Holding

Employees appointed on a temporary basis for a project that has been discontinued have no vested right to regularisation, and the court cannot order their regularisation in the absence of sanctioned posts.

Summary

The Uttar Pradesh Land Development Corporation appointed a panel of trainees as Assistant Project Managers for the World Bank‑funded "Million Wells Scheme" and paid them a stipend. When the scheme was discontinued, six of the trainees filed a writ petition seeking regularisation and pay‑scale upgrades. The Allahabad High Court ordered their regularisation, but the Corporation appealed to the Supreme Court. The Supreme Court examined the internal notes, letters, and a government order that created only temporary posts for the project and held that the appointments were strictly temporary; no vested right to regularisation arose upon the project's closure. Consequently, the Court set aside the High Court’s order and allowed the appeal, stating that courts cannot create posts or regularise employees where no regular vacancies exist.

Issues considered

Whether employees appointed on a temporary basis for a specific project acquire a vested right to regularisation after the project ends.
Whether a court can direct the regularisation of such temporary employees in the absence of any sanctioned regular posts.
Whether the internal memorandum and recruitment letters can be construed as creating a right to regular posts.

Subjects

regularisationtemporary employmentproject closurevested rightservice lawWorld Bank projectMillion Wells Schemeappointmenttemporary posts

Judgment

,j'

A M.D., U.P. LAND DEV. CORPN. AND ANR.
v.
AMAR SINGH AND ORS.

APRIL I, 2003
\-
B [SHIVARAJ V.PATIL AND ARIJIT PASAYAT, JJ.]

Service Law:

Project employment-Claim for regularisation-During a scheme known
C as 'Million Wells Scheme '-Under a World Bank Project in State of U.P.
certain persons were emploxedfor training as Assistant Project Managers on
a fixed stipend-Later the "Million Wells Scheme" was discontinued-Some
of the persons so employed, claiming regularisation filed a writ petition before
High Court, which allowed the same-Held, once the project comes to an end,
D services of employees also come to an end-Appointments of respondenls
were temporary under "Million Wells Scheme "-They were never recruiled
againsl regularly sanctioned posts on regular basis-When work of the scheme
had come to an end, respondents were not entitled to claim regularisalion· of
their services-Even though their services were continued by virtue of an
interim order passed in the writ petition they cannot claim benefit of
E regularisation of their services as a mall er of right-Judgment order of High
Court set aside.

Stale of Himachal Pradesh v. Nodha Ram and Ors.' AIR (1997) SC
1445 relied on.

F Jawahar Lal Nehru Krishi, Vishwa Vidyalaya, Jabalpur, M.P. v. Bal
Kishan Soni and Ors., 119971 5 SCC 86; Ashwani Kumar and Ors. v. State of
Bihar and Ors., 119971 2 SCC I; State of U. P. and Ors. v. Ajay Kumar; 119971
4 SCC 88 and Committee of Management, Al:ra Nagar Inter College, A1ya
Nagar, Kanpur through its Manager and Anr. v. Sree Kumar Tiwary and Am-.;
G 119971 4 sec 388, cited.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6847of1997.

From the Judgment and Order dated 28.1.1999 of the High Court of
Judicature at Allahabad in SA. 745/98.
H 266
M.D., U.P. LAND DEV.CORPN. v. AMAR SINGH 267

Sunil Gupta. Gopal Prasad and S.K. Singh, for the Appellant. A
K.B. Sinha, Rajeev Kr. Singh, Sunil Kr. Singh and Goodwill Indeevar,
for the Respondent.

The following Order of the Court was delivered :
B
This appeal is a directed against the order of the Devision Bench of the
High Court. In short and substance, the facts leading to filing of this appeal
are:

The appellant-Corporation took a decision to prepare a panel of 25
posts of Assistant Project Managers. Pursuant to the said decision the C
Corporation wrote a letter to the Vice Chancellor, Agricultural University on
9.11.1990 seeking names of B.Sc.(Agr) graduates for the purpose. Thereafter,
letters were issued to the candidates for the purpose of training of one year
for the 'Million Wells Scheme' with a fixed stipend of Rs.1200 per month.
The State Government on 22.2.1993 gave sanction for creation of 30 new
and temporary posts of Assistant Manager under a new World Bank Project, D
i.e., U.P. Sodic Land Reclamation Project. The candidates who were selected,
were thereafter appointed as Assistant Managers after serving for sometime.
Out of 32 candidates selected 6 persons approached the High Court by filling
a Writ Petition seeking regularisation of their services with a grant of regular
pay-scales. The learned Single judge allowed the Writ Petition and gave E
direction to regularise their services and also to grant pay-scale applicable to
the post of Assistant Manager. Initially the Writ Petition was allowed in the
absence of representation by the Corporation, but after hearing on the
application made for recalling the order passed by the learned Single Judge,
the same order was passed upholding the direction given for regularisation on
grant of pay-scales. Aggrieved by the order of the learned Single Judge, the F
appellant-Corporation filed Special Appeal before the Division Bench of the
High court. The Division Bench did not find any merit in the appeal and in
that view, concurring with the order of the learned Single Judge, dismissed
the Special Appeal. Hence this appeal.
G
In order to appreciate the rival contentions, we think it appropriate to
refer to certain ~ocuments. The notes and order dated 2/ I I/ 1990/ prepared by
the Director of Corporation, on which a claim is made by the respondents
herein, reads thus:

-
~

(
"Work is proposed to be assigned. Therefore, actually only 13 H

'
268 SUPREME COURT REPORTS (2003) 3 S.C.R.

A employees would be available for the work of the Asset. Project
Managers while under the Million Wells Scheme a total number of
16 employees are required. In this way 3 employees of Grade-3 would
have to be appointed. Keeping in view that in future also other projects
may be received by the Corporation and several employees of this
grade may be required on a short notice, it is proposed that by inviting
B names from the Agriculture Universities or by advertising a penal of
25 persons be prepared for appointment of trainees. The posts would
be filled according to the need from this panel. On being available
the panel of trainees, the advantage would be that the work of the
employees appointed from within this pane! shall be judged for one
c year as trainees and (later on) for one year on probation and on
finding the work satisfactory and on the requirement they would be
absorbed in the corporation otherwise the option not to appoint them
would remain open.

On the above points Ka, Kha, Ga, Ghha the marked proposal for approval
D please."

It appears, pursuant to the said note and order, the General Manager of
the Corporation addressed letters to few institutions and universities seeking
names of the candidates for recruitment to the post of Assistant Project
Manager, (Group-3). One such letter reads as follows:
E
uSir.

In this Corporation around 25 posts of Assistant Project Managers
(Group-3) under pay scale of Rs.1230-2080 are likely to be created
in future. The management of the Corporation has decided that for
F the purposes of recruitment on those posts, a panel of B.Sc. (Agr.)
Agricultural graduates be prepared. The selected candidates will be
kept on training for one year and thereafter on probation for another
year.

Therefore. you are requested to send a list of agricultural graduates
G B.Sc. (Agr.) alongwith their complete addresses who have passed
out in last two years from your university. By this way candidates
will be informed for their examination/interview. Name of those
candidates who are doing higher studies, may not be included in the
said list.
H
r
M.D .. U.P. LAND DEV.CORPN. v. AMAR SINGH 269
Early action in this regard will be highly appreciated. A
After receipt of the names of the candidates in response to the letters
referred to above, the selected candidates were given letters on February 9,
1991. One such letter reads:

"Kindly refer to letter no. L.D.C ../90-91/Assistant Managers/(P)/ B
2275-B dated 14.1.91 issued by this office. You are required to
attend the office of Sr. Deputy Manager, Jaunpur (Reclamation
Development Project Million Wells Scheme, 88/A Charka Colony,
Hussainabad, Jaunpur) for training by 25.2.91. During the period of
training you will be paid Rs. 1200 (twelve hundred only) per month
as trainii1g allowance. Besides this nothing shall be payable. Travelling C
expenses shall be paid, if done exclusively, for the Corporation. No
travelling expenses will be paid for the first contribution.

If you do not attend upto 25.2.91 in that case, your selection shall
be deemed as cancelled.
D
Copy to :
'·
I. Sr. Deputy Manager, Jaunpur under Reclamation Development
Project, Million Wells Scheme, 88/a Charka Colony, Hussainabad,
Jaunpur with a view to make arrangement for training and enable the
trainees to contribute." E
The relevant portions of the letter of Joint Secretary, U.P. Government
dated 22nd February, 1993 addressed to the Joint Director of the Corporation
is to the following effect:

"Sir, F
With reference to the above mentioned subject vide your D.O.
letter No.1647 dated 24.12.92 I have been directed to state that in all
260 posts of different categories were created for the U.P. Land
Development Corporation Limited, against which at present 140 posts
are already occupied by the incumbents as mentioned in Column 5 G
and balance 120 posts are vacant, however, while keeping them
suspended, in lieu thereof permission is hereby given to fill up l 07
temporarily newly created posts as mentioned in column 6 for
implementation of the U.P. Sodic Land Reclamation Project sponsored
by the World Bank." H
'
.)

270 SUPREME COURT REPORTS [2003] 3 S.CR.

A xxx xxx xxx

5. So far as 120 vacant posts of the Corporation are concerned,
they shall remain suspended and before filling the same in future
prior approval from the Finaiicial Depa11ment of the Government
shall be obtained.
B
6. While filling up the newly created post the corporation shall
ensure that instead of filling the same enmasse they would be filled
up from time to time according to the need by taking the surplus
employees from the Agricultural Directorate and the Command Area
projects on deputation."
c On 4/8/1993 the Corporation resolved to discontinue the 'Million
Wells Scheme' with effect from 31 /3/1994. This Court granted special leave
on 29/11/1999 and stayed the impugned judgment of the High Court. On 18/
2/2000 the Corporation terminated the services of three respondents that lead
to filing a separate Writ Petition with which we are not concerned in this
D appeal.

Mr. Sunil Gupta, learned Senior Counsel appearing for the appellant-
Corporation urged that the learned Single Judge as well as the Division
Bench of the High Court committed serious error in direction regularisation
E of services of the respondents when the 'Million Wells Scheme' came to an
end with effect from 31 /3/1994 and the appointments of the respondents were
not made as against any sanctioned post; their appointments as Assistant
Managers were on a temporary basis, for the purpose of 'Million Wells
Scheme': with the closure of the Scheme the Respondents' services could not
be continued or regularised. According to him, the Division Bench of the
F High Court did not correctly and completely read the internal note or order
dated 2/11/1990, the letters addressed by the Corporation to the University
dated 9/1 I/1990 and the very Government order dated 22/2/1993 giving
sanction for temporary posts against which the respondents were appointed;
because of the same the conclusions arrived at by the Division Bench of the
G High Court are unsustainable. Jn support of his contention that with the
closure of a project work or the scheme coming to an end, the employees
appointed for the purpose of a scheme or a project work do not have any
vested right and they cannot insist or claim for regularisation of their services.
He cited few decisions of this Court : (I) Jawahar Lal Nehru Krishi Vishwa
Vidyalaya, Jabalpur, M.P. v. Bal Kishan Soni and Ors., [1997] 5 SCC 86 ;
H (2) Ashwani Kumar and Ors. v. State of Bihar and Ors., [1997] 2 SCC I ;
M.D., U.P. LAND DEV.CORPN. v. AMAR SINGH 271
(3) State of UP. and Ors. v. Ajay Kumar, [I 997] 4 SCC 88 and (4) Committee A
of Management, A1J'a Nagar Inter College, Arya Nagar, Kanpur through its
Manager and Anr. v. Sree Kumar Tiwary and Anr., [1997] 4 SCC 388.

Per contra, Mr. K.B. Sinha, Learned Senior Counsel representing the
respondent urged in support and justification of the impugned judgment and
order. According to him, names of the respondents were called for from the B
Universities ; the respondents were qualified and have rendered satisfactory
service for about three years without any complaint and merely because they
were sent for training under 'Million Wells Scheme', it could not be taken
that their services were temporary for the purpose of that scheme alone. He
added that even after training of one year, they were allowed to continue in C
service and under the circumstances, learned Single Judge as well as the
Division Bench of the High Court were right in giving the directions to
regularise their serv.ices and granting pay scales to them.

Having pursued the impugned order in the light of the documents referred
to above and keeping in view the rival contentions urged on either side, we D
are of the view that the impugned judgment and order of the High Court
cannot be sustained for the reasons more that one. The internal note and
order of the Corporation, which is made the basis for the claim that 25 posts
were available on a regular basis, is itself not correct. At this stage we may
observe that the internal note and order dated 2/11/1990 was prepared by the
Director of the Corporation for his own purpose, but strangely enough a copy E
of the same was produced by the respondents in the Writ Petition. We fail
to understand how ,the copy of this internal note and order came to the hands
of the respondents. Apart from the fact whether such an internal note itself
could give any right to the respondents, the very reading of the same does
not give an impression that it is indicated to create 25 posts on a regular p
..J basis. It only states that a panel of 25 persons be prepared for training, taking
note of the future possible requirement of persons working in the project. The
Division Bench of the High Court has misread this document. The letter
dated 9/11/1990 addressed to the Vice Chancellor of Agricultural University
seeking names of the candidates for recruitment to the post of Assistant
Project Manager (Group-3) itself shows that 25 posts of Assistant Project G
Managers are likely to be created in future for that purpose; the Corporation
had decided that a panel of B.Sc. (Agr.) graduates be prepared; the selected
candidates would be given training for one year and thereafter, they would
be put on probation for another year. A request was made in the letter to send
a list of agricultural graduates B.Sc. (Agr.) By the letters addressed to H
272 SUPREME COURT REPORTS [2003] 3 S.C.R.

A respondents individually dated February 9, 1991 they were asked to attend
the office of Senior Deputy Manager, Jaunpur (Reclamation Development
Project, Million Wells Scheme) for training by 25/2/1991; during the period
of training, ihey would be paid Rs. 1200 per month as training allowance. A
copy of the sc.id letter was also given to the Senior Deputy Manager, Jaunpur
B (Reclamation Development Project, Million Wells Scheme). We may say that
this letter does not say more than calling the candidates to join for the purpose
of training, that too under the 'Million Wells Scheme'.

The letter dated 22/2/1993 of the Joint Secretary, U.P. Government
extracted above, in clear terms states that 260 posts of different categories
C were created for the appellant-Corporation, against which 140 posts were
already occupied by the incumbents and 120 posts were still left vacant ;
those 120 posts were kept suspended and in Iieu thereof permission was
given to fill I 07 posts temporarily newly created for the purpose of U.P.
Sodic Land Reclamation Project sponsored by the World Bank. From these
documents it is clear that the respondents were never recruited as against
D regularly sanctioned posts on a regular basis. Reading of these documents
and the contentions raised on either side go to show that the appointments of
the respondents were temporary under the 'Million Well Scheme' afore-
mentioned. When the work of the scheme had come to an end, the respondents
were not entitled to claim regularisation of their services. Even though their
E services were continued after 31/3/1994 by virtue of an interim order passed
in the Writ Petition, they cannot claim benefit ofregularisation of their services
as a matter of right. This Court in State of Himachal Pradesh v. Nodha Ram
and Ors., AIR (1997) SC 1445, in para 4 has stated thus:

"4. It is seen that when the project is completed and closed due
F to non-availability of funds, the employees have to go along with its
closure. The High Cou1t was not right in giving the direction to
regularise them to continue them in other places. No vested right is
created in temporary employment. Directions cannot be given to
regularise their services in the absence of any existing vacancies nor
can directions be given to the State to create posts in a non-existent
G establishment. The Court would adopt pragmatic approach in giving
directions. The directions would amount to creating of posts and
continuing them despite non-availability of the work. We are of the
considered view that the directions issued by the High Court are
absolutely illegal warranting our interference. The order of the High
H Court is, therefore, set aside."
M.D .. U.P. LAND DEV.CORPN. v. AMAR SINGH 273

In clear and certain terms it is stated that when the project comes to A
close, the employees who are working in the project will not get any vested
right. In other words, once the project comes to an end, services of the
employees also come to an end. The other decisions cited by the learned
counsel more or less are to the same effect.

In view of what is stated above, the impugned order, in our view, B
cannot be sustained. Hence, the impugned judgment and order is set aside.
The appeal is allowed, but, with no order as to costs.

However, the learned Senior Counsel for the respondents submitted
that some of the juniors working under the same scheme have been retained C
in service and the services of the respondents were terminated. He also
submitted that the respondents having served the Corporation without any
complaint for about three years, their services may be availed of as and when
such opportunity arises. We are of the view that the question whether juniors
to the respondents are retained in service or not, does not arise for our
consideration in this appeal. As far as the request that their services could be D
availed of for some other project, all that we can say is that it is for the
respondents to approach the Authorities and if the Authorities find them
suitable and it is permissible in law to assign them such work, it is open for
them to do so, but we cannot give such a direction in that regard.

R.P. Appeal allowed. E