Holding

The 1998 amendments to the 1994 Act, including Section 7A, are constitutionally valid, do not usurp judicial review, and the cut‑off date of 25‑Nov‑1993 is a lawful classification; daily‑wage employees meeting the statutory conditions may be considered for regularisation.

Summary

The Supreme Court examined whether employees hired on daily‑wage, nominal muster‑roll, consolidated‑pay or as contingent workers in Andhra Pradesh could be regularised after five years of service and whether the 1998 amendments to the Andhra Pradesh (Regulation of Appointments to Public Services and Rationalisation of Staff Pattern and Pay Structure) Act, 1994 were unconstitutional. The Court held that the amendments, including Section 7A, were within the legislature’s plenary power and did not encroach on judicial review. The cut‑off date of 25‑Nov‑1993 for eligibility, fixed in the original Act, was deemed reasonable and not arbitrary. Consequently, daily‑wage employees who have not yet been regularised may be considered for regularisation subject to the conditions laid down in GO 22‑Apr‑1994, but only those who completed five years of service on or before the cut‑off date are entitled to it. The appeals filed by the employees were dismissed, while the State’s appeals were allowed, and the matter was disposed of.

Issues considered

Whether persons employed on daily‑wage, nominal muster‑roll, consolidated‑pay or as contingent workers are entitled to regularisation after five years of service.
Whether the Amendment Acts No. 3 of 1998 and No. 27 of 1998 to the 1994 Act are ultra vires the Constitution.
Whether Section 7A of the 1998 amendment infringes on the Court’s power of judicial review.
Whether the cut‑off date of 25‑Nov‑1993 for determining eligibility for regularisation is arbitrary, unreasonable or violative of Articles 14 and 16.

Legislation cited

Constitution of Indias. 14, s. 16, s. 162, s. 20(1), s. 245, s. 246, s. 311, s. 31(2)
Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
Industrial Disputes Act, 1947s. 25F

Subjects

regularisationdaily‑wage employeeslegislative amendmentconstitutional validityArticle 14Article 16judicial reviewcut‑off dateAndhra Pradesh public servicestaff rationalisation

Judgment

[2009] 10 S.C.R. 634

A A. MANJULA BHASHINI & OTHERS
v.
THE MANAGING DIRECTOR, AP. WOMEN'S
COOPERATIVE FINANCE CORPORATION LTD. AND
ANOTHER
B (Civil Appeal No. 3702 of 2006)
JULY 6, 2009
[B.N. AGRAWAL AND G.S. SINGHVI, JJ.]

c Andhra Pradesh (Regulation of Appointments to Public
Services and Rationalization of Staff Pattern and Pay
Structure) Act, 1994:

Amending Act No.3 and 27 of 1998 - Constitutional
D
validity of - Held : Not ultra vires the Constitution. ". ~-

Sections 7, 7A:

Persons employed on daily wage basis or nominal
muster roll or consolidated pay or as contingent worker on full
E time basis in different departments of the Government of
Andhra Pradesh and its agencies/instrumentalities -
Entitlement to be regularised in service on completion of five
years - Helq : The policy of regularisation contained in first
.
...
proviso to Section 7 of Act No.27of1998 is one time measure
F - Intended to benefit only those daily wage employees, etc.
who .completed 5 years continuous service on or before
25.11.1993. The employees who completed 5 years service
after 25. 11. 1993 cannot claim regularization - Declaration
made by the Division Bench that the ban on regularisation
will be effective from 19.8.1998 i.e. the date on which Act
G
No.27 of 1998 came into force and that all persons who have
completed 5 years service as on that date would be entitled
to be considered for regularisation of service is set aside -
The daily wage employees and others who are covered by

H 634
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 635
COOPERATIVE FINANCE COPRN. LTD.

Section 7 of the 1994 Act (amended) and whose services A
have not been regularised so far, shall be entitled to be
considered for regularisation and their services shall be
regularised subject to fulfillment of the conditions enumerated
in G. 0. dated 22.4. 1994 - The policy did not confer an
indefensible right upon all daily wage employees to be B
regularized dehors the date of enforcement of the Act - Hence
it cannot be said that the Legislature has taken away an
.~ accrued or vested right of the daily wage employees -
Insertion of Section 7A does not amount to encroachment on
the court's power of judicial review. c
Cut off date - Fixing of - Cut off date prescribed as the
date of commencement of the main Act - Cannot be dubbed
as arbitrary, unreasonable, irrational or discriminatory -

-,,,,. Constitution of India, Article 14.

Constitution of India, 1950:
D

Articles 245, 246 - Plenary powers conferred on
Legislatures - Though Legislature cannot overrule, reverse
or override a judicial decision, it can render a judicial decision E
ineffective by enacting a valid law fundamentally altering or
1 changing the conditions on which such a decision is based -
.
_..,
Such law can also be given retrospective effect with a
deeming date or with effect from a particular date.

Legislative Intent - Ascertaining of - External aid - F
Statement of objects and reasons can also be looked into as
an external aid to appreciate the true intent/object sought to
be achieved by enactment of the particular Act or for judging
reasonableness of the classification made by such Act.
G
Judicial Review:

Section 7A of the amending Act 27 of 1998, amending
the Andhra Pradesh (Regulation of Appointments to Public
Services and Rationalization of Staff Pattern and Pay
H
636 SUPREME COURT REPORTS [2009] 10 S.C.R.

A Structure) Act, 1994 - Does not amount to encroachment on
the Court's power of judicial review.

In the appeals, some of which have been filed by the
State Government and its agencies/instrumentalities and
some by the employees, who could not succeed before
8
the Andhra Pradesh Administrative Tribunal and/or the
High Court to accept their prayer for issue of a mandamus
to the concerned authorities to regularise their services,
the questions which arose for consideration were:
c (i) Whether the persons employed on daily wage
basis or nominal muster roll or consolidated
pay or as contingent worker on full time basis
in different departments of the Government of
Andhra Pradesh and its agencies/
D instrumentalities are entitled to be regularised
in service on completion of 5 years; and

(ii) whether amendments made in the Andhra
Pradesh (Regulation of Appointments to
Public Services and Rationalization of Staff
E Pattern and Pay Structure) Act, 1994 by
Amendment Act Nos.3 and 27 of 1998 are ultra
vires the provisions of the Constitution. .
~·

Dismissing the ,appeals filed by the employees and
F allowing the appeals filed by the State Government and
agencies/instrumentalities of the State, the Court
HELD : 1.1. The Andhra Pradesh (Regulation of
Appointments to Public Services and Rationalisation of
G Staff Pattern and Pay Structure) Act, 1994 was enacted
in the backdrop of the decision taken by the State
Government to curb irregular appointments, to rationalise
the staff pattern and pay structure and thereby reduce
unnecessary expenditure and also to ensure that only
H those selected by the specified recruiting agencies are
A MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 637

..
COOPERATIVE FINANCE COPRN. LTD .

appointed against the sanctioned posts. This is clearly A
"-.. discernible from the statement of objects and reasons
contained in the Bill which led to enactment of the 1994
Act and provisions contained therein. [Para 16] [670-G-
H; 671-A]
B
1.2. The statement of objects and reasons can also
be looked into as an external aid fot'appreciating the true
intent of the legislature and/or fhe object sought to be
achieved by enactment of the particular Act or for judging
reasonableness of the classification made by such Act.
[Para 22) [675-E-F]
c
Delhi Development Horticulture Employees' Union v.
Delhi Administration (1992) 4 SCC 99; State of Haryana v.
Piara Singh (1992) 4 SCC 118; District Collectorv. M.L. Singh
-........,
1998 (2) ALT 5 (SC); D. Sesharani v. Managing Director, A.P. D
Women's Co-op. Finance Corporation 2001 (2) ALT 607;
Minerva Mills Limited v. Union of India (1980) 2 SCC 591;
L. Chandra Kumar v. Union of India (1995) 1 SCC 400; S.S.
Bola v. B.D. Sardana 1997 (8) SCC 522; Gujarat Agricultural
University v. Rathod Labhu Bechar 2001 (3) SCC 574; Indra E
Sawhney v. Union of India 2000 (1) SCC 168; Madan Mohan
Pathak vs. Union of India (1978) 2 SCC 50; State of Gujarat
.
~
vs. Raman Lal Keshav Lal Soni (1983) 2 SCC 33; Chairman,
Railway Board vs. C.R. Rangadhamaiah (1997) 6 SCC 623;
Govt. of Andhra Pradesh vs. G. V.K. Girls High School (2000) F
8 sec 370; ASWINI KUMAR GHOSE II. ARAB/NOA BOSE
AIR 1952 SC 369; A. Thangal Kunju Musaliar v. M.
Venkatachalam Potti AIR 1956 SC 246; Central Bank of India
v. Workmen AIR 1960 SC 12; Bhaiji v. Sub-Divisional Officer,
Thandla (2003) 1 SCC 692; B. Banerjee v. Smt. Anita Pan
G
,. (1975) 1 SCC 166; K.P. Varghese v. /TO, Emakulam (1981)
~
4 SCC 173; Chem Taong Shang v. S. D. Baija/ (1988) 1 SCC
507; Utkal Contractors and Joinery v. State of Orissa 1987
(3) SCC 279 and Gurudevdatta VKSSS Maryadit v. State of
Maharashtra (2001) 4 SCC 534, referred to.
H
638 SUPREME COURT REPORTS [2009] 10 S.C.R.

A 2. If the State Government had sincerely implemented
the provisions of the 1994 Act, it may have succeeded in
cleansing the mess created due to irregular employment
of thousands of persons and, thereby, saved
considerable revenue which could be utilized tor
B execution of welfare schemes and development
programmes. By ensuring that appointments against the
sanctioned posts are made only from among the
candidates selected by the specified recruiting agencies
like Public Service Commission/College Service
c Commission etc. or from among the candidates
sponsored by the employment exchanges, the State
Government could have demonstrated its commitment to
the system established by rule of law and determination
to comply with the equality clause enshrined in the
Constitution and other relevant statutory provisions in
0
their true spirit. Unfortunately, that did not happen
because, inspite of the prohibition contained in Section
7 against regularisation of the existing daily wage
employees and persons appointed on temporary basis,
the State Government wilted under the pressure exerted
E by the vested interests and issued G.O. dated 22.4.1994
incorporating therein policy for regularisation of the
services of those appointed on daily wages or nominal
muster roll or consolidated pay, who had continuously
worked for 5 years and were continuing on 25.11.1993,
F i.e., the date of enforcement of the 1994 Act. This was
intended to be one time measure and not an ongoing
process/scheme for regularisation of the services of all
daily wage employees on their completing 5 years. [Para
241 [678-F-H; 679-A-D]
G
Union of India v. Mohan Pal (2002) 4 SCC 573; Union
of India v. Gagan Kumar 2005 (6) SCC 70 and Director
General, Doordarshan, Mandi House v. Manas Dey 2005 (13)
sec 437, referred to.
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 639
COOPERATIVE FINANCE COPRN. LTD.

3.1. In order to remove the ambiguity and A
imperfectness in the language of G.O. dated 22.4.1994
and make the policy of regularisation an integral part of
the 1994 Act, the legislature enacted Amendment Act
Nos.3 of 1998 and 27 of 1998. The purpose of making the
policy of regularisation a part of the 1994 Act was not to B
dilute the main object of the 1994 Act, i.e., to curb the
menace of irregular appointments and also ensure that
appointments are made against the sanctioned posts
only from among the candidates selected by the
designated recruiting agencies but also to harmonize the c
same with the prohibition contained in Section 7 against
regularisation of daily wage and temporary employees.
The preface of Act No.27 of 1998 clearly shows that the
policy contained in G.O. dated 22.4.1994 was intended to
be one time measure for regularisation of the. persons D
employed on daily wages or nominal muster roll or
consolidated pay, who completed 5 years continuous
service on or before 25.11.1993, i.e., the date of
enforcement of the 1994 Act and it was not a continuing
scheme for regularisation of all 'daily wage employees' E
as and when they were to complete 5 years period. The
language of first proviso to Section 7 by which the policy
of regularisation was engrafted in the 1994 Act shows
that the amendments were made with the sole object of
removing the ambiguity in the policy contained in G.O.
dated 22.4.1994 and the same were not intended to nullify F
or override the judgment in District Collector vs. M.L•.
Singh. [Para 26] [681-F-H; 682-A-C]

3.2. There is no doubt that if the language of the
policy contained in G.O. dated 22.4.1994 was similar to G
the one contained in newly inserted proviso to Section 7
and there was no ambiguity in it, the courts would not
have interpreted the same in a manner which would
entitle all persons employed on daily wages before
25.11.1993 to claim regularisation irrespective of the date H
640 SUPREME COURT REPORTS [2009] 10 S.C.R.
>

A of completion of 5 years service. The policy contained in
G.O. dated 22.4.1994 did not confer an indefeasible right
•
..A

upon all daily wage employees (as the term has been
defined in Section 2(ii) of the 1994 Act) to be regularised
in service de-hors the da!e of enforcement of the Act.
B Therefore, it cannot be said that by incorporating the
policy of regularisation in the 1994 Act, the legislature has
taken away an accrued or vested right of the daily wage
A,.
employees. [Para 26] [682-C-F]

District Collector vs. M.L. Singh 1998 (2) ALT 5 (SC) -
c referred to.
4. The distinction between legislative and judicial
functions is well known. Within the scope of its legislative
competence - and subject to other constitutional
,-
D limitations, the power of legislature to enact laws is !'""

plenary. In exercise of that power, the legislature can
enact law prospectively as well retrospectively. The
adjudication of the rights of the parties according to law
enacted by the legislature is a judicial function. In the
E performance of that function, the court interprets and
gives effect to the intent and mandate of the legislature
as embodied in the statute. If the court finds that the·
particular statute is ultra vires the power of legislature or .;
any provision of the Constitution, then the same can be
struck down. It is also. well settled that the legislature
F
cannot by bare declaration, without anything more,
directly overrule, reverse or override a judicial decision.
However it can, in exercise of the plenary powers
conferred upon it by Articles 245 and 246 of the
Constitution, render a judicial decision ineffective by
G enacting a valid law fundamentally altering or changing
the conditions on which such a decision is based. Such
law can also be given retrospective effect with a deeming
date or with effect from a particular date. [Para 27) [684-
A-E]
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR; A.P. WOMEN'S641
""" COOPERATIVE FINANCE COPRN. LTD.

... Government of A.P. v. H.M. T. Ltd. 1975 (2) SCC 274; A
Indian Aluminium Co. v. State of Kera/a 1996 (7) SCC 637;
...... Chakolas Spinning and Weaving Mills Ltd. vs. K.S.E. Board
1988 (2) KLT 680; Prithvi Cotton Mills Ltd. v. Broach Borough
Municipality 1969 (2) SCC 283; Patel Gordhandas
Hargovindas v. Municipal Commissioner 1964 (2) SCR 608; B
Orient Paper Miffs Ltd. v. State of Orissa AIR 1961 SC 1438;
Mis. Misrilal Jain v. State of Orissa 1977 (3) sec 212; Tirath
Ram Rajendra Nath v. State of U.P. 1973 (3) sec 585; l.N.
Saksena v. State of M.P. 19.76 (4) sec 750; A.N. Sehgal v.
Raje Ram Sheoran 1992 Supp (1) SCC 304; S.~. Chopra c
v. ..State of Haryana 1992 Supp (1) SCC 391; Zohrabi v.
Arjuna 1980 (2) SCC 203; Chairman, Railway Board vs. C.R.
Rangadhamaiah (1997) 6 SCC 623 and My/apore Club v.
State of T.N. 2005 (12) SCC 752, referred to.

""'-.., 5. The amendments made in the 1994 Act by Act D
Nos.3 of 1998 and 27 of 199.8 do not have the effect of
nullifying or overriding the judgment in District Collector
vs. M.L. Singh. Further, the policy of regularization
contained in first proviso to Section 7 of Act No.27 of
1998 is one time measure intended to benefit only those E
daily wage employees, etc. who completed 5 years
continuous se~(lice on or before 25.11.1993 and the
employees wh<> completed 5 years service after
), 25.11.1993 cannot claim regularization. [Para 37) {697~-
H; 698-A-B] F

District Collector vs. ML Singh 1998 (2) ALT 5 (SC),
referred to.

6. The 1994 Act was enforced with effect from
25.11.1993, i.e., the date on which the Ordinance was G
published in the official Gazette. Therefore, that date had
direct bearing on the policy of regularisation circulated
vide G.O. dated 22.4.1994, which was issued by the State
Government in exercise of its executive power under
H
642 SUPREME COURT REPORTS [2009] 10 S.C.R.
....
A Article 162 of the Constitution. When that policy was
engrafted in the 1994 Act in the form of proviso to Section •
7, the legislature could not have fixed any date other than ,.
25.11.1993 for determining the eligibility of daily wage
employees who fulfilled the requirement of 5 years
B continuous service. If any other date had been fixed for
counting 5 years service of daily wage employees for the
purpose of provis.o to Section 7, the object sought to be
achieved by enacting the 1994 Act would have been
defeated, inasmuch as the regular recruitment could not
c have been made for appointment against the sanctioned
posts and back door entrants would have occupied all
the posts. Therefore, the cut off date i.e. 25.11.1993
prescribed by the legislature for determining the eligibility
of daily wage employees and others covered by Section
7 of the 1994 Act cannot be dubbed as arbitrary,
D
unreasonable, irrational or discriminatory. [Para 39) [698- ~
<'

F-H; 699-A-C]

7.1. A reading of paragraphs 54, 67, 68 and 72 of the
impugned judgment shows that even though the Division
E Bench did not find the cut off date i.e. 25.11.1993 specified
in first proviso to Section 7 for determining the eligibility
of daily wage employees for regularisation to be arbitrary,
irrational or discriminatory, yet it changed the said date
from 25.11.1993 to 19.8.1998 solely on the premise that t
F Act No. 27of1998 was enforced with effect from that date.
Once the Division Bench negatived the challenge to the
validity of Act Nos.3 of 1998 and 27 of 1998, there was
no warrant for altering the date of eligibility specified in
first proviso to Section 7 of the 1994 Act and thereby
G extend the zone of eligibility of daily wage employees who
could be considered for regularisation. [Para 42] (702-D-
G] ,.
7.2. The declaration made by the Division Bench that
the ban on regularisation will be effective from 19.8.1998
H
644 SUPREME COURT REPORTS [2009] 10 S.C.R.

A 1998 (2) ALT 5 (SC) referred to Para 7
• 2001 (2) ALT 607 referred to Para 12 "'
(1980) 2 sec 591 referred to Para 12

(1995) 1 sec 400 referred to Para 12
B
1997 (8) sec 522 referred to Para 13

2001 (3) sec 574 referred to Para 13

2000 (1) sec 168 referred to Para 13
c (1978) 2 sec 50 referred to Para 14

(1983) 2 sec 33 referred to Para 14

(1997) 6 sec 623 referred to Para 14
.D (2000) 8 sec 3.70 referred to Para 14 )" ~

AIR 1952 SC 369 referred to Para 16

AIR 1956 SC 246 referred to Para 16

E AIR 1960 SC 12 referred to Para 16

(2003) 1 sec 692 referred to Para 16

(1975) 1 sec 166 referred to Para 17

(1981) 4 sec 113 referred to Para 18 ...
F
(1988) 1 sec so1 referred to Para 19
1987 (3) sec 219 referred to Para 20

(20011 4 sec 534 referred to Para 21
G
(20021 4 sec 573 referred to Para 24

2005 (6) sec 10 referred to Para 24 ):'

2005 (13) sec 437 referred to Para 24

H
A MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 645
COOPERATIVE FINANCE COPRN. LTD.

\
- 1975 (2) sec 274

1996 (7) sec 637
referred to

referred to
Para 28

Para 29
A

' 1988 (2) KLT 680 referred to Para 29

1969 (2) sec 203 referred to Para 29 B
1964 (2) SCR 608 referred to Para 29
_,,._).,
AIR 1961 SC 1438 referred to Para 29

1977 (3) sec 212 referred to Para 29
c
1973 (3) sec 585 referred to Para 29

1976 (4) sec 750 referred to Para 29

1992 Supp (1) sec 304 referred to Para 30
_,...
.. 1992 supp (1) sec 391 referred to Para 30 D

1980 (2) sec 203 referred to Para 30

2005 (12) sec 752 referred to Para 31
(1975) 1 sec 305 relied on Para 39 E
(1985) Supp. sec 45 relied on Para 40
:.(. (1994) 4 sec 212 relied on Para 41
(1998) 5 sec 111 relied on Para 41
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
3702 of 2006.

From. the Judgment & Order dated 28.4.2001 of the High
Court of Andhra' Pradesh at Hyderabad in W.A. Nos. 704, 720, G
727, 724, 741, 717, 707, 746, 734, 725, 745, 718 of 2001,
Judgment & Order dated 27.4.2001 in W.A. 550/2001 and
Judgment & Order Dated 28.4.2001 in W.A. Nos. 715, 703 and
713of2001.
H
646 SUPREME COURT REPORTS (2009] 10 S.C.R.

A WITH ...
C.A. Nos.3685, 3703, 3704, 3705, 3706, 3707, 3709, 3710,
3712,3713,3714,3715,3716,3717,3718,3721,3723,3724, '
.
3726,3727,3728,3729,3730,3731,3732,3733,3734,3737,
3742, 3744, 3748, 3749, 3750, 3751, 3752, 3753, 3754 and
B
3755 of 2006.

Dipankar P. Gupta, R. Sundaravardhan, T.N. Rao, Manjeet
A."
Kirpal, Mitin Mahapatra, D. Bharathi Reddy, Roy Abraham,
Seema Jain, Vimlesh Kumar, Himinder Lal, S. Vallinayagam,
c Y. Ramesh, B.V. Niren, Y. Raja Gopala Rao, C.S.N. Mohan
Rao, R. Santhana Krishnan, K. Radha Rani, P. Vijaya Kumar,
D. Mahesh Babu, G. Ramakrishna Prasad, Suyodhan
Byrapaneni, Siddharth Patnaik, Amar Pal, L. Roshmani (for
P.S.N. & Co.), T.V. George, Dr. Roxna Swamy, RN. Keshwani,
D T.V. Ratnam, Subhash Sharma, Annam D.N. Rao, K. Sarada ...
Devi, P. Venkat Reddy, Anil Kumar Tandale, Y. Ramesh, Y.
Vismai, D. Mahesh Babu, G. Ramakrishna Prasad, Amar Pal,
B. Sridhar, K. Ram Kumar, Shakil Ahmed Syed, Sudha Gupta,
Guntur Prabhakar, Rana Ranjit Singh, G. Seshagiri Rao, Anis
E Ahmed Khan, T. Anamika, Asha Gopalan Nair, Naveen R. Nath
and Aribam Guneshwar Sharma for the appearing parties.

The Judgment of the Court was delivered by
J
G.S. SINGHVI, J. 1. Whether the persons employed on
F daily wage basis or nominal muster roll or consolidated pay or
as contingent worker on full time basis in different departments
of the Government of Andhra Pradesh and its agencies/
instrumentalities are entitled to be regularised in service on
completion of 5 years and whether amendments made in the
G Andhra Pradesh (Regulation of Appointments to Public
Services and Rationalization of Staff Pattern and Pay Structure)
Act, 1994 (for short 'the 1994 Act') by Amendment Act Nos.3
and 27 of 1998 are ultra vires the provisions of the Constitution
are the questions which arise for determination in these
H appeals, some of which have been filed by the State
A MANJULABHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S547
COOPERATIVE FINANCE COP.RN. LTD. [G.S. SINGHVI, J]

Government and its agencies/instrumentalities and some have A
been filed by the employees, who could not convince the
Andhra Pradesh Administrative Tribunal (for short "the Tribunal")
and/or the High Court to accept their prayer for issue of a
mandamus to the concerned authorities to regularise their
services. B

2. In 1970s, 80s and early 90s, the country witnessed an
,...J- unusual phenomena in the field of public employment. Lakhs
of persons were engaged/employed under the Central and
State Governments in violation of the doctrine of equality
enshrined in Articles 14 and 16 of the Constitution, Employment
c
Exchanges (Compulsory Notification of Vacancies) Act, 1959
(for short 'the 1959 Act') and the rules framed under proviso
to Article 309 of the Constitution. The officers who were
entrusted with the task of making appointments on Class Ill and
" '
Class IV posts misused their power and employed their D
favourites or all those who enjoyed political power without
considering the claims of other similarly situated persons. For
avoiding compliance of the mandate of the equality clause
enshrined in the Constitution and other statutory provisions, the
empowered authorities resorted to the mechanism of E
employing the persons of their choice on daily wages or
nominal muster roll or contract or part time basis with the hope
... that on some future date the Government will frame policy for
regularisation of such employees. In this manner, nepotism,
favoritism and even corruption became hallmark of the F
appointments and a huge illegal employment market developed
in the country, a fact of whi.ch cognizance was taken by this
Court in Delhi Development Horticulture Employees' Union
v. Delhi Administration [(1992) 4 SCC 99].
G
3. Statei of Andhra Pradesh was no exception to the
',.J.
aforementioned malady. Thousands of persons were employed
in different departments of the Government and agencies/
instrumentalities of the State on daily wages or nominal muster
roll or consolidated pay or part time basis. In some cases,
H
648 SUPREME COURT REPORTS [2009] 10 S.C.R.

employment was given despite the fact that sanctioned posts .lot
A
were not available. Even if the posts existed, the concerned
authorities neither issued advertisement nor sent requisition to
the employment exchange(s) and made appointments in
complete disregard of Articles 14 and 16 of the Constitution
8 and the relevant statutory provisions including the 1959 Act
depriving thousands of unemployed persons of their right to be
considered for appointment to public posts/offices.
"'-~

4. In order to check the menace of irregular appointments,
which was creating unwarranted financial burden on the State,
c and, thereby adversely affecting the welfare schemes and
development programmes and also causing dissatisfaction
among the members of younger generation who were denied
the right of consideration for appointment, the Government of
Andhra Pradesh decided to bring a legislation for totally
D banning appointment on daily wages, regulating appointment "
on temporary basis and for rationalisation of staff pattern and
pay structure. In furtherance of that decision, the Governor of
Andhra Pradesh promulgated the Andhra Pradesh (Regulation
of Appointments to Public Services and Rationalisation of Staff
E Pattern and Pay Structure) Ordinance, 1993. The same was
published in the State Gazette dated 25.11.1993. The
Ordinance was replaced by the 1994 Act, which was enforced
,,
with effect from 25.11.1993. The State Government's
'
determination to curb irregular appointments and reduce burden
F on the State exchequer is clearly reflected in the statement of
objects and reasons contained in the bill presented before the
legislative assembly, the relevant portions of which are
extracted below:

"............ The number of employees has been increasing
G
at an enormous rate. The census of Government employee
i.·
conducted by the State Government in 1976, 1981 and
1988 and as projected in 1993 shows that the number of
employees of the Government, Universities, Institutions
receiving Grant-in-Aid and Public Sector Undertakings,
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 649
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

:>..I Local Bodies has increased from 6.78 lakhs in 1976 to A
12.34 lakhs in 1993 which constituted an increase of 82%.
Out of this, the employees of the Departments of the State
alone increased from 2.85 lakhs to 5.56 lakhs representing
an increase of95%. The Public Sector Undertakings grew
at 128% from 1.44 lakhs to 3.28 lakhs. Among the B
Government employees and Local Body employees, the
class IV and other categories constitute about 41 %.
>-.,. The expenditure particulars show that the amount
spent on the salaries, allowances and pension of
Government employees, Panchayat Raj employees,
c
employees paid out of the Grant-in-Aid, amounts to a
figure of Rs.4277 crores in 1993-94 salaries on the due
dates. Government considers that it is not fair that
people's interest should be neglected and even sacrificed
..... ... by not taking up schemes just to pay salaries to its D
employees.

In addition to the salary and pension commitment
there is a heavy debt servicing burden on the Government.
The debt also has been increasing from year to year. In E
1983 the total outstanding debt was Rs.2543 crores. It has
now reached Rs.10970 crores during 1993-94. At present,
the Government are paying as much as Rs.1012 crores
) for payment of interest and Rs.330 crores for repayment
-"

of principal amount every year. The total amount of non- F
plan items of expenditure in 1993-94 is amounting to
Rs.6222 crores, which cannot be avoided. The
Government are not able to complete a number of Irrigation
Projects and Power Projects because of lack of funds. For
the same reason productive assets like completed
G
irrigation projects and roads are not being properly
';.[ maintained resulting in wastage of assets whose
replacement will cost several hundreds of crores of rupees.
At present, the Government are spending 81 % of the debt
they receive from the Government of India, . Market
.
H
650 SUPREME COURT REPORTS [2009] 10 S.C.R.

A borrowings and all other categories of loans for repayment; ...
which means only 19% of the total debt is being added to
our resources. But it is estimated that from next year
onwards the repayment will be more than the debt receipts.
If the Government are caught in such a debt trap the
B amount available to the State Government will be limited
to its own tax and non-tax revenues and the devolutions
from the Government of India. The devolutions expected
from the Government of India is about Rs.1698 crores in .._,
1993-94. Since the expenditure on establishment is
c already 105% of the own tax and non-tax revenues of the
state, it can be seen that between this expenditure and
other non-plan expenditure the Government would have
exhausted the most of the resources leaving very little for
welfare schemes and developmental programmes. Since
no Government can i;illow such total neglect of welfare and
D .r-
developmental activities the employees of the State will not '>

be getting salaries on time and eventually they will not be
getting their full salary also.

The irregular appointments are adversely affecting
E the interest of several thousands of unemployed persons
who have registered in the employment exchange and
awaiting their turn for orders. It is also adversely affecting
the interests of Scheduled Castes, Scheduled Tribes and
backward Classes who have reservation in employment ' ,
F since the N.M.R. appointments are not taking care of the
reservation for these categories. Government have
constituted District Selection Committees and some ad
hoc Selection Committees besides the Andhra Pradesh
Public Service Commission to take up recruitment in
G accordance with law in Government Departments. Irregular
appointments are depriving these legitimate recruiting
bodies from performing their functions. Irregular .:
appointments in excess of sanctioned strength will also
result in industrial undertakings becoming unviable and
H eventually sick. When a unit goes sick, it results in
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 651
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

retrenchment and even winding-up, thus, adversely A
affecting the interests of the existing employees who are
recruited against sanctioned strength and through
authorised process of selection. Similarly unauthorised
appointments over and above the sanctioned strength in
Government Departments would also increase the number B
of employees and to that extent militate against the
Government looking after the existing employees who have
,,.__.> been recruited through proper channel. The Act will,
therefore, protect the interests of candidates in
Employment Exchanges, reserved categories, the existing c
employees who were recruited through proper channel and
the legitimate functions of the recruiting agencies.

From the above, it can be seen that the financial

- ...
position of the State arising out of excessive expenditure
on staff is so alarming that it cannot be tackled by ordinary
administrative actions and instructions. It is, therefore,
thought that a time has come when we have to provide for
D

deterrent action for illegal and irregular appointments by
enacting a law. It has accordingly been decided to enact
a law to achieve the following objects, namely:- E

(a) totally banning such appointments in the institutions
covered by legislation;

(b) imposing stringent penalties for making appointments
by public servants on violation of the law; F

(c) to protect public servants from being held for contempt
for non-compliance of the orders of Tribunal or High Court
and also for abatement of pending cases claiming
regularization of services which are already filed before G
the courts of law by making a suitable provisions therefor;
and

(d) to protect the interests of candidates registered with
Employment Exchange, the reservation rights of Scheduled
H
652 SUPREME COURT REPORTS [2009] 10 S.C.R.

A Castes, Scheduled Tribes and Backward Classes, the
rights of the existing employees who are recruited through
proper channel and the functions of Andhra Pradesh
Public Service Commission, District Selection
Committees and other Selection Committees constituted
s by the Government.

The legislation will prevent further deterioration of
finances of the State and at the same time conserve the
resources for the welfare and developmental activities."

C 5. For the sake of convenient reference, Sections 2(ii), 3,
4, 7 and 9 of the 1994 Act (unamended) are reproduced below:

"2(ii) 'daily wage employee' means any person who is

-
employed in any public service on the basis of payment
D of daily wages and includes a person employed on the
basis of nominal muster roll or consolidated pay either, on :.
full-time or part-time or piece rate basis or as a
workcharged employee and any other similar category of
employees by whatever designation called other than
those who are selected and appointed in a sanctioned
E
post in accordance with the relevant rules on a regular
basis.

3. Prohibition of daily wage appointments and regulation
of temporary appointments. - (1) The appointment of any
F person in any public service to any post, in any class,
category or grade as a daily wage employee is hereby
prohibited.

(2) No temporary appointment shall be made in any public
service to any post, in any class, category or grade without
G
the prior permission of the competent authority and without
the name of the concerned candidate being sponsored by
the Employment Exchange.

4. Regulation of recruitment.- No recruitment in any public
H
A. MANJULABHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 653
COOPERATIVE FINANCE COPRN LTD. [G.S. SINGHVI, J.]

service to any post in any class, category or grade shall A
u
be made except, -
-.. (a) from the panel of candidates selec.ted and
recommended for appointment by the Public Service
Commission/College Service Commission where the post B
is within the purview of the said Commission;

(b) from a panel prepared by any Selection Committee
~--
constituted for the purpose in accordance with the relevant
rules or orders issued in that behalf; and
c
(c) from the candidates having the requisite qualification

-
and sponsored by the Employment Exchange in other
cases where recruitment otherwise than in accordance with
clauses (a) and (b) is permissible.
-I, D
~ ~ Explanation: - For the removal of doubts it is hereby
declared that nothing in this section shall apply to
compassionate appointments made in favour of son/
daughter/spouse of any person employed in public service
who dies in harness or who retires from service on medical
grounds, in accordance with the relevant orders issued E
from time to time.

7. Bar for regularization of services.- No person who is a
daily wage employee and no person who is appointed on
a temporary basis under section 3 and is continuing as F
such at the commencement of this Act shall have or shall
be deemed ever to have a right to claim for regularization
of services on any ground whatsoever and the services of
such person shall be liable to be terminated at any time
without any notice and without assigning any reason: G
Provided that in the case of Workmen falling within the
scope of section 25-F of the Industrial Disputes Act, 1947,
one month's wages and such compensation as would be
payable under the said section shall be paid in case of
termination of services: H
654 SUPREME COURT REPORTS [2009] 10 S.C.R.

A Provided further that nothing in this section shall apply to
the Workmen governed by Chapter V-8 of the Industrial
Disputes Act, 1947.

Explanation.- For the removal of doubts it is hereby
declared that the termination of services under this section
B
shall not be deemed to be dismissal or removal from
service within the meaning of article 311 of the Constitution
or of any other relevant law providing for the dismissal or
removal of employees but shall only amount to termination
simpliciter, not amounting to any punishment.
c
9. Abatement of claims.- Notwithstanding anything

D
contained in any judgment, decree or order of any court,
tribunal or other authority, the claims for regular
appointment of all daily wage employees and persons
appointed on a temporary basis, shall stand abated and
accordingly,-
-
(a) no suit or other proceeding shall be instituted,
maintained or continued in any court, tribunal or other
authority by the daily wage or temporary appointees
E
against the Government or any person or authority
whatsoever for the regularization of the services;

(b) no court shall enforce any decree or order directing the
regularization of the services of such persons; and
F
(c) all proceedings pending in any court or tribunal claiming
the regularization of services shall abate."

. 6. As soon as the 1994 Act was enacted, the beneficiaries
of illegal employment market and back door entrants became
G apprehensive of termination of their services in terms of
Section 7. Therefore, they approached the State Government
through their mentors and sympathizers in the political and
bureaucratic set up and succeeded in getting the rigor of that
section relaxed. This is evidenced from the fact that by taking
H shelter of the judgment of this Court in State of Haryana vs.
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 655
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

... Piara Singh [(1992) 4 sec 118] and using its executive power A

-
~
under Article 162 of the Constitution, the State Government
issued G.O.Ms. No.212 dated 22.4.1994 (hereinafter referred
to as 'G.O. dated 22.4.1994') for facilitating regularisation of
the services of those employed on daily wages or nominal
muster roll or consolidated pay subject to the condition that B
such persons had worked continuously for a minimum period
of 5 years and were continuing on 25.11.1993. The relevant
---··"'1'
portions of G.O. dated 22.4.1994 are reproduced below:

" "Government notice that appointing authorities of the
Institutions and Establishments under the control of State
c
Government, Local Authorities, Corporations owned and
controlled by the State Government and other bodies
-· established by the State Government grossly violated the
instructions issued from time to time by the Government
J and appointed persons indiscriminately to various D
categories of services either on Daily Wage basis or
temporary basis without there being a post and without
being sponsored by Employment Exchange and without
observing the rule of reservation to the Scheduled Caste,
Scheduled Trib'e and Backward classes. In most of the E
cases, the persons appointed for a specific work have
been continued even after their need ceased. After a lapse
of some time, all these appointees have approached the
':;
various Courts and Tribunals for regularization of their
services and Courts and Tribunals have been directing the F
State Government to regularize the services on the ground
that they have a long service to their credit. This practice
has been causing considerable drain on the finances of
the State Government. Government have thought it
imperative to prohibit the unauthorised and irregular G
appointments by a law in the public interest. Accordingly
·.-""' the State Government have enacted law regulating the
appointments to Public Services and for Rationalisation of
the Staff Pattern and Pay Structure in the reference read
above. This will streamline the recruitment along healthy H
656 SUPREME COURT REPORTS (2009] 10 S.C.R.

A lines, to enforce Erriployment Exchanges (Compulsory
...,
Notification of Vacancies) Act in its true letter and spirit,
to follow the rule of reservation enshrined in the Constitution
with utmost strictness and to punish those who are guilty
of violating the law. The above Act came into force with
-
B effect from 25.11.1993.

2. Though the reference 2nd cited, information has
been obtained from various Government Offices,
Local Bodies, Public Sector undertakings etc., from '~

the information received by Government it is seen
c that appointing authorities have violated the
instructions issued by Government and appointed
several individuals. Appointments have been made
indiscriminately in the Government Offices, Local ~

Bodies, Universities, Public Sector undertakings
D and various other Bodies and Institutions operating
on Government finances. In fact, there is no need
to continue all these Daily Wage/Temporary
employees for the reasons that not all of them are
appointed in sanctioned posts and the recruitment
E was in many cases not through Employment
Exchange. Their appointment was made without
following rule of reservation and in the case of
workcharged employees, there is no work for them
as the specific work for which they were appointed ..'
F has already been completed. Though the Act
provides that no person who is Daily Wage
employee and no person who is appointed on
temporary basis shall have any right to claim for
regularization of service on any ground, it has been
G the endeavour of the Government to regularize as
many as NMR/Daily Wage employees as possible
who are otherwise qualified depending on the ~
.
requirement of the workload while keeping in mind
the hardship that would be caused if their services
.are not regularised. The Hon'ble Supreme Court in
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 657
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

its Judgement dated 12.8.1992 in Civil Appeal No. A
2979/92 and batch have also observed to evolve .
an appropriate policy for regularization.
Accordingly, Government after careful examination
-of the whole issue and in supersession of all
·previous orders on the subject including G.O.Ms. B
No. 193, General Administration Department, dated
14.3.1990 and keeping in view the above
judgement of Supreme Court of India, have
formulated a scheme for regularization of services
of the persons appointed on Daily Wage/NMR or c
on consolidated pay and are continuing on the date

-·· of commencement of the Act. Government
accordingly decided that the services of such
persons who worked continuously for a minimum
period of 5 years and are continuing on 25.11.1993 D
be regularised by the appointing authorities subject
to fulfillment of the following conditions:

(1) The persons appointed should possess the
qualifications prescribed as per rules in force as on
the date from which his/her services have to be E
regularised.

(2) They should be within the age limits as on the date
of appointment as NMR/Daify wage employee.
F
(3) The rule of reservation wherever applicable will be
followed and back-log will be set-off against future
vacancies.

(4) Sponsoring of candidates from Employment
Exchange is relaxed. G

(5) Absorption shall be against clear vacancies of
posts considered necessary to be continued as per
work-load excluding the vacancies already notified
to the Andhra Pradesh Public Service Commission
H
r
658 SUPREME COURT REPORTS [2009] 10 S.C.R.

A I District Selection Committee. ~

(6) In the case of Workcharged Establishment, where .-
there will be no clear vacancies, because of the fact
that the expenditure on Workcharged is at a fixed
percentage of P.S. charges and as soon as the
8
work is over, the services of workcharged
establishment will have to be terminated, they shall
be adjusted in the other departments, District _., ~

Offices provided there are clear vacancies of last
Grade Service."
c
7. A number of persons who were employed on daily
wages or nominal muster roil or consolidated pay, but did not
complete 5 years on 25.11.1993 challenged the aforesaid G.O.
by filing writ petitions and applications before the High Court
-
D and Tribunal respectively. A learned Single Judge of the High
"
Court allowed the writ petitions and held that all persons
employed on daily wages or nominal muster roll or contract
basis are entitled to be considered for regularisation on
completion of 5 years. The Division Bench upheld the order of
E the learned Single Judge with the modification that daily wagers
etc. would be entitled to be considered for regularisation with
effect from the date of completion of 5 years continuous service.
The special leave petitions filed by the State Government and
agencies and instrumentalities of the State were dismissed by
" ~·

F this Court vide judgment titled District Collector v. M.L. Singh
[1998 (2) ALT 5 (SC)], which is reproduced below:

"We have heard the learned counsel for the parties. These
matters relate to regularisation and payment of wages to
the respondents who were employed on daily wage basis.
G By the impugned judgment, the Division Bench of the High
Court, while affirming with modification the order p~ssed •
4
....
by the learned Single Judge has directed that all
employees who have completed five years of continuous
service should be considered for regularization in
H accordance with the terms of G.0.Ms. No.212, dated April
A MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 659
.,. COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

~ 22, 1994 and that they should be paid their wages at par A
with the wages paid to the permanent emplcyees of that
:....f,

category. As regards payment of wages there is no
dispute between the parties that the same have to be paid
from the date of regularization. Insofar as regularization is
concerned, we are of the view that the High Court has B
rightly directed that on the basis of the Notification G.O.
Ms. No. 212, the respondent employees shall be
.~·)·
regularized with effect from the date or dates, they
completed five years continuous service. It is however
made clear that the other condition laid down in the said c
G.O.Ms. No. 212 will have to be satisfied for the purpose
of regularisation. The special leave petitions are disposed
.... of accordingly. No costs."

... -A 8. The part time employees, who were not covered by G.O .
D
dated 22.4.1994 also approached the Tribunal and High Court
claiming regularisation of their services. By an interlocutory
order dated 25.4.1997, the High Court directed that a scheme
be framed for regularisation of their services. The State
Government promptly implemented the High Court's directive
and issued G.O.(P) No.112 dated 23.7.1997 for regularization E
of part time employees who had worked continuously for a
minimum period of 10 years and were continuing on
'-'{ 25.11.1993 subject to the following conditions:-

1. "Absorption shall be against clear vacancies of F
posts considered necessary to be continued as per
work-load excluding the vacancies already notified
to the Andhra Pradesh Public Service Commission
or as the case may be, the District Selection
Committee.
G
' ":< 2. The persons appointed should possess the
qualifications prescribed as per rules in force as on
the date from which his or her services have to be
regularised.
H
660 SUPREME COURT REPORTS [2009] 10 S.C.R.
.
'

A 3. The person should be within the age limit as on the ,..
date of appointment as part-time employee.

4. The Rule of Reservation wherever applicable will be
followed and back-log will be set off against future
8 vacancies.

5. The sponsoring of candidate from Employment
Exchange is relaxed.
~ '
6. If there are two candidates, one part-time and the
c second one a full-time employee (Daily Wage
employee) of any category or name and there exists
only one vacancy, the senior most between the two
in terms of continuous service already rendered •
prior to 25-11-1993 treating two years of part-time
D service as one year of full-time service, relative ..
seniority will be calculated and regularization will be
suggested for the senior among the two
accordingly.

7. The regularization of services of full-time employee
E already made in terms of G.O.Ms. No.212, Finance
& Planning (FW.PC.111) Department, dt.22-4-1994
will not be reopened for giving effect to the present
order." ...,
F 9. Although, in State of Haryana v. Piara Singh (supra)
this Court did not lay down a proposition that the government/
public employer is bound to frame policy for regularisation of
all daily wage employees and similarly situated persons and
the policy contained in G.O. dated 22.4.1994 was intended to
G be only one time measure for regularisation of the services of
the persons employed on daily wages or nominal muster roll
•
A

or consolidated pay who completed 5 years continuous service
on 25.11.1993, interpretation thereof by the High Court, which
was approved by this Court became basis for lodgment of claim
for regularisation of service by all those who were employed
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P WOMEN'S661
COOPERATIVE FINANCE COPRN. LTD. [GS. SINGHVI, J.]

"-"', on daily wages or nominal muster roll or consolidated pay on A
or before 25.11.1993 and the cut off date specified in the G.O.
for determination of eligibility for regularisation became
redundant.

10. With a view to clearly bring out the object underlying
B
the policy of regularisation contained in G.O. dated 22.4.1994
and to make the same an integral part of the statute, the
~.J..
legislature amended the 1994 Act. The first amendment was
made by Act No.3 of 1998, which was published in Andhra
Pradesh Gazette dated 3.1.1998 and was brought into force
at once. Sections 1, 2 and 3 of Amendment Act No.3 of 1998
c
read thus:

"1. Short title and commencement. (1) This Act may be
called the Andhra Pradesh (Regulation of Appointments
... A to Public Services and Rationalisation of Staff Pattern and D
Pay Structure) (Amendment) Act, 1998.

(2) It shall come into force at once.

2. Amendment of section 4., Act 2of1994. In the Andhra
Pradesh (Regulation of Appointments to Public Services E
and Rationalisation of Staff Pattern and Pay Structure) Act,
1994, (hereinafter referred to as the principal Act), in
~ section 4, in sub-section (2), after clause (b), the following
shall be added, namely: -
F
"(c) to the appointments made in favour of
members of Scheduled Castes or Scheduled
Tribes, who or whose parents or spouse are
...,
I
subjected to atrocities, in accordance with the
relevant orders issued from time to time."
G
·'c~ 3. Amendment of section 7. In section 7 of the
principal Act;-

(a) in the opening paragraph for the expression,
"Section 3 and". the expression, "Section 3 and no H
662 SUPREME COURT REPORTS [2009] 10 S.C.R.

A person who" shall be substituted;

(b) in the first proviso, for the words "provided that," the
words "provided also that" and in the second
proviso, for the words "provided further that", the
words '·provided also that" shall respectively be
B
substituted;

(c) After the opening paragraph and before the first
proviso so amended, the following provisions shall
be inserted, namely:
c
"Provided that the services of a person, who worked on
daily wage/NMR/Consolidated pay/Contingent worker on
full time basis continuously for a minimum period of five
years and is continuing as such on the date of the
D commencement of the Act shall be regularised in
accordance with the scheme formulated in G.O.Ms. No. ·-
212, Finance & Planning (FW.PC. Ill) Department, dated
the 22nd April, 1994:

Provided further that the services of a person who worked
E on part-time basis continuously for a minimum period of
ten years and is continuing as such on the date of the
commencement of this Act shall be regularised in
accordance with the scheme formulated in G.O. (P).112,
Finance & Planning (FW.PC. Ill) Department, dated the
F 23rd July, 1997."

11. After 8 months, the 1994 Act was again amended by
Act No.27 of 1998. The preface and Sections 1. 4 and 7A of
the second Amendment Act read as under:
G "Whereas, according to the provisions of the Andhra
Pradesh (Regulation of Appointments to Public Services
and Rationalisation of Staff Pattern and Pay Structure) Act,
1994 and in accordance with the scheme formulated in the
orders issued by the Government in G.0.Ms. No. 212.
H Finance & Planning (FW.PC.111) Department dated the
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 663
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

,,,.( 22nd April, 1994, the services of a person who worked on A
daily wage/NMR/Conso!idated pay/Contingent worker on
full time basis and also continuing as such as on the 25th
November, 1993, the date on which the aforesaid Act has
come into force shall be regularised;
B
And Whereas, in various judgments rendered by the
different courts, the orders issued by the Government in
-'-> .+ G.O.Ms.No. 212, Finance & Planning (FW.PC.111)
Department, dated the 22nd day of April, 1994 have been
interpreted, that the completion of five years of service as
on 25th November, 1993 shall mean that as and when any
c
employee completes five years of service and that the first
·'
proviso under Section 7 of the said Act have also been

-
interpreted to mean as two separate and independent
conditionalities;
.... D
And Whereas, the said interpretation is contrary to
the intendment and the policy of the Government;

And Whereas, the Government felt it necessary to
remove the ambiguity found in the said proviso to section
E
7 of the said Act;

1. Short title and commencement. ( 1) This Act may be
'"..{ called the Andhra Pradesh (Regulation of Appointments
to Public Services and Rationalisation of Staff Pattern and
Pay Structure) (Second Amendment) Act, 1998. F

(2) Sub-section (1) of section 3 shall be deemed to have
come into force on the 28th October, 1996 and the
remaining provisions shall come into force at once.
G
4. Amendment of section 7. In section 7 of the principal
Act for the first proviso, the following proviso shall be
substituted, namely:-

Provided that the services of those persons continuing as
on the 25th November, 1993 having completed a H
664 SUPREME COURT REPORTS [2009] 10 S.C.R.

A continuous minimum period of five years of service on or
before 25th November, 1993 either on daily wage, or
nominal muster roll, or consolidated pay or as a contingent
worker on full time basis, shall be regularised in
substantive vacancies, if they were otherwise qualified
B fulfilling the other conditions stipulated in the scheme
formulated in G.O.Ms. No. 212, Finance & Planning
(FW.PC. Ill) Department, dated the 22nd April, 1994.

7 A. Abatement of Claims. (1) Notwithstanding any
Government order, judgement, decree or order of any
c Court, Tribunal or other authority, no person shall claim for
regularization of service under the first proviso to section
7 as it was incorporated by the Andhra Pradesh
(Regulation of Appointments to Public Services and
Rationalisation of Staff Pattern and Pay Structure)
D (Amendment) Act, 1998.

(2) No suit or other proceedings shall be maintained or
continued in any Court. Tribunal or other authority against
the Government or any person or other authority
E whatsoever for regularization of services and all such
pending proceedings shall abate forthwith;

(3) No Court shall enforce any decree or order directing
the Government or any person or other authority
whatsoever for regularization of services."
F
12. The daily wage employees and similarly situated
persons who would have been affected by the amendments
challenged the same in a batch of writ petitions filed before the
High Court. Some employees also filed applications before the
G Tribunal. The writ petitions were allowed by the learned Single
Judge of the High Court vide judgment titled D. Sesharani v.
Managing Director, A.P. Women's Co-op. Finance
Corporation [2001 (2) ALT 607]. The learned Single Judge held
that the amendments are contrary to the fundamental rights
H guaranteed to the petitioners under Articles 14, 16 and 21 of
A MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 665
COOPERATIVE FINANCE COPRN LTD. [G.S. SINGHVI, J.]

·"-" the Constitution and the Directive Principles of State Policy A
enshrined in Articles 39A, 41, 42 and 43. The learned Single
Judge further held that Section 7A of the Amendment Act by
which judicial review was denied to the aggrieved persons is
contrary to the law laid down by the Supreme Court in Minerva
Mills Limited v. Union of India ((1980) 2 SCC 591) and L. B

... ,.)-
Chandra Kumar v. Union of India ((1995) 1 SCC 400). The
learned Single Judge then relied upon the judgment of this
Court in State of Haryana v. Piara Singh (supra) and declared
that the State Government is obliged to create posts for
regularisation of the services of daily wagers etc. from the date c
of completion of 5 years service.

13. The appeals preferred by the State Government and
its agencies/instrumentalities were allowed by the Division

- _A
Bench and the order of the learned Single Judge was set aside
by placing reliance upon the judgments of this Court in S.S. D
Bola v. B.D. Sardana (1997 (8) SCC 522], Gujarat Agricultural
University v. Rathod Labhu Bechar (2001 (3) SCC 574] and
Indra Sawhney v. Union of India (2000 (1) SCC 168]. The
Division Bench also reversed the direction given by the learned
Single Judge to the State Government for creation of posts for E
regularisation of the services of daily wagers etc., but declared
that the ban imposed on regularisation would be effective from
"..( the date of enforcement of Amendment Act No.27/1998 i.e.
19.8.1998 and all persons who have completed 5 years service
as on the date of coming into force thereof would be entitled F
to be considered for regularisation of their services. The
relevant portions of the Division Bench judgment are extracted
below:

"58. The entire basis whereupon the judgment of the
G
learned single Judge is based is, therefore, erroneous. As
'::1 indicated hereinbefore having regard to the mode of
appointment the requirements thereof, absence of
sanctioned posts, non-observance of the statutory rules the
part-time employees, ad hoc employees and NMRs did
H
666 SUPREME COURT REPORTS [2009] 10 S.C.R.

A not derive any legal right whatsoever to continue in service.
In fact, save and except the right conferred upon them to
be considered for regularisation by reason of
G.O.Ms.No.212, they did not have any other legal right
whatsoever. It is now well settled principle that by reason
B of a catena of decisions of the High Court as also of the
Supreme Court of India a prolonged service would not
ripen into permanence nor by reason thereof the status of
employee can be changed.

59. It is also not a case where an individual decision inter-
c party had been sought to be taken away by reason of the
said Amendment Act in terms whereof their rights and
liabilities alone were affected. The interpretation of a
policy decision is a judgment in rem and by reason thereof,

D
no inter-party rights had been conferred or adjudicated
upon. -
60. The validation Act or for that purpose any Amendment
Act does not offend the doctrine of separation of powers.
It is also trite that the Court in exercise of its jurisdiction
E under Article 226 of the Constitution while exercising its
power of judicial review over legislation would not
invalidate an act on the ground of malice or otherwise.
Such an approach, in our opinion, is wholly unwarranted
inasmuch as the question as to whether the statute suffers
F from the vice of fraud on legislation or not must be kept
confined to the legislative competence and not otherwise.
Right to employment is not a fundamental right or a
constitutional right. In terms of Articles 14 and 16 of the
Constitution the right of a citizen is confined only to
consideration therefore. Thus it would be incorrect to
G
contend that the same would be a right of property.

67. The next question which may arise for consideration
would be as to whether the cut off date 25.11.1993 is so
arbitrary as to attract the wrath of Article 14 of the
H Constitution.
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 667
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

-....1, 68. Fixing a cut off date is normally not arbitrary unless it A
can be said to be case where such a date has been fixed
arbitrarily or capriciously and no reason exists therefor.

69. After the decision of the Apex Court in Piara Singh's
case (supra) the State had appointed a committee. The
B
committee had gone into the matter and made certain
recommendations including fixation of cut off date. Such
..... ~ a cut off date was fixed keeping in view the coming into
force of such policy decision. In Sushma Sharma v. State
of Rajasthan the Apex Court has Held :
c
It may be borne in mind that wisdom or lack of
wisdom in the action of the Government or legislature is
not justiciable by court. See in this connection the
observations of the U.S. Supreme Court in the case of
-~ Metropolis Theatre Company v. City of Chicago and D
Ernest J. Magerstadt (1912) 57 I Ed 730). To find fault with
a law is not to demonstrate its invalidity. There the learned
judge Mr. Justice Mc Kenna observed as follows:

"It may seem unjust and oppressive, yet be free from
E
judicial interference. The problems of government are
practical ones and may justify, if they do not require, rough
accommodations, illogical, it may be, and unscientific. But
~ even such criticism should not be hastily expressed. What
is best is not always discernible, the wisdom of any choice
may be disputed or condemned. Mere errors of F
government are not subject to our judicial review. It is only
its palpably arbitrary exercises which can be declared
void.

This passage has been quoted with approval by G
Chief Justice Chandrachud in Prag Ice & Oil Mills v.
Union of India (1978) 3 SCR 293 at p.333: AIR 1978 SC
1296 at p.1318.

70. Yet again in the matter of Cauvery Water Disputes
H
668 SUPREME COURT REPORTS [2009] 10 S.C.R.

A Tribunal the Apex Court clearly Held : .......

To the extent that the Ordinance interferes with the
decision of this Court and .of the Tribunal appointed under
the Central legislation, it is clearly unconstitutional being
not only in direct conflict with the provisions of Article 262
B
of the Constitution under which the said enactment is made
but being also in conflict with the judicial power of the State.

71. There is another aspect of the matter which we may
~ .. ~.

not lose sight of. In terms of Act 2of1994 a complete ban
c had been imposed in making recruitment of NMR, part-time
or ad hoc employees. Thus on and from 25.11.1993
nobody had been employed nor could be employed. Any
such appointment would ex facie violate the provisions of
the said Act 2 of 1994 which not only contains a penal
D provision but also imposed statutory liability upon the
officers to pay and unto the State all such salaries and
emoluments paid to such employees. Even a ban had been
imposed on the treasuries to honour such bills.

72. Act 27 of 1998 has come into force on 19.8.1998. Thus
E
the ban which now would be imposed, as regards grant
of regularisation will be effective from that date. Can it be
said that five years continuous service as on 13.8.1998 is
,
a condition which is wholly arbitrary and irrational so as to ~

attract Articles 14 and 246 of the Constitution. The answer
F to the aforementioned question must be rendered in
negative. It will be a repetition to state that by reason of
G.O.Ms.No.212 no workman derives any vested right to be
appointed as such. But the employees who fulfill the criteria
were entitled to be only considered therefor. Regularisation
G of service in terms of aforementioned G.O.Ms.No.212 is
dependant upon fulfillment of the condition enumerated I..
therein. As is evident from the decision of the apex Court
in M.L.Singh's case (supra) a distinction must be borne
in mind between a vested right and a right to be
H considered inasmuch as the requirement of a clear
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 669
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

-1 vacancy has a direct nexus therewith. Even if there were A
clear vacancies, such vacancies were required to be filled
up having regard to the reservation policy of the State. "

14. Learned counsel for the employees supported the
order of the learned Single Judge and argued that the Division
B
Bench committed serious error by declaring that Amendment
Act Nos.3 of 1998 and 27 of 1998 are constitutional. Learned
~A
counsel relied upon the judgments of this Court in Madan
Mohan Pathak vs. Union of India [(1978) 2 SCC 50], State of
Gujarat vs. Raman Lal Keshav Lal Soni [(1983) 2 SCC 33],
Chairman, Railway Board vs. C.R. Rangadhamaiah [(1997) c
6 SCC 623], Govt. of Andhra Pradesh vs. G. V.K. Girls High
School [(2000) 8 SCC 370] and argued that amendments
made in the 1994 Act are liable to be struck down not only
because the same have the effect of nullifying the jl,Jdgment of
-..\ this Court in District Collector vs. ML. Singh (supr~). but also D
because Section 7 A of Act No.27 of 1998 is a clear
encroachment upon the courts' power of judicial review, which
is one of the basic features of the Constitution. Learned counsel
further argued that by virtue of the policy contained in G.O.
dated 22.4.1994, persons appointed on daily wages or nominal E
muster roll or consolidated pay acquired a right to be
regularised in service and the State could not have deprived
them of the said right by retrospectively amending the 1994 Act.
:..i
Another argument of the learned counsel is that once this Court
held that all persons appointed on daily wages or nominal F
muster roll or consolidated pay are entitled to be regularised
with effect from the date of completion of 5 years continuous
service, the legislature was not justified in prescribing
25.11.1993 as the cut off date for determining the eligibility of
daily wagers etc. for the purpose of regularisation. Learned G
counsel emphasized that the interpretation placed by this Court
"·:i on G.O. dated 22.4.1994 is final and the same could not have
been undone by amending the 1994 Act.

15. Learned counsel for the State of Andhra Pradesh and
H
670 SUPREME COURT REPORTS (2009] 10 S.C.R.

A its agencies/instrumentalities argued that the 1994 Act was
amended to clarify the object underlying the policy of
regularisation contained in G.O. dated 22.4.1994 and to make
the same an integral part of the statute and the Division Bench
rightly held that the Amendment Acts do not have the effect of
B nullifyir1g the judgment of this Court in District Collector v. M.L.
Singh (supra). Learned counsel pointed out that the policy
contained in G.O. dated 22.4.1994 was one time measure for
relaxing the negative mandate contained in Section 7 against
regularisation of the persons appointed on daily wages or on
C temporary basis and argued that the legislature did not exceed
its jurisdiction by laying down the requirements of completing
5 years continuous service on or before 25.11.1993 for the
purpose of regularisation. They, however, questioned the
direction given by the Division Bench for considering the cases
of all daily wagers and like for regularisation who completed 5
D years on 19.8.1998 i.e. the date on which Amendment Act
No.27of1998 was published in the Gazette, by arguing that it
was legally impermissible for the Division Bench to change and/
or extend the date of eligibility for regularisation from
25.11.1993 to 19.8.1998 simply because the amendment
E made in Section 7 by Act No.27 of 1998 was not enforced
retrospectively.

16. In the light of the above, we shall first consider whether
the amendments made in the 1994 Act have the effect of
F nullifying or overriding the judgment of this Court in District
Collector v. M.L. Singh (supra) and whether Section 7A of Act
No.27 of 1998 amounts to an encroachment on courts' power
of judicial review. For this purpose, it is necessary to understand
the true nature of the 1994 Act, mischief sought to be remedied
G by enactment thereof and the reasons for its amendment. The
1994 Act was enacted in the backdrop of the decision taken
i:.
by the State Government to curb irregular appointments, to
rationalise the staff pattern and pay structure and thereby
reduce unnecessary expenditure and also to ensure that only
H those selected by the specified recruiting agencies are
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S671
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

~ appointed against the sanctioned posts. This is clearly A
discernible from the statement of objects and reasons
contained in the Bill which led to enactment of the 1994 Act
and provisions contained therein to which reference will be
made hereinafter. Although in Aswini Kumar Ghose v.
Arabinda Bose [AIR 1952 SC 369], it was held that the B
statement of objects and reasons contained in the Bill cannot
be used or relied upon for the purpose of construction of the
.tfl-·~· statute, this rule has not been strictly followed in the subsequent
judgments. In A. Thangal Kunju Musaliar v. M. Venkatachalam
Potti [AIR 1956 SC 246], the statement of objects and reasons c
were used for judging reasonableness of the classification
made in an enactment to see if it infringed or was contrary to
the Constitution. In Central Bank of India v. Workmen [AIR
1960 SC 12], it was held that the statement of objects and
reasons can be used for the limited purpose of understanding D
the background and antecedent state of affairs leading up to
the legislation. The same view was reiterated in large number
of other judgments including Bhaiji v. Sub-Divisional Officer,
Thandla [(2003) 1 SCC 692], in which the Court referred to
Principles of Statutory Interpretation by Justice G.P. Singh, 8th
E
Edn., 2001 and observed:

"Reference to the Statement of Objects and Reasons is
permissible for understanding the background, the
"'""' antecedent state of affairs, the surrounding circumstances
in relation to the statute, and the evil which the statute F
sought to remedy. The weight of judicial authority leans in
favour of the view that the Statement of Objects and
Reasons cannot be utilized for the purpose of restricting
and controlling the plain meaning of the language
employed by the legislature in drafting a statute and G
excluding from its operation such transactions which it
- '-..; plainly covers."

17. In 8. Banerjee v. Smt. Anita Pan [(1975) 1SCC166],
this Court approved the view expressed by the Calcutta High
H
672 SUPREME COURT REPORTS [2009] 10 S.C.R.

A Court that the statement of objects and reasons contained in ,.._
the West Bengal Premises Tenancy (Second Amendment) Bill,
1969 and proceedings of the legislature including the speech
made by the Minister at the time of introducing the Bill could
be looked into for understanding the true character of the
B amendment and observed:

"The explosive import of neglecting such a distressing
urban development reasonably obliges the State to .........
impose drastic restrictions on landlords' right to property.
And when circumvention of wholesome legal inhibitions is
c practised on a large scale the new challenge is met by
clothing the law with more effective armour and that is the
rationale of the Amendment Act. The learned Judges
rightly refer to the legislative proceedings, notorious
common knowledge and other relevant factors properly
D brought to their ken. The "sound-proof theory" of ignoring
voices from Parliamentary debates, once sanctified by
British tradition, has been replaced by the more legally
realistic and socially responsible canon of listening to the
legislative authors when their artifact is being interpreted."
E
18. In K.P. Varghese v. /TO, Emaku/am [(1981) 4 SCC ·-
173], this Court while rejecting the argument of the revenue that
rule of strict construction should be applied for interpreting
._
Section 52(2), referred to the statement of objects and reasons
F contained in the Bill presented before the Parliament, speech
made by the Finance Minister and observed:

"Now it is true that the speeches made by the members
of the legislature on the floor of the House when a Bill for
enacting a statutory provision is being debated are
G inadmissible for the purpose of interpreting the statutory
provision but the speech made by the Mover of the Bill \._,

explaining the reason for the introduction of the Bill can
certainly be referred to for the purpose of ascertaining the
mischief sought to be remedied by the legislation and the
H object and purpose for which the legislation is enacted.
A MANJULA BHASHINI v. MANAGING DIRECTOR, A.P WOMEN'S673
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

·.....,.;. This is in accord with the recent trend in juristic thought not A
only in western countries but also in India that interpretation
'•
of a statute being an exercise in the ascertainment of
meaning, everything which is logically relevant should be
admissible."
B
19. In Chem Taong Shang v. S. 0. Baijal [(1988) 1 SCC
507], the Court referred to the object sought to be achieved by
,-,.A enacting Maritime Zones of India (Regulation of Fishing by
Foreign Vessels) Act, 1981 i.e. preventing the illegal poaching
of fishes by foreign vessels including foreign vessels chartered
by Indian parties by providing deterrent punishment to protect
c
Indian fishermen and observed:

"It is pertinent to mention that in interpreting a statute the
court has to ascertain the will and policy of the legislature
~ __.
as discernible from the object and scheme of the D
enactment and the language used therein. Viewed in this
context it is apparent that the said Act has been made with
the sole purpose of preventing poaching of fishes by
foreign vessels chartered by Indian citizens within the
exclusive economic zone of India as specified in Rule 8(1) E
(q) of Maritime Zone of India Rules as amended in 1982
as well as in breach of the provisions of the said Act and
.,_,. the terms and conditions of permit issued under Section
5 of the said Act"

F
20. In Utkal Contractors and Joinery v. State of Orissa
(1987 (3) SCC 279], the Court interpreted the provisions of the
Orissa Forest Produce (Control of Trade) Act, 1981 and
observed:-

" ......... A statute is best understood if we know the reason G
.... :.-f for it The reason for a statute is the safest guide to its
interpretation. The words of a statute take their colour from
the reason for it. How do we discover the reason for a
statute? There are external and internal aids. The external
aids are Statement of Objects and Reasons when the Bill H
674 SUPREME COURT REPORTS (2009] 10 S.C.R.

A is presented to Parliament, the reports of committees
which preceded the Bill and the reports of Parliamentary
Committees. Occasional excursions into the debates of
Parliament are permitted. Internal aids are the preamble,
the scheme and the provisions of the Act. Having
B discovered the reason for the statute and so having set
the sail to the wind, the interpreter may proceed ahead.
No provision in the statute and no word of the statute may
be construed in isolation. Every provision and every word
must be looked at generally before any provision or word
is attempted to be construed. The setting and the pattern
~
-
-·

c
are important. It is again important to remember that
Parliament does not waste its breath unnecessarily. Just
as Parliament is not expected to use unnecessary
expressions, Parliament is also not expected to express
itself unnecessarily. Even as Parliament does not use any
D
word without meaning something, Parliament does not
legislate where no legislation is called for. Parliament
cannot be assumed to legislate for the sake of legislation;
nor indulge in legislation merely to state what it is
unnecessary to state or to do what is already validly done.
E Parliament may not be assumed to legislate
unnecessarily."

21. In Gurudevdatta VKSSS Maryadit v. State of
Maharashtra ((2001) 4 SCC 534], a three-Judge Bench of this
F Court interpreted the provisions of Maharashtra Cooperative
Societies Act, 1960, Maharashtra Cooperative Societies
(Second Amendment) Ordinance, 2001 and observed:

"Further, after introduction of the Bill and during the
debates thereon before Parliament, if a particular
G
provision is inserted by reason of such a debate, question
of indication of any object in the Statement of Objects and
Reasons of the Bill does not and cannot arise. The
Statement of Objects and Reasons needs to be looked
into, though not by itself a necessary aid, as an aid to
H
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 675
COOPERATIVE FINANCE COP.RN. LTD. [G.S. SINGHVI, J.)

..._,, construction only if necessary. To assess the intent of the A
legislature in the event of there being ary confusion,
. Statement of Objects and Reasons may be looked into
and no exception can be taken therefor - this is not an
indispensable requirement but when faced with an
imperative need to appreciate the proper intent of the B
legislature, statement may be looked into but not
otherwise .............
--·---" While the Statement of Objects and Reasons in the normal
course of events cannot be termed to be the main or
principal aid to construction but in the event it is required c
to discern the reasonableness of the classification as in
the case of Shashikant Laxman Kale v. Union of India
[1990 (4) SCC 366) Statement of Objects and Reasons

-' ;
can be usefully looked into for appreciating the background
of the legislature's classification." D

22. The proposition which can be culled out from the
aforementioned judgments is that although the statement of
objects and reasons contained in the Bill leading to enactment
of the particular Act cannot be made the sole basis for E
construing the provisions contained therein, the same can be
referred to for understanding the background, the antecedent
state of affairs and the mischief sought to be remedied by the
~ statute. The statement of objects and reasons can also be
looked into as an external aid for appreciating the true intent of
F
the legislature and/or the object sought to be achieved by
enactment of the particular Act or for judging reasonableness
of the classification made by such Act.

23. We may now advert to the statement of objects and
reasons contained in the Bill introduced in Andhra Pradesh G
Legislative Assembly. A perusal thereof shows that between
. "-~
1976 and 1993, the total number of employees of the State
Government, agencies/instrumentalities of the State and bodies/
institutions receiving aid from the Government increased by
82% i.e. from 6.78 lakhs to 12.34 lakhs and in 1993-1994, the H
676 SUPREME COURT REPORTS [2009] 10 S.C.R.

A State Government had to spend more than 80% of total revenue
in payment of salaries, allowances, pension, etc. of the
employees causing severe strain on the revenue of the State
which adversely affected implementation of the welfare
schemes and development programmes. That apart, there was
B growing dissatisfaction among several thousand unemployed
persons including those belonging to Scheduled Castes,
Scheduled Tribes and Other Backward Classes, who were
registered with the Employment Exchanges but could not get
opportunity of competing for selection for appointment against
C the sanctioned posts. With a view to redeem the situation, the
State Government decided to totally prohibit employment on
daily wages and also restrict appointment on temporary basis
and, at the same time, ensure that all appointments are made
against the sanctioned posts only on the recommendations of

0
the specified recruiting agencies. In furtherance of that decision,
the Governor of Andhra Pradesh promulgated the ordinance,
which was replaced by the 1994 Act. The term 'daily wage
-
employee' has been defined in Section 2(ii) to mean any person
employed in any public service on the basis of payment of daily
wages and includes a person employed on the basis of nominal
E muster roll or consolidated pay either on full-time or part-time
or piece rate basis or as a workcharged employee and any
other similar category of employees by whatever designation
called other than those who are selected and appointed on
sanctioned posts in accordance with the relevant rules on a
F regular basis. The term 'public service' has been defined in
Section 2(vi) to mean service in any office or establishment of
the Government, a local authority, a Corporation or undertaking
wholly owned or controlled by the State Government, a body
established under any law made by the Legislature of the State
G whether incorporated or not, including a University, and any
other body established by the State Government or by a
Society registered under any law relating to the registration of
societies for the time being in force, and receiving funds from
the State Government either fully or partly for its maintenance
H or any educational institution whether registered or not but
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 677
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

•rl( receiving aid from the Government. By Section 3(1), total A
prohibition came to be imposed on the appointment of any
person in any public service to any post, in any class, category
or grade as a daily wage employee. By Section 3(2), it came
to be provided that no temporary appointment shall be made
in any public service to any post, in any class, category or B
grade without the prior permission of the competent authority
and without the name of the concerned candidate being
,., ,...\ sponsored by the Employment Exchange. Section 4 of the Act
lays down that no recruitment in any public service to any post
in any class, category or grade shall be made except from the c
panel of candidates selected and recommended for
appointment by the Public Service Commission/College
Service Commission or from a panel prepared by any
Selection Committee constituted for the purpose in
accordance with the relevant rules or orders or from among
D
the candidates having the requisite qualification and sponsored
by the Employment Exchange. Section 5 of the Act provides
that where an appointment has been made otherwise than in
accordance with Section 4, the drawing authority shall not sign
the salary bill of the appointee concerned and the Pay and
Accounts Officer, Sub-Treasury Officer or any other officer upon E
whom duty has been cast of passing the salary bill shall not
....
pass such bill. Section 6 envisages imposition of different types
_., of penalties on the holders of elective offices or any other
officer or authority responsibie for making appointment in
contravention of the provisions of the Act. It also provides for F
recovery of the pay and allowances paid to a person appointed
in contravention of the provisions of the Act. Section 7 contains
a prohibition against regularization of persons appointed on
daily wages or on temporary basis. It lays down that such
appointee shall have no right to claim regularisation of service G /

... ~ on any ground whatsoever and his/her service shall be liable
to be terminated without any notice and without assigning any
reason. By virtue of first proviso to the Section 7, an exception
has been made in the case of workman to whom Section 25(F)
of the Industrial Disputes Act, 1947 is applicable. The service H
678 SUPREME COURT REPORTS [2009] 10 S.C.R.

A of such person can be terminated only after complying with the
provisions of Section 25(F). Section 9 of the Act contains a non
obstante clause and lays down that notwithstanding anything
contained in any judgment, decree or order of any court, tribunal
or other authority, the claims for regular appointment of all daily
B wage employees and persons appointed on a temporary basis,
shall stand abated and no suit or other proceedings shall be
instituted, maintained or continued in any court, tribunal or other
authority by daily wage or temporary appointees and no court
shall enforce any decree or order directing regularisation of the
c services of such persons. Section 10(1) imposes a bar to the
creation of posts in any office or establishment relating to a
public service without the previous sanction of the competent
authority. Section 10(2) declares that any appointment made to
any post created in violation of sub-section (1) shall be invalid
and the provisions of Sections 5, 6, and 7 shall mutatis mutandis
0
apply to such appointment. Section 11 envisaged constitution
of a committee to review the existing staff pattern in all offices
and establishments and also the pay scales, allowances,
exgratia, etc. payable to the employees of different categories
E other than teaching staff of the Universities and submission of
report by the committee to State Government containing specific
recommendations. By Section 12, the committee was clothed
with the powers of civil court in relation to certain specified
matters. Section 14 postulates imposition of penalty for
abatement of any offence punishable under the Act. Section 15
F provides for imposition of. penalty on the officers of the
companies acting against the provisions of the Act.

24. If the State Government had sincerely implemented the
provisions of the 1994 Act, it may have succeeded in cleansing
G the mess created due to irregular employment of thousands of
persons and, thereby, saved considerable revenue which could
be utilized for execution of welfare schemes and development
programmes. By ensuring that appointments against the
sanctioned posts are made only from among the candidates
H selected by the specified recruiting agencies like Public Service
680 SUPREME COURT REPORTS (2009] 10 S.C.R.

A "........ We do not think that clause 4 of the Scheme
.,,..
envisages it as an ongoing scheme. In order to acquire
"temporary" status, the casual labourer should have been
in employment as on the date of commencement of the
Scheme and he should have also rendered a continuous
B service of at least one year which means that he should
have been engaged for a period of at least 240 days in a
year or 206 days in case of offices observing 5 days a
week. From clause 4 of the Scheme, it does not appear
. "'
to be a general guideline to be applied for the purpose of
c giving "temporary" status to all the casual workers, as and
when they complete one year's continuous service~ Of
course, it is up to the Union Government to formulate any
scheme as and when it is found necessary that the casual
•
labourers are to be given "temporary" status and later they
are to be absorbed in Group 'D' posts." '
D
The ratio of the afore-mentioned judgment was reiterated
in Union of India v. Gagan ·Kumar (2005 (6) SCC 70] and
Director General, Doordarshan, Mandi House v. Manas Dey
f2005 (13) sec 437].
E
25. So far as these appeals are concerned, we find that
the learned Single Judge interpreted G.O. dated 22.4.1994 as
entitling all daily wage employees to. claim regularisation in ~

service with effect from the date of completion of 5 years
F irrespective of the date on which such period was completed
or would have been completed. The Division Bench maintained
the order of the learned Single Judge with the modification that
regularisation would be from the date of completion of 5 years
continuous service. This Court approved the view taken by the
Division Bench apparently because even though the policy
G
contained in G.O. dated 22.4.1994 was intended to be one
time measure for facilitating regularisation of those who "'
completed 5 years service on 25.11.1993, it did not contain· a
specific stipulation that only those who have completed 5 years
continuous service as on 25.11.1993 will be regularised. A
H
A. MANJULABHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 681
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

A
.. ,./.
reading of the judgment in District Collector vs .. M.L. Singh
(supra) makes it clear that while examining correctness of
judgment of the Division Bench of the High Court, this Court
did not consider the background in which the 1994 Act was
enacted, mischief sought to be remedied by it and various
provisions contained therein including Section 7 whereby it was B
made clear that no person employed on daily wage or on
temporary basis and continuing as such on the date of
_, commencement of the Act shall have or shall ever be deemed
J
to have the right to claim regularisation of service and his/her
services shall be liable to be terminated at any time without any c
notice and Without assigning any reason. We may observe that
if the officers responsible for drafting G.O. dated 22.4.1994 had
bothered to carefully read the provisions of the 1994 Act then
instead of using the expression "such persons who worked
continuously for a minimum period of 5 years and are continuing
• ~-
.
on 25.11.1993". they would have employed the expression
"such persons who have completed minimum 5 years of
. .
0

continuous service on or before 25.11.1993 on daily wages or
nominal muster roll or consolidated pay". However, utter non-
\
application of mind by the concerned officers resulted in the use
E
of an ambiguous expression in the policy of regularisation which
generated enormous litigation requiring the individual
employees and the State Government to invest money for an
.... avoidable exercise .
""1

26. In order to remove the ambiguity and imperfectness F
in the language of G.O. dated 22.4.1994 and make the policy
of regularisation an integral part of the 1994 Act, the legislature
enacted Amendment Act Nos.3 of 1998 and 27 of 1998. The
purpose of making the policy of regularisation a part of the 1994
Act was not to dilute the main object of the 1994 Act, i.e., to G
curb the menace of irregular appointments and also ensure that
• ..>/ appointments are made against the sanctioned posts only from
among the candidates selected by the designated recruiting
agencies but also to harmonize the same with the pr'bhibition
contained in Section 7 against regularisation of daily wage and H
682 SUPREME COURT REPORTS [2009] 10 S.C.R.

A temporary employees. The preface of Act No.27of1998 clearly
shows that the policy contained in G.O. dated 22.4.1994 was
intended to be one time measure for regularisation of the
)· .
persons employed on daily wages or nominal muster roll or
consolidated pay, who completed 5 years continuous service
B on or before 25.11.1993, i.e., the date of enforcement of the
1994 Act and it was not a continuing scheme for regularisation
of all 'daily wage employees' as and when they were to
complete 5 years period. The language of first proviso to
Section 7 by which the policy of regularisation was engrafted
l
-
c in the 1994 Act shows that the amendments were made with
the sole object of removing the ambiguity in the policy contained
in G.O. dated 22.4.1994 and the same were not intended to
nullify or override the judgment in District Collector vs. M.L.
Singh (supra). We have no doubt that if the language of the
policy contained in G.O. dated 22.4.1994 was similar to the one
D
contained in newly inserted proviso to Section 7 and there was ~

no ambiguity in it, the courts would not have interpreted the
same in a manner which would entitle all persons employed on
daily wages before 25.11.1993 to claim regularisation
irrespective of the date of completion of 5 years service. Here
E
it will also be apposite to mention that the policy contained in
G.O. dated 22.4.1994 did not confer an indefeasible right upon
all daily wage employees (as the term has been defined in
Section 2(ii) of the 1994 Act) to be regularised in service de-
hors the date of enforcement of the Act. Therefore, it cannot
F be said that by incorporating the policy of regularisation in the "
1994 Act, the legislature has taken away an accrued or vested
right of the daily wage employees. It is interesting to note that
the judgment of this Court in State of Haryana v. Piara Singh
(supra) of which shelter was taken by the State Government for
G framing the policy of regularisation of daily wagers etc. in the
teeth of the prohibition contained in Section 7 against such
regularisation does not lay down that there will be wholesale ,..
regularisation of daily wagers, casual employees, work charge
employees, etc. While dealing with the question whether the
H High Court was right in declaring that the government could not
A MANJULABHASHINI v. MANAGING DIRECTOR.AP. WOMEN'S683
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

have prescribed the requirement of particular length of service A
., "- on a particular date as a condition for regularisation, this Court
observed:

"These orders are not in the nature of a statute which is
applicable to all existing and future situations. They were
8
issued to meet a given situation facing the Government
at a given point of time. In the circumstances, therefore,
~.
there was nothing wrong in prescribing a particular date
.J
~

by which the specified period of service (whether it is one
year or two years) ought to have been put in. Take for
example, the orders issued by the Haryana government. c
The first order is dated January 1, 1980. It says, a person
must have completed two years of service, as on
December 31, 1979 i.e., the day previous to the issuance
of the order. However could it be said that fixing of such a
.a.
o<,
date is arbitrary and unreasonable? Similarly the order D
dated January 3, 1983 fixes September 15, 1982 as the
relevant date. This notification/order does two things.
Firstly, it excludes Class Ill posts of clerks from the purview
of the SSSB in the case of those who have completed a
minimum of two years of service as on September 15, E
1982, and secondly, it provides for their regularisation
subject to certain conditions. No particular attack was
,.,_ .
made as to this date in the High Court. Consequently the
-1 Government of Haryana had no opportunity of explaining
as to why this particular date was fixed. Without giving such F
an opportunity, it cannot be held that the fixation of the said
date is arbitrary. Wha.t is more relevant is that the High
Court has not held that this particular date is arbitrary.
According to it, fixation of any date whatsoever is
arbitrary, because in its opinion the order must say that G
any and every person who completes the prescribed
.. ->{ period of service must be regularised on completion of
such period of service. The next order dated March 24,
1987 prescribes the date as December 31, 1986 i.e., the
end of the previous year. In the circumstances, we see H
684 SUPREME COURT REPORTS (2009] 10 S.C.R.

A no basis for holding that fixation of the date can be held ,. ,.
to be arbitrary in the facts and circumstances of the case."

(emphasis added)

27. The distinction between legislative and judicial
B functions is well known. Within the scope of its legislative
competence and subject to other constitutional limitations. the
power of legislature to enact laws is plenary. In exercise of that
power, the legislature can enact law prospectively as well ._
retrospectively. The adjudication of the rights of the parties
c according to law enacted by the legislature is a judicial function.
In the performance of that function, the court interprets and gives
effect to the intent and mandate of the legislature as embodied
in the statute. If the court finds that the particular statute is ultra
vires the power of legislature or any provision of the
D Constitution, then the same can be struck down. It is also well
... ...
settled that the legislature cannot by bare declaration, without
anything more, directly overrule, reverse or override a judicial
decision. However it can, in exercise of the plenary powers
conferred upon it by Articles 245 and 246 of the Constitution,
E render a judicial decision ineffective by enacting a valid law
fundamentally altering or changing the conditions on which such
a decision is based. Such law can also be given retrospective
effect with a deeming date or with effect from a particular date.
)'
28. The question whether the legislature possesses the
F power to enact law apparently affecting pre-existing judgment
or amend the existing law which has already been interpreted
by the Court in a particular manner, has been considered in
several cases. In Government of A.P. v. H.M. T. Ltd. [1975 (2)
sec 274), this Court considered whether the amendment made
G in definition of a 'house' contained in the Andhra Pradesh (Gram
· Panchayat) Act. by amending Act No.16of1974 was intended
to undo the judgment of the High Court which had interpreted "'
the unamended definition and held that buildings other than
factory premises were not a 'house'. After noticing the
H unamended and amended definitions of the term 'house', the
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 685
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

Court held as under:- A
" "'
- "The new definition· of "house" which is to be read
retrospectively into the Act meets effectively both the
objections by reason of which the High Court held that the
buildings constructed by the respondent were not a
B
"house". By the amendment, the old clause: "having a
separate principal entrance from the common way" is
dropped and the definition of "house" is re-framed to
- j-
include a "factory". It is clear and is undisputed that the
buildings constructed by the respondent - the colony
buildings as well as the factory buildings - answer fully c
the description of a "house" and are squarely within the
new definition contained in Section 2(15).

We see no substance in the respondent's contention that
by re-definin!l the term "house" with retrospective effect D
-;
and by validating the levies imposed under the unamended
Act as if notwithstanding anything contained in any
judgment, decree or order of any court, that Act as
amended was in force on the date when the tax was
levied, the Legislature has encroached upon a judicial E
function. The power of the Legislature to pass a law
postulates the power to pass it prospectively as well as
retrospectively, the one no less than the other. Within the
scope of its legislative competence and subject to other
"' ~
constitutional limitations, the power of the Legislature to F
enact laws is plenary. In United Provinces v. Atiqa
Begum, Gwyer, C.J. while repelling the argument that
Indian Legislatures had no power to alter the existing laws
retrospectively observed that within the limits of their
powers the Indian Legislatures were as supreme and
G
sovereign as the British Parliament itself and that those
powers were not subject to the "strange and unusual
~ ·- ~
prohibition against retrospective legislation". The power to
validate a law retrospectively is, subject to the limitations
aforesaid, an ancillary power to legislate on the particular
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 687
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]
'·
--(

High Court. During the pendency of the writ petition, the State A
... cl. Government discontinued the levy of surcharge by issuing an

- ordinance. In Chako/as Spinning and Weaving Mills Ltd. vs.
K. S.E. Board [1988 (2) KLT 680], a Division Bench of the High
Court ruled that levy of surcharge was beyond the competence
of the State. Special leave petition filed against the order of B
the High Court was dismissed. Thereafter, the Kerala Electricity
Surcharge (levy and Collection) Ordinance, 1989 was
promulgated, which later on became the 1989 Act. This Court
- j.
upheld the power of the State to enact law for levy of surcharge
on the electricity supplied by the Electricity Board. The Court c
\ referred to the earlier judgments in Prithvi Cotton Mills Ltd. v.
Broach Borough Municipality [1969 (2) SCC 283]. Patel
Gordhandas Hargovindas v. Municipal Commissioner [1964
(2) SCR 608], Orient Paper Mills Ltd. v. State of Orissa [AIR
1961 SC 1438], Mis. Misri/al Jain v. State of Orissa [1977 (3)
D
-{
SCC 212), Tirath Ram Rajendra Nath v. State of U.P. [1973
(3) SCC 585], Government of A.P. v. H.M. T. Ltd. (supra), l.N.
Saksena v. State of M.P. [1976 (4) sec 750] and some other
judgments and Held :

'The validity of the Validating Act is to be judged by the E
following tests: (i) whether the legislature enacting the
Validating Act has competence over the subject-matter; (ii)
whether by validation, the legislature has removed the
~ ~-1( defect which the court had found in the previous law; (iii)
whether the validating law is consistent with the provisions · F
of Chapter Ill of the Constitution. If these tests are satisfied,
the Act can validate the past transactions which were
declared by the court to be unconstitutional. The legislature
cannot assume power of adjudicating a case by virtue of
its enactment of the law without leaving it to the judiciary G
to decide it with reference to the Jaw in force. The
~'··_k'
legislature also is incompetent to overrule the decision of
a court without properly removing the base on which the
judgment is founded.
H
688 SUPREME COURT REPORTS [2009] 10 S.C.R.
'

A The court does not have the power to validate an
invalid law or to legalise impost of tax illegally made and ,1c r

collected or to remove the norm of invalidation or provide
a remedy. These are not judicial functions but the exclusive -
province of the legislature. Therefore, they are not
B encroachment on judicial power.

In exercising legislative power, the legislature by
mere declaration, without anything more, cannot directly
overrule, revise or override a judicial decision. It can render •-
judicial decision ineffective by enacting valid law on the
c topic within its legislative field fundamentally altering or
changing its character retrospectively. The changed or
altered conditions should be such that the previous
decision would not have been rendered by the court, if
those conditions had existed at the time of declaring the
D law as invalid. It is also empowered to give effect to
~
retrospective legislation with a deeming date or with effect
from a particular date .............

The vice pointed out in Chakolas case has been
E removed under the Kerala Electricity Surcharge (Levy and
Collection) Act, 1989. Consequently, Section 11 of this Act
validated the invalidity pointed out in Chakolas case
removing the base. In the altered situation, the High Court
would not have rendered Chakolas case under the Act. It
has made the writ issued in Chakolas case ineffective.
~ --
,

F
Instead of refunding the duty illegally collected under invalid
law, Section 11 validated the illegal collections and
directed the liability of the past transactions as valid under
the Act and also fastened liability on the consumers. In
other words, the effect of Section 11 is that the illegal
G collection made under invalid law is to be retained and the
same shall now stand validated under the Act. Thus
considered, Section 11 is not an incursion on judicial
~ .
power of the court and is a valid piece of legislation as
part of the Act."
H
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 689
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

... <!" " 30. The judgment in S.S. Bola v. B.D. Sardana (supra) A
calls for a detailed reference because the main issue
considered in that case is similar to the one raised in these
appeals. The facts of that case show that in A. N. Sehgal v. Raje
Ram Sheoran [1992 Supp (1) SCC 304] and S.L. Chopra v.
State of Haryana [1992 Supp (1) SCC 391], this Court B
interpreted the rules framed under proviso to Article 309 of the
.J ~
Constitution and gave certain directions for fixation of seniority
of the members of engineering services. After about three
years, the State legislature enacted the Haryana Service of
Engineers, Class I, Public Works Department (Buildings and c
Roads Branch), (Public Health Branch) and (Irrigation Branch)
Act, 1995 and repeal the existing rules. The Act was given
retrospective effect from 1.11.1966 that is the date on which

- ..j
the State of Haryana was formed. The Punjab and Haryana
High Court struck down various provisions of the Act on the
groufld that the same were enacted with the sole object of
D

nullifying the earlier judgments of this Court in A.N. Sehgal v.
Raje Ram Sheoran (supra) and S.L. Chopra v. State of
Haryana (supra). By majority of 2:1, this Court held that the 1995
Act is a valid piece of legislation and set aside the order of
E
the High Court. G.B. Pattanaik, J. (as he then was), who
,,. rendered leading judgment of the majority noted that in Sehgal's
case and Chopra's case, the Court had not invalidated the
_/
""' ....... recruitment rules but merely interpreted some provisions
relating to determination of the inter se seniority of the direct
recruits and promotees and held that the Act cannot be F
•
invalidated on the ground that it was an encroachment on
judicial function. Pattanaik, J. then referred to the statement of
objects and reasons contained in the Bill introduced in Haryana
Vidhan Sabha, various judgments of this Court including in State
y. __ r'
of Gujarat v. Raman Lal Keshav Lal Soni (supra) and Held : G

" .......... In view of the aforesaid legal position when the
impugned Act is examined the conclusion is irresistible
that the said Act cannot be said to be an Act of usurpation
of the judicial power by the Haryana Legislature, but on the H
690 SUPREME COURT REPORTS [2009] 10 S.C.R.

l ..
A other hand it is a valid piece of legislation enacted by the
State Legislature over which they had legislative
competence under Entry 41 of List II of the Seventh
- .......

Schedule and by giving the enactment retrospective effect
the earlier judgments of this Court in Sehgal and Chopra
B have become ineffective. But since this does not
tantamount to a mere declaration of invalidity of an earlier
judgment nor does it amount to an encroachment by the
legislature into the judicial sphere the Court will not be
justified in holding the same to be invalid. Needless to
. -
c mention that the impugned Act has neither been
challenged on the ground of lack of legislative competence
nor has it been established to have contravened any
provisions of Part Ill of the Constitution. Consequently Mr
Sachar's contention has to be rejected and the Act has to
be declared intra vires. Necessarily, therefore the seniority
D
list drawn up on different dates in accordance with the
earlier Rules of 1961 will have to be annulled and fresh
seniority list has to be drawn up in accordance with the
provisions of the Act since the Act has been given
retrospective effect with effect from 1-11-1966. It may,
E however, be reiterated that any promotion already made
on the basis of the seniority list drawn up in accordance -,
with the Recruitment Rules of 1961 will not be altered in ,..
any manner."

F Pattanaik, J. then referred to the judgment in Zohrabi v.
Arjuna [1980 (2) SCC 203], wherein it was held that a mere
right to take advantage of the provisions of an Act is not an
accrued right and proceeded to observe:

"In the aforesaid premises, it must be held that the direct
G
recruits did not have a vested right nor had any right
"' ,
accrued in their favour in the matter of getting a particular
position in the seniority list of Executive Engineers under
the pre-amended Rules which is said to have been taken
away by the Act since such a right is neither a vested right
H
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 691.
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

..
-~ of an employee nor can it be said to be an accrued right.
· Thus there is no bar for the legislature to arilend the law
in consequence of which the inter se position in the rank
of Executive Engineer might get altered. Consequently, we
A

see no invalidity in the enactment of the Haryana Service
of Engineers, Class I, Public Works Department (Buildings B
and Roads Branch), (Public Health Branch) and (Irrigation
Branch) Respectively Act, 1995."
- fr
S. Saghir Ahmad, J. who agreed with Pattanaik, J
expressed his views in the following words: ·
c
"It would be within the exclusive domain of the judiciary to
expound the law as it is and not to speculate what it should
be as it is the function of the legislature. It is also within
the exclusive power of the judiciary to hold that a statute
4 passed by the legislature is ultra vires. The legislature in D
that situation does not become a helpless creature as it
continues to remain a living pillar of a living Constitution.
Though it cannot directly override the judicial decision, it
retains the plenary powers under Articles 245, 246 and
248 to after the law as settled or declared by judicial E
decisions. This is what was observed by this Court in
.~
Anwar Khan Mehboob Co. v. State of M.P which had the
,.. .(
.
effect of indirectly overruling its previous decision in Firm
Chhotabhai Jethabai Patel & Co. v. State of M.P. The
legislature can also validate an Act which was declared
F
invalid by the Court or amend it with retrospective effect
so as to remove the grounds of its invalidity. (See: Rai
Ramkrishna v. State of Bihar and Jadao Bahuji v.
Municipal Committee.)

The power to make a law includes the power to give it G
• ._._A' retrospective effect subject to the restriction imposed by
Article 20(1) that a legislature cannot make retrospective
penal laws. It would be valid for the legislature to make any
other enactment with retrospective effect provided no-
fundamental right is infringed by reasons of its taking away H
692 SUPREME COURT REPORTS [2009] 10 S.C.R.
-
the vested right. Under the scheme of the Constitution, it ~ ~
A
is competent for the legislature to put an end to the finality
of a judicial decision and, therefore, it would be competent
for the legislature to render ineffective the judgment of a
court by changing the basis of the Act upon which that
8 judgment was founded.

Where, however, the statutory provision is interpreted by
the Court in a particular manner and directions are issued
for implementing the judgment in the light of the
interpretation placed on the statutory provisions, the
c legislature need not pass a validating Act. In this situation,
the legislature, in exercise of its plenary powers under
Articles 245, 246 and 248 can make a new Act altering
fundamentally the provisions which were the basis of the
judgment passed by the Court. This can be done with
t
D retrospective effect. So far as service conditions are
concerned, they can be altered with retrospective effect by
making service rules under Article 309 or by an Act of the
legislature."

E 31. In Mylapore Club v. State of T.N. [2005 (12) SCC
752], a three-Judge Bench examined the validity of Sections 2
and 3 of the Madras City Tenants' Protection (Amendment) Act, .
1994 (Act No. 2 of 1996). By Section 2 of the 1996 Act, Section •
1 of the Madras City Tenants' Protection Act, 1921 was
amended and clause (f) was added providing for exemptions
F
for tenancies of land owned by religious institutions and
religious charities belonging to Hindu, Muslim, Christian or
other religions. By Section 3, it was declared that any
proceeding instituted by a tenant in respect of any land owned
by such a religious institution or religious charity, which was
G being exempted from the operation of the Act pending before ,__
i. •
any court or other authority, would stand abated and all rights
and privileges conferred by the extension of the Madras City
Tenants' Protection Act, 1921 would cease and would become
unenforceable. However, a proviso was added to the effect that
H
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 693
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]
~~ t
nothing contained in Section 3 shall be deemed to render A
invalid, any suit or proceeding in which a decree or order
passed had been executed or satisfied in full before the date
of the coming into force of the amending Act. It was argued on
behalf of the tenant Club that the amendment made by Sections
2 and 3 of Act No. 2 of 1996, whereby exemption was granted B
to certain tenancies was not in consonance with the object of
_. ;.... the parent Act. It was further contented that Section 3 of the
amending Ac.t which provided for certain pending proceedings
to abate was a legislative act to put an end to a judicial
proceedings and the same was clearly unconstitutional. While c
rejecting the first argument, the Court observed:

"The power to legislate is a plenary power vested in the
legislature and unless those who challenge the legislation
clearly establish that their fundamental rights under the
Constitution are affected or that the legislature lacked D
legislative competence, they would not succeed in their
challenge to the enactment brought forward in the wisdom
of the legislature. Conferment of a right to claim the benefit
of a statute, being not a vested right, the same could be
withdrawn by the legislature which made the enactment. It E
is open to the legislature to bring in a law that has
.... retrospective operation. That position is not disputed .
When it affects vested rights or accrued rights, that
"""
question will have to be considered in that context. But the
right to take advantage of a statute has been held to be F
not an accrued right. It could not be said that Amendment
Act 2 of 1996 lacked either legislative competence or that
it is unconstitutional. It is a matter for the legislature to
balance the object of the Parent Act with the object of
protecting the rights of religious institutions and religious G
~-~ .-4
charities and on the basis of the material available to the
legislature, the decision to exempt the buildings of such
religious institutions and religious charities has been
taken."
H
694 SUPREME COURT REPORTS [2009] 10 S.C.R.

A While rejecting the second argument, the Court obseNed: t ··-

"By Section 3 of amending Act 2of1996 impugned herein,
which is in pari materia with Section 9 of the amending
Act of 1960, the legislature had intended that pending
proceedings should be affected. Even otherwise, once the
B
applicability of the Act itself is withdrawn, no relief can be
granted to a person who could have been or who was
-l\ ~

earlier a beneficiary under that enactment, after such
withdrawal. Here, the section provides that even if some
steps have been taken pursuant to the claim by the tenant
c under Section 9 of the Parent Act, the proceeding cannot
be continued in view of the exemption enacted in favour
of the institutions. Reading Section 3 of amending Act 2
of 1996, it could not be said that it is a legislative
inteNention with a judicial decision. The proviso to Section
D 3 of amending Act 2 of 1996 has saved concluded
transactions based on judicial adjudications. All that the
said Section 3 does is to make it explicit that the
amendment is intended to apply to pending proceedings.
In the context of Section 6 of the General Clauses Act,
E unless it is shown that any right has accrued to the claimant
under Section 6 of the General Clauses Act, such a
provision making it clear that the Act could not be applied ...
any more to pending proceedings is not in any way invalid ~

or incompetent. l.Jnless the proceedings have concluded
F and the rights of the landlord have passed to the tenant,
no right accrues to the tenant. He is only in the process of
acquiring a right, the process having been set in motion
at his instance. When pending proceedings are affected
by an amendment, it is open to the legislature to provide
G th,.at the said process cannot continue. That alone has been
dooe by Section 3 of amending Act 2 of 1996. Therefore ~ .
there is no merit in challenge to Section 3 of the amending
Act."

32. Before parting with this aspect of the case, we consider
H
A MANjLJLA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 695
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

.~ t it proper to notice the ratio of the judgments on which reliance A
has been placed by the learned counsel for the employees. In
Madan Mohan Pathak v. Union of India (supra), a seven-
Judge Bench considered the constitutional validity of the Life
Insurance Corporation (Modification of Settlement) Act, 1976
by which an attempt was made to nullify the mandamus issued B
by the Calcutta High Court for payment of bonus to the
employees in terms of the settlements. This Court declared that
-* the 1976 Act is violative of Article 31 (2) of the Constitution and
also held that by simply bringing new legislation, the Parliament
could not nullify the mandamus issued by the High Court for c
payment of cash bonus to the employees in terms of the
settlement.

33. In State of Gujarat v. Raman Lal Keshav Lal Soni

.. (supra), this Court considered the question whether the State
legislature could retrospectively amend the Gujarat Panchayats D
Act, 1961 and deprive the employees of the Panchayats of their
status as government servants. The High Court allowed the writ
· petition filed by the members of the Panchayat service
belonging to the local cadre and declared that they have
, acquired the status of government servants. The High Court also E
issued consequential directions for equation of posts, revision
of pay scales and payment of salaries. During the pendency of
-~--4/ the appeals, the 1961 Act was amended with retrospective
effect from 1978 and members of Panchayat service were
sought to be deprived of their status as government servants. F
This Court struck down the amendment on the ground that the
same violated fundamental right acquired by the employees of
the panchayats and observed:

"Now, in .1978 before the Amending Act was passed,
G
thanks to the provisiol)~ of the principal Act of 1961, the
J
I ....
ex-municipal employees who had been allocated to the
panchayat service as.Secretaries, Officers and servants
of Gram and Nagar Panchayats, had achieved the status
of government servants. Their' status as government
H
696 SUPREME COURT REPORTS [2009] 10 S.C.R.

A servants could not be extinguished, so long as the posts t -
were not abolished and their services were not terminated
in accordance with the provisions of Article 311 of the
Constitution. Nor was it permissible to single them out for
differential treatment. That would offend Article 14 of the
B Constitution. An attempt was made to justify the purported
differentiation on the basis of history and ancestry, as it
were. It was said that Talatis and Kotwals who became
~ecretaries, Officers and servants of Gram and Nagar
... -
Panchayats were government servants, even to start with,
c while municipal employees who became such Secretaries,
Officers and servants of Gram and Nagar Panchayats were
not. Each carried the mark of the 'brand' of his origin and
a classification on the basis of the source from which they
came into the service, it was claimed, was permissible.
We are clear that it is not. Once they had joined the
D
common stream of service to perform the same duties, it
is clearly not permissible to make any classification on the
basis of their origin. Such a classification would be
unreasonable and entirely irrelevant to the object sought
to be achieved. It is to navigate around these two obstacles
E of Article 311 and Article 14 that the Amending Act is
sought to be made retrospective, to bring about an
artificial situation as if the erstwhile municipal employees /-
~
never became members of a service under the State. Can
a law be made to destroy today's accrued constitutional
F rights by artificially reverting to a situation which existed
17 years ago? No.

The legislation is pure and simple, self-deceptive, if we
may use such an expression with reference to a
G legislature-made law. The legislature is undoubtedly
competent to legislate with retrospective effect to take ~ .
away or impair any vested right acquired under existing
laws but since the laws are made under a written
Constitution, and have to conform to the dos and don'ts
of the Constitution, neither prospective nor retrospective
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, A.P. WOMEN'S 697
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

t
laws can be made so as to contravene fundamental rights. A
, The law must satisfy the requirements of the Constitution
today taking into account the accrued or acquired rights
of the parties today. The law cannot say, 20 years ago the
parties had no rights, therefore, the requirements of the
Constitution will be satisfied if the law is dated back by B
20 years. We are concerned with today's rights and not
yesterday's. A legislature cannot legislate today with
.... _.. reference to a situation that obtained 20 years ago and
ignore the. march of events and the constitutional rights
accrued in the course of the 20 years. That would be most c
arbitrary, unreasonable and a negation of history."

34. In Chairman, Railway Board v. C.R. Rangadhamaiah
(supra), the Constitution Bench considered the question
whether the Railway Administration could amend the rules with
retrospective effect and reduce the pension payable to the D
employees and held that such an amendment violated Articles
14 and 16 of the Constitution, inasmuch as it affected vested
right of the employees.

35. In Govt. of Andhra Pradesh v. G. V.K. Girls High E
School (supra), this Court answered in negative the question
whether the Government could issue a G.O. and deny benefit
,.._ of grant-in-aid to the school and amend the Andhra Pradesh
..; Education Act, 1982 for denying the benefit of the judgment
rendered by the High Court in favour of the respondent. F
36. In none of the above noted cases, this Court
considered an issue akin to the one examined by us. Therefore,
the proposition of law laid down in those cases cannot be
relied upon for entertaining the claim of daily wage employees
for regularisation irrespective of the fact that they may not have G
completed 5 years continuous service on or before 25.11.1993.
" _)

37. In view of the above discussion, we hold that the
amendments made in the 1994 Act by Act Nos.3of1998 and
27 of 1998 do not have the effect of nullifying or overriding the H
698 SUPREME COURT REPORTS [2009] 10 S.C.R.

A judgment in District Collector v. M.L. Singh (supra). We further
t
hold that the policy of regularisation contained in first proviso
to Section 7 of Act No.27 of 1998 is one time measure intended
to benefit only those daily wage employees, etc. who completed
5 years continuous service on or before 25.11.1993 and the
B employees who completed 5 years service after 25.11.1993
cannot claim regularisation.

38. The question whether Section 7A of Act No. 27 of 1998
amounts to an encroachment on the court's power on judicial
review is answered in negative in view.of the three-Judge Bench
C judgment in Mylapore Club v. State of Tamil Nadu (supra) and
we respectfully follow the ratio of that judgment. Even otherwise,
in view of the interpretation placed by us on the policy of
regularisation contained in first proviso to Section 7 of the 1994
Act, the question of abatement of claims etc. has become purely
D academic.

39. We shall now consider whether the cut off date, i.e.,
25.11.1993 specified in the first proviso to Section 7 of the
1994 Act (as amended by Act No. 27 of 1998) for determination
E of the eligibility of daily wage employees to be considered for
regularisation is arbitrary, irrational and violative of Articles 14
and 16 of the Constitution. Undisputedly, the Ordinance issued
in 1993 was the first exercise of legislative power by the State
to prohibit employment on daily wages and to restrict ,.
F appointments on temporary basis and, at the same time,
streamline the recruitment in public services by adopting a
procedure consistent with the doctrine of equality embodied in
Articles 14 and 16 of the Constitution. The 1994 Act was
enforced with effect from 25.11.1993, i.e., the date on which the
Ordinance was published in the official Gazette. Therefore, that
G date had direct bearing on the policy of regularisation circulated
vide G.O. dated 22.4.1994, which was issued by the State
Government in exercise of its executive power under Article 162
of the Constitution. When that policy was engrafted in the 1994
Act in the form of proviso to Section 7, the legislature could not
H
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 699
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

- t·
have fixed any date other than 25.11.1993 for determining the
eligibility of daily wage employees who fulfilled the requirement
of 5 years continuous service. If any other date had b.een fixed
A

for counting 5 years service of daily wage employees for the
purpose of proviso to Section 7, the object sought to be
achieved by enacting the 1994 Act would have beeri defeated, B
inasmuch as the regular recruitment could not have been made
for appointment against the sanctioned posts and back door
., .. entrants would have occupied all the posts. Therefore, the cut
off date i.e. 25.11.1993 prescribed by the legislature for
determining the eligibility of daily wage employees and others c
covered by Section 7 of the 1994 Act cannot be dubbed as
arbitrary, unreasonable, irrational or discriminatory. This view
of ours is in tune with judicial precedents on the subject. In
Union of India v. Parameswaran Match Works [(1975) 1 SCC
305], a three-Judge Bench was called upon to decide whether D
the date for making the declaration, i.e., September 4, 1967
fixed for grant of the benefit of concessional rate of duty was
irrational and arbitrary. The High Court declared that the cut off
date fixed for grant of the concessional rate of duty violated
Article 14 of the Constitution. This·Court disapproved the view
E
taken by the High Court and held that the choice of a date as
the basis for classification cannot always be dubbed as
arbitrary even if no particular reason is forthcoming for the
.... same, unless it is shown to be capricious or whimsical. It was
~
further held that there is no mathematical or logical way for
fixing a particular date and the decision of the legislature or its F
delegate must be accepted unless the fixation of date is found
to be very wide off the reasonable mark.

40. In Sushma Sharma v. State of Rajasthan [(1985)
Supp. SCC 45]. fixation of 25th June, 1975 as the cut off date G
. ./
for the determination of eligibility of temporary teachers for the
purpose of absorption in terms of the Rajasthan Universities
Teachers (Absorption of Temporary Lecturers) Act, 1973 was
challenged on the ground of discrimination and violation of
Articles 14 and 16. A learned Single Judge of the High Court H
700 SUPREME COURT REPORTS [2009) 10 S.C.R.

A declared that the cut off date was arbitrary and violative of the
equality clause enshrined in the Constitution. The Division t -

Bench reversed the order of the learned Single Judge and held
that the cut off date did not offend the doctrine of equality. This
Court approved the view taken by the Division Bench and
B observed:
'The object of this legislation was to provide for absorption
of temporary lecturers of long standing. So therefore
experience and continuous employment were necessary . ~

ingredients. The Hindi version of the Ordinance used the
c expression "ke prarambh ke samaya is roop me karya kar
rahe hein" is capable of meaning "and are continuing" to
work as such at the time of the commencement of the
Ordinance. Keeping the background of the purpose of the
Act in view that would be the proper construction and if
D that is the proper construction which is in consonance with
the English version of the Ordinance and the Act as well
•
as with the object of the Act then in our opinion the Act
and the Ordinance should be construed to mean that
only those would be eligible for screening who were
E appointed prior to June 25, 1975 and were continuing at
the time of the commencement of the Ordinance i.e. June
12, 1978 i:e. approximately about three years. If that is
the correct reading, then we are unable to accept the
criticism that those who were for a short period appointed ,. --
F prior to June 25, 1975 then again with interruption were
working only at the time of the commencement of the
Ordinance i.e. Ji.me 12, 1978 would also be eligible. In
other words people with vety short experience would be
eligible for absorption. That cannot be the purpose of the
G Act. It cannot be so read reasonably. Therefore on a
proper construction it means that all temporal}' lecturers
who were appointed as such on or before June 25, 1975
and were continuing as such at the commencement of
••
the Ordinance shall be considered by the University for
screening for absorption. The expression "were
H
A. MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 701
, . COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.]

continuing" is significant. This is in consonance with the A
.., t

-
object cf the Act to ensure continuity of experience and
service as one of the factors for regularising the
appointment of the temporary lecturers. For regularising
the appointment of temporary lecturers, certain
continuous experience is necessary. If a Legislature B
considers a particular period of experience to be
necessary, the wisdom of such a decision is not subject
. .A:
to judicial review. Keeping the aforesaid reasonable
meaning of clause 3 of the Ordinance and Section 3 of the
Act in view, we are of the opinion that the criterion fixed c
for screening for absorption was not an irrational criterion
not having any nexus with the purpose of the Act.
Therefore, the criticism that a teacher who was working
even for two or three months only before June 25, 1975
and then with long interruptions was in employment of the D
University at the time of the commencement of the
Ordinance would be eligible but a teacher who had worked
continuously from June 26, _1975 i.e. after the date fixed
i.e ..June 25, 1975 for three years would be ineligible and
as such that will be discrimination against long experiehce,
E
cannot be accepted. Such a construction would be an
unreasonable construction unwarranted by the language
used in the provisions concerned. It is we/I-settled that if
a particular period of experience is fixed for screening or
,... for absorption, it is within the wisdom of the Legislaturr;-,
and what period should be suffici~nt for a particular job F
or a particular employment is not subject to judicial
review."

(emphasis added)
G
41. In Union of India v. Sudhir Kumar Jaiswa/ [(1994) 4
~ ~
sec 212], it was held that fixing of 1st August as the cut off
date for determining the eligibility in the matter of age of the
candidates appearing in the examination held for recruitment
to the Indian Administrative Service/Indian Foreign Service etc.
H
702 SUPREME COURT REPORTS [2009] 10 S.C.R.

A cannot be termed as arbitrary merely because the preliminary ~

'
-
examination was held prior to that date. The court accepted the
explanation given by the Union of India that 1st of August of the
year is normally fixed for determination of the eligibility of the
candidates and the same was not modified before holding the
B preliminary examination because it was only a screening test
and marks obtained at such examination were not taken into
consideration at the time of preparing the final result. In Union
of India v. K.G. Radhakrishana Panickar [(1998) 5 SCC 111],
' .
it was held that the decision of the railway administration to fix
c 1.1.1961 as the cut off date for the purpose of counting of past
service of Project Casual Labourers for the purpose of retrial
benefits was not arbitrary or unreasonable because two
separate schemes were framed for regularisation of casual
labourers. -
D 42. The question which remains to be considered is
whether the Division Bench was justified in holding that all daily
wage employees who completed 5 years service on the date
of enforcement of Act No. 27of1998, i.e., 19.8.1998 would be
entitled to be considered for regularisation of their services. A
E reading of paragraphs 54, 67, 68 and 72 of the impugned
judgment shows that even though the Division Bench did not
find the cut off date i.e. 25.11.1993 specified in first proviso to
Section 7 for determining the eligibility of daily wage employees
for regularisation to be arbitrary, irrational or discriminatory, yet ,.
F it changed the said date from 25.11.1993 to 19.8.1998 solely
on the premise that Act No. 27 of 1998 was enforced with effect
from that date. In our view, once the Division Bench negatived
the challenge to the validity of Act Nos.3 of 1998 and 27 of
1998, there was no warrant for altering the date of eligibility
G specified in first proviso to Section 7 of the 1994 Act and
thereby extend the zone of eligibility of daily wage employees
who could be-considered for regularisation. A% a corollary, we ••
hold that the declaration made by the Division Bench that all
persons who completed 5 years service as on the date of
H coming into force of Act No.27 of 1998 would be entitled to be
A MANJULA BHASHINI v. MANAGING DIRECTOR, AP. WOMEN'S 703
COOPERATIVE FINANCE COPRN. LTD. [G.S. SINGHVI, J.)

.... ,_ considered for regularisation of their services is legally A
unsustainable and is liable to be set aside.
- 43. In the result, the appeals filed by the employees (C.A.
Nos.3702, 3703, 3704, 3705, 3706, 3707, 3709, 3710, 3721,
3733, 3734, 3737, 3742, 3744, 3748, 3749 and 3751 of 2006) 8
are dismissed and those filed by the State Government and
agencies/instrumentalities of the State (C.A. Nos.368~. 3712,
3713,3714,3715,3716,3717,3718,3723,3724, 3726,3727,
- A
3728, 3729, 3730, 3731, 3732, 3750, 3752, 3753, 3754 and
3755. of 2006) are allowed. The declaration made by the
Division Bench that the ban on regularisation will be effective
c
from 19.8.1998 i.e. the date on which Act No.27of1998 came
into force and that all persons who have completed 5 years
"'..
service as on that date would be entitled to be considered for
regularisation of service is set aside. It is, however, made clear
that the daily wage employees and others who are covered by D
Section 7 of the 1994 Act (amended) and whose services have
not been regularised so far, shall be entitled to be considered
for regularisation and their services shall be regularised subject
to fulfillment of the conditions enumerated in G.O. dated
22.4.1994. With a view to obviate further litigation on this issue, E
we direct the Government of Andhra· Pradesh, its officers and
agencies/instrumentalities of the State to complete the exercise

- ...
for regularisation of the services of eligible employees within
four months of the receipt/production of copy of this order,
without being influenced by the fact that the application, writ F
petition or appeal filed by any such employee may have been
dismissed by the Tribunal or High Court or this Court. Since
some of the appeals decided by this order relate to part time
employees, we direct that similar exercise be undertaken in
their cases and completed within four months keeping in view G
the conditions enumerated in G.O.(P). No.112 dated 23.7.1997.
_,,.,. _J._

G.N. Appeals disposed of.