MALOOK SINGH AND OTHERS versus STATE OF PUNJAB AND OTHERS

[2021] 7 S.C.R. 1080

[2021] 7 S.C.R.

AMALOOK SINGH AND OTHERS

STATE OF PUNJAB AND OTHERS

(Civil Appeal Nos 6026-6028 of 2021)

SEPTEMBER 28, 2021

[DR. DHANANJAYA Y. CHANDRACHUD,VIKRAM NATH AND V NAGARATHNA, JJ.]

Service Law – Determination of seniority – Ad hoc service, ifcounted for – Doctrine of res judicata vis-à-vis law of precedent – InCview of an earlier writ petition filed by appellants-ad hoc employeesagainst regularly recruited employees appointed after them,seniority list was redrawn and the appellants were granted seniorityw.e.f. dates of their initial appointment by including the period ofad hoc service – Fixation of seniority challenged by privateDrespondents who were not party to the earlier writ petition but wereadversely affected – Allowed by Single Judge – Appeals, dismissedby Division Bench – Held: In the earlier writ petition, reliance placedby Single Judge on Direct Recruit Class II Engineering Officers’Association v. State of Maharashtra reported as [1990] 2 SCR 900 tohold that ad hoc service should be counted for conferring the benefitEof seniority is misplaced – In the present case, initial appointmentwas supposed to be stop gap arrangement besides being not inaccordance with the rules, thus the ad hoc service cannot be countedfor the purpose of seniority, as held in Direct Recruit case – Further,a binding decision of the court which has attained finality wouldFbind only the parties to the proceedings inter-se – Seniority listprepared pursuant to the earlier judgment would not bind thosewho were not parties to the earlier proceedings and were adverselyaffected – In view of the express terms of the regularization policyin the present case, seniority would date with effect from the date ofregularization – However, during the pendency of the presentGproceedings, the appellants, the private respondents as well as theappellants in companion appeals received promotions from time totime and have retired from service, thus, the pensionary benefitsbeing disbursed to them not to be disturbed and no recoveries made– Constitution of India – Art.142 – Punjab Civil Secretariat (StateHService Class III) Rules 1976.

Disposing of the appeals, the Court

HELD: 1.1 As matter of first principle, the view whichhas been adopted in the impugned judgment of the Division Benchof the High Court cannot be faulted. The policy for regularizationissued on 3 May 1977 is clear in regard to the date ofregularization, the principle for reckoning seniority and the basison which seniority should be reckoned inter se between personsbelonging to the group of ad hoc employees who were regularized.The policy clearly specifies that regularization would be grantedto persons who had fulfilled minimum of one year service as on31 March 1977. As regards seniority, clause 5(a) specifies thatthe seniority, upon regularization would date back to 1 April 1977vis vis candidates appointed on regular basis after selectionthrough the prescribed procedure. As between ad hoc employeeswho were regularized, inter se seniority would however be basedon the length of service so that person possessing longerservice would rank senior to junior in terms of the length ofservice. The judgment of the Single Judge in Malook Singh’scase-the earlier writ petition (Malook Singh vs. State of PunjabCWP No 2780/1980) essentially dealt with two facets. The firstwas that persons who were recruited after following the regularprocedure for selection after the date of regularization of ad hocemployees on 1 April 1977 could not rank senior to those whohad been regularized prior to their date of appointment. Thesecond aspect on which the Single Judge held in favour of thepetitioners in CWP No 2780 of 1980 was that once regularizationtakes place, the length of ad hoc service must count for thedetermination of seniority. The second facet of the judgment ofthe Single Judge was specifically kept open in the Letters PatentAppeal by the Division Bench. Therefore, clearly the judgmentin Malook Singh’s case did not conclude the issue of whether adhoc service would count for the purpose of determining seniority.The Special Leave Petition (SLP (C) No 7513 of 1993) againstthe judgment of the Division Bench was dismissed by this Courton 16 July 1993. The judgement in Malook Singh wassubsequently overruled in Gurmail Singh v. State of Punjab. [Paras8, 18, 19 and 21][1086-D; 1091-C-H; 1092-A; 1095-E-F]

1082SUPREME COURT REPORTS

[2021] 7 S.C.R.

AMalook Singh v State of Punjab CWP No. 2780/1980;Gurmail Singh v. State of Punjab CWP No. 9200 of1993 decided on 21 July 1994 – referred to.

1.2 The decision in Direct Recruits stands for the principlethat ad hoc service cannot be counted for determining theBseniority if the initial appointment has been made as stop gaparrangement and not according to rules. The reliance placed bythe Single Judge in the judgement dated 6 December 1991 onDirect Recruits to hold that the ad hoc service should be countedfor conferring the benefit of seniority in the present case is clearlymisplaced. The notification dated 3 May 1977 stated that theCad hoc appointments were made in administrative interest inanticipation of regular appointments and on account of delay thattakes place in making regular appointment through the concernedagencies. In this regard, the vacancies were notified to theEmployment Exchange or advertisements were issued, as the

Dcase maybe, by appointing authorities. The appointments werenot made on the recommendation of the Punjab SubordinateService Selection Board. However, subsequently policy decisionwas made to regularize the ad hoc appointees since their ousterafter considerable period of service would have entailedhardship. Thus, the initial appointment was supposed to be stopEgap arrangement, besides being not in accordance with the rules,and the ad hoc service cannot be counted for the purpose ofseniority. [Para 20][10936-D-E; 1095-C-E]

Direct Recruit Class II Engineering Officers’ Associationv. State of Maharashtra (1990) 2 SCC 715 : [1990] 2FSCR 900 – followed.

Keshav Chandra Joshi v. Union of India (1992) 1 Suppl.SCC 272; Rashi Mani Mishra v. State of Uttar Pradesh(2021) SCC OnLine SCC 509 – relied on.

G2. binding decision of the court which has attained finalitywould bind the parties to the proceedings inter-se. The privaterespondents in Malook Singh’s case were persons who had beenrecruited after 1 April 1977 albeit after following regular processof selection. The judgment, therefore, would only bind those whoare parties to the proceedings. The judgment would by no meansH

operate to bind others whose interest did not coincide with theprivate respondents who are impleaded in the proceedings. Thisis precisely the reason why the Single Judge in the subsequentproceedings held that the seniority list which was preparedpursuant to the earlier judgment would not operate to bind thosepersons who were not parties to the earlier proceedings and wereadversely affected. In this backdrop, there is no reason for thisCourt to take different view than that which has weighed withthe High Court in coming to the conclusion that in view of theexpress terms of the policy of regularization, seniority would date

with effect from the date of regularization. [Para 21][1096-C-F]

State of Rajasthan v. Nemi Chand Mahela (2019) 14

SCC 179 : 2019 (7) SCALE 143 – relied on.

3. The appellants and the private respondents, as well asthe appellants in the companion appeals have from time to timereceived their promotions during the pendency of theseproceedings and have retired from service. While the judgmentof the Division Bench is affirmed on the issue of the principle, itis directed that the pensionary benefits which are being disbursedto the appellants shall not be disturbed. Likewise, the pensionarypayments which are being disbursed to the respondents be paidover in accordance with law. No recoveries be made of any naturewhatsoever from the appellants. [Paras 22, 23][1096-F-G; 1097-E-G]

Case Law Reference

[1990] 2 SCR 900followedPara 6

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6026-6028 of 2021.

From the Judgment and Order dated 15.03.2011 of the High Courtof Punjab and Haryana at Chandigarh in L.P.A. Nos.471, 472 and 476of 2011.

With

Civil Appeal Nos. 6024 and 6025 of 2021.

P. S. Patwalia, Sr. Adv., Ms. Pragati Neekhra, Ms. Manju Jetley,Subhasish Bhowmick, Advs. for the Appellants.

AMs. Ranjeeta Rohatgi, Arun K. Sinha, Advs. for the Respondents.The Judgment of the Court was delivered by

DR DHANANJAYA Y CHANDRACHUD, J.

1. Leave granted.B2. This batch of appeals arises from judgment and order dated15 March 2011 of Division Bench of the High Court of Punjab andHaryana.

3. For convenience of reference, the facts as they emerged in thelead Civil Appeal[1] may be set out.C

4. The appellants were appointed as clerks in 1975-1976 in thePunjab Civil Secretariat on an ad hoc basis. On 3 May 1977, their serviceswere regularized with effect from 1 April 1977 pursuant to policy ofregularization. The policy of regularization notes that in anticipation ofregular appointments, ad hoc appointments were resorted to by variousDappointing authorities in “administrative interest” after notifying thevacancies to the employment exchange or, as the case may be, by issuingadvertisements. Since the ad hoc employees had acquired experience,and their ouster after considerable period of service would entailhardship, their services were regularized, subject to certain terms andconditions. Clause (5) of the policy on regularization contained theEfollowing stipulations:

“5. The seniority of the ad hoc employees whose appointmentsare regularized in terms of the above policy shall be determined inthe following manner:-

F(a) After approval by the Appointing Authority the regularizationof their appointments shall date back to 1st April, 1977 from whichdate their seniority shall be determined vis-à-vis candidatesappointed on regular basis after selection through the prescribedagencies;

G(b) The service rendered on ad hoc basis shall be taken into accountfor purposes of determining inter se seniority among the ad hocemployees themselves and person having longer service shallbe senior and if the date of appointment on ad hoc basis is thesame, then the older member shall be senior to younger member.”

5. From the above stipulations, it becomes evident that theregularization in terms of the policy dated 3 May 1977, was to becomeeffective on 1 April 1977 from which date their seniority would bedetermined in relation to candidates who were appointed on regularbasis after following the normal procedures for selection. However, asbetween the ad hoc employees who were regularized, it was stipulatedthat service rendered on an ad hoc basis shall be taken into account sothat person having longer service shall be senior and if the date ofappointment on ad hoc basis was the same, the older member wouldrank senior to the younger.

6. batch of seventy-three clerks, including the appellants, whowere working in the office of the Punjab Civil Secretariat instituted awrit petition[2] under Article 226 to challenge the seniority position as itstood on 31 December 1978 (Malook Singh v State of Punjab). Besidesthe official respondents, twenty-seven private respondents were impleadedas parties to the writ petition. These respondents, it must be noted, wereregularly appointed candidates who had been appointed after 1 April1977. The petitioners in those proceedings claimed the benefit of ad hocservice rendered by them towards their seniority as against regularlyrecruited clerks appointed after them. By judgment and order dated 6December 1991, Single Judge of the High Court observed that interms of Rule 9 of the Punjab Civil Secretariat (State Service Class III)

Rules 1976, the seniority inter se of members of service in each cadrewould be determined by the length of continuous service on post in thecadre of service. The Single Judge held that while the petitioners beforethe High Court had been regularized from 1 April 1977, the privaterespondents were appointed subsequently. As consequence, those whowere appointed subsequently could not claim seniority over those whowere regularized prior to their appointment. Besides the above finding,Single Judge held that in view of the decision of this Court in DirectRecruit Class II Engineering Officers’ Association v. State ofMaharashtra[3], once the services had been regularized they would relateback to the date of their initial appointment and the ad hoc servicewould have to be kept in view in determining seniority and other benefits.The petition was allowed in the above terms.

2 CWP No 2780/1980

3 (1990) 2 SCC 715

A7. The judgment of the Single Judge was carried in LettersPatent Appeal by the State of Punjab. The Division Bench, by itsjudgement dated 4 January 1993, held that the Single Judge was justifiedin coming to the conclusion that persons who had been regularized witheffect from 1 April 1977 would rank senior to those who had beenrecruited after their date of regularization and to that extent the petitionersBbefore the Single Judge had been correctly held to be senior to the privaterespondents. Having held this, the Division Bench however clarified thatit was expressing no opinion on the second aspect which was advertedto by the Single Judge namely, that upon regularization, the services ofthe petitioners for the purpose of seniority would relate back to the dateCof their initial appointment. This question was left open to be dealt in anappropriate case with clarification that the judgment of the Single Judgewould not be treated as binding precedent.

8. The Special Leave Petition[4] against the judgment of the DivisionBench was dismissed by this Court on 16 July 1993. Contempt petitionsDwere filed before the High Court for non-compliance of the judgment ofthe Single Judge dated 6 December 1991. During the pendency of thecontempt petitions, the seniority list was redrawn and finalized by anOffice Order dated 14 January 1994. According to the seniority list, theappellants to these proceedings were granted seniority with effect fromtheir dates of initial appointment by including the period of ad hoc service.EThe contempt petitions were disposed of by the High Court by its orderdated 12 August 1994.

9. batch of writ petitions[5] was instituted before the High Courtto challenge the fixation of seniority. The persons who instituted thesepetitions had grievance that the fixation of seniority had been madeFwithout affording hearing to them and that the judgment of the HighCourt dated 6 January 1991 would not bind them since they were notparties to the earlier writ petition[6]. The State of Punjab contested theproceedings. The Single Judge, by an order dated 5 January 2011, allowedthe writ petitions which were instituted by the private respondents. TheGSingle Judge came to the conclusion that the judgment in CWP No 2780of 1980 (Malook Singh v. State of Punjab) had been overruled by

4 SLP (C) No 7513 of 1993

5 Writ Petition Nos 2607 of 1994, 1702 of 1994 and 2341 of 1995

6 CWP No 2780 of 1980

Division Bench of the High Court in Gurmail Singh v. State of Punjab[7].The Single Judge also noted that another writ petition[8 ]was filed beforethe High Court, which was allowed by Single Judge of the High Courton 24 December 1997, on the basis of the decision in Malook Singh’scase. Against the said judgment, Letters Patent Appeal[9] was preferred,which was allowed on 8 January 1999, adverting to the fact that inGurmail Singh’s case, the decision in Malook Singh had beenoverruled. Moreover, it was also observed that in the Letters PatentAppeal, which was filed before the Division Bench in Malook Singh’scase, it was specifically observed that the judgment of the Single Judgewould not be cited as precedent to determine whether ad hoc servicewould be reckonable for the purpose of seniority. Against the judgementof the Division Bench of the High Court, Special Leave Petitions[10] werefiled before this Court which were dismissed in limine on 19 July 1999.After adverting to these developments, the Single Judge came to theconclusion that it was well settled principle that where the initialappointment is made without following due procedure in accordancewith the mandate of Articles 14 and 16, ad hoc service would not countfor the determination of seniority. The Single Judge held that the decisionin Malook Singh’s case having attained finality would bind the State,the petitioners and the private respondents who were parties to thatproceeding. The rights of parties which were determined by conclusivejudgment could not be thus reopened as between the parties to thatproceeding. Consequently, the Single Judge held that as between theparties to the decision in Malook Singh’s case, the judgment would betreated as final and binding. On the other hand, the persons who wereappointed by due process of selection and were not parties to theearlier proceedings in Malook Singh’s case would not be bound by thedecision.

10. Following the judgment of the Single Judge, Letters PatentAppeals[11] were carried to the Division Bench. The Division Bench byits judgment and order dated 15 March 2011, dismissed the Letters PatentAppeals. The Division Bench has held that ad hoc service followed byregularization would not qualify for the purpose of fixing seniority in

7 CWP No. 9200 of 1993 decided on 21 July 1994.

8 CWP No 16488 of 1995

9 LPA No 133 of 1998

10 SLP No 8534-35 of 1999

11 LPA Nos 471, 472 and 476 of 2011

Aview of the law settled by the Supreme Court. At the same time, thejudgment in Malook Singh’s case would nonetheless enure to the benefitof those who were parties to the proceedings but would not adverselyaffect the rights of others who were not parties to the proceedings. Thejudgment of the Division Bench has given rise to the present appeal.

B11. While entertaining the Special Leave Petition initially on 6June 2011, an order of status quo was passed while issuing notice.Subsequently, on 27 April 2012, the order was modified since the StateGovernment submitted to the Court that there were vacancies in thecadre of Under Secretaries and Deputy Secretaries which were requiredto be filled up. The application for modification was allowed by permittingCthe State government to fill up the available vacancies on an ad hocbasis. At that stage, the Court was apprised of the fact that out of eighteenpetitioners, only two petitioners who were working as Superintendentsat the relevant time were eligible for promotion against the vacancies.During the past decade that these proceedings have remain pendingDbefore this Court, all the appellants as well as the respondents havebeen promoted and almost all of them have, as matter of fact, retiredfrom service.

12. Mr P S Patwalia, learned senior counsel appearing on behalfof the appellants in the appeal arising out of the lead Special LeaveEPetition[12] has urged the following submissions:

(i)All the appellants have, as matter of fact, received theirpromotions during the pendency of the proceedings and haveretired, beginning well over decade ago;

(ii)When the appellants were appointed on an ad hoc basis,Fthe initial appointment, strictly speaking cannot be construedto be of back door entry having regard to the fact that theemployment exchange was notified and they were selectedby regular selection committees though not by the PunjabSubordinate Service Selection Board[13];

G(iii)The High Court has correctly come to the conclusion thatas between the parties to the decision, in Malook Singh’scase, the judgment would continue to bind notwithstanding

the fact that it has been subsequently disapproved in anotherjudgment of High Court; and

(iv)In consequence, insofar as the State is concerned, it wouldbe bound to give effect to the decision in Malook Singhand at this stage, all that the appellants would seek is thattheir pensionary payments be duly protected.

13. On the above premises, Mr Patwalia, learned senior counselsubmits that at this length of time, it would be manifestly in the interestof justice if the pensionary benefits which are being drawn by theappellants are protected and direction is issued by this Court in theexercise of its jurisdiction under Article 142 of the Constitution restrainingthe State from making any recoveries in respect of the payments whichhave already been made.

14. Ms Anusha Nagarajan, counsel appearing on behalf of theState of Punjab has on the other hand, urged the following submissions:

(i)Though the judgment of the Single Judge in MalookSingh’s case had held that the benefit of ad hoc servicemust be counted for the purpose of determining seniority ofthose who are regularized with effect from 1 April 1977,this was specifically kept open by the Division Bench in theLetters Patent Appeal and as consequence, the claim forcounting ad hoc service in determining seniority was notdecided;

(ii)The order of regularization dated 3 May 1977, specificallyprovides that (a) seniority shall be reckoned from 1 April1977; and (b) as between ad hoc employees whose serviceswere regularized, their inter se seniority would be based onthe length of ad hoc service;

(iii)In CWP No 2780 of 1980, the respondents were directlyrecruited candidates who were appointed after 1 April 1977,as consequence of which, the Single Judge had come tothe conclusion that the persons who were regularized witheffect from 1 April 1977 would rank senior to those whowere recruited after that date;

(iv)As matter of fact, in the first round of proceedings, personswho were directly recruited and appointed prior to 1 April

1090SUPREME COURT REPORTS

A1977 were not impleaded as parties to the proceedings andclearly, they would not be governed by the earlier judgmentwhich would not bind them; and

(v)In this backdrop, having regard to the well settled positionin law, it was correctly held by the Single Judge of the HighBCourt that ad hoc service of persons who had originallybeen appointed without following due procedure would not

count for the purpose of seniority.

15. Learned counsel consequently submitted that having due regardto the fact that the principle which was sought to be espoused by theCSingle Judge in Malook Singh’s case – that ad hoc appointment wouldcount for the purpose of seniority has been overruled not only by theHigh Court subsequently, but does not reflect the correct position in law,the impugned judgment of the Division Bench would need to be sustained.At the same time, learned counsel has expressed before the Court thepractical difficulty of redrawing and revising the seniority list at this lengthDof time in respect of persons who were appointed as far back as in 1977,all of whom have retired from service after receiving their promotionorders.

16. During the course of these proceedings, we have also heardMr Arun K Sinha, learned counsel appearing on behalf of some of theEcontesting respondents and Mr Surjit Singh Swaich, learned counselappearing on behalf of the appellants in the companion appeals. Insofaras the private respondents represented by Mr Sinha are concerned, itmay be noted that their grievance specifically is in regard to the mannerof appointment of the appellants. In the counter affidavit which has beenFfiled in these proceedings on their behalf, it has been stated that thepolicy of the State of Punjab dated 3 May 1977 regularizing the servicesof the ad hoc employees with effect from 1 April 1977 clarified thatseniority shall be determined with effect from that date. During the periodfrom 1 April 1977 (the effective date of regularization) and 3 May 1977(the date of issuing the order for regularization), some clerks had joinedGon different dates on the recommendations of the PSSSB. Though therecommendations of the PSSSB were made on diverse dates betweenDecember 1976 and April 1977, they had joined service before the issuanceof the notification of regularization in the cadre of clerks as it stood on31 December 1978. On these grounds, it has been submitted that the

appellants ought not to rank higher in seniority on the basis of the lengthof ad hoc service.

17. Mr Surjit Singh Swaich, learned counsel has appeared on behalfof batch of persons who were petitioners before the High Court inanother batch of writ petitions[14]. It may be noted at this stage, that theyhad sought seniority on the basis of the judgment in Malook Singh’scase.The High Court has rejected their claim on the ground that MalookSingh is not an authority for the proposition that ad hoc service prior tothe date of regularization should count in the effectuation of seniorityand, in any event, the issue has been kept open in the judgment of theDivision Bench in Letters Patent Appeal against the judgment of theSingle Judge.18. As matter of first principle, the view which has been adoptedin the impugned judgment of the Division Bench of the High Court cannotbe faulted. The policy for regularization issued on 3 May 1977 is clear inregard to the date of regularization, the principle for reckoning seniorityand the basis on which seniority should be reckoned inter se betweenpersons belonging to the group of ad hoc employees who wereregularized. The policy clearly specifies that regularization would begranted to persons who had fulfilled minimum of one year service ason 31 March 1977. As regards seniority, clause 5(a) specifies that theseniority, upon regularization would date back to 1 April 1977 vis viscandidates appointed on regular basis after selection through theprescribed procedure. As between ad hoc employees who wereregularized, inter se seniority would however be based on the length ofservice so that person possessing longer service would rank senior toa junior in terms of the length of service.

19. The judgment of the Single Judge in Malook Singh’scaseessentially dealt with two facets. The first was that persons whowere recruited after following the regular procedure for selection afterthe date of regularization of ad hoc employees on 1 April 1977 could notrank senior to those who had been regularized prior to their date ofappointment. The second aspect on which the Single Judge held in favourof the petitioners in CWP No 2780 of 1980 was that once regularizationtakes place, the length of ad hoc service must count for the determinationof seniority. It is important to note here that the second facet of thejudgment of the Single Judge was specifically kept open in the Letters

APatent Appeal by the Division Bench. Therefore, clearly the judgment inMalook Singh’s case did not conclude the issue of whether ad hocservice would count for the purpose of determining seniority.

20. The law on the issue of whether the period of ad hoc servicecan be counted for the purpose of determining seniority has been settledBby this Court in multiple cases. In Direct Recruits (supra), ConstitutionBench of this Court has observed:

“13. When the cases were taken up for hearing before us, it wasfaintly suggested that the principle laid down in Patwardhan case[(1977) 3 SCC 399: 1977 SCC (L&S) 391: (1977) 3 SCR 775]was unsound and fit to be overruled, but no attempt was made tosubstantiate the plea. We were taken through the judgment by thelearned counsel for the parties more than once and we are incomplete agreement with the ratio decidendi, that the period ofcontinuous officiation by government servant, after hisappointment by following the rules applicable for substantiveappointments, has to be taken into account for determining hisseniority; and seniority cannot be determined on the sole test ofconfirmation, for, as was pointed out, confirmation is one of theinglorious uncertainties of government service depending neitheron efficiency of the incumbent nor on the availability of substantivevacancies. The principle for deciding inter se seniority has toconform to the principles of equality spelt out by Articles 14 and16. If an appointment is made by way of stop-gaparrangement, without considering the claims of all theeligible available persons and without following the rulesof appointment, the experience on such appointment cannotbe equated with the experience of regular appointee,because of the qualitative difference in the appointment.To equate the two would be to treat two unequals as equalwhich would violate the equality clause. But if the appointmentis made after considering the claims of all eligible candidates andthe appointee continues in the post uninterruptedly till theregularization of his service in accordance with the rules madefor regular substantive appointments, there is no reason to excludethe officiating service for purpose of seniority. Same will be theposition if the initial appointment itself is made in accordance with

the rules applicable to substantive appointments as in the presentcase. To hold otherwise will be discriminatory and arbitrary…..

47. To sum up, we hold that

(A) Once an incumbent is appointed to post according toa rule, his seniority has to counted from the date ofappointment and not according to date of his confirmation.The corollary to the above rule is that where the initialappointment is only ad hoc and not according to rules andmade as stop-gap arrangement, the officiation in such postcannot be taken into account considering the seniority.”

(emphasis supplied)

The decision in Direct Recruits (supra) stands for the principlethat ad hoc service cannot be counted for determining the seniority if theinitial appointment has been made as stop gap arrangement and notaccording to rules. The reliance placed by the Single Judge in thejudgement dated 6 December 1991 on Direct Recruits (supra) to holdthat the ad hoc service should be counted for conferring the benefit ofseniority in the present case is clearly misplaced. This principle laid downin Direct Recruits (supra) was subsequently followed by this Court inKeshav Chandra Joshi v. Union of India[15]. Recently two judgeBench of this Court in Rashi Mani Mishra v. State of Uttar Pradesh[16],of which one of us (Justice DY Chandrachud) was part, observed thatthe services rendered by ad hoc employees prior to their regularizationcannot be counted for the purpose of seniority while interpreting theUttar Pradesh Regularization of Ad Hoc Appointment Rules. This Courtnoted that under the applicable Rules, “substantive appointment” doesnot include ad hoc appointment and thus seniority which has to be countedfrom “substantive appointment” would not include ad hoc service. ThisCourt also clarified that the judgement in Direct Recruits (supra) cannotbe relied upon to confer the benefit of seniority based on ad hoc servicesince it clearly states that ad hoc appointments made as stop gaparrangements do not render the ad hoc service eligible for determiningseniority. This Court speaking through Justice MR Shah made thefollowing observations:

15 1992 Supp (1) SCC 272

16 2021 SCC OnLine SCC 509

“36. The sum and substance of the above discussion would bethat on fair reading of the 1979 Rules, extended from time totime; initial appointment orders in the year 1985 and the subsequentorder of regularization in the year 1989 of the ad hoc appointeesand on fair reading of the relevant Service Rules, namely ServiceRules, 1993 and the Seniority Rules, 1991, our conclusion wouldbe that the services rendered by the ad hoc appointees prior totheir regularization as per the 1979 Rules shall not be counted forthe purpose of seniority, vis-à-vis, the direct recruits who wereappointed prior to 1989 and they are not entitled to seniority fromthe date of their initial appointment in the year 1985. The resultanteffect would be that the subsequent re-determination of theseniority in the year 2016 cannot be sustained which wasconsidering the services rendered by ad hoc appointees prior to1989, i.e., from the date of their initial appointment in 1985. Thiscannot be sustained and the same deserves to be quashed and setaside and the seniority list of 2001 counting the services renderedby ad hoc appointees from the date of their regularization in theyear 1989 is to be restored.37. Now so far as the reliance placed upon the decision of thisCourt in the case of Direct Recruit Class II Engg. Officers’ Assn.(supra), relied upon by the learned Senior Advocate appearing onbehalf of the ad hoc appointees is concerned, it is required to benoted that even in the said decision also, it is observed and heldthat where initial appointment was made only ad hoc as stopgap arrangement and not according to the rules, the officiation insuch post cannot be taken into account for considering the seniority.In the case before this Court, the appointments were made to apost according to rule but as ad hoc and subsequently they wereconfirmed and to that this Court observed and held that whereappointments made in accordance with the rules, seniority is to becounted from the date of such appointment and not from the dateof confirmation. In the present case, it is not the case ofconfirmation of the service of ad hoc appointees in the year 1989.In the year 1989, their services are regularized after followingdue procedure as required under the 1979 Rules and after theirnames were recommended by the Selection Committee constitutedunder the 1979 Rules. As observed hereinabove, the appointmentsin the year 1989 after their names were recommended by the

Selection Committee constituted as per the 1979 Rules can besaid to be the “substantive appointments”. Therefore, even onfacts also, the decision in the case of Direct Recruit Class IIEngg. Officers’ Assn. (supra) shall not be applicable to the factsof the case on hand. At the cost of repetition, it is observed thatthe decision of this Court in the case of Direct Recruit Class IIEngg. Officers’ Assn. (supra) was considered by this Court in thecase of Santosh Kumar (supra) when this Court interpreted thevery 1979 Rules.”

The notification dated 3 May 1977 stated that the ad hocappointments were made in administrative interest in anticipation ofregular appointments and on account of delay that takes place in makingregular appointment through the concerned agencies. In this regard, thevacancies were notified to the Employment Exchange or advertisementswere issued, as the case maybe, by appointing authorities. Theappointments were not made on the recommendation of the PunjabSubordinate Service Selection Board. However, subsequently policydecision was made to regularize the ad hoc appointees since their ousterafter considerable period of service would have entailed hardship.Thus, the initial appointment was supposed to be stop gap arrangement,besides being not in accordance with the rules, and the ad hoc servicecannot be counted for the purpose of seniority.

21. Now the question that remains is that who would be bound bythe judgement given in Malook Singh judgement which was subsequentlyoverruled in Gurmail Singh. In State of Rajasthan v. Nemi ChandMahela[17] two judge Bench of this Court has elucidated the differencebetween the doctrine of res judicata and law of precedent in the followingterms:

“11…The reasoning given in paras 22 and 23 in ManmohanSharma case [Manmohan Sharma v. State of Rajasthan, (2014) 5SCC 782 : (2014) 2 SCC (L&S) 8] relating to the case of DanveerSingh would reflect the difference between the doctrine of resjudicata and law of precedent. Res judicata operates inpersonam i.e. the matter in issue between the same partiesin the former litigation, while law of precedent operates inrem i.e. the law once settled is binding on all under the

Ajurisdiction of the High Court and the Supreme Court. Resjudicata binds the parties to the proceedings for the reasonthat there should be an end to the litigation and therefore,subsequent proceeding inter se parties to the litigation isbarred. Therefore, law of res judicata concerns the samematter, while law of precedent concerns application of lawBin similar issue. In res judicata, the correctness of thedecision is normally immaterial and it does not matterwhether the previous decision was right or wrong, unlessthe erroneous determination relates to the jurisdictionalmatter of that body. [Internal citations omitted]”

(emphasis supplied)

Thus, binding decision of the court which has attained finalitywould bind the parties to the proceedings inter-se. The privaterespondents in Malook Singh’s case were persons who had beenrecruited after 1 April 1977 albeit after following regular process ofDselection. The judgment, therefore, would only bind those who are partiesto the proceedings. The judgment would by no means operate to bindothers whose interest did not coincide with the private respondents whoare impleaded in the proceedings. This is precisely the reason why theSingle Judge in the subsequent proceedings held that the seniority listEwhich was prepared pursuant to the earlier judgment would not operateto bind those persons who were not parties to the earlier proceedingsand were adversely affected. In this backdrop, there is no reason forthis Court to take different view than that which has weighed with theHigh Court in coming to the conclusion that in view of the express termsof the policy of regularization, seniority would date with effect from theFdate of regularization.

22. Having resolved the above issue, as matter of principle, theCourt is then left with moulding the relief. Both the appellants and theprivate respondents, as well as the appellants in the companion appealshave from time to time received their promotions during the pendency ofGthese proceedings and have retired from service. Some among themhave retired nearly decade ago. There may be some merit in thesubmissions which have been urged by Mr P S Patwalia, learned seniorcounsel that the judgment in CWP No 2780 of 1980 must govern thosewho are parties to the proceedings and cannot be resiled from by theHState which was bound by the ultimate direction. Recasting the seniorityof persons who have retired from service after receiving promotionsand reworking the dates of notional promotion at this stage for the entirecadre going back all the way to 1 April 1977 is daunting exercise forthe State of Punjab. This is point which was emphasized by Ms AnushaNagarajan in the course of her submissions. Revising the seniority atthis length of time would cast an insuperable burden on the State. Duringthe pendency of these proceedings, an exercise was directed to beconducted on limited basis, for which several months were required.Retrieving correct data to rework seniority commencing from April 1977would be extremely difficult, resulting in further litigation. With thisbackdrop, when most of the pensioners have retired from service severalyears ago, it would be in the interests of justice if the pensionary benefitswhich they are now receiving are duly protected both against recoveriesand in respect of their disbursement for the future. Such directionwould be manifestly in the interest of justice and accordingly we issuean order under Article 142 of the Constitution to that effect. Insofar asthe private respondents are concerned, they too like the appellants havebeen promoted from time to time during the pendency of these proceedingssince 2011 and are in the receipt of pensionary benefits. The matter, inour view, must rest there so that the pensioners are not left in state ofuncertainty at this stage of their lives after rendering long years of serviceto the State in the Punjab Civil Secretariat.

23. Consequently, while we affirm the judgment of the DivisionBench on the issue of the principle which has been decided above, wedirect that:

(i)The pensionary benefits which are being disbursed to theappellants shall not be disturbed. Likewise, the pensionaryFpayments which are being disbursed to the respondents shallbe paid over in accordance with law;

(ii)No recoveries shall be made of any nature whatsoever fromthe appellants; and

(iii)Insofar as the companion appeals are concerned, asGrecorded earlier, CWP No 16925 of 2003 and CWP No4490 of 1994 were instituted on the basis of the observationsof the Single Judge in Malook Singh’s case. That aspecthas been duly clarified both in the Letters Patent Appealand by the Single Judge in the judgment dated 5 January

1098SUPREME COURT REPORTS[2021] 7 S.C.R.

A2011. Hence, no further directions are required in thecompanion appeals. Both sets of appeals are disposed of.

24. The appeals are accordingly disposed of.

25. Pending applications, if any, stand disposed of.

Divya Pandey

Appeals disposed of.