Supreme Court Upholds Protection of Railway and PSU Employees with Invalidated Caste Certificates

The case of K. Nirmala & Ors. v. Canara Bank & Anr. revolves around the issue of employees who secured government jobs based on caste certificates that were later invalidated. The Supreme Court was called upon to determine whether such employees could retain their employment after their caste status was de-scheduled by the State of Karnataka. In a landmark judgment, the Court ruled in favor of the employees, granting them protection by allowing them to continue in service as General Merit (GM) candidates while revoking any future benefits related to their previously recognized Scheduled Caste (SC) or Scheduled Tribe (ST) status.

The dispute arose when the State of Karnataka issued notifications reclassifying certain castes that were previously recognized under SC/ST categories. Employees who had been recruited under reserved quotas found their caste certificates invalidated, leading to their dismissal from service. The affected employees approached the courts seeking protection of their jobs. The Karnataka High Court dismissed their claims, leading to an appeal before the Supreme Court.

Background of the Case

Facts Leading to the Dispute

The appellants were employed in various government undertakings, including Canara Bank, Oriental Insurance, and Hindustan Aeronautics Limited, under SC/ST reserved categories.
They had obtained caste certificates in accordance with government notifications issued by the State of Karnataka.
In a landmark ruling in State of Maharashtra v. Milind (2001), the Supreme Court held that state governments do not have the power to amend or modify the SC/ST list notified under Articles 341 and 342 of the Constitution.
Following this ruling, the Government of Karnataka rescinded its previous notifications and invalidated the caste certificates of the affected employees.
The employers subsequently issued termination notices to the employees.
The employees challenged their termination before the Karnataka High Court, which dismissed their writ petitions.
The matter was then appealed to the Supreme Court.

Legal Issues Raised

Petitioners’ Arguments

The employees argued that:

They had secured employment through valid caste certificates issued by competent authorities in accordance with government policies.
The subsequent declassification of their caste should not affect their employment status, as they had not obtained their jobs through fraud or misrepresentation.
The government itself had extended protections through circulars dated March 11, 2002, and March 29, 2003, ensuring that employees in their position would be allowed to continue in service.
The Ministry of Finance, in a letter dated August 17, 2005, had advised that employees affected by declassification should be retained in service as General Merit (GM) candidates.
The Karnataka High Court erred in dismissing their claims without considering the protective circulars.

Respondents’ Arguments

The government and public sector employers contended that:

The Supreme Court had already settled the issue in State of Maharashtra v. Milind, ruling that states have no power to modify SC/ST lists.
The caste certificates were no longer valid, and the employees had lost their claim to reservation benefits.
The Office Memorandum issued by the Ministry of Social Justice and Empowerment on July 8, 2013, clarified that the declassified castes were not entitled to any SC/ST benefits.
Employees who had secured jobs based on invalid certificates could not be allowed to continue, as it would deprive genuine SC/ST candidates of their rightful opportunities.

Supreme Court’s Observations

On the Validity of Caste Certificates

The Supreme Court reaffirmed the principle that:

Only Parliament has the power to amend or modify the SC/ST list under Articles 341 and 342 of the Constitution.
State governments cannot add or remove castes from the list through executive orders or circulars.
Any employment secured based on an invalid caste certificate does not confer a right to reservation benefits.

On Protection of Employees’ Service

However, the Court noted that:

The employees had obtained their caste certificates in good faith, based on existing government policies.
The Government of Karnataka had issued protective circulars in 2002 and 2003, ensuring job security for affected employees.
The Ministry of Finance had also endorsed this protection in its 2005 communication.
Similar protections had been granted in previous cases where declassification of castes had occurred.

On the Office Memorandum of 2013

The Court found that:

The 2013 Office Memorandum did not consider the Karnataka government’s 2003 circular, which specifically extended protection to the affected castes.
Since the circular was still in force, the Office Memorandum could not override it.
Therefore, the employees were entitled to protection under the 2003 circular.

Final Judgment

The Supreme Court ruled that:

The Karnataka High Court’s decision was set aside.
The employees’ termination orders were quashed.
The employees were allowed to continue in service as General Merit (GM) candidates.
They would not be entitled to future reservation benefits, including promotions under SC/ST quotas.
Employers were directed to reinstate the employees and provide them with the benefits they would have received as GM candidates.

This ruling balances the need to uphold constitutional provisions with the protection of employees who had obtained jobs in good faith. It ensures that those who were misled by state policies are not unfairly penalized while preventing further misuse of reservation benefits.

Petitioner Name: K. Nirmala & Ors..
Respondent Name: Canara Bank & Anr..
Judgment By: Justice Hima Kohli, Justice Sandeep Mehta.
Place Of Incident: Karnataka.
Judgment Date: 27-08-2024.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: k.-nirmala-&-ors.-vs-canara-bank-&-anr.-supreme-court-of-india-judgment-dated-27-08-2024.pdf

Directly Download Judgment: Directly download this Judgment

See all petitions in Public Sector Employees
See all petitions in Employment Disputes
See all petitions in Termination Cases
See all petitions in Judgment by Hima Kohli
See all petitions in Judgment by Sandeep Mehta
See all petitions in allowed
See all petitions in Quashed
See all petitions in supreme court of India judgments August 2024
See all petitions in 2024 judgments

See all posts in Service Matters Category
See all allowed petitions in Service Matters Category
See all Dismissed petitions in Service Matters Category
See all partially allowed petitions in Service Matters Category