Petitioners Not Being Employees Have No Legal Right To Stop Govt From Outsourcing Services: Madhya Pradesh High Court

Justice S.A. Dharmadhikari was dealing with a batch of petitions that were challenging the order passed by the State Government, whereby it decided to outsource the services through an outsourcing agency and had also directed for fresh selection for appointment on the post of Assistant Grade- III/Data Entry Operator by conducting an open written examination.

The case of the Petitioners was that they were initially appointed as Assistant Grade-III/Data Entry Operator in their respective schools, after appointment on contractual basis through their Outsourcing Agency. They were performing their duties honestly and sincerely and their services were extended from time to time. To their utter surprise, the government issued the impugned order, whereby it granted authorisation to outsource the said services by conducting fresh selection for appointment of Assistant Grade-III/Data Entry Operator.

Placing reliance on the decision of a division bench of the Court in State of M.P. v. Puneet Mohan Khare, the Petitioners contended that the existing employees, such as them, cannot be replaced by another set of employees appointed through outsourcing agencies.

In contrast, the State argued that the Petitioners were never appointed by conducting regular selection by the State Government. It was submitted that from the beginning itself, as per the appointment letters, it could be seen that they were appointed through their outsourcing agency. It was further pointed out that the said Agency was not made a party in the instant petition. The State contended that it was for the Government to change the mode of appointment by outsourcing the services, as per requirement on contractual basis. It was asserted that the aforesaid decision for outsourcing was taken in the interest of economy and efficiency.

With regard to the decision in Puneet Mohan Khare case, the State argued that it was not applicable in the facts and circumstances of the case. It was further submitted that the Petitioners were never appointed by the State Government or by any of its agency, which is evident from the appointment order, and therefore, the petition was not maintainable and the same was liable to be dismissed.

Perusing the material on record, the Court noted that the Petitioners had not filed any appointment order issued by the State Government or its agency, appointing them on various posts. It further observed that they were appointed through an outsourcing agency and that their salary was also not being paid through the State exchequer, but the same being paid through the Contractor. It thus, held that-

In view of aforesaid, the nature of relationship of the petitioners with the respondents particularly regarding terms and conditions of their services, is not established. Apparently the petitioners have no right to stop the respondents from outsourcing certain services in the interest of economy and efficiency.

The Court went on to examine the decision of a division bench of the Court in Laxmi Prasad Dubey & Ors. v. Union of India & Ors., wherein the bench, dealing with an identical issue, had held that since the Petitioners could not produce orders of appointment by the Government, their relationship with the State was not clear. Accordingly, it was held that they had no right to stop the State from outsourcing their certain services in the interest of economy and efficiency. The said decision attained finality after an appeal preferred against it was dismissed by the Apex Court.

Considering its decision in Laxmi Prasad case, the Court held that even in the present case, the Petitioners had no legal right to restrain the Government from outsourcing certain services-

It is a settled legal position that one set of contractual employee cannot be replaced by another. The petitioners herein were never appointed through regular selection or on contract basis directly by the State Government but their services were outsourced through a private agency. In the light of Laxmi Prasad Dubey (supra), the petitioners have no legal right to stop the respondents from outsourcing services in the interest of economy and efficiency. In any case, it is also a settled position that the Courts should refrain from interfering with the policy matters of the State.

With the aforesaid observations, the Court held that the petition had no merit and was accordingly dismissed.

Case Title: Sandeep Kumar Pathak & Others Vs. The State of Madhya Pradesh & Others

Citation: 2022 LiveLaw (MP) 59

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