Barred By Delays And Laches - Subsequent Litigants Seeking To Benefit From Compromise Order Had To Approach Courts In Time - SC In TANGEDCO's Case

In this case, the Tamil Nadu Generation and Distribution Corporation Ltd. (hereafter "TANGEDCO"), acting in compliance with the report of Justice Khalid, called applications to fill up 4000 ITI Helper (Trainee) vacancies, by direct recruitment through Employment Exchange. Some writ petitions were preferred for a direction to relax the upper age limit while filling up the vacancies to the post of ITI Helper (Trainee) in TANGEDCO by direct recruitment. These writ petitions were disposed of by the Madras High Court. Moreover, the Supreme Court had directed grant of preference by calling candidates who have undergone apprenticeship training in the Tamil Nadu Electricity Board to attend only the interview for the post of ITI Helper (Trainee) along with the other candidates sponsored through the Employment Exchange. However, they had to go through the process of viva-voce test. 4000 ITI Helpers (Trainee) were selected in terms of the Government Order and appointment orders were consequently issued. Their selection was based on marks scored by such candidates in ITI National Trade Certificate/National Apprenticeship Certificate (85% weightage), and interview marks (15% weightage). Moreover, the appointments also adhered to the relevant prescribed reservation ratios and roster.

However, candidates who were not selected approached the Madras High Court which dismissed the writ petitions. The unsuccessful candidates appealed to the Division Bench which did not decide the dispute, on its merits; it merely recorded the terms of the compromise and directed TANGEDCO to recruit the appellants/petitioners. After the compromise order, several other unsuccessful candidates approached the High Court and claimed parity with the parties who had benefited from the order. A single judge dismissed the petitions earlier but In another set of writ petitions, allowed the claims. TANGEDCO's appealed before the Division Bench. Wherein the candidate's appeals were dismissed and TANGEDCO's appeals were allowed. This impugned judgment of the Division Bench on the Madras High Court was challenged by aggrieved appellants before the Apex Court.

On behalf of the aggrieved appellants, Counsels, Mr. Gautam Narayan and Mr. T.B. Sivakumar appeared while TANGEDCO was represented by Senior Counsel, Mr. Joydeep Gupta before the Supreme Court.

The primary issue in this case was –

Whether the subsequent litigants could be allowed to benefit from a compromise order at a belated stage.

It was contended by the appellants that TANGEDCO had acted unfairly and in a discriminatory manner, in refusing to employ those who were not parties in the proceedings that led to the compromise order. It was submitted that in terms of performance, the aggrieved candidates might well have secured better ranking than those 84 unsuccessful candidates who were offered employment, by the compromise order. It was further claimed that there was no distinction between them and those who were offered employment under the compromise order. Thus, it was submitted that the initiation of litigation could not be the basis of any intelligible, or indeed legitimate differentia, as was sought to be projected by TANGEDCO.

On the other hand, TANGEDCO submitted that the compromise order was not based on the merits of the case. The Division Bench of the Madras High Court had merely followed the compromise memo and had embodied it in its order. Thus, the order could not have any precedential value since it was binding only on the parties, and not those who had not approached the court. It was submitted that though interviews were conducted in 2013 and the present Appellants' candidature was rejected, they waited till the compromise order, and then approached the court belatedly. It was argued that the compromise order was not based on any rule of law, but on a mere concession and was devoid of any legal basis. Thus, the rejection of the Appellants' representation, which was purely based on the compromise order, was justified.

It was observed by the Supreme Court that the Division Bench of the Madras High Court in its compromise order had proceeded to accept the terms proposed by the parties. The Court did not examine the merits of the case, and why such proposal was justified in the facts of the case. It was asserted that it was one thing for a public employer, to concede in the course of proceedings to an argument which it had hitherto clung to, but was untenable.

The Court held that fairness demanded that public bodies, as model employers, did not pursue untenable submissions. However, in such cases, a concession that was based on law and accorded to a just interpretation of the concerned law and/or rules was sustainable. However, it was altogether another thing for a public employer, whose conduct was questioned, and who had succeeded on the merits of the case before the lower forum to voluntarily agree in an unreasoned manner, to a compromise. The harm and deleterious effect of such conduct were to prioritize the claim of those before the court when it was apparent that a large body of others, waiting with a similar grievance (and some of whom probably have a better or legitimate claim on merits to be appointed) were not parties to the proceedings. In such cases, a compromise was not only unjustified but also was contrary to law and public interest as per the cases of C. Channabasavaiah v. State of Mysore read with Ahmedabad Municipal Corporation v. Rajubhai Somabai Bharwad.

However, the Apex Court observed that the case of State of Uttar Pradesh v. Aravind Kumar Srivastava had carved out an exception which was that subsequent litigants, wishing to benefit from orders made in other's cases, had to approach the courts in time, without delay or laches. In this case, there was no question of any finality to the compromise order since it was neither an order in rem nor a binding precedent. Moreover, the aggrieved Appellants and the contesting candidates (in TANGEDCO's appeal) did not approach the court in time. They woke up after the compromise order, claiming parity, and filed petitions in the court. Clearly, therefore, they cannot claim any benefit from the compromise order.

Additionally, the Court asserted that, if there had been a benefit or advantage conferred on one or a set of people, without legal basis or justification, that benefit could not multiply, or be relied upon as a principle of parity or equality. Hence, it was held that the aggrieved Appellants and the respondent applicants (in TANGEDCO's appeal) could not claim the benefit of parity and their writ petitions that were founded on the compromise order could not be justified in law.

Hence, the appeals of the aggrieved Appellants, against the judgment and order of the Division Bench of the Madras High Court were dismissed and TANGEDCO's appeals were accordingly allowed.

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