STATE OF RAJASTHANversusKUNJI RAMAN

                             STATE OF RAJASTHAN                                      A
                                      v.
                                KUNJI RAMAN

                              [WITH VICE VERSA)

                               DECEMBER 17, 1996                                     B

                 [S.C. AGRAWAL. AND G.T. NANAVATI, JJ.)

          Labour Law--Rajasthan Service Rules, 1951-Rule 2(g)(h)-Rajasthan
    Service (Concession on Project) Rules, 1975-Rule 4-Public Works Depart-          C
    ment-Work charged establisfament-Service conditions-Non application of
    Rajasthan Service Rules,' 1951 and Subsidiary Rules-Whether dis~
    criminatory-Held, Ncr-Claim of parity with employees of regular estab-
    lishmen~ot justified-Equal pay for equal w.ork-Constitution of India, Art.

    39(d).                          j                                                D
           Respondent along with 3 , employees working on Mahi Project filed
     a Writ Petition as benefits of house rent allowance, project allowance, leave
     encashment were not given to them on the ground that the Rajasthan
    Service (Concessions on Project) Rules, 1962 were not applicable to them
    as· they were work-charged employees. The petitioners contended that             E
    persons employed as work-charged employees perform the same functions
    and discharge the same duties as workmen on the regular establishment
    and, therefore, differential treatment given to them amounted to hostile
    discrimination; that on the principle of 'equal pay for equal work' workmen
    of the work charged establishment were entitled to same benefits as were
    made available to the workmen on the regular establishment and that the          F
    Rajasthan Service Rules and Rajasthan Service (Concession on Project)
    Rules are violative of Articles 14 and 16 of the Constitution in as much as
    they deny equal treatment to the workmen of the work-charged estab·
    lishment.              '-- ·--.c
             I
          The High Court allowed the Writ Petition holding that the employees G
    employed on work-charged establishments did not belong to the same class
    and were governed by different set of Rules, they could not claim parity
    with the regular establishment employees on the basis of the principle of
    equal pay for equal work and, therefore, clauses. (g), (h) and (i) or Rule 2
\   of the Rajasthan Service Rules were not discriminatory and violative of H
                                         255
    256                  SUPREME COURT REPORTS[1996) SUPP.10 S.C.R.

A   Articles 14 and 16 of the Constitution. However, it was held that project
    allowance payable under the Project Rules being compensatory in nature -
    and not a source of profit to the employees, on the basis of the doctrine of
    'equal pay for equal work' compensatory allowance had to be paid to the
    work-charged employees also at the same rate at which it was being paid
B   to the employees on regular establishment.

        The High Court struck down Rules 2(b) and (d) of the 1962 Project
  Rules and Rules 4(2) and (4) of 1975 Project Rules also as violative of
  Articles 14 and 16 of the Constitution and it was held that the Project
  Rules would, therefore, apply to all the employees working on Mahi Project
C irrespective of whether they were permanent, temporary or work charged
  employees and declared that the petitioner and other work charged
  employees working on the Mahi Sagar Project were entitled to payment of
  project allowances in the same manner in which they were paid to the
  permanent or temporary staff working on the Project but the petitioner
  and other work charged employees shall not be entitled to any arrears and
D that they should be paid the project allowance under the 1975 Rules from
  the date of the order. The State filed this appeal against the judgment of
  the High Court. The petitioner also filed Civil Appeal against the order of
  non payment of arrears.

E         The appellant State alleged that the work-charged employees had
    always been treated differently from employees on regular establishment
    and therefore, separate rules had been framed for regulating their recruit·
    ment and conditions of service; that for the employees engaged in the
    work-charged establishment of Mahi Sagar Project there. were separate
    standing others governing the terms and conditions of their service; that
F   the High Court committed a grave error in striking down Rules 2(b) and
    (d) of the Project Rules 1962 and Rule 4(2) and (4) of project Rules 1975.

       The question raised for consideration was whether by treating the
  work-charged employees on the Mahi Project differently from the
G employees working on regular establishment of P.W.D. and making the
  Rajasthan Service Rules and the Project Rules inapplicable to them, the
  Government could be said to have acted in a discriminatory and arbitrary
  manner.

           Allowing the State Appeal and dismis~ing the appeal of the workmen,
H    this Court
                           STATEv. KUNJIRAMAN                              257

           HELD 1.1. A work-charged establishment broadly means an estab· A
    lishment of which the expenses, including the wages and allowances of the
    staff, are chargeable, to "works". The pay and allowances of employees who
    are borne on a work-charged establishment are generally sho\vn as a
    separate sub-head of the estimated cost of the works. The work-charged
    employees are engaged on a temporary basis and their appointments are B
    made for the execution of a specified work. From the very nature of their
    employment, their services automatically come to an end on the completion
    of the works for the sole purpose of which they are employed .. Thus a
    work-charged establishment is materially and qualitatively different from
    a regular establishment. [262-E-G]
                                                                                  c
           1.2. In the State of Rajasthan the Public Works Department is
    maintaining two separate establishments: (1) Regular and (2) Work·
    charged. The employees working in the regular establishment are governed
    by the Rajasthan Service Rules, 1951 and the work-charged employees are
    governed by the Work-charged Employees Service Rules. The RSR are             D
    made inapplicable, inter alia, to the work-charged emplTiyees. The work
    charged employees fall under two categories; (1) those who are working
    on a 'project and (2) those who are not working on a project. For the
    workmen engaged on the work-charged establishment of Mahi Bajaj Sagar
    Project the Government had framed separate standing orders under the
    Industrial Employment (Standing Or~ers) Act, 1946 and they apply to all       E
    persons engaged on work-charged establishment of the said Project whose
'   terms of service are not regulated. by the RSR, Rajasthan Civil Service
    (Classification, Control and Appeal) Rules and any other Rules framed
    under Article 309 of the Constitution by the Government of Rajasthan. The
    standing orders provide not only for classification, recruitment and ter-     F
    mination of service but also for wages and allowances and other service
    conditions of the persons engaged on the Mahi Project. Whereas the
    employees who are not working on a project get work-charged pay scale
    those who are working on a project get a special pay scale and they are
    also entitled to other benefits and allowances as are applicable to all the
    employees covered under the Industrial Disputes Act, 1947, Factories Act,     G
    1948 and Industrial Employment (Standing Orders) Act, 1946. The
    petitioner and other employees represented by him were undisputably
    governed by the said certified standing orders. They were not treated as
    full-time Government employees and, therefore, were free to utilise their
    free time in the manner they wished. They were also entitled to grant of      H
    258                   SUPREME COURT REPORTS[l996] SUPP.10 S.C.R.

A overtime wages. A sub-division is regarded as a unit for the purpose of
    establishment of the work-charged employees. A separate seniority list of ,
    each category is maintained in each unit for the purpose of promotion as
    well as retrenchment. The service of work-charged employee is ordinarily
    not transferable from one work-charged establishment to another·work-
B   charged establishment. [262-H; 263-A-F]

        1.3. A work-charged establishment thus differs from a regular estab-
  lishment which is permanent in nature. Setting up and continuance of a
  work-charged establishment is dependent upon the Government undertak-
  ing a project or a scheme or a 'work' and availability of funds for executing
C it. So far as employees engaged on work-charged establishments are
  concerned not only their recruitment and service conditions but the nature
  of work and duties to be performed by them are not the same as those of
  the employees of the regular establishment. A regular establishment and
  a work-charged establishment are two separate types of establishments /
D and the persons employed on those establishments thus form two separate
  and distinct classes. For that reason, if a separate set of rules are framed
                   •
  for the persons engaged on the work-charged establishment and the -
  general rules applicable to persons working on the regular establishment
  are not made applicable to them,\ it cannot be said that th4!Y are treated in ·
  an arbitrary and discriminatoryl manner by the Government. It is well
E settled that the Government has the power to frame different rules for
  different classes of employees. [263-G-H; 264-A-B]

          1.4. The Project Rules have been framed by the Government in
    exercise of the power available to it under Rule 42 of the RSR. They are
F   subsidiary Rules made for the. purpose of granting specfal concessions and
    allowances to Government servants working on projects.- When non-ap-
    plication of the main Rules, namely RSR to work-charged employees is not
    found to be violative of Articles 14 and 16 by the High Court it is difficult
    to appreciate how the subsidiary Rules for that reason only can be held to
    be violative orthose Articles. The High Court failed to consider this aspect
G   and erroneously struck down Rules 2(b) and (d) or the 1962 Project Rules
    and Rules 4(2) and (4) of the 1975 Project Rules. [264-C-E]

          1.5. When an employee working in the regular establishment is trans-
    ferred to a project he has to leave his ordinary place of residence and service
H   and go and reside within the project area. That is not the position in the case
                       STATEv. KUNJIRAMAN [NANAVATI,J.].                       259
                                         I'
  ~     of an employee who is engaged on the work-charged establishment for A
        executing that work. Respondent and Qther employees on whose behalf he
                                         1     1
        had filed the petition were all engaged for execution of the Mahi Project and
        thus they became a part of the ll;Or~·charged establishment of Mahi .Project.
        They were not required to shirt f~~m their regular place of service. While
        fixing the pay scales of emplo~es of the work-charged establishment of
                                                                                      B
        Mahi Project the element of 'Project allowance was also included therein
        and for that reason their pay scales were higher than the pay scales of
        general category work-charged employees, some of whom were transferred
        and posted on the Mahi Project. [264·G:H; 265-A·C]

               1.6. What they really want is parity with the employees of the regularc
        establishment. In other works, what they want is that they should be
        treated as regular employees of the Public Works Department of the
        Rajasthan Government and should be given all benefits which are made
        available under the RSR and the Project Rules. Such a claim is not
        justified. The High Court committed an error in declaring Rules 2(b) and
        (d) of the Project Rules 1962 and Rules 4(2) and (4) of the Project Rules D
        1975, as ultra vires Articles 14 and 16 of the Constitution. [265·E·F]

             CIVIL APPELLATE JURISDICTION : Civil Appeal No. 652 of
        1993 Etc.

             From the Judgment and Order dated 29.1.92 of the Rajasthan High         E
        Court in D.B.C.W.P. No. 187 of 1987.

              Aruneshwar Gupta for the Appellant, in C.A. No. 652/93 Respon·
        dent in C.A. No. 653/93.

             M.P. Raju, T.U. Rajan, Liangri Nivmai and L.J. Vadakara for the         F
        Respondent in C.A. No. 652/93, in C.A. No. 653/93 in Appellant.

           ·· The Judgment of the Court was delivered by
---           NANAVATI, J. Both these appeal arise out of the judgment and
        order dated 29.1.92 of the Rajasthan High Court in D.B. Civil Writ Petition G
 '":~
        No. 187 of 1987. Civil Appeal No. 652 of 1993 is filed by the State of
        Rajasthan, Respondent No. 1 in the writ petition and Civil Appeal No. 653
        of 1993 is filed by Kunji Raman who was the writ petitioner. Both these
        appeals are, therefore, heard together and disposed of by this common
        judgment.                                                                   H
    260                  SUPREME COURT REPORTS[1996] SUPP.10 S.C.R.

A       Kunji Raman was employed on March 28, 1974 as a Fitter in the
  Mechanical Division-II of Mahi Project. He was promoted and appointed -
  as Lathe Operator on October 23, 1975. On January 12, 1987 he filed the
  aforesaid writ petition in his behalf and on behalf of 36 other employees,
  as benefits of house rent allowance, project allowance, leave encashment
B are not given to'them on the ground that the Rajasthan Service Rules, 1951
  (for short RSR) and the Rajasthan Service (Concessions on Project) Rules,
  1962 (for short 'Project Rules') are not applicable to them as they are
  work-charged employees. It was the contention of the petitioner that
  persons employed as work-charged employees perform the same functions
  and discharge the same duties l\S workmen on the regular establishment
C and, therefore, differential. treatment given to them amounts to hostile
  discrimination. It was also contended that on the principle of 'equal pay
  for equal work' workmen of the work-charged establishment are entitled
  to same benefits as are made available to the workmen on the regular
  establishment. The validity of·t1fe RSR and Project Rules was also chal-
D lenged on the ground that they are violative of articles 14 and 16 of the
  Constitution inasmuch as they deny equal treatment to the workmen of the
  work-charged establishment.

         The High Court held that the employees .who are on regular estab-
  lishment and the employees employed on work-charged establishments do
E not belong to the same class and are governed by different set of Rules;
  and, therefore, Jhey cannot claim parity with the· regular establishment
  employees on the basis of the principle of 'equal pay for equal work'. It
  rejected the contention that clauses (g), (h) and (i) of Rule 2 of RSR are
  discriminatory and, therefore, violative of Articles 14 and 16 of the Con-
F stitution. However, on the ground that project allowance payable under the
   Project Rules is compensatory in nature and not a source of profit to the
   employees, it held that on the basis of the doctrine of 'equal pay for equal
   work' compensatory allowance has to be paid to the work-charged
   employees also at the same rate at which it is being paid to the employees
                                                                                    .
   on regular establishment. The High Court, for that reason, struck down
G Rules 2(b) and (d) of the 1962 Project Rules and Rules 4(2) and (4) of
   1975 Project Rules also (as 1975 Project Rules had replaced 1962 Project
   Rules) as violative of Articles 14 and 16 of the Constitution. It further held
   that the Project Rules would, therefore, apply to all the employees working
   on Mahi Project irrespective of whether they are permanent, temporary or
H work-charged employees. The High Court allowed the writ petition and
                STATEv. KUNJIRAMAN[NANAVATI,J.]                       261

 declared that the petitioner and other work-charged employees working on A
 the Mahi Sagar Project are entitled to payment of project allowances in
 the same manner in which they are paid to the permanent or temporary
 staff working on the Project. Calling in question, this part of the judgment
 and order, the State has filed, with the leave of this Court, Civil Appeal
 No. 652 of 1993. As the High Court held that the petitioner and other work- B
 charged employees shall not be entitled to any arrears and that they should
 be paid the project allowance under the 1975 Rules from the date of the
 order, the petitioner has filed Civil Appeal No. 653 of 1993.

         The contention of the appellant-State is that the work-charged
  employees have always been treated differently from employees on the C
  regular establishment and, therefore, the State Government has framed
  separate Rules, under Article 309 of the Constitution, for regulating their
  recruitment and conditions of service. They are : the Rajasthan Public
  Works Department (Building & Roads including Gardens, Irrigation,_
  Water works and Ayurvedic Departments) Work-charged Employee Ser- D ·
  vice Rules, 1964 (hereinafter referred to as the Work-charged Employees
  Service Rules). Their service conditions are, therefore, governed by those
  Rules and not by the RSR and the 'Project Rules'. Even in the class ·of
  work-charged employees there are two categories namely; (1) General
  category - work-charged employees and (2) work-charged employees who
  are employed on projects; and, their service conditions also differ. For the E
  employees engaged in the work-charged establishment of Mahi Sagar
  Project there are separate standing orders framed under the Industrial
  Employment (Standing Orders) Act, 1946, governing the terms and condi-
  tions of their service. The High Court having held that the Governor has
  power under the proviso to Article 309 of the Constitution to frame F
  different rules for different categories of government servants in various
  services and, therefore, it was open to the Government to exclude the
  applicability of Rajasthan Civil Service Rules, committed a grave error in
  holding that Rules 2(b) and (d) of the Project Rules, 1962 which have now
  been superseded and Rules 4(2) and (4) of the Project Rules, 1975 are G
  violative of Articles 14 and 16. It was further contended that the High
  Court failed to appreciate that the petitioner and the work-charged
  employees on whose behalf the petition was filed had acquired the status
- of pt:rmanent work-charged employees of the Mahi Project and thus
  belonged to a separate category of work-charged employees and the peti-
  tion was not filed on behalf of other categories of work-charged employees H
    262                  SUPREME COURT REPORTS[l99~] SUPP.10 S.C.R.

A viz. apprentice, casual, temporary and quasi-permanent. The High Court,
  therefore, committed a grave error in striking down Rules 2(b) and (d) of
  the Project Rules, 1962 and Rule 4(2)(4) of the Project Rules, 1975 with
  respect to those other categories of work-charged employees also. On the
  other hand it was contended on behalf of the work-charged employees that
B there being no differep.ce between the nature of work and the duties
  performed by them and the employees on regular establishment, treating
  them in a different manner in the matter of service conditions amounts to
  hostile discrimination and, therefore, those provisions of the RSR and the
  Project Rules which make those Rules inapplicable to work-charged
  eniployees employed on projects are violative of Articles 14 and 16 of the
C Constitution. It was also contended that the High Court having held that .
  the work-charged employees of the Mahi Project are entitled to project
  allowances wrongly deprived them of the said benefit for the period prior
  to the date of the decision.

D          Therefore, the question that arises for consideration is whether by
    treating the work-charged employees of the Mahi Project differently from
    the employees working on the regular establishment of P.W.D. and making
    the RSR and the Project Rules, 1962 and 1975 inapplicable to them, the
    Government can be said to haye acted in a discriminatory and arbitrary
    manner.
E
          A work-charged establishment as pointed out by this Court in Jas-
    want Singh v. Union of India, [1979] 4 SCC 440 broadly means an estab-
  lishment of which the expenses, including the wages and allowances of t!ie
  staff, fare chargeable to "works". The pay and allowances of employees who
p are borne on a work-charged establishment are generally shown as a
  separate sub-head of the estimated cost of the works. The work~charged
  employees are engaged on .a temporary basis and their appointments are
  made for the execution of a specified work. From the very nature of their
  employment, their services automatically come to an end on the completion
  of the works for the sole purpose of which they are employed. Thus a
G work-charged establishment is materially and qualitatively different from a
  regular establishment.

           lil the State of Rajasthan the Public Works Department is maintain-
     ing two separate establishments: (1) Regular and (2) Work-charged. The
H    employees working in the regular establishment are governed by the RSR
                         STA1Ev. KUNJIRAMAN(NANAVATI,J.]                          263

          and the work-charged employees are governed by the Work-charged A
        c- Employees Service Rules. The RSR are made inapplicable, inter alia, to
          the work-charged employees. The work-charged employees fall under two
          categories : (1) those who are working on a project and (2) those who are
          not working on a project. It appears that for the workmen engaged on the
         work-charged establishment of Mahi Bajaj Sagar Project the Government
                                                                                         B
         has framed separate standing orders under the Industrial Employment
          (Standing Orders) Act, 1946 and they apply to all persons engaged on
          work-charged establishment of the said Project whose terms of service are
          not regulated by the RSR, Rajasthan Civil Service (Classification, Control
          and Appeal) Rules and any other Rules framed under Article 309 of the
          Constitution by the Government of Rajasthan. The standing orders provide       c
          not only for classification, recruitment and termination of service but also
         for wages and allowances and other service conditions of the persons
         engaged on the Mahi Project. Whereas the employees who are not working
         on a project get work-charged pay scale those who are working on a project
         get a special pay scale and they are also entitled to other benefits and
                                                                                         D
         allowances as are applicable to all the employees covered under the
         Industrial Disputes Act, 1947, Factories Act, 1948 and Industrial Employ-
         ment (Standing Orders) Act, 1946. The petitioner and other employees
         represented by him are undisputably governed by the ~aid certified stand-
~·       ing orders. They are not treated as full-time Government employees and,
         therefore, are free to utilise their free time in the manner they wish. They    E
         are also entitled to grant of overtime wages. A sub-division is regarded as
         a unit for the purpose of establishment of the work-charged employees. A
         separate seniority list of each category is maintained in each unit for the
         purpose of promotion as well as retrenchment. The service of a work-
         charged employee is ordinarily not transferable from one work-charged           F
         establishment to another work-charged establishment.

                A work-charged establishment thus differs from a regular estab-
_,,.,    lishment which is permanent in nature. Setting up and continuance of a
         work-charged establishment is dependent upon the Government undertak-
         ing a project or a scheme or a 'work' and availability of_fund for executing G
;'-,     it. So far as employees engaged on work-charged establishments are con-
         cerned, not only their recruitment and service conditions but the nature of
         work and duties to be performed by them are not the same as those of the
         employees of the regular establishment. A regular establishment and a
         work-charged establishment are two separate types of establishments and H


                                                                                             '·
    264                   SUPREME COURT REPORTS[l996] SUPP.10 S.C.R.

A the persons employed on those establishments thus form two separate and
    distinct classes. For that reason, if a separate set of rules are framed for
    the persons engaged on the work-charged establishment and the general
    rules applicable to persons working on the regular establishment are not
    made applicable to them, it cannot be said that they are treated in an
B   arbitrary and discriminatory manner by the Government. It is well-settled
    that the Government has the power to frame different rules for different
    classes of employees. We, therefore, reject the contention raised on behalf
    of the appellant in Civil Appeal No. 653 of 1993 that clauses (g), (h) and
    (i) of Rule of RSR are violative of Articles 14 and 16 of the Constitution
    and uphold the view taken by the High Court.
c
           The Project Rules have been framed by the Government in exercise
    of the power available to it under Rule 42 of the RSR. They are subsidiary
    Rules made for the purpose of granting special concessions and allowances
    to Government servants working on projects. When non-application of the
    main rules, namely, RSR to work-charged employees is not found to be
D   violative of Articles 14 and 16 by the High Court it is difficult to appreciate
    how the subsidiary Rules for that reason only can be held to be violative
    of those Articles. The High Court failed to consider this aspect and in our
    opinion, erroneously struck down Rules 2(b) and (d) of the 1962 Project
    Rules and Ru1es 4(2) and (4) of the 1975 Project Rules.
E
         It was also contended on behalf of the State that the High Court
  having held that the workmen working on the regular establishment and
  the employees working on a work-charged establishment belong to two
  separate categories and, therefore, separate classification made by the
  Government in that behalf is reasonable, committed a grave error in
F striking down Rules 2(b) and (d) of the 1962 Project Rules and Rules 4(2)
  and (4) of the 1975 Project Rules by invoking the principle of equal pay
  for equal work. The reason given by the High court for taking that view is
  that the project allowance is compensatory in nature and, therefore, the
  classification made between the work-charged employees and the
                                                                                      ••
G employees of the regular establishment has no rational nexus with the
  object sought to b~ achieved by those Rules. What the High Court failed
  to appreciate is that when an employee working in the regular estab-
  lishment is transferred to a project he was to leave his ordinary place of
  residence and service and go and reside within the project area: That is
  not the position in the case of an employee who is engaged on the
H work-charged establishment for executing that work. Respondent Kunji
               STATEv. KUNJIRAMAN[NANAVATI,J.)                        265

Raman and other employees on whose behalf he had filed the petition were A
all engaged for execution of the Mahi Project and thus they became a part
of thel work-charged establishment of Mahi Project. They were not re-
quired to shift from their regular place of service. The High Court also
failed to consider that for such employees the pay scales under the Pay
Scale Rules are also different, The material produced by the State goes to
show that while ,fixing the pay scales of employees of the work-charged B
establishment of Mahi Project the element of project allowance was also
included therein and for that reason their pay scales were higher than the
pay scales of general category work-charged employees, some of whom
were transferred and posted on the Mahi Project. Except a general denial
in the rejoinder affidavit by Kunji Raman no other material has been C
produced to point out that the said claim of the Government is not correct.
The order dated 30.4.81 annexed with the rejoinder affidavit of Kunji
Raman is with respect of those work-charged employees who were ab-
sorbed on 43 regular posts which were newly created. They thus ceased to
be work-charged employees employed on a project and became general
category work-ch<lfged employees whose pay scales were different and D
were, therefore, paid the project allowance. Thus the claim made by
Respondent Kunji Raman and other similarly situated employees for grant-
ing them project allowance was really misconceived. From what- is now
stated by them in the counter affidavit, it appears that what they really want
is parity in all respects with the employees of the regular establishment. In
other words, what they want is that they should be treated as regular E
employees of the Public 1"orks Department of the Rajasthan Government_.
and should be given all benefits which are made available under the RSR
and the Project Rules. Such a claim is not justified and, therefore, the
contention raised in that behalf cannot be accepted. We hold that the High
Court committed an error in declaring Rules 2(b) and (d) of the Project p
Rules, 1962 and Rules 4(2) and ( 4) of the Project Rules, 1975 as ultra vires
Articles 14 and 16 of the Constitution.

      We, therefore, allow Civil Appeal No. 652of1993 and dismissed Civil
Appeal No. 653 of 1993. In view of the facts and circumstances of the case
there shall be no order as to costs.                                         G
R.A.                                            State appeal allowed and
                                              Workmen appeal dismissed.