Daily Wage Employment Through “Backdoor Entry” Creates No Right To Regularization Even After Decade Of Service: Patna High Court Dismisses LIC Workers' Plea While Clarifying Regularization Principles

Background

The petitioners, led by Tunna Kumar, were daily wage workers employed as Class-IV staff in various LIC branches for more than a decade. On 17-02-2020, LIC issued an order directing that all daily wage workers be removed from its offices and replaced with outsourced staff. The petitioners challenged this order, arguing that they were entitled to regularization due to their long-term service. They cited previous Supreme Court judgments, including E. Prabhawathi v. LIC of India (SLP (C) Nos. 10393-10413 of 1992) and D.V. Anil Kumar v. LIC of India (2011 SCC Online SC 1602), which had allowed regularization of temporary employees under certain conditions.

The petitioners sought the quashing of the order and requested the court to direct LIC to regularize their services, claiming that their employment for over ten years entitled them to such relief. They argued that LIC's decision to replace them with outsourced workers violated their rights and contradicted the principles laid down in the earlier Supreme Court cases.

Arguments

The petitioners, represented by Mr. Siya Ram Shahi, argued that they had been working as daily wage Class-IV staff in various LIC offices for over a decade. They pointed to prior Supreme Court rulings in E. Prabhawathi v. LIC of India and D.V. Anil Kumar v. LIC of India that allowed for the regularization of temporary employees who met specific criteria. The petitioners contended that they were entitled to the same treatment and that the LIC's decision to replace them with outsourced workers violated their rights.

Mr. Umesh Prasad Singh, counsel for LIC, opposed the petition, arguing that the petitioners had been engaged informally at the branch level and did not hold any sanctioned posts. He further contended that their temporary employment did not confer any legal right to regularization. Moreover, LIC, which had the authority to decide such matters, had not been made a party to the petition. The respondents emphasized that the petitioners' employment was a “backdoor entry,” and they were not entitled to regularization.

Court's Reasoning

The petitioners cited cases like D.V. Anil Kumar v. LIC of India and Hashmuddin v. LIC of India (Civil Appeal No. 2268 of 2011) to argue that their long-term service entitled them to regularization. However, the court found that these precedents were distinguishable. In those cases, the employees had been appointed through proper recruitment processes, while the petitioners in this case were hired informally by branch-level officers. Since their employment was not regularized through proper channels, they had no legal right to claim permanent employment.

The court further invoked the Supreme Court's ruling in Uma Devi v. State of Karnataka (2006) 4 SCC 1, which clarified that regularization cannot be claimed by employees engaged through “backdoor entry” or informal means. The court emphasized that merely being employed for a long time as a daily wager does not automatically grant a right to regularization. The petitioners' reliance on earlier Supreme Court cases was, therefore, misplaced, as they had not followed the appropriate recruitment process.

However, the court also explained that the petition failed on a technical ground. According to Section 3 of the Life Insurance Corporation of India Act, 1956, LIC is a body corporate capable of suing and being sued. Since the relief sought by the petitioners—regularization and employment—could only be granted by LIC, it was a necessary party to the proceedings. However, the petitioners did not implead LIC as a party. Such absence meant that no effective order could be passed, and the petition was dismissed on this basis. However, the court granted the petitioners liberty to approach LIC through the appropriate outsourced agencies for employment and to ensure compliance with existing labor protections under laws like the Minimum Wages Act and the Employees' Provident Fund Act.

Decided on: 08-10-2024

LL Citation: 2024 LiveLaw (Pat) 85

Counsel for the Petitioners: Mr. Siya Ram Shahi, Mr. Rakesh Kumar

Counsel for the Respondents: Mr. Umesh Prasad Singh, Mr. Abhimanyu Vatsa, Mr. Sameer Sawarn

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