U’khand HC Criticises State’s Arrangement To Employ Ex-Servicemen [Read Judgment]

U’khand HC Criticises State’s Arrangement To Employ Ex-Servicemen [Read Judgment]

The Uttarakhand government has earned some serious criticism from the Uttarakhand High Court which called its arrangement for recruitment of ex-servicemen and their dependants and also others, in various government departments through Uttarakhand Purvsanik Kalyan Limited (UPNL), a sham and directed the state government to regularize the employees sponsored through UPNL.

A bench of Justice Rajiv Sharma and Sharad Kumar Sharma passed the direction while stressing that people employed through UPNL were the employees of the state government as it said, “The action of the State Government of not regularizing the employees sponsored through agency of UPNL and to deny them minimum of pay-scale including dearness allowance is arbitrary and unreasonable.”

It also recommended that the state government should make appointments to public posts through agencies of Public Service Commission, Service Selection Boards in conformity with Articles 14 and 16 of the Constitution of India instead of restricting it to the agency which was primarily set up for sponsoring the names of ex-servicemen and their dependants.

The decision comes as a major relief to thousands of persons employed through UPNL as only in Garhwal region, 12,118 unskilled, semi-skilled, skilled, highly skilled and officers are engaged through UPNL, whereas in Kumaon region 5,953 have been engaged through UPNL.

The court was highly critical of UPNL sponsoring names of persons other than ex-servicemen and their dependents even as it was primarily set up to ensure employment to these sections.

The court was hearing a petition moved by one Kundan Singh wherein an impleadment application was filed by Uttarakhand UPNL Savinda Karamchari Sangh highlighting the exploitation of the workmen by the state government as well as local bodies.

The court was told that though the workmen are being paid the honorarium of Rs 8,400, a GST @ 18% and 2.5% Service Tax is also deducted from their salary and there is only a meagre increase in their honorarium from time to time compared to their counterpart in similar positions.

The bench has passed the directions as under:



  1. The state government is directed to regularize the employees sponsored through UPNL in a phased manner within a period of one year as per regularization schemes framed from time to time.

  2. The state government is directed to ensure that the employees sponsored by UPNL get minimum of pay-scale with dearness allowance along with arrears to be paid within a period of six months from today.

  3. The respondents are directed not to deduct any GST or service tax from the salary of the employees sponsored by UPNL.


During the hearing, the court took note of the Memorandum and Articles of Association of UPNL and the main objects of the company i.e., providing employment/self-employment to ex-servicemen and their dependants and in case suitable ex-servicemen/their dependants are not available, employment can be provided to others to meet the requirements of the principal employer.

The main object of the company is also to provide financial assistance to the ex-servicemen, their dependants, family members of ex-servicemen including imparting them necessary training.

“The State Government in its own wisdom vide letter dated 09.06.2016 had directed that in future UPNL will sponsor ex-servicemen only and thereafter, vide letter dated 05.07.2016 UPNL has been allowed to sponsor dependants of ex-servicemen also.

“The UPNL is neither registered under Section 7 of the Act nor it has got license as contractor under Section 12…The UPNL has sponsored the names of thousands of employees for engagement by State Government. The funds are provided by the State Government. The disciplinary control is also of the State Government. The agency of UPNL has been used as intermediary only to deny the benefits of regularization and regular salary to the workmen. The UPNL was never intended to sponsor the names of all employees except ex-servicemen and their dependants and it was only when suitable ex-servicemen/their dependants are not available, the names of other candidates could be sponsored. The persons appointed by the State Government through agency of UPNL are only a camouflage,” said the bench.

“It is reiterated that the Principal Employer is the State Government. The master-servant relationship exists between the State Government and its employees, even though sponsored by the UPNL. The employees sponsored by UPNL are discharging similar duties which are being discharged by their counterparts. They are qualified and fulfill other eligible criteria, as per the recruitment and promotion rules,” said the bench.

The court also said that “Salary is the property within the meaning of Article 300-A of the Constitution of India. No GST or Service Tax can be deducted from the salary of the petitioners without any authority of law”.

Read the Judgment Here