D.Y. Chandrachud, J.
1. Rule, by consent of Counsel returnable forthwith. Counsel appearing on behalf of the Respondents waives service. By consent of Counsel and at their request taken up for hearing and final disposal.
The Petitioner before the Court is a statutory body constituted under the Khadi and Village Industries Commission Act, 1956. The activities of the Petitioner are subject to the supervision and control of the Central Government. The expenditure incurred by the Petitioner, including the salaries of its employees, is provided from the Consolidated fund. The Central Government appoints the Chairman and other Directors on the Board of Directors of the Petitioner.
2. The two Respondents are unskilled workmen, who are engaged in an establishment conducted by the Petitioner at Dahanu, known as the Gajanan Naik Multidisciplinary Trading Centre. The workmen were initially engaged in 1988 as daily wagers. In 1992 their services came to be terminated. The Respondents challenged the dispensation of their services and succeeded before the Labour Court at Thane. The workmen were reinstated in service by the Petitioner as daily wagers and have continued to thereafter remain in service.
3. A complaint of unfair labour practices was instituted by the Respondent-workmen, being Complaint (ULP) 212 of 2006 under Items 5, 6 and 9 of Schedule-IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Ad, 1971. The relief that was sought against the Petitioner was that the workmen be made regular employees and be given the status of permanent employees. Consequential relief of the fixation of pay scales, increments and allowances was also sought. Evidence was adduced before the Industrial Court. On behalf of the workmen, the First Respondent and on behalf of the Petitioner, an officer of the rank of Assistant Director working in the Workshop at Dahanu, filed affidavits in lieu of Examination-in-Chief.
4. The defence to the complaint of unfair labour practices was that the activities of the Petitioner are subject to the administrative control of the Central Government under the Khadi and Village Industries Commission Act, 1956. It has been stated that the Central Government has laid down the procedure for making appointments to various categories of posts. Before appointments are made, posts have to be sanctioned and the procedure for selection, including by advertising of posts, has to be followed. Reliance was placed on Standing Order 766 dated; 28th April, 1969. It has been stated that the workshop at Dahanu was suffering heavy losses and the consolidated, balance sheet in respect thereof would show an accumulated loss of Rs. 1,26 crores. According to the Petitioner, sufficient work was not available even for the regular employees of the Commission and the salaries of the regular employees have not been paid on time. In the circumstances, it was stated that the establishment of the Petitioner is not in a position to absorb an additional burden by way of salary expenditure and there was no question, therefore, of recruiting additional man power. It was stated that there was no vacant post of a helper at Dahanu sanctioned by the Central Government. As K-matter of fact, the officers of the Petitioner have been directed to stop appointing daily wagers altogether. In any event, it was submitted, the Respondents could not be regularized bypassing the regular recruitment procedure.
5. Before the Industrial Court one of five defences which was raised was as regards the jurisdiction of the Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. This challenge m founded on the argument that the appropriate Government in respect of the Petitioner is the Central Government and not the State Government under Section 2(a)(i) of the Industrial Disputes Act, 1947. In so far as this aspect is concerned, the issue is no longer res Integra and is covered by the judgment of a Division Bench of this Court dated 5th May, 2005 in Khadi and Village Industries Commission v. Jagdish B. Patil 2004 LPA 55 of in Writ Petition 5312 of 2001. In fart, the judgment was in a case; involving the Respondents to these proceedings. The: Division Bench held that the appropriate Government in relation to industrial disputes concerning the Khadi and Village Industries Commission is the Slate. Government. In the circumstances, the first issue would stand concluded by the judgment of the Division Bench.
6. The Industrial Court by its order dated 21st April, 2008 held that the workmen had been continued as daily wagers ever since 1988 And that it was necessary that the posts on which they were working should be get sanctioned. The operative direction which was issued by the Industrial Court was to the following effect:
The respondents are hereby directed to consider the claim of the complainants on priority and if at any time in near future the posts on which they are working are sanctioned and if not it is further directed that the Respondents should take necessary positive steps to submit proposal to the appropriate authority of the concerned for getting sanctioned posts on which the complainants are working, so that the same needs to be got sanctioned within the stipulated period of three months from the date of this order and thereafter the workers concerned be awarded all the monetary and consequential benefits arising out of the same.
7. Counsel appearing on behalf of the Petitioner submitted that the Industrial Court has transgressed its jurisdiction in issuing a direction that the Petitioner should submit a proposal for getting the posts on which the Respondents are working sanctioned from the Competent Authority and that the posts should be got sanctioned within a period of three months upon which the workmen concerned should be awarded all monetary and consequential benefits arising therefrom. It was submitted that such a direction for getting the posts sanctioned by the Central Government could not have been issued and having regard to the precarious financial position of the Petitioner, it was impossible to contemplate any further recruitment at this stage. On the other hand, Counsel appearing on behalf of the Respondent workmen supported the order of the Industrial Court.
8. The Petitioner is a statutory body constituted under the Khadi and Village Industries Commission Act, 1956. The Commission is established and constituted under Section 4(1) and the members of the Commission are appointed by the Central Government. The functions of the Commission under Section 15(1) are to plan, promote, organize and assist in the establishment and development of Khadi and Village Industries in rural areas. Section 16 provides that the Commission would be bound in the discharge of its functions by such directions as the Central Government may give to it. Under Section 17, the Central Government, after due appropriation made by Parliament by law, pays to the Commission in each financial year such sums as may be considered necessary for the performance of the functions of the Commission under the Act. Under Section 20(1) the Commission is required to prepare and submit its budgets to the Central Government. Sub-section (2) of Section 20 provides that no sum shall be expended by or on behalf of the Commission unless the expenditure is covered by a specific provision in the budget-approved by, the Central Government. The Central Government is empowered to frame rules under Section 26 to give effect to the provisions of the Act. The Commission is subject to the administrative control of the Central Government. The Respondents are daily wagers whose services were dispensed with in 1992. Following an order of reinstatement passed by the Labour Court, they have been continued as daily wagers. On behalf of the Petitioner, evidence was adduced before the Industrial Court. The Assistant Director, who deposed, stated that no post of helper had been sanctioned by the Central Government and even against sanctioned posts, there was a regular procedure for filling up vacancies. In so far as the workshop at Dahanu is concerned, it has sustained accumulated losses of Rs. 1.26 crores and sufficient work was not available even for regular employees. The Respondents were being paid minimum Wages at the rate of Rs. 110/- per day.
9. The Central Government which has the power and jurisdiction to sanction posts in the establishment of the Commission was not a party to the complaint. There is merit in the submission which was urged on behalf of the Petitioner that the Industrial Court has acted in excess of its jurisdiction in directing that the posts should be got sanctioned within three months by the Central Government. The jurisdiction ID sanction posts does not vest with the Petitioner, but with the Central Government. The Central Government was not before the Industrial Court. A direction that the posts should be got sanctioned within a period of three months could not have been passed in proceeding, to which the sanctioning authority was not a party. That apart, the fundamental point is that the question as to whether a particular post should be sanctioned of otherwise is entirely a matter which has to be determined by the Central Government in its discretion, having regard to the financial and administrative implications of creating additional posts. It is no part of the jurisdiction of the Court to intercede in this area. Recruiting additional manpower impinges on budgetary provisions. Granting permanency similar affects the financial position of the organisation which Government funds. Judicial orders of the nature which the Industrial Court has passed will only hasten the process of rendering a dysfunctional organization defunct. Courts, including Industrial Courts, wide as their jurisdiction may be, must be conscious of the clear line which demarcates judicial review from matters which lie within the province of Government. Sanctioning posts is an instance of a power which is the realm of the executive. There is merit in the submission which has been urged on behalf of the Petitioner that having regard to the precarious financial position, particularly of the workshop at Dahanu, there is no need for additional man power, particularly in the context of a situation where even the regular employees do not have adequate work. The Petitioner has continued the Respondents in service in pursuance of the order passed by the Labour Court following the earlier termination in the year 1992, which was challenged. That however, cannot confer upon the Respondents a right to regularization. The direction which was issued by the Industrial Court to the Petitioner to move the Central Government for sanction and to get the posts sanctioned within a period of three months is, in the circumstances, unsustainable and will have to be quashed and set aside. The Petition has to be allowed and is accordingly allowed. Rule is made absolute in terms of prayer Clause (a). In the circumstances of the case, there shall be no order as to costs