JUDGMENT : K.M. Thaker, J. 1. In Special Civil Application No. 2763 of 2006 the petitioner a Co-operative bank has challenged the order dated 20.4.2005 passed by the Industrial Court, Rajkot in Appeal (IC) No. 4 of 2001 and Appeal (IC) No. 5 of 2001 and order dated 3.4.2001 passed by learned Labour Court, Junagadh in BIR Applications No. 5 of 1999 and 15 of 1999 whereby the applications filed by present respondent are allowed by the labour Court and the Appeals filed by present petitioner have been dismissed by the learned Industrial Court by holding that the respondents in the petitions who were appointed by the liquidator are the employees of the petitioner bank. 2. Since in these two petitions common issues are involved and common submissions are made and since factual aspects are also similar they are heard and decided together by this common judgment. 3. The facts involved in and leading to present petition are that the petitioner, a Co-operative bank, is engaged in various activities including the activity and function of advancing credit/loan to Cooperative societies (mandali) registered under the Gujarat Co-operative Societies Act (hereinafter referred to as the “Act”). 3.1 It is claimed by the petitioner that in several cases a Co-operative Society (mandali) registered under the provisions of the Act may not remain economically viable and may have to be taken under liquidation process. 3.2 It is also claimed that there may be other reasons which may call for an order to take mandali into liquidation. 3.3 Once an order directing that the mandali may be taken in liquidation is passed, then a liquidator is appointed under the provisions of the Act who undertakes the process of winding up of such society (mandali). 3.4 According to the provisions under the Act the appointment of the liquidator is done by the Registrar of Co-operative societies. 3.5 After the Registrar passes order appointing the liquidator for conducting liquidation process, the liquidator has to set up his establishment since he would require his own staff and set up to undertake the process of winding up. 3.6 For such purpose the liquidator would appoint his own staff i.e. clerk, peon etc. 3.7 The said staff is appointed by the liquidator and they work under the supervision and control of the liquidator and they perform the work and functions related to liquidation of the society (mandali). 3.6 For such purpose the liquidator would appoint his own staff i.e. clerk, peon etc. 3.7 The said staff is appointed by the liquidator and they work under the supervision and control of the liquidator and they perform the work and functions related to liquidation of the society (mandali). 3.8 So far as present case is concerned, the petitioner has claimed that in respect of certain societies (mandali) which were ordered to be woundup the Registrar appointed officers of the petitioner bank as liquidator. The said appointment came to be made under the order passed by the Registrar. The officers who came to be appointed as liquidator were directed to undertake process of liquidation of the co-operative societies. 3.9 It is further claimed that after such appointment the liquidator (who, incidentally, happened to be officers of the petitioner bank) would set up his/their own establishment and would appoint necessary staff required for undertaking the process of winding up of the societies. 3.10 It is further claimed that present respondents are persons who came to be appointed by, and under the order of liquidator. 3.11 It is further claimed that despite such position the respondents raised dispute and claimed that they are employees of the petitioner bank and should be treated as employees of the petitioner bank and they should be paid salary and other benefits on par with the employees of the petitioner bank. So as to agitate said demand the respondents filed applications in the labour Court at Junagadh which came to be registered as BIR Applications No. 5 of 1999 and 15 of 1999. 3.12 In response to the said applications filed by present respondents the petitioner bank filed its reply and disputed and denied the allegations and claim by the respondents. The parties led evidence before the learned labour Court. Subsequently, upon considering the material on record and submissions by learned Counsel for the contesting parties, learned labour Court passed judgment and order dated 3.4.2001 whereby learned labour Court rejected the contention of the petitioner bank that the claimants i.e. present respondents are not its employees and that relationship of employer – employee does not exist between the respondents and the petitioner bank. Learned labour Court directed the petitioner bank to absorb the respondents as its permanent employees from the date when the respondents completed service of 240 days and to pay arrears from such date. Learned labour Court directed the petitioner bank to absorb the respondents as its permanent employees from the date when the respondents completed service of 240 days and to pay arrears from such date. 3.13 Feeling aggrieved by the judgment and order in BIR Applications No. 5 of 1999 and 15 of 1999 dated 3.4.2001 passed by learned labour Court, the petitioner bank filed Appeals before learned Industrial Court i.e. Appeal (IC) No. 4 of 2001 and Appeal (IC) No. 5 of 2001. After considering rival submissions, learned Industrial Court rejected the Appeals vide judgment and order dated 20.4.2005 and confirmed the order dated 3.4.2001 passed by learned labour Court. Learned Industrial Court however directed the petitioner bank to pay arrears with interest @ 10% to be calculated from 1.5.2001. Feeling aggrieved by the said decision the original opponent bank has taken out present petitions. 4. Mr. K.M. Patel, learned Senior Counsel with Mr. Gohel, learned advocate for the petitioner bank submitted that the respondents are not appointed or employed by the petitioner bank and the said persons do not perform any duty or function on behalf of the petitioner bank. Learned Senior Counsel also submitted that the salary of the concerned persons is also not paid by the petitioner bank and petitioner bank does not exercise any control of any nature whatsoever or in any manner whatsoever, over the present respondents. He also submitted that the respondents were appointed by the liquidator and they are employees of the liquidator. The learned Senior Counsel also submitted that the respondents worked for the liquidator and performed duty related to the liquidation of the co-operative societies (in liquidation) and that therefore also there is no justification to consider said persons as employees of the petitioner bank. Learned Senior Counsel also submitted that learned labour Court as well as learned Industrial Court failed to appreciate the distinguishing features which are vital for determining the dispute. 4.1 Learned Senior Counsel also submitted that even documents like vouchers and other registers demonstrate that the salary of the respondents and other expenses are met with from the funds of the society and not the petitioner bank and that therefore there is no basis to hold that the respondents are employees of the petitioner bank and/or to direct the petitioner bank to treat the respondents as its employees and to absorb them. The learned Senior Counsel also submitted that impugned orders may be set aside. He relied on the decision in case of Official Liquidator vs. Dayanand (2008 [10] SCC 1). 5. On the other hand Mr. Gohel, learned advocate and Mr. Supehia, learned advocate for the respondents submitted that the learned labour Court and learned Industrial Court have not committed any error. Learned Counsel for the respondents submitted that the liquidator is officer/employee of the bank and the said officer issued appointment orders and also signed the vouchers and authorized the payments and that therefore the acts done and committed by the officer of the bank are deemed to have been committed and done by and on behalf of the bank and therefore learned labour Court or learned Industrial Court have not committed any error in directing the petitioner bank to absorb the respondents as its employees, and to pay salary on par with its employees. 5.1 Learned advocate for the respondents relied on the decision by Hon'ble Apex Court in case of Government of India vs. Court Liquidators Employees Association [ AIR 2000 (SC) 405 ] and submitted that the case of the respondents is similar to the case of the employees who were concerned in the said matter inasmuch as the employees of the said matter were appointed by official liquidator attached to the Court and appointed under provisions of Companies Act 1956 for the purpose of undertaking and completing the process of liquidation of the company (in liquidation) in accordance with the provisions of the Companies Act. 6. I have heard learned Senior Counsel for the petitioner bank and learned advocate for the respondents and also considered the material on record. I have also considered the judgment dated 3.4.2001 passed by learned Labour Court, Junagadh in BIR Applications No. 5 of 1999 and 15 of 1999 and the decision dated 20.4.2005 passed by the learned Industrial Court, Rajkot in Appeal (IC) No. 4 of 2001 and Appeal (IC) No. 5 of 2001. 7. The fundamental and primary issue involved in present proceedings is about existence of “employer and employee” relationship between the petitioner and the respondents. 7.1 The petitioner bank claimed that employer – employee relationship does not exist between the bank and the respondents. 7. The fundamental and primary issue involved in present proceedings is about existence of “employer and employee” relationship between the petitioner and the respondents. 7.1 The petitioner bank claimed that employer – employee relationship does not exist between the bank and the respondents. 7.2 The respondents claimed that the fact that employer – employee relationship exists between them and the petitioner bank cannot be denied and learned labour Court as well as learned Industrial Court have not committed any error in recording such conclusion. 7.3 This is the crux of the dispute between the parties to present petition. Learned labour Court and learned Industrial Court have accepted the claim and contention of the respondents and recorded the conclusion that the respondents are employees of the petitioner bank. 8. Thus on record of present petition there are concurrent findings of fact. 8.1 However, the petitioner bank would contend that in present case though there are concurrent decisions they are contrary to evidence on record and are based on misconstrued facts and evidence and misconstrued position of law and that therefore they should not be sustained and may be set aside. 9. 8.1 However, the petitioner bank would contend that in present case though there are concurrent decisions they are contrary to evidence on record and are based on misconstrued facts and evidence and misconstrued position of law and that therefore they should not be sustained and may be set aside. 9. For considering rival contentions it is necessary to keep in focus that:- (a) in view of the provisions under the Act, more particularly Section 107 and Section 110 of the Act, the functions performed by the liquidator are statutory functions and duties and he exercises power or authority conferred by the Act, (b) the liquidator is an authority constituted under the provisions of the Act and the Act confers certain powers and authority on the liquidator to enable him to discharge the functions related to liquidation of the Co-operative Societies (mandali) against which order of winding up is passed, (c) in view of the scheme of and the provisions under the Act the appointment of liquidator is made by the Registrar of co-operative society, (d) the liquidator is appointed to undertake and complete the process of liquidation/winding up in accordance with the procedure prescribed under the Act and for that purpose he has to discharge the function and duty contemplated under the Act and in the manner prescribed under the Act, more particularly under Section 110 of the Act, (e) further, the liquidator acts as per the instruction by the registrar of co-operative societies and the registrar co-operative societies exercises supervision over the liquidator, (f) when the registrar appoints liquidator, the liquidator would require his own staff and set up/establishment to undertake the activity and process of winding – up of the society (in liquidation) and for that purpose the liquidator would appoint clerk, peon etc., (g) the staff/persons engaged by the liquidator for undertaking the winding-up process would work under his instructions, supervision and control and they will perform the work and functions related to the liquidation of the society (under liquidation). (h) it is pertinent that the liquidator's establishment is separate and independent from other establishments and it is a different and distinct legal entity. (i) the establishment of the liquidator is not and cannot be treated or presumed as part of the establishment or entity of the petitioner bank. (h) it is pertinent that the liquidator's establishment is separate and independent from other establishments and it is a different and distinct legal entity. (i) the establishment of the liquidator is not and cannot be treated or presumed as part of the establishment or entity of the petitioner bank. (j) the appointment of liquidator is for specific purpose and specific task and for limited tenure i.e. until the process of liquidation is completed or the time limit for completing the process of liquidation (as specified under the Act) expires. (k) the liquidator is, thus, a statutory authority and separate legal entity, 10. On the other hand the petitioner bank is a cooperative society which is separately incorporated by its promoters/shareholders and is registered under the provisions of the Act as an independent and separate undertaking. 10.1 The establishment of the petitioner bank is independent and separate from the liquidator's establishment and the bank has its own separate and individual existence and it is a legal entity separate and distinct from the liquidator's establishment. 10.2 The activity of the bank is materially and substantially different from the activity and function of the liquidator's establishment. 11. In present case the petitioner bank had placed on record copies of the vouchers by virtue of which the salary was paid to the respondents. The copies of the said vouchers are placed on record of present petition also. 11.1 On examination of the said documents it comes out that – (a) the payment of the salary was made by the liquidator (i.e. in the name and under the authority of and under the seal of the liquidator) and (b) the payment of salary to the respondents was debited in the account of concerned mandalis under liquidation viz. Shree Vadhavi Sahakari Mandali Ltd., Shree Umrala Seva Sahakari Mandali Ltd., Shree Gana Seva Sahakari Mandali Ltd., Bagdu Seva Sahakari Mandali Ltd., Magnath Pipli Seva Sahakari Mandali Ltd., Shree Khadiya Seva Sahakari Mandali Ltd., Shree Kangari Seva Sahakari Mandali Ltd., Shree Kediyari Seva Sahakari Mandali Ltd. etc, (c) the said documents also establish that (i) salary to the respondents was not paid by the petitioner bank; from its own fund/account and (ii) the salary to the respondents was paid out of the funds (and debited to the account) of the concerned mandalis to which the respondents were assigned by the liquidator. 12. 12. Besides this, the registrar's letter approving the appointment of present respondent No. 6 is placed on record as specimen, the appointment letters issued to the respondents (when they came to be appointed on the establishment of the liquidator) are also placed on record of this petition (annexure-F page 179). On examination of the said letter (specimen) it also comes out that registrar's approval/sanction was requested for and was granted in respect of the appointments of the respondents. The said aspect brings out that the appointments were subject to such approval/sanction, which would not be the case for persons appointed by the bank. The appointment letters are issued in the name of and under the sign, authority and seal of the liquidator and not by the Bank i.e. any authorized and competent officer of the bank. 13. While opposing the respondent's applications by filing its written statement and on the strength of its documents i.e. the approval/sanction letter (issued by the registrar) and payment vouchers (under which salary was paid to the respondents) and appointment letters the petitioner bank claimed that (a) the relationship of employer and employee does not exist between the petitioner bank and the respondents; and (b) bank's employees are appointed in accordance with the procedure prescribed under its selection policy and recruitment rules (c) that the bank i.e. any authorized officer of the bank had not appointed the respondents and the bank did not exercise any control over the said persons; and (d) the respondents did not discharge any duty or function of the petitioner bank and did not work for the petitioner bank (e) the respondents acted as per and under the instruction by the liquidator; and (f) that the respondents were not governed by its regulations; and (g) that even the salary of the concerned persons/respondent was not paid by the petitioner bank. 14. What is pertinent is the fact that the respondents did not counter the said contentions and did not place on record any material to establish that they were appointed by the petitioner bank and that their appointment were made in accordance with the procedure prescribed by petitioner's Rules and that they worked under the instructions, supervision and control of the Bank and that their salary was paid by the bank. 14.1 On one hand the respondents failed to place any material on record to support their allegations and claims and on the other hand they also failed to place on record any material contrary to the documents place on record by petitioner bank. 14.2 It is also pertinent that despite this being the position, the learned Courts failed to appreciate conspicuous absence of evidence supporting allegations and claims and despite absence of any evidence which would support respondent's claim the learned Court's accepted the respondent's claim and granted the relief. The respondents failed to establish aforesaid aspects. 14.3 The respondents failed to establish very basic ingredients and characteristic necessary for recognizing employer – workman relationship viz. appointment, supervision and control, payment of “wages” and right to terminate. 15. It is pertinent that the process of liquidation of co-operative society (mandali) starts with an order passed under Section 107 of the Act. After such order is passed, the registrar of co-operative societies appoints (Section 108 of the Act) the liquidator who is entrusted with the completion of the process of liquidation in accordance with the provisions under the Act and the Rules. 15.1 The person who is appointed as liquidator may be officer of the bank and the Bank could be one of the creditors of the society which is put under process of liquidation by virtue of Registrar's order. 16. However the said aspect does not wipe out separation of legal entity and separation of establishments viz. of the liquidator's establishment and the petitioner bank. Merely because the person who is appointed by the Registrar happen to be bank's employee, it would neither wipe out separation of the two distinct entities viz. liquidator and the bank nor will the fact that the officer appointed (as liquidator) happened to be the bank's employee make the office of liquidator sub-ordinate to the bank. It is pertinent that the liquidator has to discharge statutory function and his establishment is separate and legal entity. Once a person is appointed as liquidator under the order of the Registrar (for performing statutory duty of winding up of the any co-operative society or societies) then such person, on and from the date his appointment as liquidator becomes effective, would be constituted as liquidator i.e. as a separate legal entity distinct from any other establishment. Once a person is appointed as liquidator under the order of the Registrar (for performing statutory duty of winding up of the any co-operative society or societies) then such person, on and from the date his appointment as liquidator becomes effective, would be constituted as liquidator i.e. as a separate legal entity distinct from any other establishment. 16.1 Thus, if an officer of the Bank is appointed as “liquidator”, the bank, after his appointment as liquidator, cannot exercise supervision and control or authority over the said person (until he continues to hold the office and post of liquidator) and the bank cannot direct the officer who is nominated or appointed as liquidator by the registrar to do or to restrain him from doing a particular act or to perform particular act in manner suggested by the bank. 16.2 Similarly, merely because an officer-employee of a bank is appointed as “liquidator” by order of a Registrar, the decisions and actions taken and/or orders passed by “liquidator” shall bind the office and establishment of the “liquidator” but it cannot be termed as acts and orders by and/or on behalf of and/or in name of and on behalf of the bank. 16.3 Unfortunately, the learned Courts failed to appreciate this aspect and distinction as well. 17. 16.3 Unfortunately, the learned Courts failed to appreciate this aspect and distinction as well. 17. From the documents placed on record by the petitioner it has also emerged that (i) the respondents were appointed for the work related to winding-up of co-operative societies (ii) and that they were appointed by and under the order of the liquidator and that they were appointed on the establishment of the liquidator; and (iii) that they were not appointed on the establishment of the bank and/or by the bank (iv) and that they were not selected, recruited and appointed after following the policy or the prescribed procedure and rules of the bank; and (v) the said persons worked for and under the instruction of the liquidator and they discharged functions related to winding up procedure under and as per the instruction and direction by the liquidator (after his appointment by the Registrar), (vi) their salaries were paid by the liquidator from the funds of the societies (in liquidation) and their salaries were debited to the amounts of the societies in liquidation; and (vii) the liquidator possessed and exercised power and authority of supervision over the respondents; and (viii) the petitioner bank did not pay their salary; and (ix) the petitioner bank did not possess power or authority to terminate the respondents from the service. 17.1 These aspects are borne-out from the documents at pages 168 to 175. 18. On this count it is pertinent to note that there is nothing on record in light of which it can be construed that: (a) the petitioner bank had appointed the respondents and it had issued appropriate order/s and that (b) the petitioner bank exercised control or supervision over them; and that (c) the rules and regulations of the petitioner bank were applicable to them; and that (d) their service was governed by the rules and regulations of the bank; and that (e) their salary was paid by the petitioner bank and/or that the power to take any disciplinary action in case of misconduct, vested with the petitioner bank; and/or that (f) in the matters related to discipline and/or with regard to service condition they were governed by the rules of the petitioner bank. 19. 19. When the above aspects are examined conjointly then it emerges that in light of the material on record and on its true and proper construction the conclusion by the learned Courts that the employer – employee relationship exists between the bank and the said persons i.e. respondents, is not sustainable. 19.1 When the petitioner bank has neither made selection of the persons nor has the petitioner Bank issued appointment letters through its competent and authorized officer and when the bank did not make payment of salary to the persons nor did it exercise supervision and control over the respondents and when the respondents were not subject to any rules – much less service and/or discipline rules - of the bank and when the bank did not possess and did not exercise authority to take disciplinary action against them or the authority to terminate their service and when the respondents failed to establish existence of any ingredient, characteristic or element necessary for establishing employer – workmen relationship it cannot be accepted that employer – employee between the bank and the said persons exist (or existed) in present case. 20. Unfortunately, the learned labour Court failed to take into account and appreciate the said aspects. 20.1 The documents and other evidence obtaining on record are either not taken into account or they are misconstrued in a manner not permissible in law. 20.2 The learned Courts have drawn inferences from the said documents which are not supported by the facts nor justified in law. 21. The learned Courts also failed to take into account and failed to appreciate that the respondents did not place any material on record to demonstrate and establish that they were bound by and they were subjected to the rules and regulations of the petitioner bank including rules related to disciplinary actions and that the authority to take disciplinary action or to terminate service of the respondents vested with the petitioner bank and for such purpose they were governed by the rules applicable to the employees of the bank. 21.1 When the respondents failed to place any cogent material on record to establish any ingredient or characteristic relevant for determining or ascertaining relationship of employer and employee between the bank and the respondents, the learned Courts could not have reached to such conclusion in absence of cogent evidence. 21.1 When the respondents failed to place any cogent material on record to establish any ingredient or characteristic relevant for determining or ascertaining relationship of employer and employee between the bank and the respondents, the learned Courts could not have reached to such conclusion in absence of cogent evidence. In present case learned Courts have drawn such inference by ignoring evidence on record and/or by misreading the documents. 22. When all these aspects are taken into account then it becomes clear that the persons engaged by the liquidator (who could be officer/employee of the bank) cannot be considered or treated employees – workmen of the bank and the learned Courts are not justified in directing absorption of such person as employees – workmen of the bank or in directing that the said persons should be paid salary and other benefits on par with other employees of the bank. Though in absence of any cogent evidence which would establish and demonstrate employer – employee relationship between the petitioner bank and the respondents the learned Courts could not and ought not have passed such directions, the learned Courts have passed impugned orders. 23. In the process learned Court has fallen into error or misapplication of law and misreading of facts and evidence. 23.1 Unfortunately, the aspects mentioned above are not considered and appreciated by the learned labour Court or learned Industrial Court and the learned Courts have allowed themselves to be influenced and guided by unsubstantiated allegations. 23.2 On this count it would be appropriate to take into account the observations by Hon'ble Apex Court in case of Official Liquidator (supra) wherein Hon'ble Apex Court observed that:- 46. At the outset, we consider it necessary to remove the misgivings entertained by the respondents and the High Courts that while dismissing the appeals filed by the appellants in the earlier round of litigation, this Court had endorsed the directions given by Calcutta and Kerala High Courts for absorption of company paid staff without any rider. A careful reading of paragraphs 20 to 25 of the judgment in Govt. A careful reading of paragraphs 20 to 25 of the judgment in Govt. of India and others v. Court Liquidator's Employees Association and others (supra) makes it crystal clear that while approving the reasons and conclusions recorded by the High Courts and dismissing the appeals, this Court not only gave an opportunity to the appellants to frame a new scheme modeled on the 1978 Scheme within six months and implement the same but also stayed the operation of the orders impugned in the appeals and the one passed in Writ Petition (C) No. 473 of 1988. The use of the words "failing which the judgments under appeal and the order in WP (C) No. 473 of 1988 will stand confirmed" in paragraph 25 leaves no manner of doubt that the orders passed by the High Court and the one passed by this Court in WP (C) No. 473 of 1988 were to become effective only if the Government of India had not framed new scheme modeled on the 1978 Scheme. However, the fact of the matter is that Government of India not only framed and notified the 1999 Scheme within six months from the date of judgment, but also issued guidelines for implementation of the same. Therefore, the orders passed by Calcutta and Kerala High Courts and the direction given by this Court in Writ Petition (C) No. 473 of 1988 will be deemed to have become ineffective and inoperative and the respondents cannot derive any benefit from those orders and direction. 47. Now on merits. Rules 308 and 309 of 1959 Rules, which were framed by this Court under Section 643 of the Companies Act, 1956 to facilitate employment of special or additional staff in any liquidation and payment of salaries and allowances to such staff read as under :- 308. Employment of additional or special staff - Where the Official Liquidator is of opinion that the employment of any special or additional staff is necessary in any liquidation, he shall apply to the Court for sanction, and the Court may sanction such staff as it thinks fit on such salaries and allowances as to the Court may seem appropriate. 309. Employment of additional or special staff - Where the Official Liquidator is of opinion that the employment of any special or additional staff is necessary in any liquidation, he shall apply to the Court for sanction, and the Court may sanction such staff as it thinks fit on such salaries and allowances as to the Court may seem appropriate. 309. Apportionment of expenses of common staff - Where any staff is employed to attend to the work of more than one liquidation, or any establishment or other charges are incurred for more than one liquidation, the expenses incurred on such staff and the common establishment and other charges, shall be apportioned by the Official Liquidator between the several liquidations concerned in such proportions as he may think fit, subject to the directions of the Judge, if any. The above reproduced rules were framed with a view to ensure that the proceedings of liquidation are not hampered on account of shortage of staff. It was felt that if additional manpower is required for effectively dealing with liquidation cases, the Official Liquidator may apply to the Court and employ such staff after receipt of the sanction. The additional staff is paid from the company fund. If the staff employed under Rule 308 is required to attend the work of more than one liquidation or any establishment or other charges are incurred for more than one liquidation, then the Official Liquidator is required to apportion the expenses subject to the direction, if any, of the Judge concerned. 48. It is not in dispute that the respondents were engaged/employed by the Official Liquidators pursuant to the sanction accorded by the Court under Rule 308 of the 1959 Rules and from the inception of their employment, they are being paid from the fund created by disposal of the assets of the companies in liquidation. They were neither selected in accordance with the procedure prescribed under the rules framed under proviso to Article 309 of the Constitution nor they were appointed against the posts sanctioned by the Government of India. It is thus clear that the company paid staff constitute a separate and distinct class. They were neither selected in accordance with the procedure prescribed under the rules framed under proviso to Article 309 of the Constitution nor they were appointed against the posts sanctioned by the Government of India. It is thus clear that the company paid staff constitute a separate and distinct class. While deciding the appeals in the earlier round of litigation, this Court must have been alive to the aforementioned facts and this appears to be the reason why the directions given by Calcutta and Kerala High Courts for absorption of all company paid staff were stayed for six months and an opportunity was given to the Central Government to frame a new scheme within that period. 52. As mentioned above, while approving the reasons and conclusions recorded by the two High Courts and dismissing the appeals, this Court not only permitted the Government of India to frame a scheme modeled on the 1978 Scheme but also stayed implementation of the orders impugned in the appeal and the one passed by itself in the transferred writ petition. If the Court intended that all members of the company paid staff working on the date of judgment i.e. 27.8.1999 should be absorbed in the regular cadres against Group 'C' and 'D' posts, then a simple direction to that effect would have been sufficient and there was no occasion to stay the implementation of the orders of the High Courts for six months with liberty to the Government of India to frame a new scheme within the same period. The absence of such a direction shows that the Court was very much conscious of the fact that recruitment to the regularcadres is governed by the rules framed under Article 309 of the Constitution and it would be highly detrimental to public interest to issue direction for wholesale absorption/regularization of the company paid staff and thereby abrogate/stultify opportunity of competition to younger generation comprising more meritorious persons who may be waiting for a chance to apply for direct recruitment. Obviously, the Court did not want to sacrifice the merit by showing undue sympathy with members of the company paid staff who joined service with full knowledge about their status, terms and conditions of their employment and the fact that they were to be paid from the company fund and not Consolidated Fund of India. Obviously, the Court did not want to sacrifice the merit by showing undue sympathy with members of the company paid staff who joined service with full knowledge about their status, terms and conditions of their employment and the fact that they were to be paid from the company fund and not Consolidated Fund of India. In this context, we may also mention that though the Official Liquidators appear to have issued advertisements for appointing the company paid staff and made some sort of selection, more qualified and meritorious persons must have shunned from applying because they knew that the employment will be for a fixed term on fixed salary and their engagement will come to an end with the conclusion of liquidation proceedings. As a result of this, only mediocres must have responded to the advertisements and jointed as company paid staff. In this scenario, a direction for absorption of all the company paid staff has to be treated as vlolative of the doctrine of equality enshrined in Articles 14 and 16 of the Constitution. 59. The creation and abolition of posts, formation and structuring/restructuring of cadres, prescribing the source and mode of recruitment and qualifications and criteria of selection etc., are matters which fall within the exclusive domain of the employer. Although the decision of the employer to create or abolish posts or cadres or to prescribe the source or mode of recruitment and lay down the qualification etc., is not immune from judicial review, the Court will always be extremely cautious and circumspect in tinkering with the exercise of discretion by the employer. The Court cannot sit in appeal over the judgment of the employer and ordain that a particular post or number of posts be created or filled by a particular mode of recruitment. The power of judicial review can be exercised in such matters only if it is shown that the action of the employer is contrary to any constitutional or statutory provisions or is patently arbitrary or vitiated by mala fides. 116. In our opinion, any direction by the Court for absorption of all company - paid staff would be detrimental to public interest in more than one ways. Firstly, it will compel the Government to abandon the policy decision of reducing the direct recruitment to various services. 116. In our opinion, any direction by the Court for absorption of all company - paid staff would be detrimental to public interest in more than one ways. Firstly, it will compel the Government to abandon the policy decision of reducing the direct recruitment to various services. Secondly, this will be virtual abrogation of the statutory rules which envisage appointment to different cadres by direct recruitment." 24. From the foregoing discussion it emerges that the learned Courts have also failed to take into account the scheme of the Act and the Rules framed thereunder. The vital fact that the establishment of the liquidator is a legal entity separate independent and distinct from the entity of petitioner bank, is, unfortunately, overlooked by the learned Courts. It is also pertinent that the observations and conclusions recorded by the learned Court with regard to the issue related to relationship of employer – employee between the petitioner bank and the respondents are contrary to or have been passed by disregarding the evidence on record or in absence of and without support of any cogent and conclusive evidence and the said defects render the impugned observations and findings perverse and unsustainable. 25. Learned Senior Counsel for the petitioner submitted that the decision dated 20.10.2000 in Special Civil Application No. 2271 of 1991 wherein the Court considered similar issue in respect of similarly placed persons was placed before the learned Court for consideration. However, on examination of the judgment impugned in present petitions it appears that the learned Courts failed to consider and follow the said decision by this Court. The said error and infirmity also renders the impugned judgment unsustainable. 26. In view of the facts of the case and in light of the foregoing discussions and above mentioned reasons, the judgment and order passed by learned labour court and confirmed by learned industrial court cannot be sustained as the same are contrary to legal position laid down and explained in the above mentioned decision by Hon'ble Apex Court. 27. Therefore, impugned decisions deserve to be set aside and are accordingly set aside. The petitions deserve to be allowed and accordingly the petitions are allowed. Rule is made absolute to the aforesaid extent. Orders accordingly.