The Bombay High Court has held that once the competent authority vide his order under Section 76(2) of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, regularized the appointments and the parties had acted upon that order, the benefit so conferred could not subsequently be taken away or deferred by an order passed without valid reasons, without expressly recalling the earlier order, and without issuing a show-cause notice and granting an opportunity of hearing.
The Court clarified that an order having civil consequences and depriving the petitioners of benefits already conferred could not be sustained when passed in breach of the principles of natural justice and in breach of Articles 14 and 16 of the Constitution of India. Accordingly, the impugned orders were directed to be withdrawn, cancelled, quashed and set aside.
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The Division Bench comprising Justice G. S. Kulkarni and Justice Aarti Sathe found much substance in the petitioners’ contentions because, admittedly, by the order dated June 24, 2002, respondent no. 2 had regularized the appointments of the petitioners in exercise of powers under Section 76(2), and such regularization was required to be given effect from the date of that order.
The Bench observed that the petitioners had accepted the order and had changed their position by withdrawing the complaint before the Labour Court on the basis that the disputes stood settled, and therefore vested rights had accrued to them. The impugned order dated June 19, 2006 was held to have been passed abruptly, without issuance of a show-cause notice or grant of an opportunity of hearing, although its effect was to take away the benefit of regularization already granted and postpone it to a later date.
The Bench further observed that the impugned order did not record any valid reason, did not expressly recall or supersede the earlier order dated June 24, 2002, and that before such drastic action could be taken, the earlier order ought to have been recalled in a manner known to law after issuing a show-cause notice. The Bench also held that even this could not have been done after four years when both parties had acted upon the earlier regularization order. It rejected the justification in the reply affidavit and observed that the issue of irregular appointment had become a non-issue in view of the order dated June 24, 2002, and that the earlier order granting regularization was itself in the nature of a compromise.
Thus, the Bench held that the impugned order, having civil consequences, could not have been passed in the manner adopted and that the valuable rights of the petitioners guaranteed under Articles 14 and 16 of the Constitution of India had stood breached.
Briefly, the petitioners were appointed to various Class IV posts by Uran Municipal Council. Although the State contended that these appointments were made without following the prescribed procedure under the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965, the petitioners contended that an advertisement had been issued, interviews were conducted by the Selection Committee, and appointment orders were issued on March 31, 1997, May 14, 1997 and September 29, 1997. As they were not being treated as regular employees, Complaint (ULP) No. 141 of 2001 was filed before the Labour Court at Thane seeking regularization.
During the pendency of that complaint, by order dated June 24, 2002, the Director of Municipal Administration, in exercise of powers under Section 76(2) of the said Act, regularized the appointments of the 21 employees as a one-time exception and granted ex post facto sanction subject to conditions. Pursuant to this, the petitioners withdrew the Labour Court complaint on the ground that permanency letters had been issued and the matter stood settled. Thereafter, by order dated June 19, 2006, the Deputy Director communicated that the petitioners should be regularized only with effect from the date of that order and not from the earlier date.
