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  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 136 of the Constitution
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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • Article 136 of the Constitution
Smart Summary

Factual and Procedural Background

The appellants were engaged by the U.P. Cooperative Bank Ltd. (“the Bank”) between 1978-1981 on a daily-wage, stop-gap basis. Their remuneration was gradually increased: first through a consolidated monthly salary, then to the minimum of the regular pay scale (without annual increments) from 1-7-1983. After the U.P. Regularisation of Ad Hoc Appointments Regulations, 1985 came into force, they were regularised on various dates during 1985-1986 and accorded full pay-scale benefits prospectively.

In 1990 the appellants filed writ petitions before the Allahabad High Court seeking regular pay scales, allowances and increments retrospectively from the date of their original ad hoc appointments. A learned Single Judge (order dated 6-7-2005) allowed the petitions, extending to them the benefit earlier granted in Jai Kishun v. U.P. Coop. Bank Ltd. (1989) 2 UPLBEC 144. The Bank’s special appeals were allowed by a Division Bench, which set aside the Single Judge’s decision and dismissed the writ petitions. The present appeal by special leave challenges the Division Bench judgment.

Legal Issues Presented

  1. Whether employees appointed on a daily-wage or ad hoc basis are entitled to the regular pay scale with annual increments for the period preceding their regularisation.
  2. Whether the Bank is estopped from denying such benefits to the appellants because similar benefits had earlier been given to three employees in Jai Kishun (1989) 2 UPLBEC 144.

Arguments of the Parties

Appellants' Arguments

  • The Division Bench itself noted no significant difference between the work performed by the appellants and that of regular employees.
  • The Bank conceded in Jai Kishun that similarly placed employees were entitled to regular pay scales; having allowed that judgment to attain finality, the Bank cannot discriminate against the appellants.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Jai Kishun v. U.P. Coop. Bank Ltd. (1989) 2 UPLBEC 144 On concession, three employees were granted regular pay scale with increments from 1-7-1981. Held not to confer a general right; benefit confined to that specific case.
State of Haryana v. Jasmer Singh (1996) 11 SCC 77 Daily-wage/ad hoc employees are not entitled to parity with regular employees in pay scales. Used to establish that appellants lacked a legal right to claim retrospective pay-scale benefits.
State of Haryana v. Tilak Raj (2003) 6 SCC 123 Reiterated that ad hoc workers cannot claim regular pay scales solely on parity. Cited alongside Jasmer Singh to deny the appellants’ claim.
Col. B.J. Akkara (Retd.) v. Government of India (2006) 11 SCC 709 Implementation of a judgment for some employees does not create an automatic right for others similarly placed. Applied to reject the contention that benefits extended in Jai Kishun must be universally applied.
State of Maharashtra v. Digambar (1995) 4 SCC 683 State’s failure to appeal in some cases does not estop it from contesting similar claims later. Relied on to uphold the Bank’s right to contest the appellants’ claims despite acquiescence in earlier isolated cases.

Court's Reasoning and Analysis

The Supreme Court identified the core inquiry as whether stop-gap/ad hoc employees possess a right to regular pay scales with increments for their pre-regularisation service. It found:

  • The appellants relied neither on contractual terms nor on any statutory rule conferring such entitlement.
  • Precedents such as Jasmer Singh and Tilak Raj decisively hold that daily-wage or ad hoc workers cannot claim pay-scale parity with regular staff.
  • Because no legal right existed, the appellants attempted to invoke parity with the benefit granted in Jai Kishun. The Court, citing Akkara and Digambar, ruled that implementation of an earlier judgment for a few employees—particularly when based on concession—does not bind the State or employer in subsequent, financially significant cases, unless mala fides or selective discrimination is proved.
  • No evidence of “pick-and-choose” or bad faith by the Bank was established.

Consequently, the Division Bench’s reversal of the Single Judge was affirmed.

Holding and Implications

DISMISSED – The appeal lacks merit and is dismissed. The appellants are not entitled to retrospective pay-scale benefits for their ad hoc service.

Implications: The decision reinforces the principle that daily-wage or ad hoc service does not, absent a specific rule or contract, generate entitlement to regular pay scales. It also underscores that isolated concessions or unchallenged judgments do not automatically extend rights to all similarly situated employees. No new precedent was set; the Court applied existing jurisprudence to deny the claim.

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    Surendra Nath Pandey And Others v. Uttar Pradesh Cooperative Bank Limited And Another

    Order

    1. Leave granted. Heard the parties.

    2. The appellants were appointed during 1978-1981 on daily-wage basis by the first respondent, U.P Cooperative Bank Ltd. (for short “the Bank”), by way of stopgap arrangement. Up to 30-6-1981, they were on daily wages. From 1-7-1981, they were paid consolidated salary of Rs. 368 per month which was increased to Rs. 575 per month from 1-4-1982. From 1-7-1983, they were extended the benefit of the minimum in the pay scale applicable to regular employees i.e Rs. 325 per month, with allowances, but without yearly increments.

    3. On 30-7-1985, the U.P Regularisation of Ad Hoc Appointments (on Posts within the Purview of the Uttar Pradesh Cooperative Institutional Service Board) Regulations, 1985 were notified and came into force. In terms of the said Rules, the appellants were regularised on different dates—1-10-1985, 9-12-1985, 24-4-1986 and 29-9-1986 and they were also extended the benefit of regular pay scales with all allowances. In the year 1990, they approached the Allahabad High Court by filing a writ petition seeking the benefit of regular pay scale, allowances and other benefits which were extended to regular employees, with effect from the date of their stopgap or ad hoc appointment.

    4. A learned Single Judge of the High Court, by order dated 6-7-2005, allowed the writ petitions and directed the first respondent, Bank to treat the appellants on a par with employees, who were the petitioners in Jai Kishun v. U.P Coop. Bank Ltd. (1989) 2 UPLBEC 144

    5. In Jai Kishun (1989) 2 UPLBEC 144, the High Court had affirmed the decision of the Labour Court directing that certain employees of the Bank (whose cases were espoused by the Union) shall be extended the benefit of pay scale by starting with a minimum of Rs. 325 per month with effect from 1-7-1981 with annual increments in the regular pay scale and all other allowances. This direction was issued on a concession by the learned counsel for the Bank given on the peculiar facts and circumstances of the case, with respect to three employees. The effect of the judgment of the learned Single Judge was that the appellants were also to be extended the benefit of the regular pay scale with annual increments with effect from 1-7-1981.

    6. Feeling aggrieved, the Bank appealed and the Division Bench of the High Court allowed the special appeals of the Bank, set aside the judgment of the learned Single Judge and dismissed the writ petitions. The said order is challenged in this appeal by special leave.

    7. The appellants submit that the Division Bench found that there was no significant difference between the type of work which the appellants were rendering and the type of work which their counterparts who were regularly employed were rendering at the relevant point of time.

    8. The appellants also submitted that the Bank did not dispute the fact that the petitioners in Jai Kishun (1989) 2 UPLBEC 144 who were given the benefit of the regular pay scales, were similarly placed as the appellants. They contend that the decision in Jai Kishun (1989) 2 UPLBEC 144 having become final the Bank cannot discriminate between the petitioners in Jai Kishun (1989) 2 UPLBEC 144 and other similarly situated employees like the appellants and, therefore, they are also entitled to the same reliefs.

    9. We are of the view that the real issue is whether persons employed on stopgap or ad hoc basis were entitled to the benefit of pay scales with increments during the period of service on daily or stopgap or ad hoc basis. Unless the appellants are able to establish that either under the contract, or applicable rules, or settled principles of service jurisprudence, they are entitled to the benefit of pay scale with increments during the period of their stopgap/ad hoc service, it cannot be said that the appellants have the right to claim the benefit of pay scales with increments.

    10. Admittedly, the appellants do not claim the said relief on the basis of any rules or contract. This Court in a series of decisions (see, for example, State of Haryana v. Jasmer Singh (1996) 11 SCC 77 and State of Haryana v. Tilak Raj (2003) 6 SCC 123), has held that the daily wage or ad hoc employees were not entitled to the benefit of regular pay scales with increments, by claiming parity with regular employees. Therefore, it is clear that the appellants did not have a right to claim the said relief.

    11. If the appellants do not have a legal right to seek the benefit of pay scales before their regularisation, the question is whether they are entitled to such a relief on the ground that such a relief has been extended to some similarly placed employees in pursuance of the decision in Jai Kishun (1989) 2 UPLBEC 144. This question is answered by this Court in Col. B.J Akkara (Retd.) v. Govt. of India (2006) 11 SCC 709 while dealing with a similar contention:

    “23. … It is contended that the respondents having accepted and implemented the decision of the Delhi High Court in the case of Civilian Medical Officers, cannot discriminate against the Defence Service Medical Officers placed in identical position and, therefore, the benefit given to the Civilian Medical Officers in pursuance of the decision of the Delhi High Court should also be extended to them. The petitioners rely on the broad principles underlying estoppel by judgment, legitimate expectation, and fairness in action in support of their contention.
    24. The respondents … contended that the fact that a decision of the High Court had been accepted or implemented in the case of some persons, will not come in the way of the Union of India resisting similar petitions filed by others in public interest.”

    12. A similar contention was considered by this Court in State of Maharashtra v. Digambar (1995) 4 SCC 683. This Court held:

    “16. … Sometimes, as it was stated on behalf of the State, the State Government may not choose to file appeals against certain judgments of the High Court rendered in writ petitions when they are considered as stray cases and not worthwhile invoking the discretionary jurisdiction of this Court under Article 136 of the Constitution, for seeking redressal therefor. At other times, it is also possible for the State, not to file appeals before this Court in some matters on account of improper advice or negligence or improper conduct of officers concerned. It is further possible, that even where SLPs are filed by the State against judgments of the High Court, such SLPs may not be entertained by this Court in exercise of its discretionary jurisdiction under Article 136 of the Constitution either because they are considered as individual cases or because they are considered as cases not involving stakes which may adversely affect the interest of the State. Therefore, the circumstance of the non-filing of the appeals by the State in some similar matters or the rejection of some SLPs in limine by this Court in some other similar matters by itself, in our view, cannot be held as a bar against the State in filing an SLP or SLPs in other similar matter(s) where it is considered on behalf of the State that non-filing of such SLP or SLPs and pursuing them is likely to seriously jeopardise the interest of the State or public interest.”

    The said observations apply to this case.

    13. A particular judgment of the High Court may not be challenged by the State where the financial repercussions are negligible or where the appeal is barred by limitation. It may also not be challenged due to negligence or oversight of the dealing officers or on account of wrong legal advice, or on account of the non-comprehension of the seriousness or magnitude of the issue involved. However, when similar matters subsequently crop up and the magnitude of the financial implications is realised, the State is not prevented or barred from challenging the subsequent decisions or resisting subsequent writ petitions, even though judgment in a case involving similar issue was allowed to reach finality in the case of others. Of course, the position would be viewed differently, if petitioners plead and prove that the State had adopted a “pick-and-choose” method only to exclude the petitioners on account of mala fides or ulterior motives.

    14. In view of the above, we are of the view that the appellants are not entitled to any relief based on the decision in Jai Kishun (1989) 2 UPLBEC 144. The Division Bench of the High Court was justified in reversing the decision of the learned Single Judge which extended the benefit of Jai Kishun (1989) 2 UPLBEC 144 to the appellants.

    15. The appeal has no merit and is, accordingly, dismissed.

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    Surendra Nath Pandey And Others v. Uttar Pradesh Cooperative Bank Limited And Another
    (Jan 19, 2010)