Holding

The settlement clause treating the Nepal-based workers as fresh entrants for seniority is just and fair, and they are not entitled to regular CPWD seniority; the settlement is approved.

Summary

The petitioners, Nepal-based workers employed by the CPWD under a bilateral agreement between India and Nepal, challenged termination notices and sought declaration that they were regular CPWD employees in India entitled to parity in seniority, promotion, and benefits. The Union of India argued that they were a separate class and that the settlement agreement, which treated them as fresh entrants for seniority while granting other benefits, was appropriate. The Court examined the nature of their employment, the terms of the settlement (especially clause 7(vii)), and the potential adverse impact on regularly recruited Indian employees if seniority were granted. It held that the settlement was just and fair, that the workers could not claim regular CPWD seniority, and that the clause treating them as fresh appointments was valid. Consequently, the Court approved the settlement, dismissed the writ petitions, and ordered the termination notices to stand, with no costs awarded.

Issues considered

Whether Nepal-based workers employed under the bilateral agreement are entitled to be treated as regular CPWD employees in India with equal seniority and promotion rights.
Whether the settlement agreement, particularly clause 7(vii) treating such workers as fresh entrants for seniority, is legally valid and enforceable.
Whether the termination notices issued after project completion can be quashed under Article 32 of the Constitution.

Subjects

service lawbilateral agreementCPWDseniorityregular appointmentterminationsettlementArticle 32employment lawpublic sectorNepalIndia

Judgment

\
A MAHENDRA RAJ MARG KARAMCHARI UNION
~ ORS. ETC .. ETC.
v.
UNION OF INDIA AND ORS.

MARCH 24, 1995
B
[K. RAMASWAMY AND N. VENKATACHALA, JJ.)

Service law:

C CPWD-Bilateral agreement between India and Nepal-Construction
work in Nepa! .pursuant to agreement-Recruitment of local persons-Com-
pletion of project-Tennination of service~laim for regular appointment
and parity with CPWD employees of Indi~Agreement conferring
benefits-Directio_ns regarding.
D
Pursuant to a bilateral agreement between the Govt. of India and the
Government of Nepal the former undertook various construction works in
Nepal on behalf of latter. For exeeution of the said work petitioner8 were
appointed from amongst local people. On completion of work when ter·
mination notices were issued, the petitioners filed petitions in this Court
B for quashing the notices. They also sought declaration that (i) they belong
to the Nepal based .category of CPWD employees of the Gove.mment of
India and (ii) they are to be treated at pal' with CPWD employees working
in India.

F The case of Union of India was that the petitioners cannot get the
reliefs sought as they were always treated as a separate class. However, /
under an agreement entered with the appellant-Union, practically all the~ _,,...
reliefs sought for were granted to the petitioners but as many of ·the
regularly recruited Indian employees were permanent and/or seniors, the ~
G petitioners working in work charge project could not be treated as regular.
Therefore In Para 7 of the agreement it was provided that services of those
workers who accept the post offered in India would be treated as fresh ones
and their past service would not be counted for seniority but for all other
purposes they would be given the benefit.

H Disposing of the petitions, "this Court .
1116
(
I

MAHENDRA R.M. KARAM. UNION v. U.0.1. 1117

HELD : The petitioners' prayer itself clearly indicates that they are A
.conscious that at no time they were treated as members of the Indian
establishment. They remained only as Nepal based employees appointed
for execution of the works in Nepal. Normally, when th!! works are com-
pleted the establishment gets closed. Then the persons employed therein
also would lose their jobs. But, with a view to facilitating their continuance
B
in India, with benevolent attitude the Government of India reached an
agreement with their Union. But for the agreement petitioners have no
right to the posts. Only condition which would have effect on the continuity

t-r I
I
of the service is in paragraph 7(vii) thereof. In this regard the stand taken
by the Government of India is just and fair. To treat the regularly recruited
employees of CPWD in India and those who are sought to be absorbed by C
bilateral agreement like the writ petitioners is to treat unequals as equals,
and the latter would get unfair advantage over the former who would be
adversely affected. In the circumstances, clause 7(vii) of the Agreement is
just and fair and calls for no interference. The settlement covers all the
disputes and has given the petitioners more than what they had asked for D
in the writ petitions. No further directions need be given except approving
the settlement entered ·into by the Government of India with the Union
which is part of the record. [lUO-C-F, 1121-A-C]

CIVIL ORIGINAL JURISDICTION: W.P. (C) Nos. 5140-48, 3516,
5149-52, of 1983. E
(Under Article 32 of the Constitution of India.}

Govind Mukhoty, Naresh Kaushik, Mrs. Lalitha Kaushik with him for
the Petitioner.
F
V.C. Mahajan, Mrs. Sushma Suri, Ms. Binn Tamta, with him for the
Respondents.

The following Order of the Court was delivered :

These Petitions are disposed of by a common order since the ques- G
tions raised are the same. Pursuant to a bilateral agreement between the
Government of India and the Government of Nepal various works in Nepal
were undertaken by the Government of India on behalf of Nepal Govern-
ment, in particular, the road construction. In execution of the said projects
several persons including these petitioners came to be appointed. They are H
\
\

1118 SUPREME COURT REPORTS (1995) 2 S.C.R.

A of four categories, namely, 1, Nepal based muster roll workers 2. Nepal
based regular establishment comprising of LDCs (class III and IV) such
as Khalasis, Jamadars, Cooks etc. 3. Nepal based regular classified staff
and 4. Nepal Based workcharged establishment. After the completion of
the projects when termination notices were issued, they filed the writ
B p.!titions under Article 32 seeking to quash them and also for declaration
that they belong to the Nepal based category of CPWD employees of the
Government of India. That they are entitled to equal terms on par with
C.P.W.D. employees working in India in particular of continuity of service
and right to promotion etc. on an integrated basis and consequential
benefits that would ensue therefrom. Pending writ petitions this Court had
C given certain directions which were implemented. When the matter had
come up on November 15, 1994 for hearing, this Court directed the
respondents to file an affidavit by a competent officer stating on oath as to
what are the reliefs as originally asked for remain for consideration after
complying with the directions given by this Court from time to time.
D Pursuant there to, Mr. P.K. Majumdar, Suptd. Engineer (Head Orts.)
CPWD. (Food Zone) filed an affidavit on behalf of the respondents. There
he had stated that with a view to put an end to the on going agitation
between the Nepal based workmen and the Government. MRM. Karam-
chari Union who had espoused the case was called for settlement. After
prolonged negotiations the Union had entered into initial settlement with
E the Government of India on 25.10.1981 and final settlement on June 9,
1983. In furtherance thereof directions were given to the appropriate
officers to comply with the terms of the settlement. It was also stated that
subsequently representation was made to the Government of India that the
President and the Secretary of the Union were not competent to make the
F settlement on behalf of the workmen and that, therefore, the settlement
entered into by them does not bind the workmen. It was also stated that
at the time when the settlement was entered into, the President and the
Secretary were the competent persons. Since the settlement has beneficial
to them, all the benefits were confirmed except in respect of five persons,
who despite giving of notices had not turned up even after the directions
G given by this Court. It is not know whether they had also presented
themselves before the Chief Engineer pursuant to the second direction
issued by this Court on 29.5.1984. The terms of the settlement also have
been enclosed as part of the record.

H Shri Mukhoty, learned senior counsel for the petitioners contended
(
MAHENDRA R.M. KARAM. UNION v. U.0.1. 1119
that the Chief Engineer working in Nepal had written in letter of the year A
1966 to the Chief Engineer, C.P.W.D., New Delhi wherein he had admitted
that the workers working in Nepal are part of the establishmt-nt of
C.P.W.D. and they are also entitled to overtime payment, since from the
inception they were treated to be CPWD employees. The CPWD manual
gets attracted to the employees though they are working in Nepal. [n
support thereof, he placed reliance, in particular on chapter 3 of section 1
B
and also the Recruitment Rules of the CPWD employees in Appendix 5
of the manual at page 206. It is his contention that since the construction
of the highways in Nepal were undertaken by the CPWD and the new zone
in that behalf had been established in the year 1964. The petitioners having
been recruited from time to time in that zone and having been allowed to c
continue them till the execution of the works, they became members of the
CPWD under Government of India control and that therefore, they are
regular employees and their services cannot be terminated on completion
of the works in Nepal.
D
Shri V.C. Mahajan, leaned senior counsel for the respondent has
contended that the petitioners were never treated as members of the
establishment within the Indian territory. They were recruited to construct
the works in Nepal undertaken pursuant to bilateral agreement between
the Government of India and Government of Nepal and they were always
treated as a separate class. On completion of the construction work ter- E
mination orders were issued. They were no longer be; treated as members
of the establishment of CPWD working in India and that therefore they
cannot get the reliefs sought for. However, with a view to put an end to
the prolonged agitation by the Union, an agreement was entered into.
Pursuant thereto all the terms and conditions were implemented. Since
F
r many of the Indian employees were regularly recruited are seniors or
permanent employees, the petitioners working in Nepal in the work-
charged establishment etc., cannot be treated as regular employees of the
CPWD, if so done the seniority of the Indian employees would be adversely
affected. Therefore in paragraph 7 of the settlement to obviate such
piquant situation for the purpose of seniority, appointments are treated to G
be fresh ones. For all other purposes they are given the benefits like
pension etc. as mentioned in the Settlement. Therefore, practically the
reliefs sought for have been granted to him under the settlement.

Having given our anxious consideration to the respective contentions, H
1120 SUPREME COURT REPORTS [1995) 2 S.C.R.

A we are of the considered view that there is considerable force in the
contention of the Union of India. It is true that many of the petitioners
-f
were appointed by the Chief Engineer concerned from local people for
execution of the work, as explained in the c.ounter affidavit filed by the
Union of India from time to time while the works were in progress in
B particular to lay the roads and they continued till the works were com-
pleted. It is also true that for the purpose of recruitment in CPWD in India
Nepal citizens were treated as citizens of India. The construction of Na-
tional Highways in Nepal was also treated as part of the work to be done
by the CPWD. But the question is whether they can be treated as if they
are the regularly recruited candidates of the Indian establishments. The
C very prayer itself clearly indicates that they are conscious that at no time
they were treated as members of the Indian establishment. They remained
only as Nepal based employees appointed for execution of the works in
Nepal undertaken pursuant to the bilateral agreement between the
Government of India atid the Government of Nepal. Normally, when the
D works are completed the establishment gets closed. Then the persons
employed therein also would lose their jobs. But, with a view to facilitate
their continuance in India, with benevolent attitude Government of India
reached an agreement with their union. But for the agreement they have
no right to the posts. We have also independently examined the terms and
conditions of the settlement. Only condition which would have effect on
E th.e continuity of the service is in paragraph 7 (vii) thereof. It states that
the workers who accept the post offered in India will be treated as fresh
entrants and their past service will not count for seniority. However, their
past service will count for other admissible purposes including pensionary
benefits provided they surrender their retrenchment compensation. Their
F past service in Nepal will be counted as past experience for promotion or
appointment for higher posts. The period of break in service on their
joining the MRM Project PHR EWR Projects will be regularised. Other
conditions are not material for the purpose of this order, therefore, they
are omitted, though all the terms are treated as part of this order.
~:·
G Thus the agreement would clearly indicate that all the benefits except
the seniority was given. It is stated in the counter affidavit filed by Mr.
Majumdar that if seniority is given, the regularly recruited Indian can-
didates would adversely get affected. Therefore, with a view to see that the
regularly recruited Indian employees will not have any adverse effect on
H the absorption of Nepal based employees, their appointments are treated
(
I

MAHENDRA R.M. KARAM. UNION v. U.0.1. 1121

as fresh appointments so that their seniority will be counted from the date A
of fresh appointment. We think that the stand taken by the Government of
India is just and fair. To treat the regularly recruited employees of the
CPWD in India and those who are sought to be absorbed by bilateral
agreement like the writ petitioners is to treat unequals as equals, and the
latter would get unfair advantage over the former who would be adversely B
affected. Under these circumstances clause 7(vii) is just and fair and calls
for no interference. The settlement covers all the disputes and has given
them more than what they had asked for in the Writ Petitions.

We, therefore; find that no further directions need be given except
approving the settlement entered into by the Government of India with the C
Union which is now part of the record which W'! have upheld.

The Writ Petitions are accordingly disposed of. No Costs.

W.P.(C) No. 9516 of 1983 :

Pursuant to the direction given by this Court, the petitioner has D
already been taken into and is continuing in the service. The respondents
are directed that the period of his absence from duty will be treated as
continuous but without backwages which would ensue for all other pur-
poses. The W.P. is accordingly disposed of. No costs.

T.N.A. . Peti~on disposed of.
E