Holding

Employees who have served for a considerable period and possess the requisite qualifications must have their services regularised, and the Kerala Water Authority is empowered to do so without awaiting state government approval.

Summary

The Kerala Water Authority (KWA) was created under the Kerala Water Supply and Sewerage Act, 1986, transferring all Public Health Engineering Department (PHED) employees to the Authority. Employees were divided into four groups based on their dates of appointment, and many faced termination. The petitioners sought regularisation of their services, arguing that appointments made before the Kerala Public Service Commission (PSC) was consulted under Rule 9(a)(i) of the 1958 Subordinate Service Rules were not irregular. The Supreme Court examined the statutory framework, the retrospective effect of the Act, and the constitutional mandate for job security, concluding that the rule must be interpreted in line with the Constitution’s spirit. It held that employees who have served for long periods and possess requisite qualifications must have their services regularised, and that the Authority alone can regularise ex‑PHED employees without awaiting state approval. The Court issued detailed directions for regularisation of all similarly situated workers and dismissed the Authority’s objections.

Issues considered

The applicability of Rule 9(a)(i) of the Kerala State Subordinate Service Rules to appointments made by the KWA before PSC consultation.
Whether the KWA is obligated to regularise the services of employees transferred from PHED and those appointed between 1 April 1984 and 30 July 1988.
The statutory effect of Section 69 of the Kerala Water Supply and Sewerage Act, 1986 and its impact on recruitment procedures.
The constitutional validity of terminating long‑serving employees in violation of Article 14 and Article 41.

Legislation cited

Subjects

regularisation of servicetemporary appointmentpublic service commissionemployment securityconstitutional lawArticle 14Article 41Kerala Water Authority

Judgment

JACOB M. PUTHUPARAMBIL AND ORS. ETC. ETC.
..
A
v.
KERALA WATER AUTHORITY AND ORS. ETC. ETC.

SEPTEMBER 19, 1990

B [A.M. AHMADI AND K. JAYACHANDRA REDDY, JJ.]

Kera/a Water Supply and Sewerage Act, 1986/Kerala State Sub-
ordinate Service Rules, 1958-Section 19( !)/Rule 9(a)(i)-Kerala
Water Authority-Transfer of employees and regularisation of service.

Consequent upon the establishment of Kerala Water -Authority
,..- ..
c under the Kerala Water Supply and Sewerage Act, 1986, all the func-
tions which were till then carried on by the Public Health Engineering
Department (PHED) were transferred to the said Authority. Contem-
poraneously with that every person working in the PHED became the
employee of the Kerala Water Authority by virtue of Section 19(1) of
D the Act. Though the said Act was given retrospective operation w.e.f.
Isl March 1984, Section 69 thereof came into force from the date of
publication of the Act in the Gazettee viz., 4.8.1986; actual effect could
be given w.e.f. 30.7.1988 on which date the necessary notification was ' 1
issued where by the rule was amended and the Authority came within
the purview of the Public Service Commission. Thus the employees of
E the Authority fell into four different groups viz., (i) those who were in
the employment of PHED before the constitution of the Authority and
were transferred to the Authority, (ii) those whom the Authority
.employed between !st April, 1984 and 4th August 1986, (iii) those who
were appointed between 4th August 1986 and 30th July 1988, and (iv)
those who were appointed after 30th July 1988. The Authority it seems
F terminated the services of various employees. -'
The petitioners apprehending termination of their services hy the
Authority filed petitions contending inter alia that they were recruited
through, the Employment Exchange and till the issuance of the notifica-
tion dated 30. 7.1988, amending the concerned PSC rule, there was no
G question of the Authority consulting the PSC and therefore, appoint-
ments made prior to that date could not be termed as irreg_ular or
unauthorised and could not be determined on that ground. It is, asserted
by them that the High Court refused to grant relief to those employees
whose services were threatened and despite favourable orders passed by
this Court in cases that came before it, the Authority continued to
H terminate the services of employees similarly placed treating those

562
.. ,, JACOB v. KERALA WATER AUTHORITY 563

orders as having been passed in respect of only those employees who
A
were before the Court. It is, therefore, urged by them that this Court
should pass orders laying down guidelines for the regularisation of the
services of not only the petitioners but also all others similarly placed so
that the low income employees are not required to knock at the doors of
different courts for protection against the threatened arbitrary action
of the Authority terminating their services. The Authority has contested
the cases on the plea that all the appointments made before or after
April I, 1984 were governed by Rule 9(a)(i) of the Rules till Section 69
came into force w.e.f. 4.8.1986 and 30.7.1988 when it was amended.
Appointments made after 4.8.1986 are clearly subject to the require-
ment of Section 69 of the Act and the Authority cannot act in contraven•
tion thereof. Services of all those who were governed by Rule 9(a)(i) will
have to be determinated on the expiry of 180 days. c
Allowing the appeals as also writ petitions, this Court,

HELD: Interpreting Rule 9(a)(i) consistently with the spirit and
philosophy of the Constitution, which it is permissible to do without b
doing violence to the said rule, it follows that employees who are serving
on the establishn1enl for long spells and have the requisite qualifications
for the job, should not be thrown out but their services should. be
regularised as far as possible. Since workers belonging to this batch
have worked on their posts for reasonably long spells they are entitled
to regularisation in service. [388A-B] E

P. K. Natayani & Ors. v. State of Kera/a and Ors., [1984] Suppl.
SCC 212; Dr. A.K. Jain & Ors. v. Union of India and Ors., [1987]
·.. Suppl. SCC 497; Daily-rated Casual Labour employed under P & T
Department through Bhartiya Dak Tar Mazdoor Manch v. Union of
India and Ors., [1988] l sec 122, referred to. F

ORIGINAL JURISDICTION: Writ Petition (Civil) No. 112 of
1990 etc. etc.

(Under Article 32 of the Constitution of India.)
G
P.S. Poti, E.M.S. Anam, V.J. Francis and M.N. Popli-fot the
Petitioners.

,,.._~
T.S. Krishnamurthy Iyer, G. Viswanatha Iyer, A.S. Nambiar.
K.R. l(urup, S. Balakrishanan, Yijay Kumar, T.T. Kunhi Kannan.
Smt. S. Vasudevan a11d P.K. Manoharforthe Respondents. H
564 SUPREME COURT REPORTS I 1990] Supp. 1 S.C.R. ~
•.
A The Judgment of the Court was delivered by

AHMADI, J. In special leave petitions, leave granted.

An autonomous body called the Kerala Water and Waste Water
Authority was constituted with effect from 1st April, 1984 under
B Section 3(1) of the Kerala Water and Waste Water Ordinance, 1984
(No, 14 of 1984) which Ordinance was brought into force w.e.f. ]st
March, 1984. This ordinance was replaced by similar Ordinances
issued from time to time, the last being Ordinance No. 27 of 1986
which was in turn replaced by the Kerala Water Supply and Sewerage
Act. 1986 (Act No. 14 of 1986), (hereinafter called 'the Act'); Section
1(3) whereof provides that it shall be deemed to have come into force
c on Isl March, 1984. This Act, besides providing for the establishment
of an autonomous authority to be called the Kerala Water Authority,
makes provision for the development and regulation of water supply
and waste water collection and disposal and for matters connected
therewith. There is no dispute that the functions which were carried on
D by the Public Health Engineering Department (PHED) were transfer-
red to the autonomous body on the enactment of the Ordinance No. 14
of 1984. After the enactment of the Act, every person working in the
Pl-JED became the employee of the Kerala Water Authority (for short
'the Authority') by virtue of Section 19(1) of the Act, which reads as
under:
E
"Transfer of employees to the Authority-Save as other-
wise provided in this section, every person who was
employed in the Public Health Engineering Department of
the Government shall, on and from the appointed day
become an employee of the Authority and shall hold his
F office or service therein by the same tenure, at the same
remuneration and upon the same terms and conditions, and
with the same rights and privileges as to pension, gratuity
and other matters as he would have held the same on the
appointed day if this Act had not come into force and shall
continue to do so until his employment in the Authority is
G terminated or until his remuneration or other· terms and
conditions of service are revised or altered by the Autho-
rity under or in pursuance of any law or in accordance with
any provision which for the time being governs his service:

Provided that nothing contained in this sub-section shall
H apply to an employee in the cadres of the Administrative
_; JACOB v. KER(\LA WATER AUTHORITY [AHMADI, J.I 565

Officers, Financial Assis_tants Divisional Accounts, Typists
and Stenographers, who, by notice in writing given to the A
Government and the Authority within such time as the
Government may, by general or special order, specify, inti-
mates his intention of not becoming an employee of the
Auihority:
B
Provided further than an employee referred to in the pre-
ceding proviso shall continue to be an employee under the
Government and shall be provided elsewhere in any post or
other service under the Government."

Sub-sections (3) and (6) of Section 19 make it clear tha·t such transfer
of service shall not entitle the employee to claim any compensation c
under the Industrial Disputes Act, 1947 nor shall it amount to
retrenchment or abolition of post under any extant rule, regulation or
order applicable to Government servants. Thus, the erstwhile staff of
the PHED was by the thrust of Sectiqn 19(1) transferred on the
establishment of the Authority. This would naturally concern those D
persons only who were in tbe employment of the PHED before the
establishment of the Authority w .e.f. !st April, 1984.

The staff members employed by the Authority after its constitu-
tion were naturally appointed under the provisions of the concerned
statute. Since the Act has retrospective effect, reference may be made E
to Section 8( 1) of the Act which reads thus: -

"Appointment of officers and staff-Subject to the provi-
sions of sub-section (2), the Authority may appoint for the
purpose of enabling it to carry out its powers, duties and
functions under this Act, a Secretary and such other offi- F
cers and staff as may be required against posts duly sanc-
tioned by it:

Provided that the Authority shall obtain the previous
approval of the Government for the creation of post above
the rank of the Executive Engineer." G

By virtue of Section 8(3), except as provided by sub-sections (1) & (2).

--
....
the appointment and conditions of service of the officers and emp-
. l_oyees of the Authority are to be governed by rules made by the
Government from time to time. Although the Act is deemed to_have
come into force w :e.f. 1st March, 1984, Section 69 became effective H
566 SUPREME COURT REPORTS [1990] Supp. rs.c.R. . ~

from the date of publication of the Act in the Gazette i.e. 4th August,
A
1986. That section reads as follows:

"Amendment of Act 19 of 197(}-With effect from the date
of publication of this Act in the Gazette, the Kerala Public
Service Commission (Additional functions as respects cer-
B tain Corporations and Companies) Act, 1970 (19 of 1970)
shall have effect subject to the following amendment,
namely:-

in clause (a) of Section 2, the words and figures "or the _..
Kerala Water Authority" established under section 3 of the
Kerala Water Supply and Sewerage Act 1986;'', shall be
c added at the end."

Even though Act 19 of 1970 stood so amended by the force of Section
69, actual effect could be given after issuance of Notification No. G .0.
(MS) No. 38/88/P & ARD dated 30th July, 1988 on which date item
D (Liii) was added to the relevant rules as

"Amendment of the Rules-In the Kerala Public Service --,
Commission (consultation by Corporation and Companies)
Rules, 1971, in Clause (d) of rule 2, after item (Lil), the
following item shall be added, namely:-
E
(LIII)-The Kerala Water Authority."

This amendment was considered necessary with a view to bringing the
Authority within the purview of PSC so that it may seek the advice of ~
..,.J
that body on matters relating to the methods of recruitment of its
F employees, etc.

From the above discussion it becomes clear that the employees
of the Authority can be divided into four distinct groups, viz., (i) those
who were in the employment of PHED before the constitotion of the
Authority and were transferred to the Authority (ii) those whom the
G Authority employed between 1st April, 1984 and 4th August, 1986 (iii)
those who were appointed between 4th August, 1986 and 30th July,
1988 and (iv) those who were appointed after 30th July, 1988.

H
The petitioners in this batch of matters are serving in different
capacities, such as, cleaners, pump operators, draftsmen, drivers, etc.
They claim that they were appointed through the Employment Ex-
~-
. -
-.i JACOB v. KERALA WATER AUTHORITY [AHMADI. J.] 567

change. between 1981 .and 1988. They contend that they have been
compelled to approach this Court as their services are likely to be A
terminated as has been done in the case of a few of their colleagues.
They contend that till the issuance of the notification dated 30th J.uly,
1988 amending the concerned PSC rule {amendment extracted
earlier) there was no question of the Authority consulting the PSC and
therefore, appointments made prior to that date cannot be termed as B
irregular or unauthorised and cannot be determined on that ground.
They.contend that as in a few cases the High Court of Kerala failed to
appreciate this true legal position and refused to grant relief to
employees whose services were threatened, the Managing Director of
,the Authority issued instructions to his subordinates to terminate the
services of similarly placed employees, thereby compelling the present
petitioners to approach this Court so that all such employees are c
uniformly governed by this Court's order. They point out that in Civil
Appeals Nos. 472 to 478 of 1988 arising from the High Court decision.
and Writ Petitions (Civil) Nos. 857 and 1135 of 1987, this Court passed
the following order on 1st February, 1988:
D
___; "Special leave granted. Heard counsel for the parties.

We are of the view that in the facts and circumstances of
these cases the services of such of the appellants as possess
the requisite qualifications should be regulated in accor·
dance with the Kerala Public Service Commission (Addi- E
tional fuActions as respects certain Corporations and Com-
panies) Act, 1970 and until such regularisation is made, no
appointment on similar posts from outside be made. If
,. there be any excess employees now in service employment,
it will be open to the Authority to terminate their services
on condition that as and when vacancies arise, they shall F
first be considered for appointment keeping the direction
indicated above in view.

Recruitments in future will, however, be in accordance
with the Kerala Public Service Commission (Additional
functions as respects certain Corporations and Companies) G.
Act, 1970 and the Kerala Water Supply and Sewerage Act,
1986."

Thereafter in another batch of special leave petitions Nos. 4385 to
4387 of 1988 this Court passed the following order on 24th March,
1988: H
568 SUPREME COURT REPORTS [1990) Supp. 1 S.C.R. ~

"Heard learned counsel for parties. The only direction
A
which we can give in the facts and circumstances of the case
will be in case after all those who have been regularly
selected by the Public Service Commission are appointed
and thereafter any vacancies are left, the same should be
given to those who, like the petitioners, have already been
B in service taking into consideration their seniority. Every
step should be taken by the Water Authorities to regularise
the services of such people who can be appointed under our

c
direction as indicated above. There will be no further direc-
tion in this case. The other person who may be thrown out
of employment on account of the direction of the Water
Authority which is impugned before us, may appear before
- J

the Public Service Commission in the next examination.
The State of Kerala has informed us that age bar would be
waived. The petitions are disposed of accordingly."
~

The Authority treated these orders as confined to the workinen who
D had filed the proceedings 'and did not extend the ratio to others simi-
larly placed. Not only that, the Authority, contend the petitioners,

,
placed different interpretations on the aforesaid orders and continued ''
to terminate the services of the employees. Another group of writ
petitions Nos. 525, 527, 528, and 503 of 1988 came up before this Court
on 28th November, 1988 when this Court passed the following Order:
E
"Mr, Krishna Murthy Iyer appearing for the Kerala Water
Authority states that the claims of the petitioners can be
divided into three categories, namely (1) those who had
been employed by Public Health Engineering Department
before the Kerala Water Authority was constituted, (2)
<,
j
F those who get employed between 1.4.1984 and 1986 and (3) 1
the persons appointed after 1986. The Kerala Water
Authority is given three months' time to examine the indi-
vidual cases of these groups and take its decision accord-
ingly. We dir.ect the Authority to place its conclusions
before the Court before giving effect to them. Status quo as -~

G on today will continue until further orders."
j
The grievance of the petitioners is that no action was taken by the I
Authority within the time allowed nor h_as it taken any action till today
to implement the said order. The petitioners also contend that the .......,.,j
employees are compelled to knock at the doors of different courts as
H the Authority continues to terminate the services of the employees
JACOB v. KERALA WATER AUTHORITY \AHMADI, J.l 569

notwithstanding the aforequoted orders passed by this Court. Mr. P.S.
A
Poti. the learned counsel for the petitioners, therefore, made a fervent
appeal that this Court should pass an order laying down guidelines for
the regularisation of the services ofnot only the petitioners but also all
others similarly placed so that these low income group employees are
not required to knock at the doors of different courts to protect
themselves from the threatened arbitrary action of the Authority B
terminating their services. In other words he wants this Court to
formulate a scheme for the regularisation of the services of all similarly
placed employees which would put an end to all pending cases and
future cases which are bound to arise if the Authority continues its
' present policy.

The claims made by the employees in this group of cases is con- c
tested mainly on the plea that their tenure and service conditions were
regulated by Rule 9(a)(i) of the Kerala State and Subordinate Service
Rules. 1958 (hereinafter called 'the Rules') which were statutory in
character and were, therefore, binding on the Authority as well as the
employees. It is contended that the employees belonging to different D
)
categories were appointed on different dates by the PHED prior to 1st
,-.
April, 1984 under this rule and, therefore, their services could only be
regulated thereunder. After the autonomous Authority was consti-
tuted w.e.f. 1st April, 1984 on the enactment of Ordinance 14 of 1984,
the Authority passed a Resolution No. 8 on 25th April, 1984 adopting
the aforesaid Rules and hence all appointments made after 1st April,
1984 also came to governed by Rule 9(a)(i) of the Rules till Section 69
of the Act came into force w.e.f. 4th August, 1986 and nor 30th July,
1988 when the relevant rule was amended by the introduction of item
(LIU) referred to earlier. Appointments made after 4th August, 1986
are clearly subject to the requirement of Section 69 of the Act and the
Authority cannot act ip contravention thereof. Had it not been for F
Court orders restraining the Authority from terminating their services,
_...,; the services of all those .who were governed by Rule 9(a)(i) would have
been terminated op the expiry of 180 days, The text of that rule may be
noticed at this stage:

"Where it is necessary in the public interest, owing to an G
emergency which has arisen to fill immediately a vacancy in
a post borne on the cadre of a service, class or category and
there would be undue.delay in making such appointment in
accordance with these rules and the Special Rules, the
appointing authority may appoint a person, otherwise than
in accordance with the said rules, temporarily." H

i
570 SUPREME COURT REPORTS [ 1990] Supp. I S.C.R. ,_ ~-
,..
A
The first proviso is not relevant for our purpose but reliance was
placed on the second proviso which reads as under: 9~

"Provided further that a person appointed under this
clause by direct recruitment to a post other than teaching
post [and a post covered by the proviso to clause (iii) of
B rule lO(b )] shall not be allowed to continue in such post for
a period exceeding three months."
(i.e. one hundred eighty days)

The rule further requires that a person appointed under clause (i)
should be replaced as soon as possible by a member of the service or an
approved candidate qualified to hold the post under the said rules.
c Such replacement must take place in the order of seniority based on
length of temporary service in the unit. It is, therefore, the case of the
Authority that appointments made under this rule were purely tem-
porary, not to exceed three months, and had to be terminated on the
expiry of the said period and it was not open to the Authority to
D continue their services even by reappointment unless fresh candidates
were not available for reappointment through employment exchange.
Therefore, had it not been for the restraint orders issued by different
Courts, the Authority contends it was under an obligation to act in
conformity with the above rules. However, as regards those who had
joined service prior to !st April. 1984 in different categories, the
E Authority passed a resolution on 30th January, 1987 to the following
effect:

"Resolved to recommend the Government the regularisa-
tion of the service of the employees recruited in the erst-
while PHED and still working in the Kerala Water
F Authority."

The Government, it seems, has not taken any decision in this behalf as
~::
yet. Since the counter filed on behalf of the State Government is silent
on this point we inquired of the learned counsel for the State to clarify
the position. We were told that since the Authority was an autono-
G mous body it was free to regularise the services of such employees, if it
w so desired, without the concurrence of the State Government. While
admitting the fact that appointments were made from the lists submit-
i\i
"
,,

H
ted by various District Employment Officers, the Authority contends
that as the appointments were governed by Rule 9(a)(i) they could not
enure beyond three months and the termination of their employment
did not fall within the ambit of 'retrenchment' as understood under the
•
,
i;._ ......
JACOB v. KERALA WATER AUTHORITY [AHMADL J.I 571

Industrial Disputes Act, 1947. In any case even otherwise the applica-
tion of that law is specifically excluded by Section 19(3) of the Act and A
hence the benefit of that law cannot be extended to the employees of
the Authority. The contention that the action of the Authority to
terminate the services is .violative of Article 14 is repelled on the plea
that acting in conformity with a statutury Rule 9(a)(i) can never be
branded as arbitrary. Lastly it is contended that the Authority was not B
directed lo apply this Court's orders passed in some of the proceedings
referred to earlier to all similarly situated employees as the Court's
orders were based on 'the fact and circumstances of these cases' and
were not intended to be of general application. With reference to the
order of 24th March, 1988 it is said that the Authority has moved a
review application which is pending. The Authority contends that as
there is no infringement of any fundamental right. the writ petitions c
brought under Article 32 of the Constitution cannot be sustained. The
above is the stand taken by the Autbority. The State Government has
by and large supported this stand and, therefore, we· need not restate
the contentions raised in their counter. The respondents, therefore,
contend that the employees are not entitled to any relief whatsoever D
and the appeals/petitions deserve to be dismissed with costs.

The question of regularisation in service must be examined keep-
ing in mind the historical as well as the constitutional perspectives ..
During the colonial rule industrial growth in the country was tardy aqct'
most of the large-sized industries were controlled by British intere.sts. E
These establishments employed Indian labour on wages far below the
sustenance levels. Men, women and even children were required to
work for long hours in thoroughly unhygienic conditions. Because of
large-scale unemployment there was a surplus labour market which the
employers could and did exploit. This virtually forced the labour to
accept employment on terms unilaterally dictated by the employers. F
The relationship between the employer and the employee being purely
contractual, the hire' and fire rule governed. Those were the days of
laissez faire when contractual rights were placed above human rights.
The concepts of dignity of labour and fair remuneration for work done
were wholly alien. The workers had to work in appalling conditions
and at low wages with no job security. G

After we attained independence the pace of industrial growth
accelerated. Our Constitution makers were aware of the hardships and
insecurity faced by the working classes. The Preamble of our Constitu-
tion obligates the State to secure to all its citizens social and economic
justice, besides political justice. By the 42nd Amendment, the Pream- H
572 SUPREME COURT REPORTS [19901 Supp. 1 s.c.tt

ble of the Constitution was amended to say that ours will be a
A
socialistic democracy. In furtherance of these promises certain funda-
mental rights were engrafted in Part III of the Constitution. The Con-
stitution guarantees 'equality', abhors discrimination, prohibits and
penalises forced labour in any form whatsoever and extends protection
against exploitation of labour including child labour. After extending
B these guarantees, amongst others, the Constitution makers proceeded
to chart out the course for the governance of the country in Part IV of·
the Constitution entitled 'Directive Principles of State Policy'. These
pr\nciples reflect the hopes and aspirations of the people. Although
the provisions of this part are not enforceable by any court, the princi-
ples laid down therein are nevertheless fundamental in the governance
of the country and the State is under an obligation to apply them in
c making laws. The principles laid down therein, therefore, define the
objectives and goals which the State must endeavour to achieve over a
period of time. Therefore, whenever the State is required to make laws
it must do so consistently with these principles with a view to securing
social and economic freedom so essential for the establishment of an
D egalitarian society. This part, therefore, mandates that the State shall
strive to promote the welfare of the people by minimising the
inequalities in income and eliminating inequalities jp status, facilities
and opportunities; by directing its policy towards securing, .amongst
others, th_e distribution of the material resources of the community to
subserve the common good; by so operating the economic system .as
E not to result in concentration of wealth; and by making effective provi-
sion for securing the right to work as also to public assistance in cases
of unemployment, albeit within the limits <If its economic capacities.
There are certain other provisions which enjoin on the State certain
duties, e.g. securing to all workers work, a living wage, just and
humane conditions of work, a decent standard of life, partidpation in ••
F management, etc., which are aimed at improving the lot of the work-
ing classes·. Thus the Preamble promises socio-economic justice, the
fundamental rights confer certain justiciable socio-economic rights and
the Directive Principles fix the socio-economic goals whieh the State
must strive to attain. These three_ together co_nstitute the core and
conscience of the Constitution.
G
India is a developing country. It has a vast surplus labour
market. Large-scale unemployment offers a matchin.g opportunity to
the employer to exploit the needx. Under such market conditions the
employer can dictate his terms of .employment taking advantage of the
absence of the bargaining power in the other. '):he unorganise.d job ,._ ·
H seeker is left with no option bµt .to .accept employment .on .talce-it•or-
)ACOB v. KERALA WATER AUTHORITY {AHMADI, J.] 573

le;ive-it terms offered by the employeL Such terms of employment
A
offer no job security and the employee is left fo the mercy· of the
employer. Employers have betrayed an increasing tendency to employ
.temporary ha,nds even on regular aod permanent jo.bs with a view to
circumventing the protection offered to the working classes under the
.benevolent Jegislations enac.ted from time to time. One such device
i!dopled is to get the work done .through contract labour. It is in this B
·backdrop that we must consider the request for regularisation in
service.

Before We deal wit)! the case on hand it would be a.dvantageous
to refer to some of .the decision bearing on the question of regularisa-
tion. In Smt. P.K. Narayani & Ors. v. State of Kerala & Ors., {1984]
Suppl: sec 212 the petitioners who had been serving as employees of c
the State of Kerala or its public .sector undertakings for .th.e past few
years challenged the action of the employer in terminating their
services to wake room for the candidates selected by the Kerala Public
Service Commission. This Court .directed .that the petitioners and all
others similarly placed should be allowed to appear at the next exami- . D
nation that the Public Service Commission may hold without raising
the age bar; till then the petitioners and others may be continued in
· service provided there are vacancies. This, clarified the Court, will not
confer any· right .on the employees to continue in service or of being
selected by the Commission otherwise than in accordance with the
extant r.ules and regulations. These directions .were given to resolve ·E
what this Court described as 'a human problem which has more than
one facet', Ag;i.in in Dr. A. K. Jain & Ors. v. Union of India.& Ors.,
[ 1987] Suppl. SCC 497 the services of ad hoc Assistant Medical Offi-
.cers who were initially appointed for six months but we~e continued
for periods ranging upto four years, were sought to be terminated .to
accommodate the candidates selected by the Union Public Service F
Commission. The petitioners .claimed that their services should be
regularised and their seniority should be fixed from the date of their
initialentry in.service as,ad hoc appointees. In the counter, the Union
of India contended that 'ad hoc' appointments were made by the
General Managers of the Zonal Railways to tide over temporary
,shortages of doctors and their tenures were extended till regular selec- G
tion was mage by the UPSC and appointments were made by the
.President of India. Since the appointing authority was the President of
India ~uch ad hoc appointments by the General Managers of .the Zonal
Railways could not be regularised. It was further contended that ,the
ad .hoc appointees were granted age relaxation .and were ,asked to
appear at two special selections based on interview alone held by. the · lj
574 SUPREME COURT REPORTS [1990] Supp. 1 S.C.R.

UPSC_in 1982 and 1985. The petitioners were those ad hoc appointees
A
who had either failed to avail of the special benefit of selection or had
appeared and failed to qualify. In the circumstances it was contended
that they could not be regularised in service. Notwithstanding the
same this Court directed regularisation of services of all doctors
appointed upto October 1, 1984 in consultation with UPSC on the
B evaluation of their work and conduct based on the confidential reports
in respect of the period subsequent to October 1, 1982. Such regulari-
sation was to be from the dates from which they were continuously
working. The services of those not regularised were allowed to be
terminated. The petitions of those appointed after October 1, 1984
were however dismissed.
c In the case of Daily-rated Casual Labour employed under P & T
Department through Bhartiya Dak Tar Mazdoor Manch v. Union of
India & Ors., [1988] 1 SCC 122 this Court, while dealing with the
question of their absorption, referred to the State's obligations (refer-
red to as an individual's rights} under Part IV of the Constitution and
D observed as under:

"Of those rights the question of security of work is of
utmost importance. If a person does not have the feeling
that he belongs to an organization engaged in production
he will not put forward his best effort to produce more.
E That sense of belonging arises only when he feels that he
will not be turned· out of employment the next day at the
whim of the management. It is for this reason it is being
repeatedly observed by those who are in charge of
economic affairs of the countries in different parts of the
world that as far as possible security of work should be
assured to the employees so that they may contribute to the
• f
F
maximisation of production. It is again for this reason that
managements and the governmental agencies in particular
should not allow workers to remain as casual labourers or
temporary employees for an unreasonable long period of
.'time."
G
This Court emphasised that unless a sense of belonging arises. the
worke.r will not give his best and consequently production will suffer
which in turn will result in economic loss to the nation. This Court,
therefore, directed the department to prepare a scheme on a ration.al
basis for absorbing those who have worked for a continuous period of '--
H. one year.
JACOB v. KERALA WATER AUTHORITY [AHMADI, J.] 575

Tested on the above and keeping in mind the constitutional
philosophy adverted to earlier, we may now proceed to consider the
A
main plank of the contention raised by the Authority. But before we
do so we may dispose of the non-controversial part of the case.

From the pleadings in this case one thing that clearly emerges is
that the Authority had taken a decision on 30th January, 1987 to B
-regularise the services of ihose who were employed by the erstwhile
PHED and whose services stood transferred _to the Authority by the
thrust of the statute. According to the resolution extracted earlier, the
Authority recommended to the State Government that the services of
the employees recruited in the erstwhile PHED and who continued to
work on the establishment of the Authority should be regularised. The C
learned counsel for the State Government contended that since these
employees were now borne on the establishment of the Authority on
the statutory transfer of their services, it was for the Authority to
regularise their services, and it was quite unnecessary to make a
recommendation to the State Government in that behalf.. To put it
differently, the stand of the SJate Government through its counsel is D
_, that the question of regularisation of the .ser.vices .of ex,Pl-!ED
employees now borne on the establishment of the Authority is exclu-
sively within the purview of the Authority and the State Government
has no role to play. That means it was wholly unnecessary on the part
of the Authority to make the recommendation it made by the resolu-
tion of 30th January, 1987 to the State Government for the regularisa- E
tion of the ex-PHED employees serving on its establishment on that
date. To us the position, therefore, appears crystal clear that it is for
the Authority ancl the Authority alone to regularise the services of
-~ such empfoyees without waiting for a nod from the State Government.
The sphinx-like silence on the part of the State Government for now
over. three years from the date of the resolution is indeed disturbing F
and betrays total lack of concern for this pressing human problem.

The second batch .of workers comprise those who were appointed
between 1st April, 1984 and 4th August, 1986 by the Authority itself.
Under section 8(1) of the Act the power to appoint the Secretary and
other officers and staff members ves!s in the Authority. Only when a G
post .above t}!er~nk of an Executive Engineer is to be created that the
sanction of the State Government becomes necessary under the pro-
viso. Sub-section (2) to which sub-section (1) is subject expects the
Authority to seek the previous sanction of the Government if it desires
to employ a servant of the Central or State Government on deputation
and not otherwise. It is, therefore, clear beyond any manner of doubt 'H
I,_ --
576 SUPREME COURT REPORTS [1990] Supp. 1 S.C.R.

that the power to appoint the. staff-members with whom we are con-
A
cerned, solely vests in the Authority. Since the Act is brought into
force w.e.f. 1st March, 1984 the question of regularisation of the
services of staff-members appointed after that date must be examined ·
with reference to the power found in section 8(1) of the Act. Howe\1ef,
the contention of the Authority is based on Rule 9(a)(i} of the Rules,
B which it claims to have adopted under Resolution No. 8 dated 25th
April, 1984. The Authority contends that by the thrust of this rule the
appointments were limited to 180 days only and since the said rules
had statutory flavour the Authority was bound to act in acc0rdance
therewith. We ha'Ve extracted the relevant part of this rule earlier.

c
Since these rules were framed in exercise of power conferred by the
proviso to· Article 309 of the Constitution they are undoubtedly statu• ..
tory in character but Mr. Po ti was right in his contention that they do
not retain that character in their application to the staff·members of
the Authority since they have been adopted by the Authority under a
resolution. These rules would undoubtedly be statutory in chatactet in
their application to the members of the Kerala Subordinate services
D for whom tfiey were enacted but when any other authority adopts them
by a resolution for reglilating the services of its staff, the rules do not
continue to remain statutory in their application to the staff of that
Authority. They are like any ·other administrative rules which do not
have statutory force. It was not contended, as indeed it could not be,
That these rules derive statutory force from section 64 or 65 of the Act.
E Section 64 confers the rule making power on the State while sectioo 65
empowers the Authority to make regulations .with the previous
approval of the Government. It is nobody's case that these rules were
adopted after obtaining the previous approval of the Government. If
that be so; we must accept Mr. Poti's .submission that these rules ill
their application to the staff'members of the Authority appointed after
F 1st April, 1984 have no statutory flavour or force.

Now to the text of Rule 9(a)(i) of the Rules. lt empowers the
appointing authority to appoint a person iemporarily otherwise than in
accordance with the rule if (i) it is necessary in public intere·st and (ii)
where an emergency has arisen to fill any particular post which has
G fallen vacant, immediately. In the present case it is difficult to say that
all appointments made after 1st April, 1984 were required to be filled'
immediately because of an emergency of-the ty(J'e contemplated 5y the
said rule. On the contrary it seems appointments w.ere routineiy made
in purported exercise of power conferred by this rule. The proviso oil
which reliance is ·placed, which we have extracted- eatlier, merely
H states that ordinari!J such appointments will be of those persons who
_j JACOB v. KERALA WATER AUTHORITY [AHMADI, J.] 577

posseu t~ requisite qua:lfficatioil_s forthe post. If any person who does
A
not pos·sess the requisite qualifications is aPPointed under the said
clause, he will be liabie to be replaced by a qualified person. Clause
(iii) of llule 9 states that a petson appointed under clause (i) shall, as
won as possible, be replaced by a member of the service or· an
apptovcid candidate qualified to hold the post. Clause (e) of Rule 9.
however, provided for regularisation of service of any person
appoill\ed und'er clause (i) of sub'rufe (a) if he had completed con-
tinu0us service of iwo years on l)ecembet 22, 1973, notwithstanding
anything contained in tli:e roles .. This is a clear indication that in the
past the Govetnmertt also cnnsidered ir just and fair to regularise the
setvicl!S of those whti had been irt continuous service for rwo years
prior to the ciil"off date. The spirit underlying this treatment clearly
sllows that the Government did not consider it just,. fair or reason"ble c
to tetminafo the service·s· of those who were In empioyment for a
period of two or more years prior to the cut-off date. This approach is
qalte consistent with the spirit of the rule which was intended to be
invoked fo' setve emergent situations whieh could not brook delay.
Such appointments were intended to be stopcgap temporary appoint" D'
ments toservdhe stated purpo~e and· not long term ones. The rule was
, not intended to fill a large number of posts in the seFvice but only those
Which could not, be kept vacant till regular appointments were made in
acc-0rdance with the rules. But once the appointments continued for
long_; the services had to be regularised if the incumbent possessed the
requisite qualifications as was done by sub-rule (e). Such an approach
alone would be consistent with the constitutional philosophy adverted
t<J eatliet. Even otherwise, the· rule must be so interpreted, if the
language 0f the role permits, as will advance this philosophy of the
Constitu!ion. If the rule is so intetpreted· it seems clear to us that
• -employees Who' have· been working on the establishment .since long,
and who possess the requisite qualifications for the job :is obtaining on
the date of their empfoyment, must be allowed to continue on their
j-0b~ and their services shoulc;! be regularised .. It is unfair and uiireason"
able to remove peopie Who have been rendering service since some-
time as such removal has serious consequences. The family of the
employee\ whidr has settled dowp and accommodated its needs to the
emoluments r"ceived by the bread winner, will face economic ruina- G
tion' if the job is suddcrnly taken away. Besides, the precious period of
·early life devoted' in the service of the establishment will be wholly
wasted a"nd' the incumbent may be rendered 'age barred' for securing a
job eisewhere. It is indeed unfair to use him, generate hope and a
feelin11, of security in him attune his family to live within his earnings
and theI\ Suddenly·tothrow him out of job. Such behaviour would be an
578 SUPREME COURT REPORTS [ 1990] Supp. 1 S.C.'R.

affront to the concept of job security and would run counter to the
A
constitutional philosophy, particularly the concept of right to work in
Article 41 of the Constitution. Therefore, if we interpret Rule 9(a)(i)
consistently with the spirit and philosophy of the Constitution, which it
is permissible to do without doing violence to the said rule, it follows
that employees who are serving on the establishment for long spells
B and have. the requisite qualifications for the job, should not be thrown
out but their services should be regularised as far as possible. Since
workers belonging to this batch have worked on their posts for reason-

c
ably long spells they are entitled to regularisation in service.
The third and fourth batches concern workers who were
appointed between 4th August, 1986 and 301.h July, 1988 and after 30th
July, 1988, respectively. Their appointments would be governed by
-
Section 69 which became effective from 4th August, 1986. By virtue of
this section the Kerala Public Service (Additional Functions as respect
certain Corporations and Companies) Act, 1970 (19 of 1970) came to
be amended with effect from 4th August, 1968 on which date it came
to be published in the Gazette. Thereby in clause (a) of section 2 the
0 'Kerala Water Authority' came to be added. In law, therefore, the
need to consult the PSC had arisen. True it is that the consequential
notification amending the 1971 Rules was issued on 30th July, 1988.
But on that account we do not think it would be proper to treat them
differently .. We think it advisable to treat them as forming a single
batch since the need to consult the PSC had arisen on Section 69
E coming into effect from 4th August, 1986.

In the result we allow these appeals and writ petitions and make
the rule absolute as under:

"(1) The Authority will with immediate effect regularise the
F
services of all ex-PHED employees as per its Resolution of 30th
January, 1987 without waiting for State Government approval.

(2) The services of workers employed by the Authority between
Isl April, 1984 and 4th August, 1986 will be regularised with
immediate effect if they possess the requisite qualifications for
the post prescribed on the date of appointment of the concerned
worker.

(3) The services of workers appointed after 4th August, 1984
and possessing the requisite qualifications should be regulated in
accordance with Act 19 of 1970 provided they have put in con-
H
tinuous service of not less than one year, artificial breaks. if any,
JACOB v. KERALA WATER AUTHORITY [AHMADI, J.[ 579
·'
to be ignored. The Kerala Service Public Service Commission
will take immediate steps to regularise' their services as a sepa-· A
rate block. In so doing the Kerala Public Service Commission
will take the age bar as waived.

(4) The Kerala Public Service Commission will consider
the question of regularisation of the services of workers who B
possess the requisite qualifications but have put in less than one
year's service, .separately. In doing so the Kerala Public Service
Commission will take the age bar as waived. If they are found fit
they will be placed on the list along with the newly recruited
candidates in the order of their respective merits. The Kerala
Public Service Commission will be free to rearrange the list
accordingly. Thereafter fresh appointments will issue depending c
on the total number of posts avilable. If the posts are inadequate,
those presently in employment will make room for the selected
candidates but their names will remain on the list and they will be
entitled to appointment as and when their turn arrives in regular
course. The list will enure for such period as is permissible under D
the extant rules.

(5) The Authority will be at liberty to deal with the services of
the workers who do not possess the requisite qualifications as
may be it considered appropriate in accordance with law.
E
(6) Those workers whose services have been terminated in viola-
tion of this Court's order in respect of which Contempt Petition
No. 156 of 1990 is taken out shall be entitled to the benefit of this
order as if they continue in service and the case of each worker
will be governed by th¢ ~lause applicable to him depending on
the category to which he belongs and if he is found eligible for F
regularisation he will be restored to' service and assigned his
proper place.

This order will regulate the services not only of the parties to the
present petitions but also all others similarly situated including those
who may be parties to other proceedings pending in different Courts. G

If further directions are .required in the matter of working out of
the abov~ order the High Court of Kerala may be approached for the
same. All the aforestated proceedings are disposed of accordingly with
' _. no order as to costs;

Y. Lal Appeals and petitions allowed.