- 1 - WA No.100601 of 2024 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 22ND DAY OF APRIL, 2025 PRESENT THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA WRIT APPEAL NO.100601 OF 2024 (S REG) BETWEEN: 1. KARNATAKA POWER CORPORATION LTD., HEAD OFFICE, NO.82, SHAKTIBHAVAN RACE COURSE ROAD, BENGALURU-560 001, BY ITS MANAGING DIRECTOR. 2. DIRECTOR (HR) KPCL, HEAD OFFICE NO.82 SHAKTIBHAVAN RACE COURSE ROAD, BENGALURU-560 001. 3. ASSISTANT GENERAL MANAGER, (HRD) A, KPCL, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 4. MEDICAL OFFICER, K.H.E.P. HOSPITAL, AMBIKANAGAR AND INCHARGE MEDICAL OFFICER OF K.H.E.P. HOSPITAL, GANESH GUDI AND KADRA KARNATAKA POWER CORPORATION LTD., AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 5. CHIEF ENGINEER, KARNATAKA POWER CORPORATION LTD., AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. ...APPELLANTS (BY SRI. PRAMOD NAIR, SENIOR ADVOCATE FOR SRI. MRUTYUNJAY HALLIKERI, ADVOCATE) AND: 1. RAMAKRISHNA S/O. VENKAPPA NAIK, AGE: 41 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, KARNATAKA HYDRO ELECTRIC PROJECT AMBIKANAGAR, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.18/2, 6TH TYPE, 1 COLONY, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA -581 363. ASHPAK KASHIMSA MALAGALADINNI Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - WA No.100601 of 2024 2. TANUJA W/O. UMESH NAIK D/O. NARASIMHA NAIK, AGE: 45 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, KARNATAKA HYDRO ELECTRIC PROJECT AMBIKANAGAR, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.22/2, 6TH TYPE, 1 COLONY, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 3. KAMALA D/O. SURESH NAIK W/O. ARUN NAIK, AGE: 36 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, KARNATAKA HYDRO ELECTRIC PROJECT AMBIKANAGAR, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.16/1, 6TH TYPE, 1 COLONY, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 4. MANGALA D/O DATTATREYA NAIK W/O. RAVIRAJ NAIK, AGE: 35 YEARS, OCC. STAFF NURSE, R/O: K.H.E.P. HOSPITAL, KARNATAKA HYDRO ELECTRIC PROJECT AMBIKANAGAR, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.6/1, 6TH TYPE, 1 COLONY, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 5. VINAYA KINI D/O SHASHIKANT KINI W/O SHAILESH SAMANT, AGE: 42 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, GANESHAGUDI, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.24/1, 6TH TYPE, 2ND CROSS, GANESHAGUDI, DANDELI, DIST: UTTARA KANNADA-581 363. 6. MEENAKSHI W/O MITHUN NETREKAR D/O ACHITRAPPAMETRI, AGE: 36 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, KARNATAKA HYDRO ELECTRIC PROJECT AMBIKANAGAR, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.4/1, 6TH TYPE, 1 COLONY, AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 7. SULAKSHA D/O. BABU MAHALSEKAR, AGE: 42 YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, GANESHAGUDI, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.7/13, 7TH TYPE, 5TH CROSS, GANESHAGUDI, DANDELI, DIST: UTTARA KANNADA-581 363. - 3 - WA No.100601 of 2024 8. JYOTI PATTAN W/O ARUN BABURAVKAR, AGE: YEARS, OCC: STAFF NURSE, R/O: K.H.E.P. HOSPITAL, GANESHAGUDI, TQ: DANDELI, DIST: UTTARA KANNADA. R/O: QUARTER NO.36/1, 6TH TYPE, 1ST LINE, GANESHAGUDI, DANDELI, DIST: UTTARA KANNADA-581 363. 9. ANAND MURAGANUR, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 10.SHWETA ANIL KANCHARKAR, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 11.KAVITA PARASHURAM GOUDA, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 12.ARUN S. RANE, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 13.ANITA UDAY NAYAK, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 14.MAMATA SANDIP GOUDA, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 15.VINITA VAZ, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 16.KEERTI T. NAIK AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 17.BHAVANA V.V. AGE: MAJOR, OCC: STAFF NURSE, R/O : AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. - 4 - WA No.100601 of 2024 18.SHASHIKALA GAJANAN NAIK, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 19.RAVIKUMAR, AGE: MAJOR, OCC: STAFF NURSE, R/O:AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 20.ANJALI NETREKAR AGE: MAJOR, OCC: STAFF NURSE, R/O:AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 21.NEETA NILEKANI, AGE: MAJOR, OCC: STAFF NURSE, R/O: AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 22.SARITA NARAYAN MADAR, AGE: MAJOR, OCC: STAFF NURSE, R/O:AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. 23.SRI. RAJU, ASSISTANT GENERAL MANAGER, HRD, A, KPCL, R/O :AMBIKANAGAR, DANDELI, DIST: UTTARA KANNADA-581 363. …RESPONDENTS (BY SRI. J.S. SHETTY, ADVOCATE FOR R1 TO R8; NOTICE TO R9,R10 & R15-DISPENSED WITH; NOTICE TO R11 TO R14 & R16 TO R23 ARE SERVED) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT 1961, PRAYING TO, PARTIALLY SET ASIDE THE JUDGMENT PASSED BY THE LEARNED SINGLE JUDGE DATED 24/09/2024 IN W.P. NO.106025/2023, IN TERMS OF THE PRESENT WRIT APPEAL, AND DISMISS THE WRIT PETITION IN W.P.NO.106025/2023 FILED BY RESPONDENT NO.1 TO 8, IN THE INTEREST OF JUSTICE AND EQUITY. THIS WRIT APPEAL HAVING BEEN HEARD AND RESERVED ON 26.03.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, S.G. PANDIT, J., DELIVERED THE FOLLOWING: CORAM: THE HON'BLE MR. JUSTICE S G PANDIT AND THE HON'BLE MR. JUSTICE C.M. POONACHA - 5 - WA No.100601 of 2024 CAV JUDGMENT (PER: THE HON'BLE MR. JUSTICE S G PANDIT) The appellants, respondents before the learned Single Judge are in appeal under Section 4 of the Karnataka High Court Act, 1961, questioning the correctness and legality of the order dated 24.09.2024 passed in W.P.No.106025/2023 whereunder the learned single Judge held that claims of the petitioners for continuation as Staff Nurse until appointments are made would require consideration, with further observation that if the respondents outsource provision of healthcare to the employees in toto, the petitioner would be entitled to claim retrenchment compensation. 2. Parties to the present appeal would be referred to as they stood before the learned Single Judge. The appellants were respondents, and the respondents No.1 to 8 herein were the petitioners before the learned Single Judge. 3. The respondents-Karnataka Power Corporation Ltd., (hereinafter referred to as ‘the Corporation’, for short) is providing healthcare facility to its employees and general public where the Corporation’s Townships are located. For the purpose of providing healthcare facility, the respondent-Corporation - 6 - WA No.100601 of 2024 appointed petitioners as Staff Nurse on contract basis to the KHEP Hospitals at Ambikanagar, Ganeshgudi and Kadra Townships. It is stated that the petitioners were appointed on contract basis as Staff Nurse between August 2015 and December 2021. The petitioners have rendered service between 3 to 8 years depending on their date of contract appointment. While the petitioners were working as Staff Nurse on contract basis, the respondent-Corporation under Recruitment Notice dated 13.06.2023 (Annexure-N) invited applications for appointment of Staff Nurse, INM and Pharmacist, on contract basis, at KHEP Hospitals at Ambikanagar, Ganeshgudi and Kadra, for a period of 11 months. Questioning the same, the petitioners approached the learned Single Judge in W.P. No.106025/2023 and also sought a direction to continue them in service till the regular appointment is made to the post in which they were working. 4. The respondents-Corporation filed its statement of objections opposing the prayer of the petitioners contending that the petitioners were appointed on contract basis as Staff Nurse for a fixed period and further stated that, on completion of contract period, they are liable to be discontinued/terminated. Further, the respondent-Corporation - 7 - WA No.100601 of 2024 contended that the petitioners have no vested right to seek to continue their service. The respondents also contended that the petitioners are also not entitled for regularization. Further, the respondents stated that in pursuance of the impugned notification inviting application for appointment on contract basis dated 13.06.2023 (Annexure-N), selection has already been completed and some of the selected candidates have already reported for duty. It is further stated that the petitioners are not selected as they are not meritorious. Thus, they prayed for dismissal of the writ petition. 5. The learned Single Judge, on hearing the parties to the petition, held that the petitioners are entitled for continuation until regular appointments are made and that if the respondents resort to outsource healthcare to its employees, the petitioners could claim retrenchment compensation. Aggrieved by the same, the respondents are in appeal. 6. Heard Sri. Pramod Nair, learned Senior Counsel for Sri Mrutyunjay S. Hallikeri, appearing for respondents/appellants and learned counsel Sri. J.S.Shetty appearing for the petitioners. Perused the entire writ appeal papers. - 8 - WA No.100601 of 2024 7. Learned Senior Counsel, Sri. Pramod Nair would submit that the impugned order of the learned Single Judge is opposed to the material on record and further submits that the learned Single Judge misdirected himself while directing continuation of the petitioners in service until regular appointment of Staff Nurse was made. It is submitted that the petitioners were, initially, appointed on contract basis for eleven months and though they are continued from time to time, their services are liable to be terminated or discontinued on completion of contract period. It is submitted that, in pursuance of the Recruitment Notice dated 13.06.2023 (Annexure-N) selection process is complete and the petitioners are not selected as they are not meritorious. Learned Senior Counsel would further submit that the petitioners were aware of the status of their appointment being temporary in nature and as such, they could not have maintained writ petition. The petitioners also participated in the selection process and having participated in the selection process they cannot challenge the notification inviting application for appointment on contract basis. 8. Learned Senior counsel would further submit that the learned Single Judge committed a grave error in observing - 9 - WA No.100601 of 2024 that the petitioners would be entitled to claim retrenchment compensation if the respondents outsourced the healthcare to its employees in toto. He submits that the question of entitlement to retrenchment compensation is not raised in the writ petition and the learned Single Judge could not have decided entitlement of the petitioners for retrenchment compensation in the present writ petition. 9. Learned Senior Counsel places reliance on as many as 17 decisions of the Hon’ble Apex Court and other High Courts in support of his contentions. We have gone through those decisions and would refer to the decisions which are necessary for deciding the question involved in the present writ appeal. 10. Per contra, learned counsel Sri. J.S.Shetty appearing for the petitioners would support the order of the learned Single Judge and submits that a temporary or contractual employee cannot be replaced by another set of temporary or contractual employees. He submits that the petitioners are working as Staff Nurse in the KHEP Hospitals of the respondents-Corporation for 3-8 years depending on their date of appointment on contract basis. Further, learned counsel would submit that the selection and appointment of petitioners - 10 - WA No.100601 of 2024 is by inviting applications and after following regular process of selection. Further, he also submits that the petitioners possess requisite qualifications and as such, the petitioners are entitled to be continued in service until regular recruitment is made. He submits that the learned Single Judge has made it clear that the right of the petitioners to continue as Staff Nurse on contract basis is only until regular recruitment is made. Therefore, he prays for dismissal of the appeal. 11. Having heard the learned counsels for the parties and on perusal of the entire writ petition papers, the only point that falls for consideration is, Whether the respondents-Corporation could replace one set of contractual employees by another set of contractual employees and whether the order of the learned Single Judge requires interference? 12. The answer to the above point would be in the negative for the following reasons: (a) The respondents-Corporation is a ‘State’ within the meaning of Article 12 of the Constitution of India. The State authority cannot act like a private employer and it shall be a Model Employer. But, the action of the respondents-Corporation - 11 - WA No.100601 of 2024 in the matter of recruitment and appointment cannot be unreasonable or arbitrary. (b) The petitioners are admittedly working on contract basis as Staff Nurse in the KHEP Hospitals run by respondents- Corporation at their Townships i.e., Ambikanagar, Ganeshgudi and Kadra. The petitioners have placed on record their appointment letters at Annexure-M Series. The appointment of petitioners on contract basis appears to have been made by following regular procedure for appointment i.e. calling applications, verifying the educational qualifications of the candidates and their suitability. There is no dispute with regard to the nature of appointment. (c) The Hon’ble Apex Court in catena of decisions has made it clear that one set of contractual or temporary employees cannot be replaced by another set of contractual or temporary employees. The Hon’ble Apex Court in Manish Gupta and Another Vs. President, Jan Bhagidari Samiti and Others1, at paragraphs 13 and 15 has held as follows: “13. A perusal of the advertisement dated 24-6- 2016 issued by the Principal, Government Kamla Raja Girls Post Graduate Autonomous College, Gwalior, which is at Annexure P-2 of the appeal paperbook and the 1 (2022)15 SCC 540 - 12 - WA No.100601 of 2024 advertisement dated 2-7-2016 issued by the Principal, SMS Government Model Science College, Gwalior, M.P., which is at Annexure P-3 of the appeal paperbook, would show that the appointments were to be made after the candidates had gone through due selection procedure. Though Shri Nataraj, learned ASG has strenuously urged that the appointments of the appellants were as guest lecturers and not as ad hoc employees, from the nature of the advertisements, it could clearly be seen that the appellants were appointed on ad hoc basis. It is a settled principle of law that an ad hoc employee cannot be replaced by another ad hoc employee and he can be replaced only by another candidate who is regularly appointed by following a regular procedure prescribed. Reliance in this respect can be placed on the judgment of this Court in Rattan Lal v. State of Haryana [Rattan Lal v. State of Haryana, (1985) 4 SCC 43 : 1985 SCC (L&S) 938] and on the order of this Court in Hargurpratap Singh v. State of Punjab [Hargurpratap Singh v. State of Punjab, (2007) 13 SCC 292 : (2008) 2 SCC (L&S) 618] .” “15. We are informed at the Bar that the appellants are being paid on a per hour basis i.e. at the rate of Rs 1000 per hour and they are continuing to work in pursuance of the order of status quo passed by this Court on 28-4-2017 [Ramveer Singh Gurjar v. Jan Bhagidari Samiti, 2017 SCC OnLine SC 2106] . We also find substance with the submission made on behalf of the respondent State that continuation of the appellants would depend on the number of students offering themselves for the courses concerned.” (d) In the instant case also, when the petitioners are working on contractual basis, there was no occasion for the respondents-Corporation to issue recruitment notice dated 13.06.2023 (Annexure-N) inviting applications to fill up posts of Staff Nurse on contract basis. The action of the respondents to replace one set of contractual employees by another set of contractual employees is totally arbitrary and opposed to the decisions of the Apex Court referred to above. In the - 13 - WA No.100601 of 2024 circumstances, we do not find any error or illegality in the order of the learned single Judge holding that the petitioners are entitled to continue until regular appointments are made. (e) The contention of estoppel, that having participated in the selection process, the petitioners cannot challenge, would not merit any consideration, since the petitioners are not challenging the selection, however the petitioner contention is that temporary or contract employee cannot be replaced by another set of temporary/contract employees. (f) At paragraph (35) of the impugned order, learned Single Judge has observed that if respondents outsource healthcare to its employees in toto, the same cannot be challenged or opposed by petitioners and in such case, they would be entitled to claim retrenchment compensation. The said observation, in our view, is premature and the said situation has not arisen. Moreover, the learned Single Judge’s observation is only that the petitioners are entitled to claim retrenchment compensation. That entitlement or claim is to be decided before the appropriate forum at appropriate stage. The said observation, at this stage, would not affect the respondents in any manner. If at all, the petitioners claim for - 14 - WA No.100601 of 2024 retrenchment compensation, it is open for the respondents- Corporation to contest their claim. 13. For the reasons recorded above, we are of the considered view that the respondents have not made out any ground to interfere with the order of the learned single Judge. Accordingly, the writ appeal stands rejected. Sd/- (S G PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE KMS CT:VP