New Delhi, March 28
In the era of economic liberalisation when a lot of emphasis is on downsizing the administration, the Supreme Court in a judgment of far-reaching significance today ruled that the government had a right to abolish any office or post and retrenched employees had no right to seek re-employment or adjustment in other departments.

Holding that the government’s power to abolish any post had been recognised by the apex court in its various rulings, a Bench of Mr Justice H. K. Sema and
Mr Justice A. R. Lakshmanan said if such closure resulted in the holder of the office ceasing to be a government servant it “has got to be recognised”.

“The measure of economy and the need for streamlining the administration to make it more efficient may induce any state government to make alternations in the staffing pattern of the civil services necessitating either the increase or decrease in the number of posts or abolish the post. In such an event, a department which was abolished or abandoned wholly or partially for want of funds, the court cannot, by a writ of mandamus, direct the employer to continue employing such employees as have been abolished,” the apex court ruled.

“In such circumstances, this court has held in a number of cases that the employees have no right to seek re-employment in any other organisation,” the court said.

The Bench said when the government had made a “categorical condition” in its abolition order that the employees “will not be given any pay protection, and moreover due to the absence of any legal right for pay protection” such claims, in our opinion, cannot be sought for.”

The ruling came in a case pertaining to the abolition of Avas Vikas Sansthan (AVS), an organisation created by the Rajasthan Government in 1988 under the Societies Registration Act an objective to make study of technology for construction of low cost houses and collecting data for this purpose.

The AVS created under the housing scheme of Urban Development Corporation, an undertaking of the Union Government, had 604 employees when its management took a decision on March 26, 1999 to dissolve the body as it was incurring huge financial losses and did not have funds to pay the salaries to the employees.

The Congress Government, headed by the then Chief Minister, Mr Ashok Gehlot, had ratified the dissolution of AVS in a Cabinet decision on May 18, 1999 by making an explicit provision in its order that “no pay protection be granted to the employees.”

The Rajasthan High Court had allowed writ petition of employees and directed the state government to protect their pay and pension benefits, fix higher pay scale to them under 1992 order, give them benefit of Fifth Pay Commission, regularise daily wages and give alternative employment to some of them in local bodies.