order in W.P.No. 8070 of E
1990 and it was disposed of cursorily without adverting to any issue on
merits. The short order passed by the Division Bench on 24.7.1995 reads as
follows:

"Heard learned counsel for the appellant and learned counsel for the F
respondent.

We do not think there is any mistake in the direction issued by the
learned single Judge except that a clarification is required to reckon
the date of continuous appointment and thus regularization in the
post held by the petitioners respondents from the date of continuous G
appointment for the purpose of both of emoluments as well as seniority.

We accordingly clarify that the date of initial appointment as indicated
in the order of the learned single Judge will be read as the date of
continuous appointment as defined under Section 258 of the Industrial
Disputes Act. Such continuous service of the petitioner/respondents H
936 SUPREME COURT REPORTS [2004] I S.C.R.

A shall be counted for all benefits in the service in accordance with law. .....
I

With the clarification as above, the appeal is dismissed."

This order was followed in most of the writ petitions and writ appeals including
the orders under appeal.
B It is difficult to comprehend the ratio of the above decision. While
purporting to clarify the order passed in the writ petition by the learned single
Judge, the Division Bench imported a totally alien concept of continuous
service within the meaning of Section 25B of the 1.0. Act which was for the
special purpose of applying the provisions as to lay off and retrenchment
C contained in Chapter V-A of the Act. Moreover, the order in the writ appeal
is as vague as it could be. The expression 'date of continuous appointment'
makes no sense. Even if it is taken that the said wording has been inaccurately
used for the words 'continuous service', still, the direction is unintelligible.
Continuous service within the meaning of Section 25B-for how long? Nothing
D has been specified. In this state of things, in W.P. No. 24263 of 1998, a
learned single Judge proceeded on the basis that as per the decision in W.A.
705/1995, the employees were entitled to seek regularization with effect from
the date of initial appointment, thus making the clarification given by the
Division Bench virtually otiose.

E The problem was compounded by another Division Bench decision of
the High Court in Writ Appeal No. 1108 of 1997 A PSRTC v. P. T. Rao ( 1998)
2 ALT 447. That was an appeal against the order of the learned single Judge
directing regularization keeping in view the directions given in writ appeal
No. 705 of 1995 (supra). The learned Judges after referring to the decision
of this Court in State of H01yana v. Piara Singh, AIR (1992) SC 2130,
F observed:
"Thus, it is clear that the High Court cannot issue a blanket direction
to regularize the services of the employees on completion of a
particu Jar period. If we examine the cases of the respondents-workmen
here in the light of the principles laid down by the Supreme Court in
G State of Haryana v. Piara Singh (supra), we have to hold that the
order of the learned single Judge requires modification."

Having said so, curiously, the following order was passed in the next
paragraph which is the operative part of the judgment:

H "Therefore, the order of the learned single Judge is modified to the
DIVISIONAL MANAGER, APSRTC v. P.L. RAO [REDD!, J.] 937
.. '
.J. effect that the respondents-workmen are entitled to the regularization A
of their services from the date of their initial appointment to such
posts on completion of 240 working days. If there are number of
claimants seeking regularization, the same can be done only in a
phased manner. In so far as the claim of the workmen for arrears or
backwages is concerned, having regard to the facts and circumstances
of this case, we hold that the respondents-workmen are not entitled B
to the same.

With the above modification, the Writ Appeal is disposed of."

The direction given in paragraph 5 is not quite consistent with what
was held in the previous para of the judgment after referring to the law laid c
down in Piara Singh 's case. The concept of 'continuous service for a period
of one year' as per Section 258 of the l.D. Act has been imported by this
Division Bench also. Moreover, it is difficult to reconcile the two directions
·in para 5 (contained in the first two sentences). Perhaps, what the learned
Judges meant was that the employees' claim for regularization should be D
considered on completion of 240 working days and if they are otherwise
eligible, they should be absorbed on regular basis to the extent of vacancies
-+
available~ In the event of such regularization, it would take effect from the
' date of initial appointment.

It is difficult to follow the logic or the reason behind the law laid down E
by the Division Bench. If the regularization has to take place in a phased
manner subject to availability of vacancies etc., the question of according
regular status to the employees right from the date of initial appointment on
daily-wages does not arise. Moreover, if the services of respondents in the
writ appeal have already been regularized and they claim regular status from
the date of initial appointment, the High Court should have addressed itself
F
_;-
to the specific question whether the regularization after some period of daily
wage service was legally correct and recorded a finding thereon. The
observations made and the directions given have only added to the dimension
of controversy rather than solving the problem. How and in what manner the
said judgment in [1998 (2) ALT 447), which is sought to be relied upon by G
the appellants, was implemented is not known. No details are available in this
regard. However, it is difficult to construe the judgment in the said writ
appeal as upholding the contention of the appellants excepting the passing
observation that the regularization could be done in a phased manner.

In the light of the above discussion, we are of the view that the law laid H
938 SUPREME COURT REPORTS [2004] I S.C.R.

A down or the directions given in various writ petitions/writ appeals are not ,
~ '
legally sustainable for more than one reason. Firstly, wrong criterion based
on Section 25B of l.D. Act was applied in case after case. Secondly, the
respondents and other similarly situated employees approached the Court
under Article 226 long after their regularization, thereby unsettling the settled
B position. Thirdly, on the facts of these cases, it is evident that the services of
the employees who were recruited as Conductors were regularized within a
reasonable time. The respondent-employees were therefore treated fairly. No
service rule or regulation or any other principle of law has been pressed into
service by the respondents to claim regularization from an anterior date i.e.
right from the date of their initial appointment as daily wage employees.
c For the above reasons, we should have, in the normal course set aside
the judgments under appeal and dismissed the writ petitions. However, there
are certain facts which stare at the appellants, that come in the way of these
appeals being allowed in toto. We have to take note of the material fact that
the appellants failed to question the adverse decisions by filing appeals at the
D appropriate time. They allowed many judgments to become final though they
related to employees of the same Region/Division. For instance Writ Petition
No. 33077 of 1997 filed by 26 Conductors was disposed of on the same day
on which Writ Petition No. 33083 of I997 (which is under appeal in C.A.No.
2455 of 1999) was disposed of. In the Writ Appeals w!iich have given rise
E to C.A.Nos. 30 I7 of 1999 and 5881 of I999, reference has been made by the
Division Bench to Writ Petition No. 26 I 11 of I998 disposed of or. 4.11. I998
in which there were 30 petitioners. In the affidavit filed in the High Court in
Writ Petition No. 33083 of 1997 which has given rise to C.A. No. 2455 of
I999, reference has also been made to two other writ petitions namely
W.P.Nos. 31361 of 1996 and 14709 of 1996 decided on 19.4.1996 and
F 26.7.1996 respectively, wherein it was alleged that directions were given to
regularize the services from the date of original appointment. Above all, it -',
seems that the orders of the Division Bench passed in Writ Appeal Nos. 410
of 1997andI108of1997 (elaborately referred to supra) seem to have become
final. In · iew of this peculiar situation and in order to avoid the anomalies
G that might otherwise ensue, while we hold that the respondent-employees
have failed to establish their legal right to get the status of regular employees
right from the date pf their initial appointment on daily wage basis and the
respective dates of regularization assigned to the respondents cannot be legally
faulted, we are inclined to mould the relief in modification of the directions
given in the judgments under appeal and direct as follows:
H
DIVISIONAL MANAGER, APSRTC v. P.L. RAO (REDDI, .I.] 939

• ). If any of the Conductors, junior· to the respondents in the relevant A
seniority list of the concerned Division/Region, have got the benefit of seniority
and regularization OR are entitled to get the same by virtue of the judgments
that have become final, then the respondents who are seniors to them, shall
be given the same benefit on the same principle.

With these directions and observations, the Civil Appeals are disposed B
of without costs.

N.J. Appeals disposed of.