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AMICUS AI
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1997 INSC 587
Equivalent Citations
citation codes
Case Number
Disposition
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  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Neutral Citations
1997 INSC 587
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The respondents were initially engaged in the “Reserved Trained Pool” (RTP) created by the Posts and Telegraphs Department in October 1980 to meet short-term staffing shortages. RTP candidates received the same training as regular Postal/Sorting Assistants, were paid hourly wages, and were assured future absorption against regular vacancies. The scheme’s quota was reduced in 1982 and entirely abolished on 4 March 1986. All RTPs were eventually absorbed as regular employees between 1988 and January 1990 (with a few later absorptions in 1992).

After their absorption, the respondents filed original applications before various Benches of the Central Administrative Tribunal (CAT) seeking benefits identical to those conferred on casual labourers under the “Casual Labourers (Grant of Temporary Status and Regularisation) Scheme” that came into force on 29 November 1989 following this Court’s judgment in Jagrit Mazdoor Union. The CAT granted the requested reliefs—including deemed temporary status after one year’s eight-hour daily service, counting half the pre-absorption period for pension, other service benefits, and productivity-linked bonus.

The Department of Posts filed the present civil appeals challenging the CAT’s orders.

Legal Issues Presented

  1. Whether RTP employees, for the period prior to their absorption as regular staff, are entitled to the benefits granted to casual labourers under the 1989 “Casual Labourers (Grant of Temporary Status and Regularisation) Scheme”.
  2. Whether service rendered by RTPs before their regular appointment can be counted towards eligibility criteria (such as five-years’ service) for departmental promotion examinations.
  3. Whether the CAT was justified in awarding productivity-linked bonus and other benefits to RTPs on parity with casual labourers.

Arguments of the Parties

Respondents (RTP Employees)

  • Claimed parity with casual labourers on the basis that both categories performed similar work before regularisation.
  • Invoked the Supreme Court’s directions in Jagrit Mazdoor Union to argue that benefits under the 1989 Scheme should be extended to them from the date of their initial engagement as RTPs.
  • Sought counting of RTP service towards pension, temporary status, productivity-linked bonus, and eligibility for departmental examinations.

Appellant — Department of Posts

  • Contended that RTPs and casual labourers are fundamentally different: RTPs were always earmarked for eventual regular absorption and had already been regularised by 1990, whereas casual labourers had no fixed time-frame for regularisation.
  • Argued that the 1989 Scheme conferred benefits on casual labourers only prospectively from 29 November 1989 and could not be applied retrospectively to RTPs.
  • Relied on State of Maharashtra v. Digambar to submit that earlier unchallenged CAT orders do not preclude the State from contesting similar reliefs subsequently when they are legally untenable.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jagrit Mazdoor Union (Regd.) v. Mahanagar Telephone Nigam Ltd., 1990 Supp SCC 113 Recognised and approved the 1989 Scheme granting temporary status and certain benefits to casual labourers; directed its implementation. The CAT relied on this case to extend similar benefits to RTPs. The Supreme Court distinguished RTPs from casual labourers and held that the precedent did not justify such extension.
State of Maharashtra v. Digambar, (1995) 4 SCC 683 Non-filing of an appeal in similar matters does not bar the State from challenging erroneous reliefs in later cases. Cited to justify entertaining the present appeals even though earlier CAT orders granting similar reliefs to some RTPs had not been appealed.

Court's Reasoning and Analysis

1. Distinct statutory positions. The Court emphasized that RTPs were always intended for regular absorption under their own 1980 scheme, had received full training, and in fact became regular employees by 1990 (some earlier). In contrast, casual labourers lacked any assured time-frame for regularisation, which justified conferring temporary status and attendant benefits upon them prospectively from 29 November 1989.

2. Prospective operation of the 1989 Scheme. The benefits to casual labourers were explicitly conferred only from 29 November 1989. RTPs sought the same benefits for periods preceding that date—periods during which even casual labourers themselves were not entitled to them. Granting such relief would therefore create an unwarranted advantage for RTPs.

3. Inapplicability of parity. Equating RTPs with casual labourers was held to be erroneous because RTPs had already enjoyed the principal benefit—regular absorption—promised under their own scheme. The Court ruled that they could not simultaneously invoke a distinct scheme framed for another category to obtain additional advantages.

4. Productivity-linked bonus. The Tribunal’s extension of bonus on the basis of earlier CAT judgments in OAs 612 and 171 of 1989 was rejected. Relying on Digambar, the Court stated that an unchallenged order in another matter does not compel repetition of an incorrect relief.

5. Counting pre-absorption service. For departmental examinations requiring five years’ continuous satisfactory service “in one or more eligible cadres,” the Court held that service rendered prior to regular appointment could not be counted, as RTP service was not service “in any eligible cadre.”

Holding and Implications

Appeals Allowed; Tribunal judgments set aside; original applications dismissed.

Direct Effect: RTP employees will not receive the benefits (temporary status, pension counting, productivity-linked bonus, or pre-absorption service credit) that were granted to casual labourers under the 1989 Scheme. No costs were awarded.

Broader Implications: The decision clarifies that employees belonging to distinct staffing schemes cannot claim parity of benefits merely by analogy, particularly when their own scheme already provides for regularisation on different terms. No new legal doctrine was created, but the ruling reinforces careful differentiation between employment categories when extending welfare schemes.

To access the original judgment, please Sign In or Subscribe.

    Union Of India And Another v. K.N Sivadas And Others

    Sujata V. Manohar, J.— Leave granted in SLP (C) No. 17422 of 1995.

    2. Applications for impleadment in CAs Nos. 124-125 of 1996 are allowed.

    3. The respondents in these appeals were, at the material time, in the Reserved Trained Pool of Posts and Telegraphs Department, Government of India. After the bifurcation of the two departments in the year 1988 the respondents continued in the Reserved Trained Pool of their respective departments.

    4. The Reserved Trained Pool was set up in October 1980. Under a circular bearing No. 60/36/80-SPB I dated 30-10-1980 issued by the office of the Director General, Indian Posts and Telegraphs Department, a scheme was framed for constitution of a standing pool of trained reserve candidates for Post and RMS offices. The circular set out that in many operative offices the smooth flow of work was hampered by shortage of staff due to absenteeism and other causes. Meeting this shortage with overtime arrangements was not always a satisfactory solution. Hence it was decided that a standing pool of trained reserve candidates (hereinafter referred to “as RTPs”) should be formed in each recruiting unit to meet these short-time needs and recurrent needs. The scheme was made applicable to the cadres of Postal Assistants and Sorting Assistants. As per existing practice, at the time of each recruitment, after the select list was drawn up, an additional list of candidates known as Part “B” or Part II list was being prepared by each recruiting unit. The candidates in Part “B” list were called up against drop-outs from the main list. They were imparted training only after they were brought to the main list. It was now proposed under the new scheme that after the main list is drawn up, a specific additional reserve list of candidates equal in number to 50% of the number of candidates in the main select list will be drawn up. The candidates in the reserve list will also be imparted training like the candidates in the main list. The candidates in the reserve list will constitute a standing pool of trained reserve. They will be absorbed in regular vacancies in their turn after the candidates in the main list are absorbed. Till then they will be used as short-duty staff against vacancies due to absenteeism or any other reason. Besides, they will be used for handling peak hour work. Since the purpose of having them as short-duty staff is to minimise staff shortages, they may be called for engagement depending upon their ready and easy availability on demand and not necessarily in the order of their position in the reserved list. Their eventual absorption, however, will be in the order of their merit. They may be employed according to needs but subject to a maximum of eight hours a day. They will be paid on hourly rates of wages. Clause 5 of the circular provides for the manner of absorption. It says that reserved candidates are recruited as a standby over and above the vacancies announced at the time of recruitment. The surplus recruited candidates will be given priority of absorption against vacancies for subsequent recruitment in the manner which is set out in that clause.

    5. This scheme was in operation from the date of the circular till 4-3-1986 when the scheme was abolished. The initial creation of reserved pool was on the basis of 50% of the notified vacancies. In 1982, the percentage of reserved pool was reduced to 15% of the notified vacancies. The entire scheme was abolished with effect from 4-3-1986. The respondents in the appeals were recruited as RTPs. They have been since absorbed as regular employees on various dates from 1988 to January 1990 (with a few exceptions as hereinafter set out).

    6. The respondents filed applications before different Benches of the Central Administrative Tribunal claiming reliefs similar to those which were granted to casual labourers in their departments in view of a scheme framed for casual labourers in the year 1989 as per the directions given by this Court in Jagrit Mazdoor Union (Regd.) v. Mahanagar Telephone Nigam Ltd. 1990 Supp SCC 113, (1990) 13 ATC 768 The respondents prayed that the benefits which were given to the casual labourers under the scheme which came into effect in the year 1989 should be given to them with effect from the date they were recruited as RTPs till the date of their absorption as regular employees. The first of such applications came up before the Central Administrative Tribunal, Ernakulam Bench which is the subject-matter of CAs Nos. 80-123 of 1996. The Tribunal directed that the applicants before them who had been rendering service for eight hours a day continuously, on completion of one year of such service should be deemed to have attained temporary status and half the period of eight hours a day should be counted for qualifying service for pension. It also directed that all other benefits made available to casual mazdoors after attaining temporary status should be extended to the applicants as set out therein and that the applicants should be paid productivity linked bonus during the period when they were RTPs if they had completed 240 days of service each year for three years after their recruitment as RTP candidates. Similar reliefs have been given by the Hyderabad Bench of the Tribunal also. Hence the Department has filed the present appeals from these judgments of different Benches of the Tribunal.

    7. The directions given by the Central Administrative Tribunal are based upon a decision of this Court in Jagrit Mazdoor Union (Regd.) v. Mahanagar Telephone Nigam Ltd. 1990 Supp SCC 113, (1990) 13 ATC 768 This judgment was in respect of writ petitions which were filed either by casual labourers, or by reserved trained pool employees. This Court after referring to certain interim orders passed in various petitions before it, referred in paragraph 5 to the scheme known as Casual Labourers (Grant of Temporary Status and Regularisation) Scheme which had been formulated and put into operation from 1-10-1989. It said:

    “5. … We find that the scheme is comprehensive and apart from provision for conferment of temporary status, it also specifies the benefits available on conferment of such status. … In these circumstances, no further specific direction is necessary in the two applications relating to the two Nigams of Bombay and Delhi except calling upon the respondents to implement every term of the scheme at an early date.”

    In paragraph 6, this Court dealt with the two remaining writ petitions by the RTP employees in the Department of Posts. It has recorded that after April 1986, about 7000 RTPs have been absorbed. It said:

    “6. … Since the RTP category is no more expanding, only about 2900 of them remain to be absorbed. We have been told by learned counsel for the department that equal number of justified and supernumerary posts are being created and the Ministry's proposal is in the hands of the Ministry of Finance for approval and is expected to be finalised soon. This has to be done within a time frame and we direct the posts of both the categories to be created by the end of January 1990, and the process of absorption to be completed by 31-3-1990. With such absorption made, the RTPs will become regular employees. All their claims would, thereafter, be regulated on the basis of entitlement in accordance with extant rules.”

    The judgment was delivered in November 1989. The expected sanction was obtained and all RTPs have been absorbed as regular employees in January 1990.

    8. Are reserved trained pool employees prior to their absorption as regular employees, entitled to the benefits which have been given to casual labourers under the Casual Labourers (Grant of Temporary Status and Regularisation) Scheme framed under Circular No. 45-95/87-SPB I, dated 12-4-1991 issued by the Ministry of Communication, Government of India, Department of Posts and brought into effect from 29-11-1989? The Casual Labourers (Grant of Temporary Status and Regularisation) Scheme sets out that in compliance with the directions of the Hon'ble Supreme Court, a scheme was drawn up by this Department in consultation with the Ministries of Law, Finance and Personnel and the President has been pleased to approve the scheme. The scheme provides that temporary status would be conferred on casual labourers in employment as on 29-11-1989 and who continue to be currently employed and have rendered continuous service for at least one year. During the year they must have been engaged for a period of 240 days. The scheme gives various benefits to casual labourers which are conferred with effect from 29-11-1989. A casual labourer, therefore, is not given under the scheme any benefits prior to 29-11-1989. Under the scheme temporary status is conferred on casual labourers if they fulfil the various conditions and requirements laid down in the scheme. Clause 7 provides that conferment of temporary status does not automatically imply that the casual labourers would be appointed as regular Group “D” employees within any fixed time-frame. Appointment to Group “D” vacancies will continue to be done as per the extant recruitment rules, which stipulate preference to eligible ED employees. Therefore, various benefits which go with the conferment of temporary status were given to these casual labourers in view of the fact that their eventual absorption as regular employees was not to be within any fixed time and they were not automatically entitled to become regular employees.

    9. The position of RTPs is quite different. In the first place, the very scheme which constituted RTPs provided for their absorption as regular employees. With this in mind, they were also given the same training as regular employees. They were required in the meantime, to carry out short-term duties or to handle peak hour traffic on an hourly wage basis. However, there was clear assurance in the scheme that they would be accommodated in future vacancies as regular employees in the manner set out in the scheme. We are informed that there was a backlog in absorption because of a ban on recruitment during certain years. All the RTP employees have been absorbed as regular employees by 1990. Some of the respondents who are before us have been absorbed much earlier, in the year 1988. Therefore, they are in a much better position than casual labourers and are now enjoying all the benefits of regular employment. Their claim relates to the period prior to their absorption. The entire period in effect, is either prior to 1988, or in the case of some of the respondents, prior to January 1990. The benefits which they claim are the benefits which have been conferred on casual labourers only after 29-11-1989. The respondents, however, are claiming these benefits for earlier periods. (In respect of those respondents who were absorbed in January 1990, their continuation as RTPs after 29-11-1989 is only of two months' duration.) In other words, RTPs are claiming benefits for a period for which a similar benefit has not been conferred on casual labourers under the Casual Labourers (Grant of Temporary Status and Regularisation) Scheme.

    10. The Tribunal, in our view, has erred in equating RTPs with casual labourers. The position of these two categories of employees is very different as we have already set out. The Tribunal has also erred in assuming that casual labourers are getting these benefits during the period for which the RTPs are claiming these benefits. RTPs have already obtained the benefit of absorption in regular service because of their own scheme. They, therefore, cannot, on the one hand, avail of their own special scheme and at the same time, claim additional benefits on the basis of what has been given to the casual labourers. This is unwarranted, especially as the period for which they claim these benefits is the period during which such benefits were not available to casual labourers.

    11. Among the various benefits the Tribunal gave to the respondents (RTPs) productivity-linked bonus if they had put in, like casual labourers, 240 days of service each year for three years or more on the basis of its judgment in OAs Nos. 612 and 171 of 1989. The appellants have submitted that although the order in these two OAs was not challenged in appeal, it should not be automatically made applicable to all RTPs. The appellants have relied upon the observations of this Court in State of Maharashtra v. Digambar (1995) 4 SCC 683 to the effect, inter alia, that non-filing of an appeal before this Court by the State in similar matters, by itself cannot operate as a fetter for this Court in entertaining special leave petitions subsequently filed even if they are considered as relating to similar matters when this Court finds that the relief which was granted was wrong; specially when there is every possibility that such relief may continue to be granted to other complainants who may go before that forum, which may ultimately result in a big financial loss to the State. There is substance in this submission because we find that the reliefs which were granted by the Tribunal are wholly unwarranted, looking to the service conditions of RTPs as compared to the service conditions of casual labourers.

    12. In CAs Nos. 124-125 of 1996 the respondents originally worked as Telegraph Assistants in various Central Telegraph Offices in their reserved trained pool and were absorbed in regular service in 1992. In their Department, the scheme of temporary status and regularisation for casual labourers has come into effect from 1-10-1989. Their case is no different from the case of other RTPs although undoubtedly, they have been regularised a little later. As stated above, the position of RTPs is very different from the position of casual labourers and the Tribunal could not have equated the two.

    13. In CAs Nos. 127-130 of 1996 the RTPs who have been regularly absorbed in the year 1988 have been given the benefit of counting their service as RTPs for the purpose of their eligibility to appear for the departmental examination. The relevant rule provides that the candidates “must have put in at least 5 years' continuous satisfactory service in one or more eligible cadres” before they can appear for the examination. The eligibility is related to five years' service in the cadre. Any service which was rendered prior to regular appointment in the cadre, cannot count for the purpose of this rule because it cannot be considered as service in any eligible cadre. The Tribunal was, therefore, wrong in granting to RTPs the benefit of service rendered by them prior to their regular appointment, for the purpose of their eligibility to appear for the departmental promotion examination.

    14. In the premises, all these appeals are allowed, the impugned judgments of the Tribunal are set aside and the original applications filed before the Tribunal are dismissed. There will, however, be no order as to costs.

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    Union Of India And Another v. K.N Sivadas And Others
    (Aug 1, 1997)