Supreme Court Grants Regular Pay-Scale to Temporary Employees After Three Years of Service: Sets Aside Madhya Pradesh High Court’s Division Bench Ruling, Holds Government Cannot Arbitrarily Deny Benefits Granted Under 1984 Circular

Court’s Decision

The Supreme Court of India set aside the Division Bench’s judgment of the Madhya Pradesh High Court dated 02.12.2019, which had denied the benefit of regular pay-scale to the appellants. The Court reinstated the Single Judge’s judgment of 12.07.2019, which granted the appellants the right to regular pay-scale after completing three years of service.

The Supreme Court ruled that:

1. The Madhya Pradesh government’s circular dated 10.05.1984 applied to the appellants, making them eligible for regular pay-scale after three years.
2. The High Court’s Division Bench wrongly distinguished the appellants’ case from the earlier case of Ram Naresh Prajapati, which was decided in favor of similar employees.
3. The designation of the appellants as “part-time” sweepers was irrelevant since they were appointed against sanctioned posts through a Special Recruitment Drive.
4. The State government had no valid grounds to deny the benefit of regular pay-scale, as similar benefits had already been granted in previous cases.

Accordingly, the Supreme Court:

• Reinstated the Single Judge’s judgment,
• Ordered the State to grant regular pay-scale to the appellants, and
• Allowed the appeals in full.

Facts of the Case

Background

1. The appellants were appointed as part-time sweepers under a Special Recruitment Drive initiated by the Madhya Pradesh government to fill reserved posts for Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBC) in various departments.
2. The recruitment was conducted through a Selection Committee, and the appointments were made by orders of the Deputy Director of Veterinary Services, based on recommendations of the Collector’s Office.
3. The appellants were engaged as temporary employees on daily wages but continued working for several years without being granted regular pay-scale.

Government Circulars and Rules Governing the Case

1. The Madhya Pradesh Veterinary Department Contingency Paid Employees Recruitment & Conditions of Service Rules, 1979 (“1979 Rules”) provided guidelines for recruitment and service conditions of contingency-paid employees.
2. Circular dated 10.05.1984, issued by the Madhya Pradesh General Administration Department, provided that:
   • Employees initially appointed on fixed wages for three years would be considered temporary employees.
   • After completing three years, they would be eligible for revised (regular) pay-scale.
3. Circular dated 14.09.1998 stated that candidates appointed under the Special Recruitment Drive on regular posts would receive regular pay-scale.
4. Circular dated 07.10.2016 extended the benefit of regular pay-scale to daily wage employees, allowing them to be regularized as permanent employees.

Key Events Leading to the Case

1. Between 2006 and 2007, the appellants were appointed under the Special Recruitment Drive as part-time sweepers in the Work Charged Contingency Paid Establishment, with orders issued by the Deputy Director of Veterinary Services.
2. Similar employees who had been appointed earlier (1993-1996) under the same scheme had approached the High Court in Ram Naresh Prajapati v. State of MP, seeking regular pay-scale under the 10.05.1984 circular.
3. The Single Judge of the Madhya Pradesh High Court ruled in their favor on 21.01.2016, directing the government to grant them regular pay-scale.
4. The Division Bench of the High Court upheld this decision in Writ Appeal No.197 of 2016 on 21.03.2017.
5. The State challenged this ruling in the Supreme Court, but the Supreme Court dismissed the appeal on 10.01.2018, imposing a cost of ₹1,00,000 on the government.

The Appellants’ Legal Battle

1. The appellants (present case) filed representations before the Competent Authority, citing the 2016 High Court judgment in Ram Naresh Prajapati and demanding regular pay-scale. Their requests were rejected.
2. On 30.04.2018, they filed a writ petition before the Madhya Pradesh High Court, arguing that they were similarly placed and deserved regular pay under the 10.05.1984 circular.
3. The Single Judge allowed their petition on 12.07.2019, holding that the appellants were entitled to regular pay-scale and directing the State to implement the same.
4. The Madhya Pradesh government appealed, and the Division Bench overturned the Single Judge’s ruling on 02.12.2019, distinguishing the case from Ram Naresh Prajapati.
5. The Supreme Court has now set aside this Division Bench ruling and restored the Single Judge’s decision.

Issues Before the Supreme Court

1. Are the appellants entitled to regular pay-scale under the 10.05.1984 circular after completing three years of service?
2. Did the Division Bench of the High Court err in distinguishing the appellants’ case from Ram Naresh Prajapati?
3. Is the State’s denial of regular pay-scale arbitrary and in violation of legal precedents?

Petitioners’ Arguments

1. The appellants were recruited through a formal selection process under the Special Recruitment Drive, against sanctioned posts.
2. They completed three years of service and were entitled to regular pay-scale under the 10.05.1984 circular.
3. Their case was identical to Ram Naresh Prajapati, which had already been decided in favor of employees.
4. The State’s refusal to grant regular pay was arbitrary, especially since other daily wage employees had already been regularized under the 07.10.2016 circular.

Respondent’s Arguments

1. The State argued that the appellants were engaged only on a temporary basis and not against sanctioned posts.
2. Unlike the petitioners in Ram Naresh Prajapati, the appellants were never upgraded to full-time positions after a Screening Committee’s scrutiny.
3. The 10.05.1984 circular did not apply to part-time workers, and their claim for regular pay was unjustified.

Supreme Court’s Analysis and Reasoning

1. The appellants were appointed under a legitimate recruitment process and against sanctioned posts.
2. The 10.05.1984 circular applied to them since they were temporary employees who had completed three years of service.
3. The Division Bench wrongly distinguished the appellants’ case from Ram Naresh Prajapati, as the absence of a Screening Committee was an artificial distinction.
4. The appellants were entitled to regular pay-scale, just as similarly situated employees had received in previous cases.

Conclusion

1. The Supreme Court set aside the High Court’s Division Bench order of 02.12.2019, reinstating the Single Judge’s decision of 12.07.2019.
2. The appellants were declared entitled to regular pay-scale from the date of completion of three years of service.
3. The State was ordered to implement the order without delay and grant arrears.
4. The appeals were allowed in full.

Implications of the Judgment

1. Strengthens the rights of temporary employees by ensuring they receive benefits under government circulars.
2. Prevents the State from arbitrarily denying benefits that have already been upheld by courts in previous cases.
3. Ensures uniformity in employment benefits for similarly placed employees.

This ruling reaffirms that government employees who have completed three years in temporary service cannot be denied regular pay-scale arbitrarily.

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