Overruling versus Reversal: SC explains mere overruling of principles by subsequent judgment will not dilute binding effect of decision inter partes

Supreme Court: A Division Bench of S. Abdul Nazeer and Krishna Murari, JJ. held that there is a distinction between overruling a principle and reversal of the judgment. The Supreme Court reaffirmed the settled position of law by explaining that:

“Mere overruling of the principles, on which the earlier judgment was passed, by a subsequent judgment of higher forum will not have the effect of uprooting the final adjudication between the parties and set it at naught. “

Facts and Appeal

In July 1984, the appellant was appointed as Assistant Music Teacher in Government Inter College, Mahmoodabad, Sitapur, on a leave vacancy as the regular incumbent went on leave without pay. It so happened that the incumbent employee never returned and the appellant continued in service till 2021, albeit by virtue of the order of Single Judge of Allahabad High Court granting a stay on State’s order which had effectively dispensed with the appellant’s service in May 1986.

In August 2001, the State of Uttar Pradesh promulgated the Regularisation Rules, 2021 (U.P. Secondary Education Department Regularisation of Ad hoc appointments on the Post of Trained Graduate Teachers Rules, 2001). The appellant made a representation to authorities seeking regularisation in accordance with the Rules. When no action was taken on her representation, the appellant filed a writ petition before the High Court. In January 2006, a Single Judge returned a finding that the appellant had requisite qualification and had acquired a right to hold the post. It was ordered that the appellant would continue on her post and her case shall be considered for regularisation. Notably, this judgment was never challenged and therefore attained finality.

Subsequently, however, the Joint Director of Education rejected the appellant’s claim for regularisation. The appellant filed another writ petition before the High Court, and in May 2014, a Single Judge allowed her writ petition holding that since the earlier order of the Single Judge attained finality, refusal to apply Regularisation Rules, 2021 was unlawful. In terms of this judgment, the State regularised services of the appellant and simultaneously filed special appeal before a Division Bench.

The Division Bench set aside the judgment of the Single Judge, holding that since the appellant was appointed on leave vacancy and her services came to an end on May 1986 and she continued on the post on the basis of the interim order passed by the High Court in earlier round of litigation and her appointment is litigious appointment and thus she had no enforceable right to hold the post legally. Aggrieved, the appellant approached the Supreme Court.

 Analysis and Observations

The Supreme Court noted that the High Court relied on the decision in State of Karnataka v. Umadevi (3), (2006) 4 SCC 1 where a Constitution Bench held that a temporary, contractual, casual or a daily-wage employee does not have a legal right to be made permanent unless the appointment has been made in accordance with the terms of the relevant service rules governing the said appointment and in adherence of Articles 14 and 16 of the Constitution. Then, the Court carved out an exception to the general principles against regularisation in case the following conditions are fulfilled: (i) The incumbent should have worked for 10 years or more on a duly sanctioned post without the benefit or protection of the interim order of any Court or Tribunal; and (ii) The appointment of such employee should not be illegal, even if irregular.

Applying the above tests carving an exception to the general principles against regularization, the Division Bench of the High Court had held that since the appointment of the appellant was dehors the rules and without undergoing the process of open competitive selection, as such the same was illegal and since she continued in service under the cover of the order passed by the Single Judge of the High Court, her appointment was litigious and, thus, not covered by exception carved out in Umadevi (3), (2006) 4 SCC 1.

The Supreme Court noted that the appellant was appointed to the post by the prescribed appointing authority under the relevant Service Rules, 1983. Further, she was appointed on a sanctioned post and possessed all necessary prescribed qualifications. The Court relied on State of Karnataka v. M.L. Kesari, (2010) 9 SCC 247 which laid down the conditions to test when the appointment will be considered illegal and when it shall be considered to be irregular. Applying the test, the Court concluded that the  appellant’s appointment could only be construed as irregular and not illegal. The finding recorded by the Division Bench of the High Court in respect of nature of the appointment of the appellant being illegal was thus not sustainable. It was held that rejection of the appellant’s claim for regularisation on the ground of her appointment being illegal was patently erroneous.

The only question which survived for Court’s consideration was whether her continuation on the post on the strength of the interim order passed by the High Court would disentitle her from regularisation in view of the dictum in the case of Umadevi (3), (2006) 4 SCC 1.

The Court referred to the January 2006 judgment of the Single Judge which had held that the appellant had requisite qualification and had acquired a right to hold the post in question. That judgment attained finality inter se between the parties as it was never put to challenge before any higher forum. That judgment also crystallised the right of the appellant for regularisation.

Next, the Court noted that when the judgment of the Single Judge was passed in January 2006, the dictum of Umadevi (3) was not even in existence as that judgment was rendered subsequently only in April 2006. Opining that the Division Bench of the High Court did not correctly understand the dictum in Umadevi (3), the Supreme Court clarified that:

“The Constitution Bench [in Umadevi (3), (2006) 4 SCC 1] has nowhere directed that service matters that stand concluded  inter partes, ought to be reopened.”

Referring to para 54 of Umadevi (3) itself, the Court stated that it is absolutely clear that earlier decisions running counter to the principles settled in the decision of Umadevi (3) will not be treated as precedents, but it cannot mean that the judgment of a competent court delivered prior to the decision in Umadevi (3) and which has attained finality and is binding inter se between the parties need not be implemented.  It was further explained:

“There is a distinction between overruling a principle and reversal of the judgment. The judgment in question itself has to be assailed and got rid of in a manner known to or recognised by law. Mere overruling of the principles by a subsequent judgment will not dilute the binding effect of the decision on inter parties.”

Lastly, the Supreme Court noted that the Division Bench of the High Court proceeded as if it was hearing an appeal against the January 2006 judgment of the Single Judge which had already attained finality. However, the appeal was filed against the later judgment of May 2014. On this, the Court said that:

“It is a well settled principle of law that a Letters Patent Appeal which is in continuation of a Writ Petition cannot be filed collaterally to set aside the judgment of the same High Court rendered in an earlier round of litigation ignoring the principles of res judicata and doctrine of finality.”

Decision

In such view of the matter, the Supreme Court held that the impugned judgment passed by the Division Bench of the Allahabad High Court was not sustainable and was, therefore, set aside. The appellant was held entitled to be regularised with all consequential benefits. [Neelima Srivastava v. State of U.P., 2021 SCC OnLine SC 610, decided on 17-8-2021]


Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

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