THE GOVERNMENT OF TAMIL NADU AND ANR. ETC. ETC.versusTAMIL NADU MAKKAL NALA PANIYALARGAL AND ORS. ETC. ETC

390                      [2023]REPORTS
               SUPREME COURT    3 S.C.R. 390              [2023] 3 S.C.R.


A     THE GOVERNMENT OF TAMIL NADU AND ANR. ETC. ETC.
                                       v.
       TAMIL NADU MAKKAL NALA PANIYALARGAL AND ORS.
                         ETC. ETC.
B                  (Civil Appeal No(s). 10563-10569 of 2017)
                                APRIL 11, 2023
             [AJAY RASTOGI AND BELA M. TRIVEDI, JJ.]
            Service Law – Direction for creations of posts –
      Impermissibility of – Held: Courts cannot direct for creations of
C
      posts – In the present case, the respondents were not in employment
      of the Government or holding a civil post or appointed against the
      cadre post in any of the Government establishment where the service
      conditions are governed/regulated by the statutory rules framed
      under the proviso to Article 309 – In absence of sanctioned post,
D     the State cannot be compelled to create the post and absorb the
      persons who are continuing in service of the State – Therefore, the
      impugned direction of the High Court to reinstate after creating the
      posts and absorb the respondents based on their qualification is
      not sustainable in law – Impugned judgment set aside – Mahatma
      Gandhi National Rural Employment Guarantee Act, 2005 –
E
      Constitution of India – Article 309.
            Allowing the appeals, the Court
            HELD: 1.1 Single Judge and Division Bench in their
      impugned judgments have concurred with the finding that such
F     of the employees who were discontinued by passing of the order
      dated 8th November, 2011 are not only entitled to reinstatement
      but deserve to be regularised in service after creation of post.
      What is being observed by the Division Bench of the High Court
      is not legally sustainable in law. The respondents were not in
      employment of the Government or holding a civil post and also
G     not appointed against the cadre post in any of the Government
      establishment where the service conditions are governed/
      regulated by the statutory rules framed under the proviso to
      Article 309 of the Constitution. In fact, the respondents were
      engaged in a scheme and were paid honorarium and this Court
H     does not find justification that as long as the scheme continues in
                                      390
   THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                           391
           MAKKAL NALA PANIYALARGAL

the State of Tamil Nadu under the mandate of Mahatma Gandhi             A
National Rural Employment Guarantee Act, 2005, at least there
appears no reason to discontinue such persons who are working
under the respective schemes undertaken by the Government
in fulfilment of the object of the Act, 2005 unless the later found
to be unsuitable for retention in service or has attained the age       B
of superannuation. [Paras 46, 49 and 50][406-F; 407-E-G]
       1.2 Such employees are not entitled for reinstatement and
for regularization of service for the reason that if the order passed
on 8th November, 2011 is not sustainable, the respondents and
other similarly situated persons engaged could be restored on           C
the same terms as they were placed before passing of the order
dated 8th November, 2011. In other words, as their placement
was extended for two years by order dated 21 st May, 2010 w.e.f.
1st June, 2010 to 31st May, 2012 at the best, such persons could
have been allowed to continue upto 31 st May, 2012. In the
absence of any further extension been granted, at least there           D
was no right vested in favour of either of the person engaged to
seek further continuance under the scheme thereafter. In absence
of sanctioned post, the State cannot be compelled to create the
post and absorb the persons who are continuing in service of the
State. The direction of the High Court to reinstate after creating      E
the posts and absorb the respondents based on their qualification
is not sustainable in law and deserves outright rejection. [Paras
51, 54 and 57][408-A-C; 409-D; 410-D]
      1.3 The justification has been tendered that such persons
who have not been re-engaged by the State Government under              F
its present policy dated 7th June, 2022 are entitled for their
honorarium for the period from 1st December, 2011 to 31st May,
2012, it is made clear that such of the employees who have not
joined pursuant to the scheme introduced by Government dated
7th June, 2022, they are always at liberty to accept their
                                                                        G
honorarium for the period of 6 months but as the Government
has already offered them honorarium earlier, they are not entitled
to any interest on the said principal amount. This Court is
informed that the total amount as per the honorarium of MNP
(Makkal Nala Paniyalargal/Village Level Workers) fixed at that
                                                                        H
392            SUPREME COURT REPORTS                      [2023] 3 S.C.R.


A     time comes to Rs.25,851/-(1st December, 2011 to 31st May,
      2012). If an application is filed, the State Government may at least
      remit the money into the bank account of the individual. It is
      made clear that such persons who have joined pursuant to the
      scheme introduced by the Government dated 7th June, 2022 in
      fulfilment of the object of the Act, 2005 shall remain co-terminous
B
      with the scheme and be allowed to continue as long as the scheme
      remain in force. At the same time, such persons who have not
      joined pursuant to the scheme dated 7th June, 2022, they are at
      liberty to accept their payments for the intervening period of 6
      months from 1st December, 2011 to 31st May, 2012 of the principal
C     amount of Rs.25,851/- to the MNP. On such application being
      filed, the appellants shall make over the money to such MNP
      through RTGS or any other mode after due verification within
      three months. The judgment impugned is set aside. [Paras 59,
      60 and 62][411-C-G; 412-A]
D           Malathi Das (Retired) now P.B. Mahishy and Others
            Vs. Suresh and Others (2014) 13 SCC 249 : [2014] 3
            SCR 637 – distinguished.
            Nihal Singh and Others Vs. State of Punjab and Others
            (2013) 14 SCC 65 : [2013] 11 SCR 1 – held
E           inapplicable.
            Divisional Manager Aravali Golf Club and Another Vs.
            Chander Hass and Another (2008) 1 SCC 683 : [2007]
            12 SCR 1084; Maharashtra State Road Transport
            Corporation and Another Vs. Casteribe Rajya
F           Parivahan Karamchari Sanghatana (2009) 8 SCC 556
            : [2009] 13 SCR 937 – relied on.
            State of Gujarat and Others Vs. R.J. Pathan and Others
            (2022) 5 SCC 394; Secretary, State of Karnataka and
            Others Vs. Umadevi(3) and Others (2006) 4 SCC 1 :
G           [2006] 3 SCR 953 – referred to.
                            Case Law Reference
      [2006] 3 SCR 953                referred to             Para 24
      [2013] 11 SCR 1                 held inapplicable       Para 24
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                               393
            MAKKAL NALA PANIYALARGAL

[2014] 3 SCR 637                  distinguished              Para 24         A
[2007] 12 SCR 1084                relied on                  Para 47
[2009] 13 SCR 937                 relied on                  Para 48
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 10563-
10569 of 2017.                                                               B
      From the Judgment and Order dated 19.08.2014 of the High Court
of Madras in WP Nos. 18163 of 2013, 18048 of 2014, WA No. 696 of
2012, WP No.11937 of 2012, WA No.697 of 2012 and WP Nos. 11936
and 22969 of 2012.
      With                                                                   C
      Civil Appeal No.10570 of 2017.
       Jaideep Gupta, V. Krishnamoorthy, Sr. Advs., D. Kumanan, Shaikh
F. Kalia, Ms. Divya Singh, Vinodh Kanna B., Advs. for the Appellants.
      P Wilson, Sr. Adv., Sureshan P., Deepak Joshi, Bhupender Singh,        D
Joseph Sebastian, R. Nedumaran, Apoorv Malhotra, Ms. Sapna Pillai,
Ms. Aishwarya Mishra, Ms. Arunima Dwivedi, P. C. Chandrashekhar,
Ms. Pinky Pawar, Aakas Pathak, Naresh Kumar, S. Nandakumar, Ms.
Deepika Nandakumar, Anand Murthi Rao, Rajeev Gupta, Mohd.
Nizamuddin Pasha, Shivendra Pandey, Lzafeer Ahmad, A. Raja Rajan,
Subham Kothari, Prashant Padmanabhan, Padam Priya, Akhileshwar               E
Jha, Ms. Kajal Kumari, Raja Sanoor P., K. S. Selvan, K. Paari Vendhan,
Ms. Haripriya Padmanabhan, Raghunatha Sethupathy B, Ms. Priya R,
Ms. Ishita Chowdhury, Ms. Pariksha, S. Sabari Bala Pandian, Avinash
Kumar, Advs. for the Respondents.
      The Judgment of the Court was delivered by                             F

      RASTOGI, J.
       1. The instant appeals have been preferred at the instance of
State of Tamil Nadu assailing the impugned judgment and order passed
by the Division Bench of the High Court dated 19th August, 2014              G
affirmingorder of the learned Single Judge dated 23rd January, 2012 in its
jurisdiction under Article 226 of the Constitution directing the State
Government to create the posts under the designation “Village Level
Workers” which is called as “Makkal Nala Paniyalargal” (hereinafter
being referred to as “MNP”) or byany other name but shall
accommodate the persons who were on the rolls of MNP on the date of          H
394             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     issuance of G.O.M No. 86 dated 8th November, 2011 against any vacant
      post in the State Government schools, village Panchayats, town
      Panchayats, Municipalities, Corporations, Collector Office, village offices
      or any other Government offices and undertakings of the Government
      of Tamil Nadu throughout the State of Tamil Nadu, according to the
      qualification possessed by each candidate, without reference to age in
B
      their native, taluk or revenue District. It was further directed that if any
      one of the MNP who could not be accommodated oris ineligible, the
      State Government shall pay last drawn salary for the period from
      1stDecember, 2011 to 31st May, 2012.
             2. The brief facts of the case culled out from the record and
C     relevant for the present purpose are that the Government of Tamil Nadu
      introduced a scheme dated 2nd September, 1989 through theRural
      Development Department in the Budget speech of 1989-1990 providing
      employment to the educated youth in rural areas who have completed
      10thstandard for various items of work in the village panchayat that can
D     be entrusted to the unemployed youth and took a decision to implement
      the scheme at the village level andto engage at least two village level
      workers - one male and one female - who would be engaged in each of
      the village panchayats in the State. Thus, a total of 25,234 workers were
      to be engaged throughout the State on a monthly honorarium of Rs.200/
      - and it entrusted separate responsibilities to male and female workers.
E     The Government also adopted a mechanism to be implemented at the
      local area where the appointments are to be made for male/female
      workers at village panchayat level for keeping the transparency while
      making appointment of unemployed educated youth.
             3. It manifests from the record that persons were appointed under
F     the scheme introduced by the State Government under its policy dated
      2 nd September, 1989. Later, the scheme was disbanded by the
      Government by order dated 13th July, 1991 on the premise that the
      appointments made of MNP are in no way helpful for the execution of
      programmes at village level except causing additional expenditure of
G     Rs.6 crores per annum to the Government and left the execution of
      various developmental activities concerned through extension officers
      at block level.
           4. In consequence thereof, the persons who were engaged as
      MNP pursuant to policy decisions of the Government dated 2 nd
H     September, 1989, their services stood terminated/discontinued.
   THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                               395
   MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

       5. Again, by GO of the Rural Development and Panchayat Raj           A
Department (hereinafter referred to as “Department”) dated 24 th
February, 1997, the scheme was restored by the Government in the
Budget for the year 1996-1997 for providing employment to 25,000 youths
on the terms and conditions earlier introduced pursuant to Circular dated
2nd September, 1989, on an honorarium of Rs.500/- per month for two
                                                                            B
MNPs in each village panchayat(one male and one female) for assisting
in the maintenance of village assets and libraries & implementation of
adult literacy programme in villages.
       6. The policy decision of the Government which was earlier
introduced by Order dated 2nd September, 1989 for all practical purposes
and later restored by the Government vide order dated 24th February,        C
1997 was again disbanded with immediate effect by order dated 1st June,
2001. The Government again revived the services of MNP and increased
thehonorarium from Rs.500/- per month to Rs.750/- per month with an
addition of Rs.50/- per month as travelling allowance by order dated 12th
June, 2006 with a clear understanding that persons who are re-engaged       D
as MNP will not be entitled for any payment from 1st June, 2001 to 31st
May, 2006 as they were not in service.
       7. At this point of time, in furtherance of order dated 12th June,
2006, the Department vide its order dated 5th December, 2006 came out
with a scheme to appoint those who were appointed as Panchayat              E
Assistants and Part Time Clerks working in village Panchayat and that
they will be switched over to scale of pay with effect from 1stSeptember,
2006. The Department issued a G.O. dated 27th November, 2008 stating
that the Government will consider filling up 50% of vacant posts arising
in the cadre of Record Clerk/Office Assistant/Night Watchman and
equivalent post from MNP. The District Collectors were directed to          F
prepare the estimated available vacancies so that MNPs could be
accommodated to the extent possible.
      8. It has come on record that in the interregnum period,
approximately 600 MNPs were absorbed in the State of Tamil Nadu in
various village panchayats as Office Assistants/Night watchman.Pending      G
absorption,by an order dated 21st May, 2010, the Departmentdirected
the MNPsto continue for two years from 1st June, 2010 till 31st May,
2012.
       9. Before their term could expire, the Government again issued
order dated 8th November, 2011 to disband MNPs with immediate effect        H
396                SUPREME COURT REPORTS                         [2023] 3 S.C.R.


A     on the premise that that there is surplus staff in panchayat units at village
      panchayat level to look after the works presently being looked after by
      MNPs and, therefore, a decision was taken to disband the post of MNP
      which will save approximately Rs.73 crores.
             10. The order passed by the Government dated 8 th November,
B     2011 pursuant to which the scheme was disbanded and in consequence
      thereof, MNPs who were working stood disengaged/terminated, came
      to be challenged by the MNPs through their associations by filing of
      a writ petition before the High Court under Article 226 of the
      Constitution.
C            11. The learned Single Judge of the High Court allowed the writ
      petition by a common order dated 23rd January, 2012 and while quashing
      the order dated 8th November, 2011 directed the State of Tamil Nadu to
      reinstate the members of the associations who have served as MNP.
      The order of the learned Single Judge came to be challenged by the
      appellants in writ appeal which came to be dismissed under the order
D     impugned by judgment dated 19th August, 2014 with the following
      directions:-
            (i)      The State Government is directed to consider creation of
                     posts either in the name of MNP or in any other name to
                     propagate the evils of consumption of liquor as contemplated
E                    under Article 47 of the Constitution of India read with Rule
                     10(5) of the Tamil Nadu Liquor Retail Vending (in Shops
                     and Bars) Rules, 2003 for accommodating MNP.
            (ii)     If the same is not possible on any account, the State
                     Government shall accommodate the persons who were on
F                    the rolls of MNP on the date of issuance of G.O.Ms No. 86
                     dated 8.11.2011 in any one of the vacant post in Government
                     schools, village Panchayats, town Panchayats, Municipalities,
                     Corporations, Village Offices, Taluk Offices and Collector
                     Offices and in various other Government Offices and
G                    Undertakings of the Government of Tamil Nadu throughout
                     the State of Tamil Nadu, or in any post as may be created
                     for implementing the new schemes introduced in 2014-2015
                     Budget and accommodate the MNP, according to the
                     qualification possessed by each candidate, without reference
                     to age in their native Taluk or Revenue District.
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                   397
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

      (iii)   The said exercise shall be commenced immediately and               A
              completed on or before 31.10.2014.
      (iv)    If any one of the MNP who could not be accommodated
              within the said period as stated supra, though they are eligible
              to be accommodated, the State Government shall pay last
              drawn salary, which they have lastly received, from                B
              1.11.2014 till they are accommodated in any of the vacant
              or newly created post.
       12. At the same time, the finding recorded by the learned Single
Judge that the action of the State Government was per se malafide in
passing the order dated 8th November, 2011 as directed in Para 33 was            C
held to be unjustified and that became the subject matter of challenge in
appeals before this Court.
      13. On the first date of hearing when the matter was listed, while
issuing notice on 23rd September, 2014, the operation of the judgment
and order dated 19th August, 2014 came to be stayed by this Court.               D
      14. It is brought to the notice of this Court that the State
Government has introduced the scheme dated 7th June, 2022 to provide
employment to the educated unemployed youth under the Mahatma
Gandhi National Rural Employment Guarantee Scheme to engage one
person for one panchayat to fill up on certain conditions or such of the         E
unemployed youth on priority who had discontinued as MNP pursuant to
order passed by the Government dated 8th November, 2011 on monthly
wages of Rs.7500/- per month.
       15. It is informed to this Court that majority of the persons who
were discontinued pursuant to the order dated 8th November, 2011 and             F
who otherwise fulfil the conditions of eligibility have joined under the
scheme introduced by the Government dated 7th June, 2022. Out of the
total number of 13,500 MNPs, majority of them have joined and 489
MNPs have not opted the new policy despite opportunity being afforded
by this Court.
                                                                                 G
       16. Learned counsel for the appellants submits that creation and
abolition of posts rests with the Government and is a matter of Government
policy, which can always be exercised in the interest and necessity of
internal administration and the Court would be the least competent in the
face of scanty material to decide whether the Government acted
bonafidely in creating a post or refusing to create a post or its decision       H
398             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     suffers from malice(legal or factual) and as long as the decision to abolish
      the post is taken in good faith, interference by the Court was not
      warranted.
            17. The abolition of post is not a personal penalty against the
      individual who has served and is an executive decision and the Doctrine
B     of Estoppel will not be applicable against the State in its governmental,
      public or sovereign function and the only exception is that where it is
      necessary to prevent fraud or manifest injustice.
            18. Learned counsel further submits that these are not the
      appointments made under the establishment of the State Government
C     against the cadre post whose service conditions are governed by the
      service rules framed under proviso to Article 309 of the Constitution.The
      present appointments are made only for the purpose of providing
      employment to educated youth in rural areas to work as MNP in
      implementation of various programmes at the village level on an
      honorarium which has been revised from time to time.
D
             19. The appointments are although made through a process held
      in the local area through the Committee constituted so that the large
      number of candidates who are inclined to seek an appointment, there
      must be some mechanism in place by which candidates could be
      shortlisted to offer appointment. Such appointments made have no co-
E     relation with the appointments made by the State Government under its
      regular establishments in terms of the recruitment rules which are
      prescribed for various State/subordinate services. Thus, no right could
      have been conferred/vested in favour of the individual and that apart,
      the Government has reviewed the whole scheme by introducing
F     employment scheme for rural educated mass, to meet the appointments
      earlier made and since they are discontinued by order dated 8 th
      November, 2011, the present Government voluntarily came out with the
      scheme dated 7th June, 2022 to consider such of the unemployed youth
      who had discontinued to work in the village panchayat as MNP, for
      almost a decade by that time, be given priority and may be engaged
G     under the Central Government scheme, which was framed under the
      Mahatma Gandhi National Rural Employment Guarantee Act,
      2005(hereinafter being referred to as the “Act 2005”) on an honorarium
      of Rs. 7500/- per month and the State also voluntarily came forward
      that as their appointment was earlier discontinued, thus for a period of 6
H     months, i.e. 1st December, 2011 to 31st May, 2012, each of the employee
      THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                 399
      MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

who discontinued and is not interested in seeking re-engagement under            A
the present scheme can always accept his 6 months’ wages for the
respective period.
       20. Learned counsel submits that majority of them have received
their wages by this time but theminiscule of persons who are contesting
today, either have not encashed or have repaid the money back to the             B
Government and submits that those who are left out and have not joined
so far under the present scheme introduced by the Government dated
7th June, 2022, although as per timelines introduced, no fresh engagement
can be made but earlier this Court permitted the persons who were
disengaged to join and become member of the scheme, still the                    C
Government has kept it open and the persons who would like to join,
they are always at liberty to re-join in terms of the scheme introduced
dated 7th June, 2022 and those who are not inclined, can always accept
their 6 months’ wages for the period from 1st December, 2011 to 31st
May, 2012 at any point of time from the Office of the District Collector
if they have not already received so far.                                        D

       21. In support of the submissions, learned counsel has placed
reliance on the recent judgment of this Court in State of Gujarat and
Others Vs. R.J. Pathan and Others1 wherein taking note of the earlier
judgment, this Court has expressed that appointments which are made
for a fixed term and on a fixed salary in a temporary unit which was             E
created for a particular project, they are not entitled to seek regularization
and if such a direction is issued by the High Court for absorption/
regularization of the employees who were appointed in a temporary unit
which was created for a particular project, are held not in conformity
with law and such orders passed by the High Court for regularization, in         F
the facts and circumstances, have not been countenanced by this Court.
       22. Per contra, learned counsel for the respondents, while
supporting the finding returned by the High Court under the impugned
judgment submits that their fate of appointment has always been
dependent upon elected Government in power. One Government came                  G
with a scheme to provide employment the successive Government has
disbanded the policy introduced by its predecessors which appears to be
only for political reasons.

1
    2022(5) SCC 394                                                              H
400             SUPREME COURT REPORTS                         [2023] 3 S.C.R.


A            23. The consistent policy which has come on record is in itself an
      indicator to show that as and when decision was taken to abandon or
      abolish the scheme, it was only for political reasons and not based on
      any substantial or valid reason on record. In the given facts and
      circumstances, the decision of the High Court in setting aside the order
      dated 8th November, 2011 was valid and justified and such impugned
B
      action of Government was indeed in violation of Articles 14, 16 and 21
      of the Constitution of India and rightly interfered by the High Court
      under the impugned judgment.
             24. Learned counsel further submits that there are consistent
      judgments of this Court where the employees have been allowed to
C     continue for sufficient long time without the intervention of the Court.
      This Court always comes forward to regularize such employees who
      hadworked uninterruptedly for sufficient long time and that can be traced
      out from the judgment of this Court in the case of Secretary, State of
      Karnataka and Others Vs. Umadevi(3) and Others2 which has been
D     later followed by this Court in Nihal Singh and Others Vs. State of
      Punjaband Others3 and further reiterated by this Court in Malathi Das
      (Retired) now P.B. Mahishy and Others Vs. Suresh and Others4.
      Taking assistance from the judgments of this Court, learned counsel
      submits that the High Court has rightly, in the given facts and
      circumstances, set aside the order dated 8th November, 2011 and in
E     consequence thereof, such of the employees who discontinued because
      of the policy being disbanded/cancelled by the Government by order
      dated 8th November, 2011 in sequel deserve to be regularized either on
      the post of MNP or any other post subject to availability. The High Court
      was conscious of this fact that there are numerous number of posts
F     where the respondent employees are eligible and they can easily be
      absorbed and thus, to protect their services which they have rendered
      for sufficient long time, they have rightly been considered for
      regularization. The finding which was recorded in the first place by the
      learned Single Judge and confirmed on legal principles by the Division
      Bench of the High Court, at least at this stage, needs no interference.
G
            25. Learned counsel further submits that during the interregnum
      period between June, 2009 and November, 2011 until the order impugned

      2
        2006(4) SCC 1
      3
        2013(14) SCC 65
H     4
        2014(13) SCC 249
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                  401
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

came to be passed, the Government earlier came up with a scheme that            A
such of the employees who are serving as MNPs may be absorbed into
a regular post of Record Clerk/Office Assistant/ Night watchman or
any other equal cadre post against 50% of regular vacancies and by an
order dated 1st June, 2009 approximately 600 MNPs were absorbed on
various posts and since this has been discontinued/disbanded by
                                                                                B
successive Government by order dated 8 th November, 2011, the
respondents who were in queue and waiting for their absorption were
deprived of their legitimate right of fair consideration and no reason was
assigned by the Government while passing the order dated 8th November,
2011 and merely because there was a change of guards, that in itself
would not be a ground to abandon the scheme which was in vogue for a            C
long time.
        26. The Division Bench of the High Court took a conscious
decision to protect the rights, interests and service conditions of such of
the employees who have served for sufficient long time but discontinued
because of the policy of the rival political groups. But the fact is that the   D
employees became its victim and that appears to be the reason for which
the impugned order dated 8th November, 2011 came to be passed and
after they have been contesting their rights for almost more than a decade,
at least, this Court in the interest of justice, may not interfere, in the
peculiar facts and circumstances of the case.
                                                                                E
       27. Learned counsel, in alternative, submits that if this Court is
not inclined to consider their submission, at least the employees who
have not been able to take employment so far, may be permitted to
accept their 6 months’ honorarium for the period between 1st December,
2011 and 31st May, 2012 which comes to principal amount of Rs.25,851/
- per MNP, at least, with a reasonable interest, as may be considered to        F
be appropriate, in the facts and circumstances of the case.
      28. We have heard learned counsel for the parties and perused
the material available on record.
       29. If we look into the scheme originally introduced by the              G
Government by Order dated 2nd September, 1989, the object of the
scheme was to provide employment to the educated youth in rural areas
who have completed 10th standard in implementing several programmes
of the Government at the village level which require continuous effort
for successful completion. After Government has identified such
programmes, they can be entrusted to a village work force of unemployed         H
402             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     educated youth for better implementation. The Government took a decision
      that there should be two village level workers-one male and one female-
      who will be engaged in each of the village panchayat. They will be
      called Makkal Nala Paniyalargal (MNP) and be engaged on an
      honorarium of Rs.200/- per month in the first instance.
B            30. As far as how the appointment has to be made, a mechanism
      was put in place that such employees who are in the age bracket of 18
      to 30 years with educational qualification of 10th standard (and those
      who are working in hill/tribal areas, their educational qualification can be
      relaxed to 8th standard),their recruitment shall take place through an
      advertisement in the local area and be considered by a Committee for
C     shortlisting the candidates to be considered for appointment. The
      mechanism which was put in place in the first instance, by order dated
      2nd September, 1989 has looked into various rough weather. It reveals
      from the record that as and when there was change of political scenario,
      the successive political party always disbanded/cancelled the policy
D     decision of its earlier Government in power which had introduced a scheme
      for offering employment to the educated unemployed youth.
             31. This can very well be noticed from the records that the
      Schemewhich was introduced by the Government for providing
      employment to educated unemployed youth in rural areas dated 2nd
E     September, 1989 came to be disbanded by the successive Government
      by order dated 13th July, 1991 in consequence discontinued the service
      rendered by such unemployed youth. Immediately thereafter, the
      successive elected Government restored its policy by order dated 24th
      February, 1997 and provided employment to the educated youth for rural
      development programmes in various schemes at the village panchayat,
F     be it for assisting in the maintenance of village assets and libraries,
      implementation of adult literacy programme in villages, for their social
      welfare and also to work for anti-liquor campaign. Such of the youth
      which put in place to get themselves involved in the scheme introduced
      in the village panchayat came to be disbanded by order dated 1 st June,
G     2001. Later, it was again introduced by order dated 12th June, 2006 and
      their honorarium stood increased at later stages and their services stood
      extended by order 21st May, 2010 for the period from 1st June, 2010 to
      31st May, 2012. But it appears that there was a change of guard in the
      interregnum period and immediately thereafter, the policy was disbanded
      by order dated 8th November, 2011 which was the subject matter of
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                   403
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

challenge before the High Court under Article 226 of the Constitution on         A
behalf of the respondents.
       32. It has to be noticed that for rural development, major focus of
planning had been productive absorption of underemployed and surplus
labour force of the rural sector. In order to provide direct supplementary
wage-employment to the rural poor, the Central Government came with              B
a legislation, namely, Act 2005, with salient features as follows:-
      (i)     The objective of the legislation is to enhance the livelihood
              security of the poor households in rural areas of the country
              by providing at least one hundred days of guaranteed wage
              employment to every poor household whose adult members             C
              volunteer to do unskilled manual work.
      (ii)    The State Government shall, in such rural areas in the State
              and for such period as may be notified by the Central
              Government, provide to every poor household guaranteed
              wage employment in unskilled manual work at least for a            D
              period of one hundred days in a financial year in accordance
              with the provisions made in the legislation.
      (iii)   Every State Government shall, within six months from the
              date of commencement of this legislation, prepare a scheme
              to give effect to the guarantee proposed under the                 E
              legislation.
      (iv)    The one hundred days of employment under the legislation
              will be provided at the wage rate to be specified by the
              Central Government for the purpose of this legislation. Until
              such time a wage rate is specified by the Central                  F
              Government for an area, the minimum wage rate fixed by
              the State Government under the Minimum Wages Act, 1948
              for agricultural labourers shall be considered as the wage
              rate applicable to that area.
      (v)     If an eligible applicant is not provided work as per the
                                                                                 G
              provisions of this legislation within the prescribed time limit,
              it will be obligatory on the part of the State Government to
              pay unemployment allowance at the prescribed rate.
      (vi)    A Central Employment Guarantee Council at the Central
              level and State Employment Guarantee Councils at the State
                                                                                 H
404               SUPREME COURT REPORTS                        [2023] 3 S.C.R.


A                   level in all States where the legislation is made applicable
                    will be constituted for review, monitoring and effective
                    implementation of the legislation in their respective areas.
            (vii)   The Standing Committee of the District Panchayat, District
                    Programme Coordinator, Programme Officers and Gram
B                   Panchayats have been assigned specific responsibilities in
                    implementation of various provisions of the legislation at
                    the Gram Panchayat, Block and District levels.
            (viii) The Central Government shall establish a fund to be called
                   ‘National Employment Guarantee Fund’ for the purposes
C                  of this legislation. Similarly, the State Governments may
                   constitute State Employment Guarantee Funds.
            (ix)    Provisions for transparency and accountability, audit,
                    establishment of grievance and redressal mechanisms and
                    penalty of noncompliance are also envisaged.
D           (x)     Provisions for Minimum features of Rural Employment
                    Guarantee Scheme and conditions for guaranteed Rural
                    Employment under a scheme and minimum entitlements of
                    labourers have been laid.
              33. Finally, the Act was introduced to provide for the enhancement
E     of the livelihood and security of the poor households in rural areas of the
      country by providing at least one hundred days of guaranteed wage
      employment in thefinancial year to every poor household whose adult
      members volunteer to do unskilled manual work and for matters connected
      therewith or incidental thereto under the Act 2005. The State of Tamil
F     Nadu is also included in the Schedule appended to the Act, 2005.
             34. Such applicant who is the head of the household or its other
      adult members who have applied for employment under the scheme be
      termed as an applicant to join in the projects for the purpose of providing
      employment to the applicants for the work taken up under a project as
      defined under Section 2(n) of the Act, 2005. The expression ‘scheme’
G
      has been defined under Section 2(p) which means a scheme notified by
      the State Government under sub-section (1) of Section 4.
            35. Chapter II provides guarantee of employment in rural areas.
      Section 3 refers to guarantee of rural employment to households, the
      State Government has to provide to every household whose adult
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                               405
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

members volunteer to do unskilled manual work not less than one hundred      A
days of such work in a financial year. It further provides that every
person who had done the work given to him under the Scheme shall be
entitled to receive wages at the wage rate for each day of work on
weekly basis or in any case not later than a fortnight after the date on
which such work is done.
                                                                             B
      36. Chapter III takes note of employment guarantee schemes
and unemployment allowance.
       37. Section 4 provides that as for the purposes of giving effect to
the provisions of Section 3, every State has to issue a notification to
introduce a scheme for providing not less than one hundred days of           C
guaranteed employment in a financial year to every household in the
rural areas covered under the Scheme and whose adult members, by
application, volunteer to do unskilled manual work.
       38. What will be the conditions for providing employment are
referred to under Section 5 of the Act, 2005. The wage rate is to be         D
fixed by the Central Government from time to time in terms of Section
6. If an applicant for employment under the Scheme is not provided
such employment within fifteen days of receipt of the application seeking
employment, he shall be entitled to a daily unemployment allowance in
accordance with Section 7.
                                                                             E
       39. Chapter IV notifies implementing and monitoring authorities
at the central level by Central Employment Guarantee Council and at
the State level, by State Employment Guarantee Council as referred to
under Sections 10 and 12 of the Act, 2005.
       40. After the Act, 2005 came into force, such States which are
                                                                             F
notified in the Schedule as referred to under Section 1(3) of the Act,
2005 which includes the State of Tamil Nadu, the same was offered to
the educated unemployed youth primarily under the Act, 2005.
       41. It has not been disputed that the scheme undertaken by the
State of Tamil Nadu under the Act, 2005 isstill in force.
                                                                             G
       42. The practice adopted by the Government in the past of which
a detailed reference has been made from 1989 onwards and to be more
specific, after the introduction of Scheme for providing employment to
the educated unemployed youth to work in the village panchayat by
order dated 2nd September, 1989, it has undergone a change at various
stages and forms.                                                            H
406               SUPREME COURT REPORTS                        [2023] 3 S.C.R.


A            43. We cannot afford to lose democracy in our country by permitting
      the political parties empowered to overrule the wisdom of their political
      opponents with the use of State machinery.
             44. So far as the object behind the scheme is concerned, it appears
      to be very laudable and at least in the interest of poor unemployed
B     educated youth by providing them to serve on the wages certified by the
      Government from time to time by providing employment under the Scheme
      introduced by the State Government, at least for not less than one hundred
      days guaranteed in a financial year who volunteered to do unskilled
      manual work. At the same time, while the policy decision of the
      Government is always open to judicial reviewon the anvil of Article 14
C
      of the Constitution and is ordinarily not to be interfered unless that is
      attached with legal or factual malice of the Government,however, in the
      instant case, the Division Bench of the High Court has set aside the
      finding so far as the malice which was imputed by the learned Single
      Judge in passing order dated 8th November, 2011 is concerned. After
D     going through the records, weare of the view that the order dated 8th
      November, 2011 might have been passed as a policy decision of the
      Government but the seriatim of facts which have come on recordat
      least cannot be countenanced by this Court.
             45. The question which emerges for our consideration is whether
E     the order dated 8th November, 2011 is untenable in the eyes of law,such
      employees who were discontinued are eligible for reinstatement and
      regularization of service?
             46. Learned Single Judge and Division Bench in their impugned
      judgments have concurred with the finding that such of the employees
F     who were discontinued by passing of the order dated 8th November,
      2011 are not only entitled to reinstatement but deserve to be regularised
      in service after creation of post. In our considered view, what is being
      observed by the Division Bench of the High Court is not legally sustainable
      in law.
G           47. There cannot be a quarrel with the proposition that the Courts
      cannot direct for creations of posts. In the case of Divisional Manager
      Aravali Golf Club and Another Vs. Chander Hass and Another5, it
      has been held as under:-

      5
H         2008(1) SCC 683
      THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                 407
      MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

         “15. The court cannot direct the creation of posts. Creation and        A
         sanction of posts is a prerogative of the executive or legislative
         authorities and the court cannot arrogate to itself this purely
         executive or legislative function, and direct creation of posts in
         any organisation. This Court has time and again pointed out that
         the creation of a post is an executive or legislative function and it
                                                                                 B
         involves economic factors. Hence the courts cannot take upon
         themselves the power of creation of a post. Therefore, the
         directions given by the High Court and the first appellate court to
         create the posts of tractor driver and regularise the services of
         the respondents against the said posts cannot be sustained and
         are hereby set aside.”                                                  C

     48. Later, in Maharashtra State Road Transport Corporation
and Another Vs. Casteribe Rajya Parivahan Karamchari
Sanghatana6, this Court held as under:-
         “41. Thus, there is no doubt that creation of posts is not within       D
         the domain of judicial functions which obviously pertains to the
         executive. It is also true that the status of permanency cannot be
         granted by the Court where no such posts exist and that executive
         functions and powers with regard to the creation of posts cannot
         be arrogated by the courts.”
                                                                                 E
       49. The respondents were not in employment of the Government
or holding a civil post and also not appointed against the cadre post in
any of the Government establishment where the service conditions are
governed/regulated by the statutory rules framed under the proviso to
Article 309 of the Constitution.                                                 F
       50. In fact, the respondents were engaged in a scheme and were
paid honorarium and we do find justification that as long as the scheme
continues in the State of Tamil Nadu under the mandate of Act, 2005, at
least there appears no reason to discontinue such persons who are
working under the respective schemes undertaken by the Government                G
in fulfilment of the object of the Act, 2005 unless the later found to be
unsuitable for retention in service or has attained the age of
superannuation.

6
    2009(8) SCC 556                                                              H
408             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A             51. But as already observed, such employees are not entitled for
      reinstatement and for regularization of service for the reason that if the
      order passed on 8th November, 2011 is not sustainable, the respondents
      and other similarly situated persons engaged could be restored on the
      same terms as they were placed before passing of the order dated 8th
      November, 2011. In other words, as their placement was extended for
B
      two years by order dated 21st May, 2010 w.e.f. 1st June, 2010 to 31st
      May, 2012 at the best, such persons could have been allowed to continue
      upto 31st May, 2012. In the absence of any further extension been granted,
      at least there was no right vested in favour of either of the person engaged
      to seek further continuance under the scheme thereafter.
C
             52. So far as the impugned direction to the State Government for
      their reinstatement and regularization is concerned, in our considered
      view, it is completely misplaced and not sustainable in law.
             53. The Judgment of this Court relied upon in Secretary, State of
D     Karnataka and Others Vs.Umadevi (3) and Others (supra) is in
      reference to such of the employees who were illegally/irregularly
      appointed in the establishment of the Government and their service
      conditions are governed under the statutory Rules framed but they have
      not gone through the process of selection as provided under their respective
      rules and were allowed to continue on ad-hoc basis for almost more
E     than a decade. This Court deprecated such practice but as one time
      measure permitted the Government to regularize such employees who
      are working against the sanctioned post and permitted by the government
      without intervention of the Court as referred to under Para 53 of the
      judgment. The same is reproduced hereunder:-
F
            “53. One aspect needs to be clarified. There may be cases where
            irregular appointments (not illegal appointments) as explained in
            S.V. Narayanappa [(1967) 1 SCR 128] , R.N. Nanjundappa
            [(1972) 1 SCC 409] and B.N. Nagarajan [(1979) 4 SCC 507]
            and referred to in para 15 above, of duly qualified persons in duly
G           sanctioned vacant posts might have been made and the employees
            have continued to work for ten years or more but without the
            intervention of orders of the courts or of tribunals. The question
            of regularisation of the services of such employees may have to
            be considered on merits in the light of the principles settled by this
            Court in the cases above-referred to and in the light of this judgment.
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                  409
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

      In that context, the Union of India, the State Governments and            A
      their instrumentalities should take steps to regularise as a one-
      time measure, the services of such irregularly appointed, who
      have worked for ten years or more in duly sanctioned posts but
      not under cover of orders of the courts or of tribunals and should
      further ensure that regular recruitments are undertaken to fill those
                                                                                B
      vacant sanctioned posts that require to be filled up, in cases where
      temporary employees or daily wagers are being now employed.
      The process must be set in motion within six months from this
      date. We also clarify that regularisation, if any already made, but
      not sub judice, need not be reopened based on this judgment, but
      there should be no further bypassing of the constitutional                C
      requirement and regularising or making permanent, those not duly
      appointed as per the constitutional scheme.”
      54. At the same time, this Court further observed that in absence
of sanctioned post, the State cannot be compelled to create the post and
absorb the persons who are continuingin service of the State.                   D

       55. In Nihal Singh and Others (supra) on which heavy reliance
has been placed, it was a case where appointments were made by the
State Government under Section 17 of the Police Act, 1861. Since their
appointments were under the Act, 1861 and were allowed to continue
for sufficient long time, which was not considered to be illegal or irregular   E
appointment, this Court considered it appropriate to observe that as they
are allowed to continue for such a long term, they deserve regularization
of service. In the instant case, the respondents were never appointed in
the establishment of the Government against a regular sanctioned post,in
the absence whereof, judgment may be of no assistance.                          F
       56. The later judgment in Malathi Das (Retired) Now P.B.
Mahishy (supra) which has been relied upon, it was a case where the
employees were working on daily wage basis serving in different
departments which are indeed Government establishments. At one stage,
the employees approached the High Court claiming regularization of              G
service and the High Court of Karnataka came to their rescue and
directed the State Government to regularize service of such employees
who are serving on a daily wage basis in Government departments and
finally the SLP was dismissed by this Court. Thereafter, contempt
petitions were filed before the High Court and in two phases, the
                                                                                H
410             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     employees were regularized, in the first and second phase of filing
      contempt petition by the incumbents concerned. But few of the
      incumbents filed contempt petition which appears to be the third phase,
      they were not considered for regularization despite the order of the High
      Court being confirmed by this Court on dismissal of the special leave
      petition on the premise of the judgment of this Court in Secretary, State
B
      of Karnataka and Others Vs. Umadevi (3) and Others (supra). This
      Court was of the view that once the judgment of the High Court has
      been affirmed and in two phases on filing contempt petitions, employees
      have been regularized, there appears no reason to deviate and takeaway
      the claim of rest of the employees who are covered by the judgment of
C     the High Court, may be the reason that there was a change in law on the
      subject after passing of the judgment of this Court in Secretary, State of
      Karnataka and Others Vs. Umadevi (3) and Others (supra) and this
      is not the factual matrix in the instant case.
             57. We are of the considered view that the direction of the High
D     Court to reinstate after creating theposts and absorb the respondents
      based on their qualification is not sustainable in law and deserves outright
      rejection.
             58. This Court, in a recent judgment in State of Gujarat and
      Others (supra) has considered the view expressed by usin paras 10 and
E     11 as follows:-
            “10. The Division Bench has also not appreciated the fact and/or
            considered the fact that the respondents were initially appointed
            for a period of eleven months and on a fixed salary and that too, in
            a temporary unit — “Project Implementation Unit”, which was
F           created only for the purpose of rehabilitation pursuant to the
            earthquake for “Post-Earthquake Redevelopment Programme”.
            Therefore, the unit in which the respondents were appointed was
            itself a temporary unit and not a regular establishment. The posts
            on which the respondents were appointed and working were not
            the sanctioned posts in any regular establishment of the
G
            Government.
            11. Therefore, when the respondents were appointed on a fixed
            term and on a fixed salary in a temporary unit which was created
            for a particular project, no such direction could have been issued
            by the Division Bench of the High Court to absorb them in
H
    THE GOVERNMENT OF TAMIL NADU v. TAMIL NADU                                   411
    MAKKAL NALA PANIYALARGAL [AJAY RASTOGI, J.]

      Government service and to regularise their services. The High              A
      Court has observed that even while absorbing and/or regularising
      the services of the respondents, the State Government may create
      supernumerary posts. Such a direction to create supernumerary
      posts is unsustainable. Such a direction is wholly without jurisdiction.
      No such direction can be issued by the High Court for absorption/          B
      regularisation of the employees who were appointed in a temporary
      unit which was created for a particular project and that too, by
      creating supernumerary posts.”
        59. The justification has been tendered that such persons who
have not been re-engaged by the State Government under its present               C
policy dated 7th June, 2022 are entitled for their honorarium for the period
from 1st December, 2011 to 31st May, 2012, we make it clear that such
of the employees who have not joined pursuant to the scheme introduced
by Government dated 7th June, 2022, they are always at liberty to accept
their honorarium for the period of 6 months but as the Government has
                                                                                 D
already offered them honorarium earlier, they are not entitled to any
interest on the said principal amount. We are informed that the total
amount as per the honorarium of MNP fixed at that time comes to
Rs.25,851/-(1st December, 2011 to 31st May, 2012). If an application is
filed, the State Government may at least remit the money into the bank
account of the individual.                                                       E

       60. We make it clear that such persons who have joined pursuant
to the scheme introduced by the Government dated 7th June, 2022 in
fulfilment of the object of the Act, 2005 shall remain co-terminus with
the scheme and be allowed to continue as long as the scheme remain in
force. At the same time, such persons who have not joined pursuant to            F
the scheme dated 7th June, 2022, they are at liberty to accept their
payments for the intervening period of 6 months from 1st December,
2011 to 31st May, 2012 of the principal amount of Rs.25,851/- to the
MNP. On such application being filed, the appellants shall make over the
money to such MNP through RTGS or any other mode after due                       G
verification within three months.
      61. In our considered view, the judgment passed by the Division
Bench of the High Court for the reasons afore-stated is not sustainable
and deserves to be set aside.
                                                                                 H
412              SUPREME COURT REPORTS                         [2023] 3 S.C.R.


A           62. Consequently, the appeals succeed and are allowed. The
      judgment impugned dated 19th August, 2014 is hereby set aside with the
      observation afore-stated. No costs.
             63. Pending application(s), if any, shall stand disposed of.

B
      Divya Pandey                                                Appeals allowed.
      (Assisted by : Shevali Monga, LCRA)




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