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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1059 OF 2005

Nihal Singh & Others …Appellants

Versus

State of Punjab & Others …Respondents

WITH CIVIL APPEAL NO.  6315     OF 2013

[Arising out of SLP (Civil) No. 12448 of 2009)

Bhupinder Singh & Others …Appellants

Versus

State of Punjab & Others …Respondents

J U D G M E N T

Chelameswar, J.

1. Leave granted in SLP (Civil) No.12448 of 2009.

2. Since both the appeals raise a common question of  

law,  the  same  are  being  disposed  of  by  this  common  

judgment.  For the sake of convenience, we shall refer to  

the facts in Civil Appeal No.1059 of 2005.

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3. This  appeal  arises  out  of  a  judgment  in  CWP  No.  

13915 of 2002 of the High Court of Punjab and Haryana  

dated 23rd January, 2003.   20 unsuccessful petitioners in  

the  above  writ-petition  are  the  appellants  herein.   The  

High Court dismissed the writ petition following an earlier  

judgment of a Division Bench in LPA 209 of 1992 dated 6th  

September,  1993,  which  in  turn  arose  out  of  Civil  Writ  

Petition No. 5280 of 1988.   The facts leading to all these  

writ petitions as could be culled out from the material on  

record are as follows:-

4. There was a large scale disturbance in the State of  

Punjab in 1980s.  State was not in a position to handle the  

prevailing law and order situation with the available police  

personnel.  Therefore,  the  State  of  Punjab  resorted  to  

recruitment  under  section  171 of  the  Police  Act,  1861  

(hereinafter  referred  to  as  ‘the  Act’)  which enabled  the  

1 Section  17,  Police  Act,  1861  –  When  it  shall  appear  that  any  unlawful  assembly,  or  riot  or  disturbance of the peace has taken place,  or may be reasonably apprehended,  and that  police force  ordinarily  employed  for  preserving  the  peace  is  not  sufficient  for  its  preservation  and  for  the  protection of the inhabitants and the security of property in the place where such unlawful assembly or   riot or disturbances of the peace has occurred, or is apprehended, it  shall  be lawful for any police  officer not below the rank of Inspector to apply to the nearest Magistrate to appoint so many of the   residents of the neighbourhood as such police officers may require to act as SPOs for such time and   within such limits as he shall deem necessary and the Magistrate to whom such application is made   shall, unless he sees cause to the contrary, comply with the application.

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State (police officers not below the rank of Inspector) to  

appoint Special Police Officers.

5. The factual background in which persons such as the  

appellants herein came to be appointed is recorded in the  

judgment in LPA No. 209 of 1992 as follows:-

“I was at the meeting held on March 24, 1984 between  the  Advisor  to  the  Governor  of  Punjab  and  Senior  officers of the banks in the public Sector Operating in  Punjab that, after reviewing the security arrangements  for  banks  in  Punjab,  it  was  decided  that  SPOs  be  appointed for the said purpose in terms of section 17  of the Police Act, 1861 (hereinafter referred to as the  Act).   This step was taken as it was felt that it would  not  be  possible  for  the  State  Govt.  to  provide  the  requisite police guards to banks and that, thereafter,  this additional force be raised, in order to do so, the  banks undertook to take over the financial burden of  the  SPOs  to  be  appointed,  but  it  was  clearly  understood that as per the provisions of the Act, such  Police  Officers  would  be  under  the  discipline  and  control  of the Senior Superintendent of Police of the  district concerned.   As regards their remuneration it  was decided that SPOs would be paid an honorarium  of  Rs.  15/-  per  day.    This  was,  however,  later  enhanced to Rs. 30/- per day.   Relevant in the context  of the SPOs to be appointed, was the further decision”

6. The appellants herein assert  that all  the appellants  

are  ex-servicemen  and  registered  with  the  employment  

exchange.  They were recruited as Special Police Officers.2

2 Ground IV of SLP - …It was the Police Department which sent the intimation to the employment   exchange and thereafter  all  the ex-servicemen who were enrolled with the Employment Exchange  were called upon and got their option to be enrolled as Special Police Officer (SPOs) under section 17   of the Police Act, 1861.   Those persons who were having armed licence were enrolled as SPOs and   this enrolment was made by the Superintendent of Police, Amritsar.   Similar orders were passed by  the Superintendent of Police regarding all the petitioners between 1986 to 1994.

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7. The appointment order of the first appellant reads as  

follows:

“Nihal Singh s/o Shri Nidhan Singh r/o Kallah PS Sadar 7-7  is  hereby  appointed  as  a  Special  Police  Officer  under  section 17 of the Police Act, 1961, in the rank of SPO and is  assigned special  constabulary  number  277.   He  shall  be  entitled to all privileges under Police Act 1861 and shall be  under the administrative control of the undersigned in the  matter of discipline etc.

He shall be paid Rs.35/- per day by the concerned bank of  posting as honorarium from the date he actually takes over  charge of his duty.”

8. In  the  background  of  such  appointments,  various  

persons  who  were  appointed,  including  the  appellants  

herein, approached the High Court of Punjab & Haryana  

from  time  to  time  seeking  appropriate  directions  for  

regularisation  of  their  services.   It  appears  that  the  

petitioners  herein  also  had  approached  the  High  Court  

earlier  in  CWP  No.19390  of  2001  praying  that  their  

services  be  regularized  in  the  light  of  notification  

No.11/34/2000-4PP-III/1301  dated  23.1.2001.   The  said  

writ  petition  was  dismissed  by  order  dated  12.12.2001  

directing  consideration  of  the  cases  of  the  petitioners  

therein (appellants herein) in accordance with the law and  

pass a speaking order.

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9. Pursuant  to  the  said  directions,  the  Senior  

Superintendent of Police, Amritsar (hereinafter referred to  

as  ‘the  SSP’)  purported  to  consider  the  cases  of  the  

appellants herein and passed an order  dated 23.4.2002  

rejecting the claim of the appellants.  The relevant portion  

of the order reads as follows:

“In compliance with the aforesaid order dated 12.12.2001  passed by the Hon’ble High Court of Punjab and Haryana,  the  joint  legal  notice  dated  3.4.2001  (Annexure  P-4)  submitted by the petitioners,  has been examined by the  undersigned and it has been found that the petitioner is not  entitled to claim the relief of regularization of his services  as he was appointed as SPOs (Bank Guards) on daily wages  basis @ Rs.30/- per day by the SSP/Amritsar vide No.14477- 80/B dated 27.4.87 S.P.O. (Bank Guard), on the request of  the Bank Authorities  which were increased later  on from  time  to  time  as  per  Govt.  instructions.   They  were  appointed as SPO (Bank Guards) in order to provide them  power, privileges and protection of ordinary police official  as provided under section 18 of the Police Act 1861 due to  terrorism in the State at that time.  The petitioners are still  working as guards with the Gramin Banks and daily wages  is being given by the Bank Authorities.  No seniority of the  S.P.O.  (Bank  Guard)  has  been  maintained  in  Amritsar  District.  SPO (Bank Guard) is still working with the Gramin  banks in Amritsar district and he can lay his claim, if any, to  the bank authorities instead of the Police Department.

Keeping  in  view  the  above  legal  notice  dated  3.4.2001  (annexure  P.4)  has  been  considered.   The  notification  No.11/34/2000-4PP-III/1301  dated  23.1.2001  is  not  applicable in the case bank guard as their daily wages are  being paid by the bank.  As such, the claim of the petitioner  (Bank  Guards)  SPO  Ajit  Singh  No.247/ASR  is  not  maintainable  against  the  State  of  Punjab  or  this  Office.  Legal notice Annexure P-4 is devoid of any legal force and  is being rejected.  The petitioner be informed personally.”

10. Challenging  the  said  order,  the  appellants  herein  

once  again  approached  the  High  Court  of  Punjab  &  

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Haryana  in  Civil  Writ  Petition  No.13915  of  2002  which  

came to be dismissed by the judgment under appeal.

11. As already noticed, the appellants’ writ petition was  

dismissed on the basis of an earlier judgment of the High  

Court of Punjab & Haryana passed in Letter Patent Appeal  

No.209 of 1992.  In the said Letter Patent Appeal filed by  

the persons similarly situated as the appellants herein, the  

High  Court  of  Punjab  &  Haryana  recorded  a  categoric  

finding that there is a relationship of master and servant  

between the State of Punjab and the SPOs:

“Such being the situation, there can be no escape from the  conclusion that the relationship of master and servant of  SPOs is with the State govt. and not with the banks.”  

However,  the  claim  of  the  SPOs  for  regularization  was  

refused holding:

“As regards regularization of the services of Special Police  Officers,  by  the  very  nature  and  purpose  of  their  appointment as such, no occasion arises to warrant such  regularization.   As mentioned earlier,  there is  no regular  cadre for  such posts,  nor have any particular  number of  posts been created for this purpose.  These factors clearly  mitigate against such services being regularized.”

 12. Relying on the said conclusion, the writ petition of the  

appellants herein also came to be dismissed. Hence the  

present appeal.

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13. We are required to examine the correctness of the  

decision dated 23.4.2002 of the SSP as approved by the  

judgment under appeal.  The reason assigned by the SSP  

for  rejecting  the  claim  of  the  appellants  (the  relevant  

portion of which order is already extracted above) is that  

the appellants are working as guards with various banks  

and  their  wages  are  being  paid  by  such  banks  and,  

therefore, their claim for regularization, if any, lay only to  

the concerned bank but not to the police department.   

14. Learned counsel for the appellants Shri R.K. Kapoor  

submitted that the conclusion of the SSP that appellants  

cannot have any claim against the State of Punjab to seek  

regularization of their services is clearly wrong in view of  

the fact  that  the master  and servant  relationship exists  

between the appellants and the State of Punjab.  Coming  

to the conclusion of the High Court that in the absence of  

regularly  constituted  cadre  or  sanctioned  posts,  

regularization of the services of the appellants cannot be  

guaranteed,  Shri  Kapoor  argued  that  the  authority  to  

create posts vests exclusively with the State.  The State  

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cannot  extract  the  work  from  the  persons  like  the  

appellants for decades and turn back to tell the court that  

it cannot regularize the services of such persons in view of  

the fact that these appointments were not made against  

any sanctioned posts.  

15. On the other hand, Shri Kuldip Singh, learned counsel  

appearing for the State submitted that in the light of the  

Constitution Bench decision of  this  Court  in  Secretary,  

State of Karnataka and Ors v. Umadevi (3) and Ors  

(2006) 4 SCC 1, in absence of a sanctioned post the relief  

such as prayed by the appellants cannot be given.

16. As can be seen from the order of appointment of the  

1st appellant - which we take to be representative of the  

orders of appointment of all the appellants (a fact which is  

not  disputed  by  the  respondent),  the  appointment  was  

made by the SSP in exercise of the statutory power under  

section 17 of the Act.  It is categorically mentioned in the  

said appointment order that the appellants are entitled to  

all the privileges under the Act. The powers, privileges and  

obligations of the SPOs appointed in exercise of the powers  

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under  section 17 of  the  Act  are  specified  in  section 18  

which reads as follows:

“Every special police officers so appointed shall have same  powers,  privileges  and  protection,  and  shall  be  liable  to  perform  the  same  duties  and  shall  be  amenable  to  the  same  penalities  and  be  subordinate  to  the  same  authorities, as the ordinary officers of police.”      

17. It is obvious both from the said section and also the  

appointment orders, the appellants are appointed by the  

State in exercise of the statutory power under section 17  

of the Act.  The appellants are amenable to the disciplinary  

control of the State as in the case of any other regular  

police officers.  The only distinction is that they are to be  

paid daily wages of Rs.35 (which came to be revised from  

time to time). Further, such payment was to be made by  

the  bank  to  whom  the  services  of  each  one  of  the  

appellants is made available.

18. From the mere fact that the payment of wages came  

from the bank at whose disposal the services of each of  

the  appellants  was  kept  did  not  render  the  appellants  

employees of those banks.  The appointment is made by  

the State.  The disciplinary control vests with the State.  

The  two  factors  which  conclusively  establish  that  the  

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relationship  of  master  and  servant  exists  between  the  

State and the appellants. A fact which is clearly recognized  

by the division bench of the High Court in LPA No.209 of  

1992.  It may be worthwhile mentioning here that under  

the law of contracts in this country the consideration for a  

contract need not always necessarily flow from the parties  

to a contract. The decision of the SSP to reject the claim of  

the  appellants  only  on  the  basis  that  the  payment  of  

wages to the appellants herein was being made by the  

concerned  banks  rendering  them  disentitled  to  seek  

regularization of  their  services  from the  State  is  clearly  

untenable.  

19. Coming to the judgment of the division bench of the  

High Court  of Punjab & Haryana in LPA No.209 of 1992  

where the claims for regularization of the similarly situated  

persons were rejected on the ground that no regular cadre  

or sanctioned posts are available for regularization of their  

services, the High Court may be factually right in recording  

that there is no regularly constituted cadre and sanctioned  

posts  against  which  recruitments  of  persons  like  the  

appellants  herein  were  made.   However,  that  does  not  

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conclusively decide the issue on hand. The creation of a  

cadre  or  sanctioning  of  posts  for  a  cadre  is  a  matter  

exclusively within the authority of the State. That the State  

did  not  choose  to  create  a  cadre  but  chose  to  make  

appointments of persons creating contractual relationship  

only demonstrates the arbitrary nature of the exercise of  

the  power  available  under  section  17  of  the  Act.  The  

appointments made have never been terminated thereby  

enabling various banks to utilize the services of employees  

of  the  State  for  a  long  period  on  nominal  wages  and  

without making available any other service benefits which  

are available to the other employees of the State, who are  

discharging  functions  similar  to  the  functions  that  are  

being discharged by the appellants.   

20. No doubt that the powers under section 17 are meant  

for meeting the exigencies contemplated under it, such as,  

riot or disturbance which are normally expected to be of a  

short duration. Therefore, the State might not have initially  

thought of creating either a cadre or permanent posts.

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21. But we do not see any justification for the State to  

take a defence that after permitting the utilisation of the  

services of large number of people like the appellants for  

decades  to  say  that  there  are  no  sanctioned  posts  to  

absorb the appellants.  Sanctioned posts do not fall from  

heaven. State has to create them by a conscious choice on  

the basis of some rational assessment of the need.  

22. The question is  whether  this  court  can compel  the  

State of Punjab to create posts and absorb the appellants  

into  the  services  of  the  State  on  a  permanent  basis  

consistent  with  the  Constitution  Bench  decision  of  this  

court in  Umadevi’s case.  To answer this question, the  

ratio decidendi of the  Umadevi’s case is required to be  

examined.   In  that  case, this Court was considering the  

legality of the action of the State in resorting to irregular  

appointments without reference to the duty to comply with  

the proper  appointment  procedure contemplated by the  

Constitution.

“4. …  The  Union,  the  States,  their  departments  and  instrumentalities have resorted to irregular appointments,  especially  in  the  lower  rungs  of  the  service,  without  reference to the duty to ensure a  proper appointment  procedure through  the  Public  Service  Commissions  or  otherwise  as  per  the rules  adopted and to  permit  these  irregular appointees or those appointed on contract or on  

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daily  wages,  to  continue year  after  year,  thus,  keeping  out  those  who  are  qualified  to  apply for  the  post  concerned  and  depriving  them  of  an  opportunity  to  compete for the post.  It  has also led to persons who get  employed, without the following of a regular procedure or  even through the backdoor or on daily wages, approaching  the courts, seeking directions to make them permanent in  their posts and to prevent regular recruitment to the posts  concerned.  The  courts  have  not  always  kept  the  legal  aspects  in  mind  and  have  occasionally  even  stayed  the  regular process of employment being set in motion and in  some cases,  even directed that these illegal,  irregular or  improper  entrants  be  absorbed  into  service.  A  class  of  employment  which  can  only  be  called  “litigious  employment”, has risen like a phoenix seriously impairing  the  constitutional  scheme.  Such  orders  are  passed  apparently in exercise of the wide powers under Article 226  of the Constitution. Whether the wide powers under Article  226  of  the  Constitution  are  intended  to  be  used  for  a  purpose certain to defeat the concept of social justice and  equal opportunity for all, subject to affirmative action in the  matter  of  public  employment  as  recognised  by  our  Constitution, has to be seriously pondered over.”  

(emphasis supplied)

23. It can be seen from the above that the entire issue  

pivoted  around  the  fact  that  the  State  initially  made  

appointments  without  following  any  rational  procedure  

envisaged under  the  Scheme of  the  Constitution in  the  

matters  of  public  appointments.   This  court  while  

recognising the authority of the State to make temporary  

appointments engaging workers on daily wages declared  

that the regularisation of the employment of such persons  

which  was  made  without  following  the  procedure  

conforming  to  the  requirement  of  the  Scheme  of  the  

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Constitution in the matter of public appointments cannot  

become  an  alternate  mode  of  recruitment  to  public  

appointment.  It was further declared that the jurisdiction  

of the Constitutional Courts under Article 226 or Article 32  

cannot be exercised to compel the State or to enable the  

State  to  perpetuate  an  illegality.  This  court  held  that  

compelling  the  State  to  absorb  persons  who  were  

employed by the State  as casual  workers or  daily-wage  

workers  for  a  long  period  on  the  ground  that  such  a  

practice  would  be  an  arbitrary  practice  and  violative  of  

Article 14 and would itself offend another aspect of Article  

14 i.e.  the State  chose initially  to appoint  such persons  

without any rational procedure recognized by law thereby  

depriving  vast  number  of  other  eligible  candidates  who  

were similarly situated to compete for such employment.

24. Even going by the principles laid down in Umadevi’s  

case, we are of the opinion that the State of Punjab cannot  

be heard to say that the appellants are not entitled to be  

absorbed into the services of the State on permanent basis  

as  their  appointments  were  purely  temporary  and  not  

against any sanctioned posts created by the State.   

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25. In  our  opinion,  the  initial  appointment  of  the  

appellants  can  never  be  categorized  as  an  irregular  

appointment.  The initial appointment of the appellants is  

made  in  accordance  with  the  statutory  procedure  

contemplated under the Act. The decision to resort to such  

a procedure was taken at the highest level of the State by  

conscious choice as already noticed by us.  The High Court  

in its  decision in LPA No.209 of 1992 recorded that  the  

decision to resort to the procedure under section 17 of the  

Act was taken in a meeting dated 24.3.1984 between the  

Advisor to the Government of Punjab and senior officers of  

the various Banks in the public sector.  Such a decision  

was  taken  as  there  was  a  need  to  provide  necessary  

security to the public sector banks.  As the State was not  

in  a  position  to  provide  requisite  police  guards  to  the  

banks, it was decided by the State to resort to section 17  

of the Act.  As the employment of such additional force  

would  create  a  further  financial  burden  on  the  State,  

various  public  sector  banks  undertook  to  take  over  the  

financial burden arising out of such employment.  In this  

regard, the written statement filed before the High Court  

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in the instant case by respondent nos.1 to 3 through the  

Assistant Inspector General of Police (Welfare & Litigation)  

is necessary to be noticed.  It is stated in the said affidavit:

“2. That in meeting of higher officers held on 27.3.1984  in Governor House Chandigarh with Shri Surinder Nath, IPS,  Advisor to Governor of Punjab, in which following decisions  were taken:-

i) That it will not be possible to provide police guard to  banks unless the Banks were willing to pay for the  same and additional force could be arranged on that  basis,  it  was  decided that police guards should be  requisitioned by the Banks for their biggest branches  located at the Distt. and Sub Divisional towns.  They  should  place  the  requisition  with  the  Distt.  SSPs  endorsing a copy of IG CID.  In the requisition, they  should clearly state that the costs of guard would be  met  by  them.   It  will  then  be  for  the  police  department to get additional force sanctioned.  This  task  should  be  done  on  a  top  priority.   In  the  meantime depending upon the urgency of the need  of any particular branch, police Deptt. may provide  from police strength for its protection.

ii) For  all  other  branches  guards  will  be  provided  by  Distt.  SSP after selecting suitable ex-servicemen or  other able bodied persons who will be appointed as  Special Police Officer in terms of Section 17 of the  Police Act.  Preference may be given to persons who  may  already be in  possession  of  licence  weapons.  All persons appointed as SPO for this purpose will be  given a brief training for about 7 days in the Police  Lines  in  the  handling  of  weapons  taking  suitable  position for protection of branches.  These SPOs will  work  under  the  discipline  and  control  and  as  per  Police  Act,  they  will  have  the  same  powers,  privileges and protection and shall  be amenable to  same penalty as an ordinary police personnel.”  

26. It  can  be  seen  from  the  above  that  a  selection  

process  was  designed  under  which  the  District  Senior  

Superintendent of Police is required to  choose suitable  

ex-servicemen or other able bodied persons for being  

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appointed as Special Police Officers in terms of section 17  

of the Act.  It is indicated that the persons who are already  

in possession of a licensed weapon are to be given priority.  

27. It is also asserted by the appellants that pursuant to  

the  requisition  by  the  police  department  options  were  

called  upon from ex-servicemen who were willing to be  

enrolled as Special Police Officer (SPOs) under section 17  

of the Police Act, 1861.3  

28. Such a procedure making recruitments through the  

employment exchanges was held to be consistent with the  

requirement of Articles 14 and 16 of the Constitution by  

this Court in  Union of India and Ors.  v.  N. Hargopal  

and Ors. (1987) 3 SCC 308.4

29. The  abovementioned  process  clearly  indicates  it  is  

not  a  case  where  persons  like  the  appellants  were  3 Paragraph 4 of the Writ petition and at page 34 of the SLP Paperbook:  

“That  the  Government  made  a  policy to  enrol  the  ex-servicemen  to  guard  the  life  and   property of the Government employees as well as Government employees.  All the petitioners being   ex-servicemen enrolled themselves  in the employment exchange.  The police department  sent the  intimation to the employment exchange and thereafter all the ex-servicemen who were enrolled with   the Employment Exchange were called upon and got their option to be enrolled in as Special Police   Officer (SPOs) under  section 17 of the Police Act,  1861 (hereinafter  called as the SPOs).   Those   persons who were having armed licence were enrolled as SPOs and this enrolment was made by the   Superintendent of Police, Amritsar.”  

4 9.   … We,  therefore,  consider  that  insistence  on  recruitment  through  Employment  Exchanges   advances rather than restricts the rights guaranteed by Articles 14 and 16 of the Constitution.  The  submission that Employment Exchanges do not reach everywhere applies equally to whatever method  of advertising vacancies is adopted.  Advertisement in the daily press, for example, is also equally   ineffective as it does not reach everyone desiring employment.

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arbitrarily  chosen  to  the  exclusion  of  other  eligible  

candidates.   It  required  all  able  bodied  persons  to  be  

considered  by  the  SSP  who  was  charged  with  the  

responsibility of selecting suitable candidates.  

30. Such  a  process  of  selection  is  sanctioned  by  law  

under section 17 of the Act.  Viewed in the context of the  

situation prevailing at  that point of time in the State of  

Punjab, such a process cannot be said to be irrational.  The  

need was to obtain the services of persons who had some  

experience  and  training  in  handling  an  extraordinary  

situation of dealing with armed miscreants.

31. It can also be noticed from the written statement of  

the  Assistant  Inspector  General  of  Police  (Welfare  &  

Litigation) that preference was given to persons who are in  

possession of licensed weapons.  The recruitment of the  

appellants and other similarly situated persons was made  

in the background of terrorism prevailing in the State of  

Punjab at that time as acknowledged in the order dated  

23.4.2002 of the SSP.   The procedure which is  followed  

during the normal times of making recruitment by inviting  

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applications  and  scrutinising  the  same  to  identify  the  

suitable  candidates  would  itself  take  considerable  time.  

Even after  such a selection the selected candidates are  

required to be provided with necessary arms and also be  

trained  in  the  use  of  such  arms.   All  this  process  is  

certainly time consuming.  The requirement of the State  

was to take swift action in an extra-ordinary situation.   

32. Therefore, we are of the opinion that the process of  

selection  adopted  in  identifying  the  appellants  herein  

cannot  be  said  to  be  unreasonable  or  arbitrary  in  the  

sense  that  it  was  devised  to  eliminate  other  eligible  

candidates.   It  may  be  worthwhile  to  note  that  in  

Umadevi’s  case,  this  Court  was  dealing  with  

appointments  made  without  following  any  rational  

procedure  in  the  lower  rungs of  various services  of  the  

Union and the States.

33. Coming to the other aspect of the matter pointed out  

by the High Court - that in the absence of sanctioned posts  

the State cannot be compelled to absorb the persons like  

the appellants into the services of the State, we can only  

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say that posts are to be created by the State depending  

upon the need to employ people having regard to various  

functions the State undertakes to discharge.

“Every sovereign Government has within its own jurisdiction right  and  power  to  create  whatever  public  offices  it  may  regard  as  necessary  to  its  proper  functioning  and  its  own  internal  administration.”5  

34. It  is  no  doubt  that  the  assessment  of  the  need  to  

employ  a  certain  number  of  people  for  discharging  a  

particular responsibility of the State under the Constitution  

is  always  with  the  executive  Government  of  the  day  

subject to the overall control of the Legislature.   That does  

not mean that an examination by a Constitutional Court  

regarding the accuracy of the assessment of the need is  

barred.   This Court in  S.S. Dhanoa  v.  Union of India  

(1991)  3  SCC  567  did  examine  the  correctness  of  the  

assessment made by the executive government.  It was a  

case  where  Union  of  India  appointed  two  Election  

Commissioners  in  addition  to  the  Chief  Election  

Commissioner just before the general elections to the Lok  

Sabha.  Subsequent to the elections, the new government  

5 42 American Jurisprudence 902 Para 31

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abolished  those  posts.   While  examining  the  legality  of  

such abolition, this Court had to deal with an argument6  

whether  the  need  to  have  additional  commissioners  

ceased subsequent to the election.  It was the case of the  

Union of India that on the date posts were created there  

was a need to have additional commissioners in view of  

certain factors such as the reduction of the lower age limit  

of the voters etc.  This Court categorically held that “The truth  of the matter as is apparent from the record is that …….there was no need for the said  

appointments…..”.  

35. Therefore, it is clear that the existence of the need  

for creation of the posts is a relevant factor reference to  

which  the  executive  government  is  required  to  take  

6 “21. In the first instance, the petitioner and the other Election Commissioners  were  appointed  when  the  work  of  the  Commission  did  not  warrant  their  appointment. The reason given by respondent 1 (Union of India), that on account  of  the  Constitution  (61st  Amendment)  Act  reducing  the  voting  age  and  the  Constitution (64th Amendment) and (65th Amendment) Bills relating to election  to the Panchayats and Nagar Palikas, the work of the Commission was expected  to increase and, therefore, there was need for more Election Commissioners, cuts  no ice. As has been pointed out by respondent 2, the work relating to revision of   electoral rolls on account of the reduction of voting age was completed in all the  States except Assam by the end of July 1989 itself, and at the Conference of the  Chief  Elecoral  Officers  at  Tirupati,  respondent  2  had  declared  that  the  entire  preparatory work relating to the conduct of the then ensuing general elections to  the Lok Sabha would be completed by August in the whole of the country except  Assam. Further, the Constitution (64th and 65th Amendment) Bills had already  fallen  in  Parliament,  before  the  appointments.  In  fact,  what  was  needed  was  more  secretarial  staff  for  which  the  Commission  was  pressing,  and  not  more  Election Commissioners.  What instead was done was to appoint the petitioner  and the other Election Commissioner on October 16, 1989. Admittedly, further  the  views  of  the  Chief  Election  Commissioner  were  not  ascertained  before  making the said appointments. In fact, he was presented with them for the first  time in the afternoon of the same day, i.e., October 16, 1989.”

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rational decision based on relevant consideration.  In our  

opinion, when the facts such as the ones obtaining in the  

instant  case  demonstrate  that  there  is  need  for  the  

creation of posts, the failure of the executive government  

to apply its mind and take a decision to create posts or  

stop extracting work from persons such as the appellants  

herein for decades together itself would be arbitrary action  

(inaction) on the part of the State.

36. The other factor which the State is required to keep in  

mind  while  creating  or  abolishing  posts  is  the  financial  

implications involved in such a decision.  The creation of  

posts necessarily means additional financial burden on the  

exchequer of the State.  Depending upon the priorities of  

the  State,  the  allocation  of  the  finances  is  no  doubt  

exclusively within the domain of the Legislature.  However  

in the instant case creation of new posts would not create  

any additional financial burden to the State as the various  

banks  at  whose  disposal  the  services  of  each  of  the  

appellants  is  made  available  have  agreed  to  bear  the  

burden. If absorbing the appellants into the services of the  

State and providing benefits at par with the police officers  

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of similar  rank employed by the State results in  further  

financial  commitment  it  is  always open for  the State  to  

demand  the  banks  to  meet  such  additional  burden.  

Apparently no such demand has ever been made by the  

State.  The result is – the various banks which avail the  

services  of  these  appellants  enjoy  the  supply  of  cheap  

labour over a period of decades.  It  is also pertinent to  

notice that these banks are public sector banks.  We are of  

the  opinion  that  neither  the  Government  of  Punjab  nor  

these public  sector  banks  can  continue such a  practice  

consistent with their obligation to function in accordance  

with  the  Constitution.   Umadevi’s  judgment  cannot  

become  a  licence  for  exploitation  by  the  State  and  its  

instrumentalities.  

37. For all  the abovementioned reasons, we are of the  

opinion that the appellants are entitled to be absorbed in  

the  services  of  the  State.   The appeals  are  accordingly  

allowed.  The judgments under appeal are set aside.   

38. We  direct  the  State  of  Punjab  to  regularise  the  

services  of  the  appellants  by  creating  necessary  posts  

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within a period of three months from today.  Upon such  

regularisation, the appellants would be entitled to all the  

benefits of services attached to the post which are similar  

in nature already in the cadre of the police services of the  

State.   We  are  of  the  opinion  that  the  appellants  are  

entitled to the costs throughout.  In the circumstances, we  

quantify the costs to Rs.10,000/- to be paid to each of the  

appellants.

………………………………………..J.                                          (H.L. Gokhale)

…………………………………..……J.                                          (J. Chelameswar) New Delhi; August 7, 2013.

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