Full Judgment Text
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PETITIONER:
SYRYA NARAIN YADAV & ORS.
Vs.
RESPONDENT:
BIHAR STATE ELECTRICITY BOARD & ORS.
DATE OF JUDGMENT08/05/1985
BENCH:
MISRA RANGNATH
BENCH:
MISRA RANGNATH
FAZALALI, SYED MURTAZA
VARADARAJAN, A. (J)
CITATION:
1985 AIR 941 1985 SCR Supl. (1) 605
1985 SCC (3) 38 1985 SCALE (1)1106
CITATOR INFO :
D 1991 SC 818 (18)
RF 1991 SC1173 (5)
ACT:
Service Law-Right to absorption in service on the basis
of representations made-Applicability of the equitable
doctrine of promissory estoppel to State employees who,
relying on representations and promises made by the public
body have altered their position to their prejudice and
detriment-Seniority Assignment of, clarified.
HEADNOTE:
Pursuant to the Respondent Board’s advertisement for
selection of electrical engineers under the "Employment
Promotion Programme", the appellants and many others joined
as Apprentice Engineers with effect from April 1, 1977.
Though in March 1977 i.e. before their appointments, the
Board had indicated that the training of six months did not
guarantee employment under the Board, in view of its
resolution in August 1977 to fill on the basis of chain
system 200 vacant posts of Junior Engineers the appellants
were asked to continue as Junior Engineers/Assistant
Engineers as the case may be on existing stipends and were
posted to Thermal Power Stations. Since no regular
appointments were made representations were made to the
Board to implement the August 1977 resolution without loss
of time since some of them would become overaged for
employment under Government. On March 8,1979 at a high level
meeting it was decided that (i) After completion of one
year’s training (which is October 1979) they will be
appointed in the post of Assistant Electrical
Engineers/Junior Engineers on provisional regular basis;
(ii) that they will remain on probation for two years and
(iii) that during the period of probation, if their conduct
is found satisfactory and on availability of permanent posts
and on the basis of inter se seniority in the Cadre they
shall be confirmed. The aforesaid decision was published on
March 13, 1979 pointing out further that those trainees who
had left training should also join at the places of their
respective postings latest by March 18,1979 failing which
they would not be considered for regular appointments.
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In the meantime, some unemployed Engineers approached
the High Court at Patna challenging the continuity of the
trainee Engineers in the employment of the Board. The Board
took the stand before the High Court that the trainee
engineers belonged to a separate class and held ex cadre
appointments as Assistant Engineers and Junior Engineers.
The High Court took the view that their continuity on ex
cadre basis was not open to challenge on the ground of non-
compliance of Rules. In May 1980, these writ petitions were
dismissed Emboldened by the acceptance of their stand by the
High
606
Court, the Board started exhibiting a negative approach in
its treatment towards the trainee engineers. Ultimately, the
appellants moved the High Court for a direction to the Board
to encadre them but failed. Hence the appeals by special
leave against the decision of the High Court.
Allowing the appeals, the Court
^
HELD : 1.1 The Bihar State Electricity Board is a
statutory authority and is ’State’ within the meaning of
Article 12 of the Constitution. [612 E]
2.1 The principle of promissory estoppel has full
application to the facts of the case. The Board has tried to
seek shelter under a set of rules framed by it in exercise
of the powers vested under section 79 of the Electricity
(Supply) Act of 1949. The defence of the Board that the
trainee Engineers continue to serve as Assistant
Engineers/Junior Engineers on ex cadre basis without
seniority and stability of service is ill placed and cannot
hold as a shield against the application of the equitable
doctrine of promissory estoppel. The records clearly show;
(i) the Board did represent to the trainee engineers from
time to time that after their training was completed, they
would be absorbed in regular employment of the Board; (2)
when some of the engineers were getting age-barred for
Government employment and had left the Board, they were told
to come back under the temptation of getting permanently
employed under the Board; (3) when the Board was reeling a
strike of its employees, these trainee engineers had stood
by the Board to keep up the generation and distribution of
electricity and had been assured of absorption; and (4) the
Board had decided to absorb them on permanent basis but
initially on a probation of two years without conducting any
further examination. [612 E-F; 609 E-C]
Union of India v. Indo-Afghan Agencies [1968] 2 SCR
366; Collector of Bombay v. Municipal Corporation, [1952]
SCR 43: Century Spinning & Manufacturing Co. Ltd. v. The
Ulhasnagar Municipal Council & Anr. [1970] 3 SCR 854;
Motilal Padampat Sugar Mill Co. Ltd. v. State of Uttar
Pradesh & Ors. [1979] 2 SCR 409 followed.
[The Court directed that the appellants being already
in employment of the Board much prior to 1983 on being taken
into regular appointment of the Board have to rank above the
recruits of 1983 and in the years thereafter; and rank below
the permanent and temporary recruits to regular posts of
engineers held under the Board prior to 1983.] [613E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 268 &
269-273 of 1984.
From the Judgment and Order dated 1.9.1983 of the Patna
High Court in C.W.J.C. Nos. 4472/82, 2562/83, 2558/83,
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4472/82 and 3558/83 respectively.
607
Raju Ramachandran and Mrs. S. Ramachandran for the
Appellants in C.A. No. 268/84, 271/84 and 272/84 and B.B.
Singh for the Appellants in C.A. No. 269/84.
A, Sharan, Suleman, Khursid and Gopal Singh for the
Appellants in C.A. No. 270/84 and 273/84.
B.P. Singh and Ranjit Kumar for the Intervener.
Parmod Sawup for the Respondents in C.A. Nos. 268/84,
269 270, 271 and 272 of 1984.
B.P. Singh and Ranjit Singh for the Respondents in C.A.
No. 273 to 1984.
The Judgment of the Court was delivered by
RANGANATH MISRA, J. These appeals are by special leave
and two of these are by Junior Engineers while the other
four are by Assistant Engineers working under the
respondent-Bihar State Electricity Board. In September,
1975, the Board advertised in local newspapers that
selection of Electrical Engineers would be made under an
"Employment Promotion Programme" and Engineers with 50 per
cent marks in the degree examination would be eligible for
consideration. In due course, such selection was made and a
group of Apprentice Engineers also called Trainee Engineers
came to serve under the Board. These selected engineers had
already completed their training for the purpose of
obtaining the degree in engineering. The graduate trainees
were called upon to report for a period of six months’
training with effect from April 1, 1977. In March 1977, the
Board had indicated that the training does not guarantee
employment under the Board but in August, 1977, the Board
resolved that 200 vacant posts of Junior Engineers would be
filled on the basis of chain system and the existing
trainees would be continued as trainees on existing
stipends. As time elapsed and no appointment were made as
represented by the Board, representation was made by some of
the trainee engineers pointing out that unless the Board’s
decision of August, 1977, was implemented without loss of
time, some of them would become overaged for appointment
under Government. Soon after the said representation, the
Board extended deputation of the trainee engineers and
indicated that the deputation to Thermal Power Stations
under the Board would be of permanent nature. The Board
608
published a notice on March 13, 1979, to the effect that a
decision regarding regular employment of degree and diploma
trainee engineers of the Board for the post of Assistant
Electrical Engineers and Junior Electrical Engineers has
been taken by the State Government and on completion of
their training in October, 1979, regular appointment would
be made. It was further pointed out therein that those
trainees who had left training should join at the places of
their respective posting latest by March 18, 1979, failing
which they would not be considered for regular appointments.
As the Board did not give effect to its representations and
decisions, the graduate engineers employed as Assistant
Engineers or Junior Engineers started agitating for
implementation of the Board’s decisions from time to time.
Ultimately, on March 8, 1979, at a high level meeting where
the Speaker of the Legislative Assembly presided, the Chief
Minister was present and among others participating in the
meeting were the Commissioner of Irrigation and Electricity,
the Chairman of the Board and the Secretary of Irrigation
and Electricity, it was decided:
"After completion of one years’ training (which is
October 1979) as decided by the Board they will be
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appointed in the post of Assistant Electrical Engineer
and Junior Electrical Engineer on ’provisional regular
basis’. After appointment they will remain on probation
for two years. During probation the period if their
conduct is found satisfactory and on the availability
of permanent posts and on the basis of inter se
seniority in the cadre they shall be confirmed."
"They will be appointed on regular basis after the
completion of training period and examination as
proposed vide office order No. 1548 dated 26.10.78 will
not be taken."
The Board communicated the aforesaid decision to the Project
Managers and Thermal Power Stations of the Board, yet the
decision was not implemented and the apprentice engineers
continued to serve as Assistant Engineers and Junior
Engineers on ex cadre basis, without security and stability
of service. Some unemployed Engineers approached the High
Court at Patna challenging the continuity of the trainee
Engineers in the employment of the Board. The Board took the
stand before the High Court that the trainee engineers
609
belonged to a separate class and held ex cadre appointments
as Assistant Engineers and Junior Engineers. The High Court
took the view that their continuity on ex cadre basis was
not open to challenge on the ground of non-compliance of
Rules. In May, 1980, these writ petitions were dismissed.
Emboldened by the acceptance of their stand by the High
Court, the Board started exhibiting a negative approach in
its treatment towards the trainee engineers. Ultimately the
appellants moved the High Court for a direction to the Board
to encadre them but failed. These appeals directed against
the decision of the High Court.
A few important aspects emerge from the record-(1) the
Board did represent to the trainee engineers from time to
time after their training was completed, they would be
absorbed in regular employment of the Board; (2) when some
of the engineers were getting age-barred for Government
employment and had left the Board, they were told to come
back under the temptation of getting permanently employed
under the Board; (3) when the Board was reeling under a
strike of its employees, these trainee engineers had stood
by the Board to keep up the generation and distribution of
electricity and had been assured of absorption; and (4) the
Board had decided to absorb them on permanent basis but
initially on a probation of two years without conducting any
further examination.
On March 13, 1979, a notice was issued by the Board to
the following effect:
"A decision regarding regular employment of degree
and diploma trainees of Bihar State Electricity Board
in the posts of Assistant Electrical Engineer and
Junior Electrical Engineer has been taken by the State
Government. On completion of their training in October,
1979, their regular appointments will be made.
Therefore, those trainees who have left their training
are informed to join at the places of their respective
postings latest by 18.3.1979 Those trainees who will
not present themselves by the said date will be neither
considered for being taken in training nor their
regular appointments will be considered."
On April 26, 1979, the Board approved the proposal contained
in the proceedings of a meeting relating to absorption of
the appellant
610
engineers in which the Speaker of the Legislative Assembly
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presided and the Chief Minister, the Commissioner of
Irrigation and Electricity, the Chairman of the Board and
the Secretary of Irrigation and Electricity participated.
The proceeding, inter alia, stated:
"(1) It was decided that after completion of one
year’s training (which is October, 1979) as decided by
the Board, they will be appointed in the posts of
Assistant Electrical Engineers and Junior Electrical
Engineers on provisional basis. After appointment, they
will remain on probation for two years. During
probation period of their conduct is found satisfactory
and the availability of permanent posts and on the
basis of inter se seniority in the cadre, their
appointments will be confirmed.
(2) They will be appointed on regular basis after
the completion of the training period and the
examination proposed vide office order No. 1548 dated
26.10.1978 will not be taken.
... ... ... ...
(9) It is also decided that the benefit of regular
appointment is being given to the trainees under
special circumstances which will not be an example for
the future and when either under the Apprenticeship Act
or under any other scheme anyone is taken as
apprentice, he will be discontinued after the period of
apprenticeship. In any circumstance, neither period of
apprenticeship will be extended nor will they have any
claim for appointment under the Board."
We have referred to these two documents out of several
of them available on the record to show that the Board was
aware of the position that these trainee engineers formed a
special class and very peculiar circumstances warranted a
definitely special treatment in regard to them. Yet it is
unfortunate that a statutory body like the Board has failed
to stand up to its representations made from time to time to
a group of engineers who had spent years of their valuable
life for qualifying themselves as engineers and who
believing the representation of the Board and acting upon
the same continued to remain in the employment of the Board
as trainee
611
engineers foregoing opportunities available to seek other
employments and in the process have become age-barred for
any public employment. This Court almost a score of years
back in clear language indicated in Union of India v. Indo-
Afghan Agencies:
Under our jurisprudence, the Government is not
exempt from liability to carry out the representation
made by it as to its future conduct and it cannot some
undefined and undisclosed ground of necessity or
expediency fail to carry out the promise solemnly made
by it, nor claim to be the judge of its own obligation
to the citizen on an ex parte appraisement of the
circumstances in which the obligation has arisen."
Shah, J. as the learned Judge then was, quoted with approval
what Chandrasekhrar Aiyar, J. had in Collector of Bombay v.
Municipal Corporation:
"Whether it is the equity recognised in Ransden’s
case, or it is some other form of equity, is not of
much importance. Courts must do justice by the
promotion of honesty and good faith, as far as it lies
in their power."
The legal position was reiterated by this Court in Century
Spinning & Manufacturing Co. Ltd. v. The Ulhasnagar
Municipal Council & Anr., where it was said:
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"Public bodies are as much bound as private
individuals to carry out representations of facts and
promises made by them, relying on which other persons
have altered their position to their prejudice. The
obligation arising against an individual out of his
representation amounting to a promise may be enforced
ex contractu by a person who acts upon the promise;
when the law requires that contract enforceable at law
against a public body shall be in certain form or be
executed in the manner prescribed by statute, the
obligation may be, if the contract to be not in that
form, enforced against it in appropriate cases in
equity..."
612
This Court added a pithy observation:
"If our nascent democracy is to thrive different
standards of conduct for the people and the public
bodies cannot be permitted. A public body is, in our
judgment, not exempt from liability to carry out its
obligations arising out of representations made by it
relying upon which a citizen has altered his position
to his prejudice."
In Motial Padampat Sugar Mill Co. Ltd. v. State of Uttar
Pradesh & Ors. this Court went ahead to state that the
doctrine of promissory estoppel is not really based on the
principle of estoppel, but it is a doctrine evolved by
equity in order to prevent injustice and it can be the basis
of cause of action.
In our view, the principle relied upon in these cases
has full application to the facts before us. The Board is a
statutory authority and is ’State’ within the meaning of
Article 12 of the Constitution. The Board has tried to seek
shelter under a set of rules framed by it in exercise of the
powers vested under section 79 of the Electricity (Supply)
Act of 1948. In the peculiar facts of the case we are of the
view that the defence is ill-placed and cannot hold as a
shield against the application of the equitable doctrine.
Admittedly, the trainee engineers before us formed a
specific class and from time to time the Board treated them
as members of class and in its resolution of April 26, 1979,
recognised this fact and swore to the position that such
treatment should never be repeated even if apprentice
engineers were appointed.
Learned counsel appearing for the Board indicated to us
that the Board was prepared to regularise the employment of
the appellants belonging to the category of the Assistant
Engineers or Junior Engineers subject to their qualifying in
the examination and being formally recruited as required
under the rules. They further emphasised that the appellants
would not be entitled to seniority above those who have
already been regularly employed under the Board.
So far as the first aspect is concerned, we have
sufficiently pointed out already that the Board had waived
the requirement of examination and had, while taking
advantage of the services of the
613
appellants when it was in need, delayed the implementation
of its representations. But it appears that several
engineers have also been recruited either on permanent or
temporary basis against regular vacancies and they are not
parties to these appeals. The appellants, therefore, cannot
have seniority above those people and we would not be
justified in making any direction which would prejudice
their seniority behind their back. It appears that there
have been requirements even during the pendency of these
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appeals. While granting leave and while disposing of
miscellaneous petitions for directions, this Court has
already made it clear that appointments pendente lite would
be subject to the result of the appeals. Therefore, the
recruits of 1983 are bound to be subject to our directions.
We are inclined to take the view that the appellants being
already in employment of the Board much prior to 1983 on
being taken into regular appointment of the Board have to
rank above the recruits of 1983 and in the years thereafter.
The Board in our view is, therefore, bound to
regularise the appointments of the appellants who had been
taken as trainee engineers initially and have continued to
be in the employment of the Board. In this view of the
matter after the hearing was over we issued a mandamus to
the Board to offer regular appointment to the appellants
within three months from that day, i.e. May 3, 1985, in the
appropriate cadre of Assistant Engineer or Junior Engineer,
as the case may be, and such appointments were to be on
probation for a period of two years as required under the
rules. In regard to seniority the appellants have to rank
below permanent and temporary recruits to regular posts of
engineers held under the Board prior to 1983 and they shall
be assigned seniority above such recruits pendente lite. We
have now indicated the reasons by our judgment. The appeals
are allowed and the judgment of the High Court is reversed
and the Board is directed to give effect to the directions
indicated above within the specified time.
We hope and trust that the Board will not conduct
itself in such an embarrassing way in future and land itself
in difficulty again.
The appellants shall have their costs throughout. One
set of hearing fee assessed at Rs. 5,000 shall be admissible
in this Court.
S.R. Appeal allowed.
614