/2023 INSC 0276/
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
   CIVIL APPEAL NO(S). 10563­10569 OF 2017
THE GOVERNMENT OF TAMIL NADU
AND ANR. ETC. ETC. ….APPELLANT(S)
VERSUS
TAMIL NADU MAKKAL NALA
PANIYALARGAL AND ORS. ETC. ETC. ….RESPONDENT(S)
WITH
CIVIL APPEAL NO(S). 10570 OF 2017
J U D G M E N T
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 19 th
  August,
2014   affirming   order   of   the   learned   Single   Judge   dated   23 rd
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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 by any other name but shall accommodate the persons who were
on the rolls of MNP on the date of issuance of G.O.M No. 86 dated
8 th
  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   their   native,   taluk   or   revenue   District.     It   was   further   directed
that   if   any   one   of   the   MNP   who   could   not   be   accommodated   or   is
ineligible, the State Government shall pay last drawn salary for the
period from 1 st
 December, 2011 to 31 st
 May, 2012.
2. The   brief   facts   of   the   case   culled   out   from   the   record   and
relevant  for   the  present  purpose  are  that   the  Government  of  Tamil
Nadu introduced a scheme dated 2 nd
  September, 1989 through the
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Rural Development Department in the Budget speech of 1989­1990
providing   employment   to   the   educated   youth   in   rural   areas   who
have   completed   10 th
  standard   for   various   items   of   work   in   the
village   panchayat   that   can   be   entrusted   to   the   unemployed   youth
and took a decision to implement the scheme at the village level and
to   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.
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   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 13 th
 July, 1991 on the
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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 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
September, 1989, their services stood terminated/discontinued.  
5. Again,   by   GO   of   the   Rural   Development   and   Panchayat   Raj
Department   (hereinafter   referred   to   as   “Department”)   dated   24 th
February, 1997, the scheme was restored by the Government in the
Budget for the year 1996­1997 for providing employment to 25,000
youths on the terms and conditions earlier introduced pursuant to
Circular dated 2 nd
  September, 1989, on an honorarium of Rs.500/­
per   month   for   two   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   2 nd
  September,   1989   for   all   practical
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purposes   and   later   restored   by   the   Government   vide   order   dated
24 th
  February, 1997 was again disbanded with immediate effect by
order   dated   1 st
  June,   2001.     The   Government   again   revived   the
services   of   MNP   and   increased   the   honorarium   from   Rs.500/­   per
month   to   Rs.750/­   per   month   with   an   addition   of   Rs.50/­   per
month as travelling allowance by order dated 12 th
 June, 2006 with a
clear   understanding   that   persons   who   are   re­engaged   as   MNP   will
not   be   entitled   for   any   payment   from   1 st
  June,   2001   to   31 st
  May,
2006 as they were not in service.
7. At this point of time, in furtherance of order dated 12 th
  June,
2006, the Department vide its order dated 5 th
 December, 2006 came
out   with   a   scheme   to   appoint   those   who   were   appointed   as
Panchayat   Assistants   and   Part   Time   Clerks   working   in   village
Panchayat and that they  will be switched over  to scale of pay  with
effect   from   1 st
  September,   2006.     The   Department   issued   a   G.O.
dated   27 th
  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   prepare   the
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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   absorption,   by   an   order   dated   21 st
  May,   2010,   the
Department   directed   the   MNPs   to   continue   for   two   years   from   1 st
June, 2010 till 31 st
 May, 2012.
9. Before   their   term   could   expire,   the   Government   again   issued
order   dated   8 th
  November,   2011   to   disband   MNPs   with   immediate
effect   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,
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
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through their associations by filing of a writ petition before the High
Court under Article 226 of the Constitution.
11. The   learned   Single   Judge   of   the   High   Court   allowed   the   writ
petition   by   a   common   order   dated   23 rd
  January,   2012   and   while
quashing  the  order  dated  8 th
  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   impugned   by   judgment   dated   19 th
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
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
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   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
2014­2015 Budget and accommodate the MNP, according to
the   qualification   possessed   by   each   candidate,   without
reference to age in their native Taluk or Revenue District.
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(iii) The   said   exercise   shall   be   commenced   immediately   and
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
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 mala fide
in   passing   the   order  dated   8 th
  November,   2011  as   directed   in   Para
33 was 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   23 rd
  September,   2014,   the   operation   of   the
judgment and order  dated 19 th
  August, 2014 came to be stayed by
this Court.
14. It   is   brought   to   the   notice   of   this   Court   that   the   State
Government   has   introduced   the   scheme   dated   7 th
  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
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or such of the unemployed youth on priority who had discontinued
as   MNP   pursuant   to   order   passed   by   the   Government   dated   8 th
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 8 th
  November, 2011
and   who   otherwise   fulfil   the   conditions   of   eligibility   have   joined
under   the   scheme   introduced   by   the   Government   dated   7 th
  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.
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   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.
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17. The   abolition   of   post   is   not   a   personal   penalty   against   the
individual   who   has   served   and   is   an   executive   decision   and   the
Doctrine   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   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.  
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
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appointments   made   have   no   co­relation   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
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   7 th
  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   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 months, i.e. 1 st
  December, 2011 to 31 st
  May,
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2012, each of the employee who discontinued and is not interested
in   seeking   re­engagement   under   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   the   miniscule   of   persons   who   are
contesting   today,   either   have   not   encashed   or   have   repaid   the
money back to the Government and submits that those who are left
out and have not joined so far under the present scheme introduced
by the Government dated 7 th
 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   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   7 th
  June,   2022   and
those   who   are   not   inclined,   can   always   accept   their   6   months’
wages for the period from  1 st
  December, 2011 to 31 st
  May, 2012 at
any   point   of   time   from   the   Office   of   the   District   Collector   if   they
have not already received so far.
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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   Others 1
  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 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 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   with   a   scheme   to   provide   employment   the
1   2022(5) SCC 394
13

successive Government  has  disbanded  the policy  introduced  by  its
predecessors which appears to be only for political reasons.  
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   8 th
  November,   2011   was   valid   and   justified
and such impugned 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
continue   for   sufficient   long   time   without   the   intervention   of   the
Court.     This   Court   always   comes   forward   to   regularize   such
employees who had worked 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
14

(3)   and   Others 2
  which   has   been   later   followed   by   this   Court   in
Nihal   Singh   and   Others   Vs.   State   of   Punjab   and   Others 3
  and
further reiterated by this Court in   Malathi Das(Retired) now P.B.
Mahishy and Others   Vs.   Suresh and Others 4
.   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   8 th
  November,   2011   and   in   consequence
thereof,   such   of   the   employees   who   discontinued   because   of   the
policy being disbanded/cancelled by the Government by order dated
8 th
 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   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
2   2006(4) SCC 1
3   2013(14) SCC 65
4   2014(13) SCC 249
15

principles by the Division Bench of the High Court, at least at this
stage, needs no interference.
25. Learned counsel further submits that during the interregnum
period   between   June,   2009   and   November,   2011   until   the   order
impugned came to be passed, the Government earlier came up with
a scheme that 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   1 st
  June,   2009
approximately 600 MNPs were absorbed on various posts and since
this   has   been   discontinued/disbanded   by   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  8 th
  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 long time.  
16

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 employees became its victim and that appears to
be   the   reason   for   which   the   impugned   order   dated   8 th
  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.
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   1 st
  December,   2011   and   31 st
  May,   2012   which   comes   to
principal   amount   of   Rs.25,851/­   per   MNP,   at   least,   with   a
reasonable interest, as may be considered to be appropriate, in the
facts and circumstances of the case.
17

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
Government by Order dated 2 nd
  September, 1989, the object of the
scheme was  to provide employment to  the educated youth in rural
areas   who   have   completed   10 th
  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 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.
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 10 th
  standard (and
those   who   are   working   in   hill/tribal   areas,   their   educational
18

qualification can be relaxed to 8 th
 standard), their recruitment shall
take   place   through   an   advertisement   in   the   local   area   and   be
considered   by   a   Committee   for   shortlisting   the   candidates   to   be
considered   for   appointment.     The   mechanism   which   was   put   in
place in the first instance, by order dated 2 nd
  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 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 Scheme
which was introduced by the Government for providing employment
to educated unemployed youth in rural areas dated 2 nd
  September,
1989 came to be disbanded by the successive Government by order
dated   13 th
  July,   1991   in   consequence   discontinued   the   service
rendered   by   such   unemployed   youth.     Immediately   thereafter,   the
successive   elected   Government   restored   its   policy   by   order   dated
24 th
  February,   1997   and   provided   employment   to   the   educated
youth for rural development programmes in various schemes at the
19

village   panchayat,   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   anti­liquor
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,   2001.     Later,   it   was   again
introduced   by   order   dated   12 th
  June,   2006   and   their   honorarium
stood increased at later stages and their services stood extended by
order 21 st
 May, 2010 for the period from 1 st
 June, 2010 to 31 st
 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   8 th
  November,   2011   which   was   the
subject matter of challenge before the High Court under Article 226
of the Constitution on 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   wage­employment   to   the   rural   poor,   the   Central
20

Government came with 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
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
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 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
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
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
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
Panchayats   have   been   assigned   specific   responsibilities   in
21

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   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.
(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 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 the financial 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 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
22

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’   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 members volunteer to do unskilled manual work not less than
one   hundred   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.
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
23

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
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.
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
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.
24

41. It   has   not   been   disputed   that   the   scheme   undertaken   by   the
State of Tamil Nadu under the Act, 2005 is still in force.
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   2 nd
  September,   1989,   it   has
undergone a change at various stages and forms.
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   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
25

Government is always open to judicial review on the anvil of Article
14 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 8 th
 November, 2011
is   concerned.     After   going   through   the   records,   we   are   of   the   view
that the order dated 8 th
 November, 2011 might have been passed as
a policy decision of the Government but the seriatim of facts which
have   come   on   record   at   least   cannot   be   countenanced   by   this
Court.
45. The   question   which   emerges   for   our   consideration   is   whether
the order dated 8 th
 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 who were discontinued by passing of the order dated 8 th
November, 2011 are not only  entitled to  reinstatement  but  deserve
26

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.   
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
Another 5
, it has been held as under:­
“15.   The   court   cannot   direct   the   creation   of   posts.   Creation   and
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
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.”
48. Later,   in   Maharashtra   State   Road   Transport   Corporation
and   Another   Vs.   Casteribe   Rajya   Parivahan   Karamchari
Sanghatana 6
, this Court held as under:­
“41.   Thus,   there   is   no   doubt   that   creation   of   posts   is   not   within
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
5   2008(1) SCC 683
6   2009(8) SCC 556
27

functions   and   powers   with   regard   to   the   creation   of   posts   cannot
be arrogated by the courts.”
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.
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   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.
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   8 th
  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
28

the   order   dated   8 th
  November,   2011.     In   other   words,   as   their
placement   was   extended   for   two   years   by   order   dated   21 st
  May,
2010   w.e.f.   1 st
  June,   2010   to   31 st
  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
was no right vested in favour of either of the person engaged to seek
further continuance under the scheme thereafter.
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 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 ad­hoc basis
for   almost   more   than   a   decade.     This   Court   deprecated   such
29

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:­
“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   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 above­referred to and in the light
of   this   judgment.   In   that   context,   the   Union   of   India,   the   State
Governments   and   their   instrumentalities   should   take   steps   to
regularise   as   a   one­time   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   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   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 continuing in service of the State.
30

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   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.
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   service   and   the   High   Court   of   Karnataka   came   to
their rescue and directed the State Government to regularize service
31

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   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   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   take   away   the   claim   of   rest   of   the
employees who are covered by the judgment of 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
32

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
Court   to   reinstate   after   creating   the   posts   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 us in paras 10
and 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
created   only   for   the   purpose   of   rehabilitation   pursuant   to   the
earthquake   for   “Post­Earthquake   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
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
Government   service   and   to   regularise   their   services.   The   High
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
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absorption/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   re­engaged   by   the   State   Government   under   its
present   policy   dated   7 th
  June,   2022   are   entitled   for   their
honorarium   for   the   period   from   1 st
  December,   2011   to   31 st
  May,
2012,   we   make   it   clear   that   such   of   the   employees   who   have   not
joined pursuant to the scheme introduced by Government dated 7 th
June,   2022,   they   are   always   at   liberty   to   accept   their   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.     We   are   informed   that   the
total   amount   as   per   the   honorarium   of   MNP   fixed   at   that   time
comes to Rs.25,851/­(1 st
  December, 2011 to 31 st
  May, 2012).   If an
application   is   filed,   the   State   Government   may   at   least   remit   the
money into the bank account of the individual.
60. We make it clear that such persons who have joined pursuant
to the scheme introduced by the Government dated 7 th
  June, 2022
in fulfilment of the object of the Act, 2005 shall remain co­terminus
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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   7 th
  June,   2022,   they   are   at
liberty   to   accept   their   payments   for   the   intervening   period   of   6
months from 1 st
  December, 2011 to 31 st
  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 verification within three
months.
61. In   our   considered   view,   the   judgment   passed   by   the   Division
Bench   of   the   High   Court   for   the   reasons   afore­stated   is   not
sustainable and deserves to be set aside.  
62. Consequently,   the   appeals   succeed   and   are   allowed.     The
judgment   impugned   dated   19 th
  August,   2014   is   hereby   set   aside
with the observation afore­stated. No costs.
63. Pending application(s), if any, shall stand disposed of.
……………………….J.
(AJAY RASTOGI)
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……………………….J.
(BELA M. TRIVEDI)
NEW DELHI;
APRIL 11, 2023
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