OFFICIAL LIQUIDATOR versus DAYANAND AND OTHERS

Citation: [2008] 15 S.C.R. 331 · Decided: 04-11-2008 · Supreme Court of India · Bench: B.N. AGRAWAL · Disposal: Appeal(s) allowed

Cited by 8 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

[2008] 15 S.C.R. 331 
~ 
OFFICIAL LIQUIDATOR 
A 
v. 
DAYANAND AND OTHERS 
(Civil Appeal No. 2985 of 2007) 
NOVEMBER 4, 2008 
B 
[8.N. AGRAWAL, HARJIT SINGH BEDI AND 
G.S. SINGHVI, JJ.] 
.. 
,_ 'r 
Service Law: 
c 
Companies (Court) Rules, 1959: 
rr. 308 and 309 -
Persons engaged by Official 
Liquidators and paid from company fund -
Claiming 
regularization, and parity in salary and allowances as paid to 
D 
employees appointed by Government of India against 
sanctioned posts - Scheme framed by Government of India 
in 1999 on the model of the 1978 Scheme for absorption of 
suitable and eligible company paid staff against 50% of 
vacancies in direct recruitment quota of Group 'C' posts -
Challenged, and absorption of all the company paid staff 
E 
.. 
sought - HELD: Company paid staff constitute a separate and 
distinct class - In view of nature of their employment, they are 
entitled neither to absorption against sanctioned posts, as of 
.,.. 
right, nor to parity in pay scales and allowances admissible 
to regular employees - The 1999 Scheme does not suffer 
F 
from any infirmity - However, failure on the part of the 
Government of India to frame. a similar scheme for absorption 
of company paid staff in Group 0 posts has resulted in 
unintended discrimination qua one section of company paid 
employees -
Therefore, Government of India directed to 
G 
frame a Scheme for absorption of eligible and suitable 
company paid employees in Group 0 posts on the model of 
.i 
the 1999 Scheme - Keeping in view the huge escalation of 
living cost, Official Liquidators are directed to mdve the Courts 
331 
H 
332 
SUPREME COURT REPORTS 
[2008] 15 S.C.R. 
A concerned for increasing the emoluments of the Company 
paid staff -
Such requests would be sympathetically 
considered subject to availability of funds - Principle of equal 
pay for equal work - Constitution of India, 1950 - Articles 14 
and 16. 
B 
Regularization -
HELD: In Uma Devi's 1 case the 
Constitution Bench of Supreme Court has laid down that there 
is no fundamental right in those who have been employed on 
daily wages, temporarily or on contractual basis, to claim 
C absorption in service -:- The law laid down in Uma Devi's case 
is binding on all courts including Supreme Court till the same 
is overruled by a larger Bench - The observation of a two-
Judge Bench of Supreme Court in Pooran Chand Pandey's2 
case that the decision in Uma Devi's case cannot be applied 
to a case where regularization has been sought for on the 
-D ground of Article 14 of the Constitution was not called for and 
the same should be read as obiter and not binding -
Precedent - Constitution of India, 1950 - Article 141. 
JUDICIAL DISCIPLINE - Held: Is sine qua non for 
E ef+ective and efficient functioning ·of judicial system as also 
for sustaining the system - Benches of High Courts and 
Supreme Court ignoring decisions area-ordinate Benches or 
larger Benches and High Courts bypassing law laid down by 
Supreme Court illustrate non-adherence to rule of judicial 
F discipline - Disrespect to constitutional ethos and breach of 
discipline have grave impact on credibility of judicial institution 
and encourages chance litigation - Predictability and certainty 
is the hallmark of judicial jurisprudence - Stare decisis. 
G 
ADMINISTRATIVE LAW: 
..judicial Review - Policy decision by Government to -· 
create/abolish posts or cadres - HELD: Power of judicial 
1. 
State of Kamataka v. Uma Devi, [2006] 3 SCR. 
H 
2. 
UP. SEB. v. Pooran Chand Pandey, [2007] 10 SCR 920. 
OFFICIAL LIQUIDATOR v. DAYANAND AND ORS. 
333 
_,-1 
review can be exercised in such matters only if it is shown that A 
the action of the employer is contrary to any constitutional or 
statutory provisions or is patently arbitrary or vitiated by ma/a 
fides - In the instant case, directions given by High Courts 
for creation of supernumerary posts to facilitate absorption of 
company paid staff are unsustainable and are set aside. 
B 
Legitimate Expectation - Held: At the root of legitimate 
expectation is the constitutional principle of rule of law, which ' 
~ 
requires regularity, predictability and certainty in government 
'r 
dealings with public - In the instant case, there is nothing to , c 
show that any competent authority had ever given any 
assurance to company paid staff that they wo 11ld get absorbed , 
against sanctioned posts or that there would be no abolition 
of posts meant to be filled by direct recruitment- On the 

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