{"id":8584,"date":"2006-03-28T00:00:00","date_gmt":"2006-03-27T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/avas-vikas-sansthan-anr-vs-avas-vikas-sansthan-engineers-on-28-march-2006"},"modified":"2017-02-01T10:00:30","modified_gmt":"2017-02-01T04:30:30","slug":"avas-vikas-sansthan-anr-vs-avas-vikas-sansthan-engineers-on-28-march-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/avas-vikas-sansthan-anr-vs-avas-vikas-sansthan-engineers-on-28-march-2006","title":{"rendered":"Avas Vikas Sansthan &amp; Anr vs Avas Vikas Sansthan Engineers &#8230; on 28 March, 2006"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Avas Vikas Sansthan &amp; Anr vs Avas Vikas Sansthan Engineers &#8230; on 28 March, 2006<\/div>\n<div class=\"doc_author\">Author: . A Lakshmanan<\/div>\n<div class=\"doc_bench\">Bench: H.K. Sema, Dr. Ar. Lakshmanan<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  5302 of 2004\n\nPETITIONER:\nAvas Vikas Sansthan &amp; Anr.               \t\n\nRESPONDENT:\nAvas Vikas Sansthan Engineers Assn. &amp; Ors.\n\nDATE OF JUDGMENT: 28\/03\/2006\n\nBENCH:\nH.K. Sema &amp; Dr. AR. Lakshmanan\n\nJUDGMENT:\n<\/pre>\n<p>J U D G M E N T<br \/>\nWITH<\/p>\n<p>C.A. Nos. 5303, 5305-5308, 5309-5311, 5312-5316,<br \/>\n5317-5322, 5323-5327, 5328-5330, 5331-5336,<br \/>\n5337, 5339, 5342-5348, 5349-5351, 5352-5354,<br \/>\n5356, 5357-5359, 5360-5365, 5366-5370, 5371-5376,<br \/>\n5377-5381, 5382-5385, 5386-5392 of 2004<\/p>\n<p>Dr. AR. Lakshmanan, J.\n<\/p>\n<p>This batch of appeals arise from the common final<br \/>\njudgment and order dated 03.05.2002, passed by the High Court<br \/>\nof Judicature for Rajasthan at Jaipur in D.B. Civil Special<br \/>\nAppeal No. 315\/2002 etc. etc. in S.B.C.W.P. No. 1750\/99 etc.<br \/>\netc. whereby the High Court partly allowed the appeal of the<br \/>\nappellants-herein by holding that the employees (respondents)<br \/>\nare entitled to reemployment and the various reliefs claimed by<br \/>\nthem.\n<\/p>\n<p>Since all the appeals involve common question of law, they<br \/>\nhave been heard together with the consent of concerned parties<br \/>\nand are being disposed of by this judgment.\n<\/p>\n<p>Facts in brief:\n<\/p>\n<p>Avas Vikas Sansthan (in short &#8216;the AVS&#8217;) was registered as<br \/>\na Society under the Societies Registration Act, 1860 on<br \/>\n17.11.1988.  The AVS was brought into existence to achieve<br \/>\ncertain objectives.  The objects of the society were to collect<br \/>\ninformation regarding low cost technology for construction of<br \/>\nhouses, undertake field studies for development of appropriate<br \/>\nlow cost building materials, undertake construction works,<br \/>\nimparting practical training etc. in the State of Rajasthan.\n<\/p>\n<p>The AVS was brought into existence as a result of the<br \/>\nScheme formulated by the Housing and Urban Development<br \/>\nCorporation, New Delhi, to set up chain of building centres in<br \/>\nthe State of Rajasthan.\n<\/p>\n<p>Appellant No.2  the Rajasthan Housing Board sanctioned<br \/>\na sum of Rs. 1-5 lakhs per building centre and provided land<br \/>\nfree of cost for setting up of 9 such centres in Rajasthan. The<br \/>\nAVS was to raise its own resources; the State Government or the<br \/>\nRajasthan Housing Board did not have any control over the AVS.<br \/>\nThe AVS had employed the respondents.\n<\/p>\n<p>The AVS started functioning in the year 1989, but in the<br \/>\nyear 1997, it began to incur heavy losses and could not pay its<br \/>\nemployees their salaries after 01.12.1998.  The Rajasthan<br \/>\nGovernment decided that, in view of the financial and<br \/>\nadministrative conditions of the AVS, it should be dissolved and<br \/>\nthe State Government directed the appellant-the Rajasthan<br \/>\nHousing Board to take immediate steps to liquidate the AVS.<br \/>\nThe State Government also directed that the employees of the<br \/>\nAVS would be adjusted on priority on the vacant posts of<br \/>\nMunicipal Boards, Municipal Councils, Jaipur Development<br \/>\nAuthority and other local bodies whenever posts fell vacant on<br \/>\nthe retirement of the employees of such local bodies.  By the<br \/>\nresolution of the AVS dated 26.03.1999, the AVS was dissolved.\n<\/p>\n<p>The respondents (employees), feeling that their services<br \/>\nmight be terminated, filed a writ petition in the High Court on<br \/>\n26.03.1999, made the following averments:<br \/>\n?\tAVS is only an agent of the State Government of Rajasthan<br \/>\nand of the Rajasthan Housing Board.\n<\/p>\n<p>?\tThe services of the respondents, who were employees of the<br \/>\nState Government\/Rajasthan Housing Board, could not be<br \/>\nterminated by the Rajasthan Housing Board or the State<br \/>\nGovernment or the AVS and<br \/>\n?\tAlso if any termination order be passed it be quashed and<br \/>\nthey might be retained in service with benefit of their past<br \/>\nservices in all respects.\n<\/p>\n<p>?\tThe Government order dated 15.03.1999 was challenged by<br \/>\nwhich the respondents were to be taken in service by local<br \/>\nbodies viz. Panchayat, J.D.A. etc at the lowest grade of<br \/>\nservices without any benefit of past services.<br \/>\nAVS terminated the services of all its 46 daily wage<br \/>\nemployees on 31.03.1999.\n<\/p>\n<p>On 01.06.1999, State Government issued an order which<br \/>\ncontained directions regarding the manner in which the<br \/>\nemployees of the AVS would be given first appointment in the<br \/>\nlocal self-Government institutions in Rajasthan without benefit<br \/>\nof past service. The condition, which was put by the Government<br \/>\nwas that, they would be given employment on the lowest post of<br \/>\npay drawn in AVS of direct recruitment and on the minimum of<br \/>\nthe grade and no benefit of past service would be given to them.<br \/>\nAn option was also given to the employees to retire under<br \/>\nVoluntary Retirement Scheme, if they so desired.\n<\/p>\n<p>The Rajasthan Housing Board and the State Government of<br \/>\nRajasthan contested the writ petitions by filing replies.<br \/>\n?\tIt was averred, inter alia, in the reply by the Rajasthan<br \/>\nHousing Board that AVS was a registered Society under the<br \/>\nSocieties Registration Act, 1860.\n<\/p>\n<p>?\tAnd it was neither financially nor administratively<br \/>\ncontrolled by the State Government or the Housing Board<br \/>\nand hence the said AVS could not be said to be a &#8216;State&#8217;<br \/>\nwithin the meaning of Article 12 of the Constitution of India<br \/>\nand the employees were not employees of the State<br \/>\nGovernment or Rajasthan Housing Board, they had no<br \/>\nremedy against the State Government or the petitioner-<br \/>\nHousing Board.\n<\/p>\n<p>During the pendency of the writ petitions, an offer was<br \/>\nmade to the employees of the AVS to agree to be given new<br \/>\nappointment in local self Government institutions on the<br \/>\ncondition mentioned in order dated 01.06.1999 of the State<br \/>\nGovernment and the employees were asked to submit<br \/>\nundertaking in the form of affidavits that they were willing to<br \/>\ntake employment in the Municipal Boards, Municipal Councils,<br \/>\nJ.D.A etc. on the conditions set out in the order and that on<br \/>\nsuch affidavits being filed, they would be given employment in<br \/>\nsuch local Government institutions.\n<\/p>\n<p>The respondents and all the other permanent employees of<br \/>\nthe AVS submitted their affidavits and were given employment in<br \/>\nthe Municipal Boards, Municipal Councils, and J.D.A.<br \/>\n\tLearned Single Judge of the High Court allowed the writ<br \/>\npetition and held as under:-\n<\/p>\n<p>a)\temployees will be entitled to salary for the period worked by<br \/>\nthem;\n<\/p>\n<p>b)\tRajasthan Housing Board to create a new cell in the name<br \/>\nof the Low Cost Housing Centre or any other name and the<br \/>\nemployees would be employed in the said centre;\n<\/p>\n<p>c)\tThe policy of the State Government to give alternate<br \/>\nemployment was quashed. However, the employees were<br \/>\ngiven option to continue in the said employment if they so<br \/>\nchoose.\n<\/p>\n<p>Feeling aggrieved, the Rajasthan Housing Board, the AVS<br \/>\nand the State Government preferred appeals before the Division<br \/>\nBench of the High Court.\n<\/p>\n<p>The Division Bench disposed of all the appeals by the<br \/>\nimpugned order. The Division Bench maintained the direction to<br \/>\npay unpaid salary. The direction to constitute a Low Cost<br \/>\nHousing Centre and the quashing of State Government decision<br \/>\nto provide alternate employment was set aside. However, the<br \/>\nDivision Bench on the appeal filed by the employees directed<br \/>\ngrant of following benefits:\n<\/p>\n<p>i)\tpay protection;\n<\/p>\n<p>ii)\tservice to be counted for the purpose of pension and<br \/>\nother retirement benefits;\n<\/p>\n<p>iii)\tbenefit of fixed period higher pay sacle available to<br \/>\nGovernment employees under Government Order dated<br \/>\n25.01. 1992;\n<\/p>\n<p>iv)\tbenefit of 5th  Pay Commission to be available on<br \/>\nnotional basis;\n<\/p>\n<p>v)\tone Narendra Kumar Sharma and few other daily wagers<br \/>\nto be treated as regular appointees as they were selected<br \/>\nbut not appointed on regular basis till date of<br \/>\ndissolution;\n<\/p>\n<p>vi)  certain employees including Brijesh Kumar Goel and<br \/>\nR.K.Saini who were working at Latur Project in<br \/>\nMaharashtra were also entitled to alternative<br \/>\nemployment in local bodies.\n<\/p>\n<p>PARTICULARS OF APPEALS <\/p>\n<p>The appeals in the present batch of cases may be divided in<br \/>\nthe following three categories:\n<\/p>\n<p>A.\tThe following 12 appeals have been filed by the RHB and AVS:<br \/>\nCivil Appeal Nos. 5302\/04, 5317-5322\/04, 5312-5316\/04,<br \/>\n5309-5311\/04, 5323-5327\/04, 5328-5330\/04, 5331-<br \/>\n5336\/04, 5342-5348\/04, 5305-5308\/04, 5337\/04,<br \/>\n5303\/04.\n<\/p>\n<p>B.\tThe following 11 appeals have been filed by the State of<br \/>\nRajasthan:\n<\/p>\n<p>Civil Appeal Nos. 5339\/04, 5371-5376\/04, 5366-5370\/04,<br \/>\n5309-5352-5354\/04, 5377-5381\/04, 5357-5359\/04, 5360-<br \/>\n5365\/04, 5386-5392\/04, 5382-5385\/04, 5356\/04.<br \/>\nC.\tThe following appeal have been filed by the Employees:\n<\/p>\n<p>     Civil Appeal Nos. 5349-5351\/04<br \/>\nAgainst the decision of the Division Bench of the High<br \/>\nCourt, the appellants preferred the above appeals to this Court.\n<\/p>\n<p>We heard Mr. Vijay Hansaria, learned senior counsel<br \/>\nappearing for the appellant and Dr. Rajeev Dhawan, learned<br \/>\nsenior counsel, Mr. Aruneshwar Gupta and Ms. Shobha, learned<br \/>\ncounsel appearing for the respective respondents.\n<\/p>\n<p>Mr. Vijay Hansaria, learned senior counsel for the<br \/>\nappellants made the following submissions:\n<\/p>\n<p>a) That after the dissolution of the AVS, in the writ petition<br \/>\npreferred by the respondents no ground was taken saying that<br \/>\nthe liquidation was mala fide nor was it prayed that the decision<br \/>\nto liquidate be quashed.\n<\/p>\n<p>b) That on 18.05.1999 Cabinet decision was taken to<br \/>\nabsorb the employees of the AVS &#8216;in principle&#8217; as decided on<br \/>\n09.03.1999 by prescribing certain terms and conditions after<br \/>\nconsidering the opinion of the Finance Department.\n<\/p>\n<p>c) That there is no conflict between the Cabinet decisions<br \/>\ndated 09.03.1999 and 18.05.1999, neither is there any change<br \/>\nin policy of the State Government nor the State Government has<br \/>\ngone back on any promise made earlier. In the cabinet decisions<br \/>\ndated 09.03.1999 only an &#8216;in principle&#8217; decision was taken to<br \/>\nadjust the employees of the AVS in other local bodies and<br \/>\n&#8216;modalities&#8217; of adjustment was worked out in the Cabinet<br \/>\ndecision dated 18.05.1999.\n<\/p>\n<p>d) Thereafter the State Government wrote to all local bodies<br \/>\nfor appointment of employees of the AVS in their departments<br \/>\nalong with affidavits filed by the employees of the AVS showing<br \/>\ntheir willingness to take employment in other local bodies. In<br \/>\n2000, all the employees of the AVS were given alternate<br \/>\nemployment as fresh employment on certain terms and<br \/>\nconditions.  All the employees have submitted affidavits inter-<br \/>\nalia stating that their appointment with local bodies will be<br \/>\ntreated as fresh appointment and will not claim continuity of<br \/>\nservice, seniority, pay protection etc and that they will withdraw<br \/>\nwrit petition. Several employees have even filed application for<br \/>\nthe withdrawal of the writ petition in terms of their<br \/>\nundertakings.\n<\/p>\n<p>e) the writ petition was not amended challenging the terms<br \/>\nof undertaking filed by the employees of Sansthan for securing<br \/>\nemployment with the local bodies. There is no allegation in the<br \/>\nwrit petition that the employees were coerced\/forced\/unduly<br \/>\ninfluenced to submit the undertaking.\n<\/p>\n<p>Submissions on Merit<br \/>\nIt was submitted by Mr. Hansaria that abolition of posts is a<br \/>\nmatter of policy and is an inherent right of the employer<br \/>\nparticularly on the closure of a project due to lack of funds and<br \/>\nheavy loss.  The natural consequence of abolition of posts in any<br \/>\norganization is the termination of services of the employees<br \/>\nengaged in such organization. It was further urged that the<br \/>\nemployees whose services have been terminated as a<br \/>\nconsequence of abolition of posts have no right to seek<br \/>\nreemployment or absorption in other departments.  Learned<br \/>\nsenior counsel relied on the view taken by this Court way back<br \/>\nin 1973 in the case of M. Ramanathan Pillai v. State of<br \/>\nKerala, (1973) 2 SCC 650 that &#8216;the discharge of the civil servant<br \/>\non account of abolition of post held by him is not an action<br \/>\nwhich is proposed to be taken as a personal penalty but it is an<br \/>\naction concerning the policy of the State whether a permanent<br \/>\npost should continue or not. The power to abolish any civil post<br \/>\nis inherent in every sovereign government. And such abolition<br \/>\nwill not entail any right on the person holding the abolished post<br \/>\nthe right to reemployment or to hold the same post.\n<\/p>\n<p>Learned senior counsel relied on the decision in<br \/>\n<a href=\"\/doc\/652283\/\">K. Rajendran v. State of Tamil Nadu,<\/a> (1982) 2 SCC 273 on the<br \/>\nsame issue in which this Court has held that, &#8216;the question<br \/>\nwhether a person who ceases to be Government servant<br \/>\naccording to law should be rehabilitated by giving an alternative<br \/>\nemployment is, as the law stands today, a matter of policy on<br \/>\nwhich the Court has no voice.&#8217; <\/p>\n<p>Citing the decision of this Court in the case of <a href=\"\/doc\/1943138\/\">Rajendra v.<br \/>\nState of Rajasthan<\/a> (1999) 2 SCC 317 and <a href=\"\/doc\/1584357\/\">S.M.Nilajkar v.<br \/>\nTelecom District Manager<\/a> (2003) 4 SCC 27 learned senior<br \/>\ncounsel submitted that when a project has been shut down due<br \/>\nto want of funds the employer cannot by a writ of mandamus be<br \/>\ndirected to continue employing such employees as have been<br \/>\ndislodged because such a direction would amount to requisition<br \/>\nfor creation of posts though not required by the employer and<br \/>\nfunding such posts though the employer did not have the funds<br \/>\navailable for the purpose. And also that the same will act as a<br \/>\ndisincentive to the state to float such schemes in future.\n<\/p>\n<p>With regard to the employment of 604 employees of the<br \/>\nAVS, it was argued that the State of Rajasthan had no legal<br \/>\nobligation to offer alternative employment to the erstwhile<br \/>\nemployees of the Sansthan. But the State of Rajasthan did frame<br \/>\na scheme and offered employment in other local bodies of the<br \/>\ngovernment. Therefore the terms and conditions of such<br \/>\nalternative employment cannot be challenged.\n<\/p>\n<p>It was also submitted that additional financial burden will<br \/>\nfall upon the various local bodies which have absorbed the<br \/>\nemployees of the AVS, if the directions of the Division Bench of<br \/>\nthe Rajasthan High Court are enforced.  It was further argued<br \/>\nthat the employees of the AVS did accept the alternative<br \/>\nemployment with the terms and conditions set out initially by<br \/>\nway of an affidavit and therefore they are now estopped from<br \/>\nclaiming benefit and challenging the terms and conditions of the<br \/>\nfresh employment by citing the decision in the case of <a href=\"\/doc\/320068\/\">Bank of<br \/>\nIndia v. O.P.Swarnakar<\/a> (2003) 2 SCC 721 which laid down<br \/>\nthat, &#8220;the scheme is contractual in nature. The contractual right<br \/>\nderived by the employees concerned, therefore, could be waived.<br \/>\nThe employees concerned having accepted a part of the benefit<br \/>\ncould not be permitted to approbate and reprobate nor can they<br \/>\nbe permitted to resile from their earlier stand.&#8221;\n<\/p>\n<p>Placing reliance on a very recent decision of this Court in<br \/>\nthe <a href=\"\/doc\/1693089\/\">State of Uttaranchal vs. Jagpal Singh Tyagi,<\/a> (2005) 8<br \/>\nSCC 49, learned senior counsel submitted that, &#8220;the employees<br \/>\ndid not, at any point of time, claim that the terms of settlement<br \/>\nwere not fair, therefore after obtaining some benefit, it was not<br \/>\nopen to the employees to later turn away without justifiable<br \/>\ncause and contend that the settlement was not fair.&#8221;\n<\/p>\n<p>On the question of Pay Protection and for counting services<br \/>\nrendered in the AVS for pension and other retiral benefits<br \/>\nclaimed by the respondents, the arguments put forward by the<br \/>\nappellant was that on facts the Cabinet decision of 18-05-1999<br \/>\nspecifically states that &#8220;no pay protection should be granted to<br \/>\nthe employees&#8221;, the same was conveyed by the Rajasthan<br \/>\nHousing Board letter dated 01-06-1999. This decision was taken<br \/>\nafter considering the views of the Finance Department. So also<br \/>\nthe undertaking by the employees when they were absorbed into<br \/>\nother local bodies had the same stipulation, therefore at this<br \/>\nlater stage such pay protection and counting of services for<br \/>\npension and other retiral benefits cannot be claimed for.\n<\/p>\n<p>Coming to the claim of the respondents for the benefit of<br \/>\nthe Government order date 25.01.1992, it was argued by the<br \/>\nappellants that the Government Order in question is applicable<br \/>\nonly to &#8216;government servants&#8217; and as such the employees of AVS<br \/>\nare not entitled to the benefit of the said government order. And<br \/>\nalso the employees would be governed by the terms and<br \/>\nconditions of the local bodies where they have been reemployed.<br \/>\nSo also the benefit of the 5th Pay Commission is applicable only<br \/>\nto government employees. Since the employees of the AVS are<br \/>\nnot govt employees they are not entitled to the benefit of the 5th<br \/>\nPay Commission.\n<\/p>\n<p>With regard to appointment of 46 daily wage employees, it<br \/>\nwas argued that after the dissolution of the Society, there is no<br \/>\nright on the part of any employee to be reemployed. Therefore, it<br \/>\nwas argued that the daily wagers have no right seeking regular<br \/>\nappointment.  The decision of this Court in the case of <a href=\"\/doc\/1964047\/\">Punjab<br \/>\nState Electricity Board v. Malkiat Singh,<\/a> (2005) 9 SCC 22<br \/>\nwas relied on.  It was held that, &#8220;it is settled law that mere<br \/>\ninclusion of name of a candidate in the select list does not confer<br \/>\non such candidate any vested right to get an order of<br \/>\nappointment&#8221;. Thus it was argued that the Writ issued by the<br \/>\nDivision Bench of the High Court to treat the daily wagers at par<br \/>\nwith the regular appointees of Avas Vikas Sansthan is wrong.\n<\/p>\n<p>Further it was argued by the appellant that the decision in<br \/>\nthe case of Central Inland Waters Transport corporation<br \/>\nlimited &amp; Anr. Vs. Brojo Nath Ganguly &amp; Anr., (1986) 3 SCC<br \/>\n156 and <a href=\"\/doc\/268805\/\">Delhi Transport Corporation vs. D.T.C. Mazdoor<br \/>\nCongree &amp; Ors.,<\/a> (1991) Supp 1 SCC 600 have no application<br \/>\nhere because those cases relate to a term in the employment<br \/>\nthat even services of a permanent employee can be terminated<br \/>\non 3 months notice without assigning any reason and such<br \/>\ncondition was specifically assailed therein. The present matter<br \/>\nrelates to providing alternative employment to the employees of<br \/>\nan organization that is liquidated and posts have been<br \/>\nabolished. In such circumstances the employees of an<br \/>\norganization that is liquidated has no right to seek<br \/>\nreemployment.\n<\/p>\n<p>It was argued that the reliance placed by the respondents<br \/>\non the provisions of Rajasthan Civil Services Rules, 1969 is<br \/>\nwholly misconceived as the Rules mentioned apply only to<br \/>\ngovernment servants. Therefore, these rules will not apply to<br \/>\nemployees of the AVS.\n<\/p>\n<p>Dr. Rajeev Dhawan, learned senior counsel for the<br \/>\nrespondent submitted as follows:-\n<\/p>\n<p>According to learned senior counsel, the judgment of the<br \/>\nDivision Bench of the Rajasthan High Court is correct in so far<br \/>\nas it gave:\n<\/p>\n<p>\ta) Pay protection (including benefit of higher scales for<br \/>\ncompleting of 9,18 and 27 years)\n<\/p>\n<p>\tb) Counting of service for retiral benefits for long standing<br \/>\nemployees of the AVS.\n<\/p>\n<p>Submissions on Law<br \/>\nThe State is expected to act as a model employer exhibiting<br \/>\n&#8216;fairness of action&#8217; towards long standing employees.  Learned<br \/>\nsenior counsel relied on the decision of this Court in <a href=\"\/doc\/1753552\/\">Gurmail<br \/>\nSingh v. State of Punjab,<\/a> (1991) 1 SCC 748.  It was laid down<br \/>\nby this Court that even though according to the provisions of<br \/>\nSection 25-FF of the Industrial Disputes Act, 1947,<br \/>\nretrenchment compensation has been paid and accepted, the<br \/>\nState was under a duty to treat employees who were on<br \/>\ndeputation and those who were dismissed equally because the<br \/>\nstate was a &#8220;model employer&#8221; exhibiting &#8220;fairness in action&#8221;.\n<\/p>\n<p>It was argued that the above case is an authority for the<br \/>\nproposition that where a state body is shut down, it is part of the<br \/>\nobligations of the state as a model employer dedicated to fairness<br \/>\nin action that subject to adjustments, employees who were on<br \/>\ndeputation and those who are dismissed should be absorbed<br \/>\nsubject to similar equities:-\n<\/p>\n<p>There should necessarily be: &#8211;\n<\/p>\n<p>?\tPay protection where appointments are made on a<br \/>\nlower scale.\n<\/p>\n<p>?\tCounting of Service for retiral benefits<br \/>\n?\tPlacing the employees on par in the receiving<br \/>\ndepartments including salary<\/p>\n<p>Gurmail Singh (supra) has also laid down that it would not<br \/>\nbe fair to allow absorbed employees to steal a march over the<br \/>\nemployees in the department into which they are absorbed.<br \/>\nHowever the regular appointees of such local bodies should not<br \/>\nbe put at a disadvantageous position by the loss of seniority due<br \/>\nto the absorption of the employees of the AVS.\n<\/p>\n<p>Following the decision in the case of Central Inland<br \/>\nWaters Transport corporation limited (supra), it can be<br \/>\nobserved that:\n<\/p>\n<p>1.\tUnfair labour contracts shock the conscience and are<br \/>\nopposed to public policy.\n<\/p>\n<p>2.\tSuch unconscionability could be caused by economic<br \/>\nduress\n<\/p>\n<p>3.\tInequality of bargaining powers vitiates contracts, such<br \/>\ncontracts also violate Article 14 of the Constitution\n<\/p>\n<p>4.\tThis Court in the present case applied Section 23 of the<br \/>\nContract Act and held the contract to be unconscionable<br \/>\nand void.\n<\/p>\n<p>&#8220;The principle deducible from the above discussions on this part<br \/>\nof the case is in consonance with right and reason, intended to<br \/>\nsecure social and economic justice and conforms to the mandate<br \/>\nof the great equality clause in Article 14. This principle is that<br \/>\nthe courts will not enforce and will when called upon to do so,<br \/>\nstrike down an unfair and unreasonable contract or an unfair or<br \/>\nunreasonable clause in the contract, entered into by two parties<br \/>\nwho are not equal in bargaining power. It is difficult to give an<br \/>\nexhaustive list of all bargains of this type. No court can visualize<br \/>\nthe different situations which can arise in the affairs of men; one<br \/>\ncan only attempt to give some illustrations.&#8221;\n<\/p>\n<p>Further, learned senior counsel submitted that this Court<br \/>\nin <a href=\"\/doc\/268805\/\">Delhi Transport Corporation v. DTC Mazdoor Congress,<\/a><br \/>\n(supra) approved the Central Inland decision (supra) and<br \/>\nstruck down the unconscionable &#8216;hire &amp; fire&#8217; clause.\n<\/p>\n<p>Our attention was invited to certain observations made by<br \/>\nRamaswamy, J. and B.C. Ray, J; which are as under:-\n<\/p>\n<p>1.\tThe State cannot impose unconscionable conditions and<br \/>\nstated that such contracts were contrary to Article 14.\n<\/p>\n<p>2.\tPublic policy in contract be construed accordingly and be<br \/>\ndrawn from the constitution.\n<\/p>\n<p>B.C. Ray, J. observed that there should not be any limitation on<br \/>\nthe freedom of contract and specifically approved Central<br \/>\nInland decision (supra) in respect of such contracts being<br \/>\ncontrary to Article 14 guaranteed under the Constitution. This<br \/>\nCourt further observed that, &#8220;The court has, therefore the<br \/>\njurisdiction and power to strike or set aside the unfavourable<br \/>\nterms in contract of employment which purports to give effect to<br \/>\nunconscionable bargain violating Article 14 of the constitution.&#8221;\n<\/p>\n<p>It was further observed in the case of Prakash<br \/>\nRamachandra v. Maruthi, 1995 Supp (2) SCC 539 that any<br \/>\nundertaking to the court and contractual arrangement resultant<br \/>\nthereto does not oust the jurisdiction or the power of the court to<br \/>\nhear cases or grant relief.\n<\/p>\n<p>Learned counsel for the respondents while citing the<br \/>\ndecision in <a href=\"\/doc\/1908449\/\">National Building Construction Corporation v.<br \/>\nRaghunathan,<\/a> (1998) 7 SCC 66 argued that a legitimate<br \/>\nexpectation is created where employees have been assured<br \/>\nabsorption on one basis, which is there altered to their detriment<br \/>\nunder coercive circumstances where they have not been paid<br \/>\nand acted on the previous promise that they have tried to<br \/>\nenforce in court. It was further argued that the decisions cited<br \/>\nby the appellant on Article 311 and abolishing civil posts are<br \/>\nexceptional and irrelevant to the present controversy.\n<\/p>\n<p>Therefore, according to learned senior counsel, the law<br \/>\nclearly establishes that,\n<\/p>\n<p>(a) The State must be a model employer and show fairness in<br \/>\naction\n<\/p>\n<p>(b) Even where all statutory requirements (such as Section 25<br \/>\nFF) and technicalities have been complied with, the State must<br \/>\nbe fair enough to absorb employees on a minimal fairness basis<br \/>\nwhich includes:\n<\/p>\n<p>\ti)\tprotection to pay scale\n<\/p>\n<p>\tii)\tcounting of past service for pensionary benefits\n<\/p>\n<p>\tiii)\tno seniority over new employees in the new<br \/>\norganization\n<\/p>\n<p>\tiv)\tequal treatment in future with all employees\n<\/p>\n<p>(c) Unconscionable contracts and undertakings are contrary to<br \/>\nsection 23 of the Indian Contract Act, public policy, Article 14 of<br \/>\nthe Constitution and Directive Principles of state policies.\n<\/p>\n<p>(d) Undertakings not accepted by the lower court (and even if<br \/>\naccepted) do not inhibit this Court&#8217;s jurisdiction to hear a matter<br \/>\nand grant relief.\n<\/p>\n<p>With regard to the argument of the appellant&#8217;s counsel that:\n<\/p>\n<p>(a) the employees should not be given pensions;\n<\/p>\n<p>\t(b) the Division Bench should not have ordered increments<br \/>\nat 7,13 &amp; 27 years as are available to other employees the<br \/>\nlearned counsel argued that, if this was made practicable, the<br \/>\nemployees after joining the new department cannot be meted out<br \/>\ndiscriminatory treatment. They will lose seniority, but they<br \/>\ncannot be denied benefits available to others. The respondent&#8217;s<br \/>\ncounsel also stated that a situation cannot be created where, a<br \/>\nformer AVS worker has no pension or Provident Fund and also<br \/>\nnot to discriminate by not to extending 9,18 &amp; 27 years of<br \/>\nservice which would be available to others.\n<\/p>\n<p>Mr. Aruneshwar Gupta, learned counsel for the respondent<br \/>\nmade the following submissions:-\n<\/p>\n<p>That AVS falls within the definition of &#8216;other authorities&#8217;<br \/>\nunder Article 12 of the Constitution and was managed,<br \/>\ncontrolled and owned by the State of Rajasthan and was dealing<br \/>\nwith the affairs of the State by referring to the decisions of this<br \/>\nCourt in <a href=\"\/doc\/123551693\/\">Federal Bank Ltd v. Sagar Thomas,<\/a> (2003) 10 SCC<br \/>\n733 and <a href=\"\/doc\/129969\/\">Pradeep Kumar Biswas v. Indian Institution of<br \/>\nChemical Biology,<\/a> (2002) 5 SCC 111.\n<\/p>\n<p>It was further argued that the learned Single Judge clearly<br \/>\nheld that the entitlement of the employees was not on any<br \/>\nhumanitarian ground but because the employees had a right to<br \/>\nbe absorbed and to be treated in a reasonable, just and proper<br \/>\nmanner.\n<\/p>\n<p>According to Mr. Aruneshwar Gupta, the employees, who<br \/>\nhave been absorbed in the other authorities, were entitled to the<br \/>\nfollowing reliefs: &#8211;\n<\/p>\n<p>1.\tFitment in the stage of the pay scale, which they were<br \/>\nalready drawing in the Avas Vikas Sansthan and<br \/>\nconsequent increments.\n<\/p>\n<p>2.\tArrears of pay on the basis of the above statement\n<\/p>\n<p>3.\tSeniority of the AVS vis-`-vis employees in the authorities<br \/>\nin which they were absorbed. They are entitled to seniority<br \/>\nin the other undertakings etc on the basis of date of their<br \/>\nsubstantive appointment. Therefore inter se seniority of the<br \/>\nemployees of Avas Vikas Sansthan who were absorbed in<br \/>\nother authorities.\n<\/p>\n<p>4.\tCorresponding designation of post in the authorities in<br \/>\nwhich they were absorbed.\n<\/p>\n<p>Ms. Shobha, learned counsel appearing for the daily wagers<br \/>\nsubmitted that some of the daily wagers were declared qualified<br \/>\nbut kept in the waiting list for non-availability of sanctioned<br \/>\nvacant posts.  According to her, the High Court has rightly<br \/>\nappreciated the facts and circumstances of the present<br \/>\ncontroversy issued appropriate directions for absorption and<br \/>\nthat the balance of equity lies in their favour in view of the fact<br \/>\nthat the respondents have successfully cleared the exemption for<br \/>\nregular appointment and had to remain in the waiting list on the<br \/>\npretext that no vacant sanctioned post is available.  It was also<br \/>\nsubmitted that the appellants have absorbed\/adjusted<br \/>\nnumerous employees of the AVS but few of them including the<br \/>\nrespondents have been left on the pretext that they were not the<br \/>\nregular appointed employees.  Concluding her arguments, she<br \/>\nsubmitted that they are also entitled for similar treatment being<br \/>\nduly selected employees of the AVS.  It is also relevant to<br \/>\nmention that the employees were not appointed against any<br \/>\nproject and the termination order was passed due to financial<br \/>\ninviability of the AVS and not because of some fault of<br \/>\nrespondent No.1.\n<\/p>\n<p>We have carefully considered the lengthy submissions<br \/>\nmade by learned counsel appearing for both the parties. We have<br \/>\nalso perused all the pleadings, annexures as well as the<br \/>\njudgments of both the Single Judge and the Division Bench of<br \/>\nthe Rajasthan High Court<\/p>\n<p>In our opinion, the submissions made by learned senior<br \/>\ncounsel for the AVS merit acceptance and stand to reason in the<br \/>\npeculiar facts and circumstances of the case.  Though the<br \/>\narguments of Dr. Rajeev Dhawan and Mr. Aruneshwar Gupta,<br \/>\nlearned counsel appearing for the employees are attractive on<br \/>\nthe first blush, yet on a careful reconsideration of the same, it<br \/>\nhas no merits.\n<\/p>\n<p>In our view, after the liquidation of the AVS due to any<br \/>\nreason unless such liquidation was malafide, there exists no<br \/>\nright on the employees of such liquidated society for<br \/>\nreemployment. In the present case, the Rajasthan Government<br \/>\ndid formulate a scheme to absorb the employees of the society<br \/>\ninto various other organizations with various terms and<br \/>\nconditions to which the respondent employees agreed. There is<br \/>\nno allegation in the writ petition that the employees were<br \/>\ncoerced\/forced\/unduly influenced to submit the undertaking.<br \/>\nTherefore, at a later stage it is unfair to take claims of service<br \/>\nconditions other than the ones that are stipulated and accepted<br \/>\nearlier.\n<\/p>\n<p>In the case of <a href=\"\/doc\/1943138\/\">Rajendra v. State of Rajasthan,<\/a> (1999) 2<br \/>\nSCC 317 and <a href=\"\/doc\/1584357\/\">S.M. Nilajkar v. Telecom District Manager,<\/a><br \/>\n(2003) 4 SCC 27 where a project has been shut down due to<br \/>\nwant of funds the employer cannot by a writ of mandamus be<br \/>\ndirected to continue employing such employees as have been<br \/>\ndislodged because such a direction would amount to requisition<br \/>\nfor creation of posts though not required by the employer and<br \/>\nfunding such posts though the employer did not have the funds<br \/>\navailable for the purpose. This finding is applicable in the<br \/>\npresent matter and therefore the finding of the High Court is not<br \/>\nfair to common conscience and also that the same will act as a<br \/>\ndisincentive to the state to float such schemes in future thereby<br \/>\nreducing the employment opportunities of many.\n<\/p>\n<p>POWER TO ABOLISH CIVIL POSTS<br \/>\nIt is settled law that the power to abolish any civil post is<br \/>\ninherent in every sovereign government and such abolition will<br \/>\nnot entail any right on the person holding the abolished post the<br \/>\nright to reemployment or to hold the same post. In the present<br \/>\ncase, the State Government was benevolent enough to float a<br \/>\nscheme to absorb such employees whose posts were abolished.<br \/>\nTherefore, in our opinion, the arguments advanced by counsel<br \/>\nfor the respondents with regard to unfairness meted out to the<br \/>\nemployees of Avas Vikas Sansthan hold no water.\n<\/p>\n<p>With regard to 604 employees of the AVS, it was argued<br \/>\nthat the State of Rajasthan had no legal obligation to offer<br \/>\nalternative employment to the erstwhile employees of the AVS.<br \/>\nBut the State of Rajasthan in all fairness did frame a scheme<br \/>\nand offered employment in other local bodies of the government.<br \/>\nThus, the terms and conditions of such alternative employment<br \/>\ncannot be challenged.  We are of the opinion, that the decision of<br \/>\nthe High Court granting relief of reemployment with pay<br \/>\nprotection, seniority and pension is erroneous. We, therefore,<br \/>\ndirect the State of Rajasthan to strictly adhere to and implement<br \/>\nits decision to offer employment in other local bodies in letter<br \/>\nand spirit.\n<\/p>\n<p>We further make it clear that all the erstwhile employees, if<br \/>\nnot already employed, should be employed in the local bodies as<br \/>\nper the scheme formulated by the Government of Rajasthan in a<br \/>\nwar footing.\n<\/p>\n<p>PAY PROTECTION<br \/>\nOn the question of Pay Protection claimed by the<br \/>\nrespondents, it is seen from the Cabinet decision of 18.05.1999<br \/>\nthat &#8220;no pay protection should be granted to the employees&#8221;. The<br \/>\nsame was conveyed by the Rajasthan Housing Board vide letter<br \/>\ndated 01.06.1999.  This decision was taken after considering the<br \/>\nviews of the Finance Department. So the undertaking by the<br \/>\nemployees when they were absorbed into other local bodies had<br \/>\nthe same stipulation. This being so, such claim for pay<br \/>\nprotection, at this late stage, cannot be made. Thus, considering<br \/>\nthe categorical condition that the employees will not be given<br \/>\nany pay protection, and moreover due to the absence of any legal<br \/>\nright for pay protection to the employees of the AVS, such<br \/>\nclaims, in our opinion, cannot be sought for.\n<\/p>\n<p>With regard to the claim of the respondents for counting<br \/>\nservices rendered in the AVS, the Cabinet decision of 18.05.1999<br \/>\nspecifically states that &#8220;the benefit of past service is not to be<br \/>\ncounted for any purpose&#8221;. The same was conveyed by the<br \/>\nRajasthan Housing Board letter dated 01.06.1999. Therefore the<br \/>\nundertaking by the employees when they were absorbed into<br \/>\nother local bodies had the same stipulation; therefore at this late<br \/>\nstage such claim for counting services rendered in the AVS for<br \/>\nthe pension and other retiral benefits, in our opinion, cannot be<br \/>\nmade.\n<\/p>\n<p>Since the employees of the AVS are not treated as<br \/>\ngovernment servants, they are not entitled to claim the benefit of<br \/>\nGovernment Order dated 25.01.1995, which is specifically<br \/>\napplicable only to government employees and the benefit of the<br \/>\n5th Pay Commission Report also stands inapplicable as this was<br \/>\nnot a claim that was sought by the respondents at any stage in<br \/>\nany court that had entertained this matter. Also the Rajasthan<br \/>\nCivil Services (Absorption of Surplus Personnel) Rules, 1969 will<br \/>\nnot apply as such to these employees of the AVS as they clearly<br \/>\ndo not fall within the definition of Surplus Personnel as defined<br \/>\nin the Rajasthan Civil Services (Absorption of Surplus Personnel)<br \/>\nRules, 1969.\n<\/p>\n<p>As regards the question of whether Rajasthan Housing<br \/>\nBoard can be considered &#8216;State&#8217; under Article 12 of the<br \/>\nConstitution, no serious arguments were made by either counsel<br \/>\nfor the parties and, therefore, we are not expressing any opinion<br \/>\non the same and decide the other issues on the basis of the<br \/>\narguments advanced.\n<\/p>\n<p>RIGHTS OF DAILY WAGERS<br \/>\nWith regard to the appointment of 46 daily wage employees<br \/>\nafter the dissolution of the Society, we hold that, in the facts and<br \/>\ncircumstances of this case there is no right on the part of any<br \/>\nemployee to be reemployed. Also daily wage employees cannot,<br \/>\nby any stretch of imagination, be put on par with regular<br \/>\nemployees under any law prevalent as of date.  The finding of the<br \/>\nDivision Bench that they can be treated on par with regular<br \/>\nemployees and be given various reliefs is wrong and erroneous<br \/>\nunder law. Therefore, we are not granting any relief to the daily<br \/>\nwage employees as their claim is not justified under law.<br \/>\nHowever, the Government of Rajasthan may sympathetically<br \/>\nconsider absorption of these employees in the vacancy available<br \/>\nif any in future by giving them preference to other new<br \/>\napplicants in any of their local bodies etc. subject to the<br \/>\nfollowing conditions:\n<\/p>\n<p>1.\tThe employees will be entitled to salary\/wages from<br \/>\nthe date of their re-employment and shall not claim<br \/>\nfor any past period;\n<\/p>\n<p>2.\tThe employees will not be entitled to pay<br \/>\nprotection, benefit of GO dated 25.01.1992, 5th Pay<br \/>\nCommission and the service rendered by the<br \/>\nemployees will not be considered for pension<br \/>\nand\/or other retrial benefits;\n<\/p>\n<p>3.\tThe appointment of Degree holder\/Diploma holder<br \/>\nEngineers shall be on the post of Junior Engineer<br \/>\non the minimum scale of pay;\n<\/p>\n<p>4.\tThe appointment of employees of Administrative<br \/>\nDepartment would be on the post of Junior Clerk<br \/>\non the minimum scale of pay;\n<\/p>\n<p>5.\tThe appointment would be subject to suitability<br \/>\nand physical fitness;\n<\/p>\n<p>6.\tThe alternative employment would be granted<br \/>\nsubject to availability of vacancy preferably within<br \/>\na period of 3 months.\n<\/p>\n<p>    If they are absorbed in future the same will be treated as<br \/>\na fresh employment and employees\/appointees will be<br \/>\ngoverned by the rules and regulations of the absorbing<br \/>\nDepartment if they are found suitable.\n<\/p>\n<p>POWER TO ABOLISH POSTS AS A MEASURE OF ECONOMY:<br \/>\nIt is well settled that the power to abolish a post which may<br \/>\nresult in the holder thereof ceasing to be a Government Servant<br \/>\nhas got to be recognized.  The measure of economy and the need<br \/>\nfor streamlining the administration to make it more efficient may<br \/>\ninduce any State Government to make alterations in the staffing<br \/>\npattern of the civil services necessitating either the increase or<br \/>\nthe decrease in the number of posts or abolish the post.  In such<br \/>\nan event, a Department which was abolished or abandoned<br \/>\nwholly or partially for want of funds, the Court cannot, by a writ<br \/>\nof mandamus, direct the employer to continue employing such<br \/>\nemployees as have been dislodged.  In the instant case, the State<br \/>\nof Rajasthan has framed a scheme and offered alternative<br \/>\nemployment in the other local bodies as a Welfare State on<br \/>\nhumanitarian grounds.  As already noticed, the employees of the<br \/>\nAVS have accepted alternative employment on terms and<br \/>\nconditions of the local bodies and having filed a solemn<br \/>\nstatement by way of affidavit that they will not claim continuity<br \/>\nof service by protection of seniority etc. nor will they challenge<br \/>\nthe terms of such employment and shall also withdraw the writ<br \/>\npetition filed by them.  They cannot now go around and say that<br \/>\nthe judgment of the Division Bench should be given effect to.  In<br \/>\nour view, they are estopped from claiming the benefits and<br \/>\nchallenging the terms and conditions of the fresh employment.<br \/>\nThe employees have no right to resile from the affidavits filed<br \/>\nbefore the High Court.  We have searched in vain in order to see<br \/>\nas to whether there is any material to show that the settlement<br \/>\nwas intended to frustrate the order passed by the High Court.<br \/>\nAt no point of time, the employees raised any dispute as regards<br \/>\nthe fairness of the settlement.  Having obtained the benefit, it<br \/>\nwas not open to them to turn down without justifiable reasons to<br \/>\ncontend that the settlement was not fair and they should be<br \/>\ngiven pay protection, counting of service for retiral benefits and<br \/>\nplacing the employees on par in the receiving Department.  The<br \/>\ncabinet decision of not granting pay protection was taken after<br \/>\ntaking into consideration the views of the Finance Department<br \/>\nas it has huge financial burden on the local bodies offering re-<br \/>\nemployment after relaxing their own recruitment rules.  In our<br \/>\nview, the aforesaid categorical condition that the employees<br \/>\nwould not be entitled to pay protection and in the absence of any<br \/>\nlegal right of pay protection and fresh employment consequent<br \/>\nupon on fresh appointment on humanitarian grounds, the<br \/>\ndecision of the High Court to grant protection of pay is<br \/>\nunsustainable and liable to be interfered with.\n<\/p>\n<p>Dr. Rajeev Dhawan, learned senior counsel for the<br \/>\nrespondents, cited many decisions.  Those cases, in our view, is<br \/>\ndistinguishable on facts and on law.  In those cases, the High<br \/>\nCourt has directed protection of pay on the facts and<br \/>\ncircumstances as can be seen from a perusal of the same.\n<\/p>\n<p>The cabinet decision dated 18.05.1999 specifically decided<br \/>\nthat their period of earlier service shall not be valid for any<br \/>\npurpose.  This was specifically conveyed by the State<br \/>\nGovernment to the Rajasthan Housing Board vide letter dated<br \/>\n01.06.1999 and also the letter of the State Government dated<br \/>\n26.02.2000 to the various local bodies.  It is stated that one of<br \/>\nthe terms of re-employment would be that earlier service tenure<br \/>\nshall not be considered for any purpose.  Furthermore, under<br \/>\nthe provisions of the AVS Employees Service Regulation, 1993,<br \/>\nthe employees of the AVS were entitled to provident fund.  Rule<br \/>\n14 provide as under:-\n<\/p>\n<p>&#8220;An employee of Sansthan shall be required to<br \/>\nsubscribe to the Contributory Provident Fund in<br \/>\naccordance with such Rules as may be prescribed<br \/>\nby the Board of Management.&#8221;\n<\/p>\n<p>The employees of the AVS were having the benefit of<br \/>\ncontributing provident fund and were not entitled to any other<br \/>\npensionary\/retiral benefits.  The employees have withdrawn<br \/>\nprovident fund including the employer&#8217;s contribution after<br \/>\ntermination of service from the AVS.  It is thus crystal clear that<br \/>\nthe services rendered by the employees with AVS cannot be<br \/>\ncounted for the purpose of pension and other retiral benefits<br \/>\nsince such benefits were not available to them even in their<br \/>\nparent organization and it was a specific condition of fresh<br \/>\nemployment that their past services with AVS will not be<br \/>\nconsidered for any purpose.\n<\/p>\n<p>Even in <a href=\"\/doc\/1511034\/\">A.I. Railway Parcel &amp; Goods Porters Union vs.<br \/>\nUnion of India &amp; Ors,<\/a> (2003) 11 SCC 590 at 603 page 34 one of<br \/>\nus was a member (Dr. AR. Lakshmanan, J} while giving various<br \/>\ndirections in the matter of regularisation of contract labour, this<br \/>\nCourt did not direct that the services rendered by the contract<br \/>\nlabourers with the contractor would be counted for the purpose<br \/>\nof grant of retiral benefits by the principal employer.  The<br \/>\nrecommendations of the 5th Pay Commission is applicable only<br \/>\nto Government Servants and as such the employees of AVS who<br \/>\nare not government employees are not entitled to 5th Pay<br \/>\nCommission even in the writ petition filed by the organisation<br \/>\nthere was no prayer for grant of benefit of 5th Pay Commission.<br \/>\nThus, the High Court has erred in directing that the benefit of<br \/>\nrecommendations of 5th Pay Commission shall be given to the<br \/>\nemployees of the AVS on notional basis.  We make it clear that<br \/>\nthe employees would be governed by the terms and conditions of<br \/>\nthe local bodies where they have been re-employed.\n<\/p>\n<p>At the time of hearing, a submission under the heading<br \/>\ndoubts of financial bona fides was made.  It is submitted that<br \/>\nthe said plea is without any pleading in the writ petition.  There<br \/>\nis no pleading either on facts or in the grounds in the writ<br \/>\npetition that the averments contained in the note dated<br \/>\n09.03.1999 and 18.05.1999 to the effect that the AVS has no<br \/>\ncapital base or reserve capital and has huge financial<br \/>\noutstanding is incorrect.  It is also not in dispute that the<br \/>\nemployees of the AVS could not be paid salaries of December,<br \/>\n1998 that amounted to about more than Rs.2 crores nor the writ<br \/>\npetitioners\/respondent employees have argued either before the<br \/>\nSingle Judge or before the Division Bench of the High Court that<br \/>\nthe liquidation of the AVS was mala fide and or extraneous<br \/>\nconsideration.  So also there is no averment in the writ petition<br \/>\nas regards the constitution of the AVS or the work of the AVS<br \/>\nbeing transferred to the AVS.  As a matter of fact, the AVS was<br \/>\nincorporated under the Companies Act in the year 1996 and the<br \/>\nAVS has majority share holding in AVS in the absence of any<br \/>\nother pleading and contention raised before the High Court such<br \/>\nsubmission on facts cannot at all be countenanced before this<br \/>\nCourt in the present proceedings.  Likewise, the submission<br \/>\nmade by learned counsel appearing for the employees that the<br \/>\nState has gone back on its decision and they have coerced the<br \/>\nemployees to agree to certain conditions cannot at all be<br \/>\ncountenanced.\n<\/p>\n<p>FAIRNESS IN ACTION:\n<\/p>\n<p>In our opinion, the State of Rajasthan has acted fairly and<br \/>\nbenevolently though the State has no constitutional and legal<br \/>\nobligation to offer alternative employment to the employees of<br \/>\nthe AVS upon abolition of posts.  Consequent to the liquidation<br \/>\nof the AVS itself, it had framed a scheme to adjust the employees<br \/>\nin other local bodies by relaxing the rules of such bodies and<br \/>\nterms and conditions were fixed without financial economic<br \/>\ncompulsions of the State.  The present case is one of liquidation<br \/>\nof an organisation and consequent abolition of post in the said<br \/>\norganisation.  There is also no pleading that the conditions<br \/>\ncontained in the undertaking are contrary to Section 23 of the<br \/>\nContract Act or violative of Article 14 of the Constitution or<br \/>\ninconsistent with the directive principles of state policy.  The<br \/>\nCentral Inland Waterways case (supra) and Delhi Transport<br \/>\nCorpn. Case (supra) relied on by these employees, in our view,<br \/>\nhave no application of the present case and is distinguishable on<br \/>\nfacts and law.  Those cases relate to a term in the employment<br \/>\nthat even services of a permanent employee can be terminated<br \/>\non 3 months&#8217; notice without assigning any reason and such<br \/>\ncondition was specifically assailed therein.  However, the present<br \/>\ncase relates to providing alternative employment to the<br \/>\nemployees of an organisation that is liquidated and posts have<br \/>\nbeen abolished.  In such circumstances, this Court has held in a<br \/>\nnumber of cases that the employees have no right to seek re-<br \/>\nemployment in any other organisation.  So also, there has been<br \/>\nno challenge in any of the case decided by the High Court to the<br \/>\nterms and conditions of undertaking that they were unfair,<br \/>\narbitrary and are contrary to public policy and as such violative<br \/>\nof Section 23 of the Contract Act or Article 14 of the Constitution<br \/>\nof India or any directive principles of state policy.\n<\/p>\n<p>The question of legitimate expectation has also not been<br \/>\nraised at any stage and as such cannot be agitated before us in<br \/>\nthis court<\/p>\n<p>The reliance on the provisions of Rajasthan Civil Services<br \/>\n(Absorption of Surplus Personnel) Rules, 1969 is wholly<br \/>\nmisconceived in as much as the said rule apply only to &#8220;surplus<br \/>\npersonnel&#8221; who were &#8220;appointed to various services or posts in<br \/>\nconnection with the affairs of the state&#8221; in terms of Rule 2 of the<br \/>\nsaid Rules. Surplus personnel have been defined in Rule 3(1) as<br \/>\nfollows:\n<\/p>\n<p>      &#8220;Surplus Personnel&#8221; or &#8220;Surplus Employee&#8221;<br \/>\nmeans the Government servant to whom the<br \/>\nRajasthan Services Rules, 1951 apply and who are<br \/>\ndeclared surplus by the government or by the<br \/>\nappointing authority, under directions of the<br \/>\ngovernment, on their being rendered surplus to the<br \/>\nrequirements of a particular department of the<br \/>\ngovernment due to the reduction of posts or<br \/>\nabolition of offices therein as measures of economy<br \/>\nor on administrative grounds but in whose case<br \/>\nthe Government decides not to terminate their<br \/>\nservices but to retain them in service by<br \/>\nabsorption on other posts.&#8221;\n<\/p>\n<p>A bare perusal of the aforesaid Rule clearly demonstrates that<br \/>\nthe rules are applicable only to the Government servants to<br \/>\nwhom Rajasthan Service Rules, 1951 apply. The employees of<br \/>\nAvas Vikas Sansthan are not government servants nor<br \/>\nRajasthan Service Rules, 1951 were applicable to them and as<br \/>\nsuch the provisions of Rajasthan Civil Services (Absorption of<br \/>\nSurplus Personnel) Rules, 1969 are not applicable in the<br \/>\npresent case.\n<\/p>\n<p>Further submissions of the learned counsel that the<br \/>\nemployees must be posted on the posts earlier held by them is<br \/>\nwithout any merit since these employees had no right to claim<br \/>\nadjustments to other local bodies. The Cabinet decision dated<br \/>\n18.05. 1999 have categorically stated as under:<br \/>\n&#8220;All these appointments should be made to the<br \/>\nlowest posts and engineers should be appointed<br \/>\nonly on the post of Junior Engineers and<br \/>\nEmployees of Administrative Departments should<br \/>\nbe appointed only on the post of Junior Clerk.&#8221;\n<\/p>\n<p>So also all these employees have given undertaking not to<br \/>\nraise any dispute in the matter. Thus this contention is<br \/>\nuntenable and is liable to be rejected.\n<\/p>\n<p>\tFor the foregoing reasons, the impugned judgments of the<br \/>\nHigh Court are set aside and we hold that all the civil appeals<br \/>\nfiled by the Rajasthan Housing Board, the AVS and the State of<br \/>\nRajasthan are allowed.  The Civil Appeals filed by the employees<br \/>\nstand dismissed.  No costs. <\/p>\n<p>IN THE SUPREME COURT OF INDIA<\/p>\n<p>CIVIL APPELLATE JURISDICTION<\/p>\n<p>CIVIL APPEAL NO. 5338 OF 2004<\/p>\n<p>State of Rajasthan\t\t\t               \t..\tAppellant  (s)<\/p>\n<p>          \tVersus<\/p>\n<p>Radha Krishan Karwashra &amp; Ors.\t\t..   Respondent (s)<\/p>\n<p>WITH  <\/p>\n<p>CIVIL APPEAL NOS. 5340-41\/2004<\/p>\n<p>ORDER<br \/>\n\tIt was submitted by Mr. Badridas Sharma, learned counsel<br \/>\nfor the appellants, that the above appeals are of an entirely<br \/>\ndifferent type in which the respondent had challenged the order<br \/>\ndated 25.04.1998 of the Avas Vikas Sansthan and by that<br \/>\nletter\/order, it was pointed out that 10 employees including Mr.<br \/>\nRadha Krishan Karwashra had not accepted to join and do the<br \/>\nalternative work offered to them and, therefore, those persons<br \/>\nwere treated as no more in the service of the Avas Vikas<br \/>\nSansthan.  That the order of 25.04.1998 was not at all related to<br \/>\ndismissal of service of employees as a result of dissolution of the<br \/>\nSociety.  It was submitted that the writ petitions challenging the<br \/>\nsaid order dated 25.04.1998 are still pending in the High Court<br \/>\nat Jaipur in writ petition Nos. 5370\/1998 and 5383\/1998.<br \/>\nSince this fact was pointed out by Mr. Badridas Sharma during<br \/>\nthe time of hearing of these appeals, we do not consider the<br \/>\nmerits of the claim made in this appeal.  In view of this, the<br \/>\nabove appeals are delinked from the batch of appeals in Civil<br \/>\nAppeal Nos. 5302\/2004 etc. etc. and disposed of accordingly.<br \/>\nBoth parties are at liberty to pursue the pending writ petitions<br \/>\nbefore the High Court in accordance with law.  No costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Avas Vikas Sansthan &amp; Anr vs Avas Vikas Sansthan Engineers &#8230; on 28 March, 2006 Author: . A Lakshmanan Bench: H.K. Sema, Dr. Ar. Lakshmanan CASE NO.: Appeal (civil) 5302 of 2004 PETITIONER: Avas Vikas Sansthan &amp; Anr. RESPONDENT: Avas Vikas Sansthan Engineers Assn. &amp; Ors. DATE OF JUDGMENT: 28\/03\/2006 BENCH: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-8584","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Avas Vikas Sansthan &amp; Anr vs Avas Vikas Sansthan Engineers ... on 28 March, 2006 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/avas-vikas-sansthan-anr-vs-avas-vikas-sansthan-engineers-on-28-march-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Avas Vikas Sansthan &amp; 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