Ashok Kumar Sharma and Others vs State of M.P. and Others

S.K. Gangele, J.

Petitioners have filed this petition with regard to grant of declaration that they are employees of the State Government and they are entitled to the benefits at par with the employees of the State Government. The petitioners No. 1 and 2 were appointed vide order dated 18th June 1984 on the posts of Sub-Engineer and Draftsman respectively by the Director, Directorate of Urban Administration Department, Bhopal. Both were posted in the office of Deputy Director, Urban Administration, Gwalior. Copy of the appointment order is filed as Annexure P-8. Similarly, petitioner No. 3 was appointed on the post of Tracer vide order dated 30th April 1979 by the Deputy Director, Local Self Government, Gwalior Division, Gwalior. Copy of the appointment order is filed as Annexure P-9. Petitioner No. 4 was also appointed as Lower Division Clerk in the office of Deputy Director Local Self Government, Gwalior Division, Gwalior by the Deputy director vide order dated 01.11.1980, copy of the appointment order is filed as annexure P-10. Petitioners Nos. 5 and 6 were also appointed on the posts of peon vide order dated 22.05.1987 and 27.05.1986 by the Deputy Director, Urban Administration, Gwalior Division, Gwalior. Copies of their appointment orders are Annexures P-11 and P-12 respectively. Petitioners have been working in the office of Deputy Director, Urban Administration, Gwalior Division, Gwalior. They have been treated as the employees of Engineering Cell and their services have been governed by the rules named as "Madhya Pradesh Municipal Employees Recruitment and Conditions of Service Rules, 1968.

In order to look after the work of respective Municipalities the State constituted services named as Madhya Pradesh Municipal Services (Engineering) vide notification dated 27th May 2005 and at the head quarter level and also division level constituted office of Director and also office of Deputy Director at division level named as office of Deputy Director, Urban Administration. To supervise the work and administrative control Director and Deputy Directors and other staff of the office have been appointed by the State Government. State Government also sanctioned the requisite staff at Directorate level and Deputy Directorate level vide a Memo dated 27th May 1975. At Deputy Director level the posts of five Assistant Engineers, ten Sub Engineers, five Tracers, Five Draftsmen, five posts of Lower Division Clerks and ten posts of Peons were sanctioned. It is an admitted fact that all the petitioners have been posted and appointed against the aforesaid posts in the office of Deputy Director, Gwalior Division Gwalior. The salaries of the employees working on the afore said posts have been fixed at par with the respective employees working in the Public Works Department of the State Government. For the purposes of grant of salary it was decided that an amount of 0.28 per cent of grant given to the Local Self Government be deposited in a Bank and from the aforesaid fund the salaries of the employees be disbursed. The employees were also granted pension and all other allowances, medical facilities and different loan advances at par with the State government employees. The petitioners, after revision of pay of the employees of the State Government in different pay commissions namely, Vora Pay Commission, Choudhary Pay Commission and 5th Pay Commission have not been given benefit at par with the State Government employees. Hence, they claimed that they are employees of the State Government because they are working under direct control of the Deputy Director, Urban Administration, who has also the Disciplinary Control including removal of the petitioners.

The respondents no. 1 to 3 in their return admitted the fact that in order to facilitate the difficulties of the Municipalities for the purposes of construction an Engineering Cell has been created under the administrative control of Director i.e. in each division under the Control of Deputy Director. It is further admitted that the salaries of the petitioners have been paid form the funds out of the subsidy granted to the Municipalities and the petitioners have also been paid the salary at par with the employees of the Public Works Department of the State Government, but, the petitioners are not the employees of the State Government because in their appointment orders it was mentioned that they would be the employees of the Municipality and there services would be Governed by the Recruitment Rules at par with the Municipal employees. It is also the admitted position that the State Government has not framed any specific Rules with regard to the employees of the State Municipal (Technical Cell).

Learned counsel for the petitioners has submitted that the petitioners are the employees of the State Government because the Municipal Council has no control over the services of the petitioners. Neither they are working in any office of the Municipalities. Only because they have been paid salary from a fund, constituted from the subsidy granted to the Municipalities, it cannot be said that they are employees of the Municipalities. Virtually, the Municipality has nothing to do with regard to their employment. In support of his contention the learned counsel for petitioners relied upon a Full Bench decision of this Court in the case of Suresh Chandra Sharma and Others Vs. State of M.P. and Others, and the judgment of Hon''ble the Supreme Court in the case of State of Gujarat and Others Vs. Raman Lal Keshav Lal and Others, and also in the case of R.N.A. Britto Vs. Chief Executive Officer and others, .

Contrary to this learned counsel for the State has submitted that the petitioners are not the employees of the State Government. They are the employees of the Municipal Councils as per their terms and conditions of the appointment. In support of his contention learned counsel for the State has relied upon a Division Bench judgment of this Court in the case of Janpad Panchayat Tatha Zila Panchayat Kramchari Sangh and Others Vs. State of M.P. and Others, .

The arguments of the learned counsel for the respondents that as per the Recruitment Rules named as Madhya Pradesh Municipal Employees Recruitment and Conditions of Service Rules, 1968 the petitioners are the employees of the Municipalities as per section 2 (e) of the aforesaid Rules cannot be accepted. In my opinion, only mentioning the fact in the appointment order that the petitioner would be employee of a Municipality, it cannot be held that he is a municipal employee because several other facts have to be taken into consideration by the Court as held by this Court and the Hon''ble Supreme Court.

From the facts stated above undisputed facts of the case are that the petitioners have been appointed by the Director and Deputy Directory of Urban Administration on their respective posts. The Engineering Cell has also been created by the Government under the Administrative control of the Director, Urban Administration, Madhya Pradesh, Bhopal. It has its office at division levels under the control of Deputy Director (Administration). The State Government has sanctioned posts at the office of Deputy Director, Urban Administration and on the aforesaid posts petitioners have been appointed. The terms and conditions of appointment i.e., their qualifications, payment of salaries, leave and other allowances and loan advances etc., have been fixed by the State Government. The pay of the petitioners have also revised from time to time by the State Government. The petitioners are under the administrative control of the Deputy Director and Director, who have a right to terminate the services of the petitioners and also award other punishments to the petitioners, sanction their leaves and other benefits. The salary of the petitioners have been paid from the fund created by deducting 28 percent amount from the grant of the Municipalities. Except this, the Municipalities have nothing to do with regard to service conditions of the petitioners. In the appointment orders of the petitioners it was mentioned that their services would be treated as the services under the Municipalities. It is also an admitted fact that with regard to the petitioners the State Government has not framed any Recruitment Rules.

The Full Bench of this Court in the case of Suresh Chandra Sharma v. State of Madhya Pradesh and others, reported in 2002 (2) MPLJ 530, in considering the point that whether the Chief Municipal Officer appointed u/s 87 of the Municipalities Act 1961 is a servant of the State Government has formulated following criteria with regard upholding the status of an employee

From the several decisions that we have referred to above, it clearly transpires that in order to find out whether a person holds a civil post under the State and is an employee of the State Government, the test to be applied is a s to whether :

The Statutory Body in connection whereof he is appointed, is a body which performs the functions which are essentially the functions of the State such as the imposition of the tax or fee in the nature of taxes and the salary and the allowance of the servants and the officers are paid out of funds contributed or lent by the State Government or raised by discharge of such essential governmental function; and

Whether the State Government has the right to select for appointment, the right to appoint, the right to terminate the employment, the right to take other disciplinary action and the right to prescribe the conditions of the service and the nature of the duties performed by such employee coupled with the right to issue direction and the right to determine and the source from which wages or salary shall be paid to such employee.

The Hon''ble Supreme Court in the case of R.N.A. Briito v. Chief Executive Officer and others, reported in AIR 1995 SC 1663, with regard to status of Panchayat Secretaries appointed under the Karnataka Village Local Boards Act (1959) as under :

The provisions of S. 80 and S. 210 of Karnataka Village and Local Boards Act clearly show that several functions which were required to be performed by the State are entrusted to the Panchayats. They also show that the properties vested in the Panchayats and the funds of the Panchayat are that of the Government and those collected by way of tax or fee by exercising the power of taxation vested in the Panchayat by the Government. Above all, provisions of the Act make it abundantly clear that the Panchayats have to function under the ultimate control of the State Government. When it comes to the Secretaries of the Panchayats appointed under the Act, their selection for appointment, their termination from service, their liability for transfer and all other conditions of their services are as provided for under the rules made under the Act or other rules made under Article 309 of the Constitution in respect of services of the State Government servants. When sub-section (2) of Section 80 of the Act States that subject to the provisions of Rules made under the proviso of Article 309 of the Constitution, the qualifications, powers, duties, remuneration and conditions of service including disciplinary matters of such Secretary shall be such as may be prescribed, it leaves no room for doubt that the secretaries of the Panchayats are Government servants, like other Government servants, who are subjected to the Rules to be made under the proviso to Article 309 of the Constitution as regards their service conditions.

Hon''ble the Supreme Court in Ram Singh and Others Vs. Union Territory, Chandigarh and Others, ; has held as under with regard to facts taken into consideration in considering the relationship of employer and employee:

In determining the relationship of employer and employee, no doubt, "control" is one of the important tests but is not to be taken as the sole test. In determining the relationship of employer and employee, all other relevant facts and circumstances are required to be considered including the terms and conditions of the contract. It is necessary to take a multiple pragmatic approach weighing up all the factors for and against and employment instead of going by the sole "test of control". An integrated approach is needed. "Integration" test is one of the relevant tests. It is applied by examining whether the person was fully integrated into the employer''s concern or remained apart from and independent of it. The other factors which may be relevant are - who has the power to select and dismiss, to pay remuneration, deduct insurance contributions, organize the work, supply tools and materials and what are the mutual obligations" between them, (See Industrial Law, 3rd End, by IT. Smith and J.C. Wood, at pp.8 to 10.)

With regard to functions of the petitioners, it is clear that the petitioners are working in the office of Deputy Director, Urban Administration, Gwalior Division, Gwalior. They have been appointed in the afore said office. The office was created in order to extent the help and supervise the construction work taken by the Municipalities. The Municipalities have been assigned the work of construction also in then- respective areas. Earlier, the work was assigned to the Public Works Department. Hence, from the above facts, it is clear that the office of Deputy Director, Urban Administration in which the petitioners are working is performing the functions of the State Government and from the facts stated above, it is clear that the State Government has total control with regard to their appointment, disciplinary action and payment of salary, creation of posts, fixation of terms and conditions of employment. In such circumstances, in my opinion, the petitioners are the employees of the State Government and they falls within the definition of "State Employees."

Consequently, petition of the petitioners is allowed. It is hereby declared that the petitioners are the employees of the State government and they are entitled to get all the benefits at par with the State Government employees. The respondents are directed to implement the order within a period of three months from the date of receipt of a certified copy of this order. No orders as to costs.