RAMESHWAR PRASAD versus MANAGING DIRECTOR U.P. RAJKIYA NIRMAN NIGAM LTD. AND ORS.

Citation: [1999] SUPP. 2 S.C.R. 593 · Decided: 16-09-1999 · Supreme Court of India · Bench: K. VENKATASWAMI · Disposal: Appeal(s) allowed

Judgment (excerpt)

RAMESHWAR PRASAD 
v. 
MANAGING DIRECTOR U.P. RAJKIYA NIRMAN 
NIGAM LTD. AND ORS. 
SEPTEMBER 16, 1999 
[K. VENKATASWAMI AND M.B. SHAH, JJ.] 
Service Law : 
A 
B 
Deputation-Absorption-Denial of-Deputationist completing 5 years C 
continuous service in the Borrowing Organisation-Option for absorption 
exercised within stipulated period-stoppage of payment of deputation 
allowance on completing maximum period of deputation-Relevant statutory 
rules providing absorption of deputationists-Borrowing organisation neither 
repatriating nor absorbing in service-Legality of-Held, in view of relevant D 
statutory Rules, deputationist stands absorbed from the date of stoppage of 
deputation allowance-Borrowing organisation's inaction in passing 
appropriate order would not affect the deputationist's right to be considered 
for absorption-Uttar Pradesh Rajkiya Nirman Nigam Ltd (Engineers and 
Architects) Service Rules, 1980---S.16(1)&(3)-UP. Absorption of Government 
Servants in Public Under~aking Rules, 1984-Rules 4 & 5. 
E 
Absorption-Deputationist-Discretion-Held, power of discretion 
cannot be exercised arbitrarily or capriciously. 
Appellant initially appointed as Civil Engineer with U.P. Small Scale F 
Industries Corporation (Respondent No. 2) went on deputation as Project 
Manager with U.P. Rajkiya Nirman Nigam (Respondent No. 1). He opted for 
continuation and permanent absorption, within the stipulated period. Without 
repatriating him to his parent department, he was continued in the deputation 
post without any break. However, on completion of his 5 years service on 
deputation, .his deputation allowance was stopped. His represe':ltations for G 
absorption were rejected on the ground that an employee working on 
deputation has no legal right to be absorbed. In the meantime, respondent No. 
2 decided to repatriate all deputationists who had completed five years on 
deputation. The appellant challenged both the orders. High Court while 
rejecting his claim for absorption passed an order for continuing his lien H 
593 
594 
SUPREME COURT REPORTS [1999] SUPP. 2 S.C.R. 
A in his parent department. Hence the present appeal. 
On behalf of the ap,Pellant it was contended that in view of Rule 4 of 
Absorption Rules, 1984, he was deemed to have been absorbed in the services . 
of respondent No. 1 from the date his deputation allowance was stopped'. 
B 
On behalf of respondent No. 2 it was contended that an employee who 
was on deputation has no right to be absorbed. 
Allowing the appeals and setting aside the orders of High Court, the 
Court 
C 
HELD: 1.1. In view of Rule 16(3) of the Uttar Pradesh Rajkiya Nirman 
Nigam Ltd. (Engineers and Architects) Services Rules, 1980 and Rules 4 & 
5 ofU.P. Absorption of Government Servants in Public Undertaking Rules, 
1984, appellant stands absorbed in the services of respondent No. 1 from the 
date his deputation allowance was discontinued. (601-G] 
D 
1.2. An employee who is on deputation has no right to be absorbed in 
the service where he is working on deputation. However, ifthe rules provide 
for absorption of employees on deputation then such employee has a right 
to be considered for absorption in accordance with the sai~ rules. In the 
instant case, Rule 16(3) of the Recruitment Rules of the Nigam and Rule 
E 5 of the Absorption Rules provide for absorption of employees who are on 
deputation. (600-B-C] 
2. The inaction of respondent No. 1 in not passing the order either for 
repatriation or absorption qua the appellant was unjustified and arbitrary. 
Rule 4 of the Absorption Rules provides that no government servant shall 
F ordinarily be permitted to remain on deputation for a period exceeding 5 
years. Hthe appellant was not to be absorbed, he ought to have been repatriated 
in the year 1990 when he completed 5 years of service on deputation. By not 
doing so, the appellant is seriously prejudiced. The delay or inadvertent 
inaction on the part of the officers of respondent No. 1 in not passing 
G appropriate order would not affect the appellant's right to be considered for 
absorption in the service of respondent No. 1 as provided in Rule 16(3) of 
Recruitment Rules. (600-D-G-H) 
3. The power of absorption, no doubt, is discretionary but is coupled 
with the duty not to act arbitrarily or at whim or caprice of any individual. 
H Thus, respondent No. l, cannot act arbitrarily by picking and choosing the 
... 
RAMESHWAR PRASAD1·. M.D. U.P. RAJKIYANIRMAN NIGAM LTD. [SHAH, J] 595 

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