Holding

The Supreme Court held that the Division Bench erred in dismissing the appeal without examining the agreement and corrigendum, and remitted the case to the High Court for fresh consideration of the respondents' claim for absorption.

Summary

The State of Punjab entered into an agreement to take over a financially distressed school in 1983, stipulating that only staff with prescribed qualifications who were members at the time of the policy decision would be retained. Teachers and laboratory assistants appointed between June 1983 and January 1984 filed a writ petition seeking absorption into government service. The High Court, ignoring a corrigendum that clarified the timing of the policy decision, granted a stay and later ordered their absorption. The Division Bench dismissed the Letters Patent Appeal on the ground that the respondents had been in service since 1987, without examining the merits. The Supreme Court held that this approach was unsustainable, as the High Court failed to consider the agreement and corrigendum, and remitted the matter to the High Court for a fresh decision.

Issues considered

Whether teachers appointed before the official takeover are entitled to absorption under the agreement and its corrigendum.
Whether the High Court erred by not considering the corrigendum and the terms of the takeover agreement.
Whether the Division Bench was correct in dismissing the appeal solely on the basis of continued service since 1987.
Whether interim arrangements affect the substantive right to absorption.

Subjects

absorptiongovernment serviceschool takeovercorrigendumstay orderletters patent appealinterim arrangementservice law

Judgment

y A
STATE OF PUNJAB AND ORS.
v.
DEV RAJ AND ORS.

SEPTEMBER 21, 2007
B
[DR.ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.]

Service Law-Absorption-Claim of-Policy decision by State
Government to take over a School in financial difficulties with its C
existing staff-Teachers who joined for certain period after policy
decision taken by State Government claiming absorption-Stay order
by High Court-Subsequently, court holding that claimants to be
absorbed-Division Bench dismissing the State 's appeal on the ground
that claimants working on basis ofstay order-Sustainability of-Held: D
Not sustainable since High Court did not consider the agreement
between School management and State Government that staff with
prescribed qualification who were members of staff when policy
decision was taken to be considered-Thus, matter remitted back.
State Government entered into an agreement with School E
Management to take over the School facing financial difficulties with
its existing staff on 28.3.1983. Respondents-teachers or laboratory
•
assistants between 29.6.1983 to 21.1.1984, filed writ petition claiming
absorption in Government services. Appellant contended that the
names of the respondents did not exist in staff statement prepared' F
by staff management at the time principle decision was taken. High
Court granted stay and the stay order continued. The Single Judge
of High Court held that though they were employed between
28.6.1983 and 26.1.1987, there was need for teachers and thus, they 1
should be absorbed. Aggrieved, appellants filed LP A which was G
dismissed on the ground that the respondents were continuing since
1987. Hence the present appeal.

Allowing the appeal and remitting the matter, the Court

185 H
186 SUPREME COURT REPORTS [2007] 10 S.C.R.

A HELD: There was a corrigendum issued that those staff with
prescribed qualification who were members of the staff when the
policy decision was taken were to be considered. The Single Judge
of the High Court did not consider this aspect. Surprisingly, the
Division Bench did not consider the merits and on the basis that the
B respondents were working since 1987, dismissed the LPA. The
approach is clearly unsustainable. The High Court ought to have
examined terms of the arrangement between the school management
and the Government. While deciding the dispute finally the Court
ought not to be influenced by the fact that some interim arrangements
c had been made. Such interim arrangements are always subject to
the outcome of the main dispute. Since the Division Bench has not
decided the appeal on merits, it is appropriate to remit the matter
to the High Court for fresh decision. [Paras 5 and 6) [188-C-E; E-F)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4408 of
D 2007.
From the Judgment and Order dated 10.3.2005 of the High Court
of Punjab and Haryana at Chandigarh in LP.A. No. 294of2003.
Krishnan Venugopal and Ajay Pal for the Appellants.
E
R.K. Kapoor, M.K. Verma and Anis Ahmed Khan for the
Respondents.
The Judgment of the Court was delivered by
F DR. ARIJIT PASAYAT, J. 1. Leave granted.
2. Challenge in this appeal is to the order passed by a Division Bench
of the Punjab and Haryana High Court dismissing the Letters Patent
Appeal filed by the appellants.
G 3. The background facts, in a nutshell, are as follows:
On 7. 9.1980 a resolution was passed by the Janta High School,
Rattewal, requesting the State Government to take over the institution as
it was under financial stress. On 28.6.1983 the Government, on principle,
decided to take over the institution subject to the conditions that a gift
H
STATEOFPUNJABv. DEVRAJ[PASAYAT,J.] 187

y deed along with certificate of qualification of the staff working in the school A
was to be supplied. Names of the respondent did not appear in the list
of the staff members. Respondents were appointed on different dates as
teachers or laboratory Assistants against unaided posts between the period
29.6.1983 to 21.1.1984. State Government passed an order on
22.1.1987 taking over the institution subject to the condition that only B
those staff members who were working at the time of taking over were
to be continued. On 22.1.1987 sGhool was taken over and the
y stipulations regarding the norms to be adopted were worked out. As
per clause (3) of the agreement, the Government was not required to take
under the control all the members of the staff and the Government was c
authorized to take those employees who fulfill the prescribed qualification
for the posts. On 22.5 .1987 a corrigendum was issued, essential portion
of which reads as under:
"In the order No.6/5-83-SE(I) dated 22.01.1987, the following
corrigendum is hereby made in the 6th and 7th lines of condition D
.A No. I below para 1:-
Original entry entry to be substituted
'at the time of taking "at the time it was
over'.' decided by the Govt. to
take over this school in E
principle viz.
26.8.83"
,.
,A.
Writ petition was filed by the respondents with a prayer to absorb
them in Government service w.e.f 22.1.1987. A reply was filed clearly
F
taking the stand that the names of the respondents did not exist in the
staff statement which was prepared by the erstwhile management of the
school at the time principle decision was taken. Subsequently, their names
were included. As per the Government order, the school was taken over
with staff existing on 28~6.1983. Therefore, the Government was not
G
bound to absorb the respondents. The learned Single Judge of the High
Court granted the stay and the stay order was continued. Subsequently,
by order dated 29. l.2003, the learned Single Judge it was held that
though the respondents were employed between 28.6.1983 to 26.1.1987,
there was need for teachers and laboratory Assistants and, therefore, they
H
188 SUPREME COURT REPORTS [2007] 10 S.C.R.

A should be absorbed. The appellants filed Letters Patent Appeal which, -"(
as noted above, was dismissed on the ground that the respondents were
continuing since 1987.