The Motor v. Pnnincial

The Motor Transport _lfali:r~:;~~~",;tate CIVIL APPELLATE JURISDICTION: Civil Appeal No. 742 of Bomh"" a .. d Ot1"r; 1963. Appeal from the judgment and order dated July 4. 5, 1961 of the Bombay High Court (Nagpur Bench) at Nagpur in Ra.hlriya Jfotor Special Civil Application No. 150 of 1961. Kan11.J<Lr Unicm, Jfagpur and Otlura S. v: G11pte, Additional Solicitor-General, G. B. Pai, and '· Prnl.'inrial - R. H. Dliebar, for the appellants. Das Gupta, J, The respondent did not appear. April 3, 1964. The Judgment of the Court was delivered DAs. GUPTA, J.-A short point arises for consideration in this appeal. But to understand how the point arises it is neces sary to embark on a somewhat lengthy statement of facts. Three Road Transport Corporations established under the Road T(ansport Corporation Act, 1950 were operating in the States of Bombay, Madhya Pradesh and Hyderabad in J 956 when the States E.eorganisation Act, 1956 was enacted.

These three cdrporations were known as the Bombay State Road fransport Corporation, the Provincial Transport Service and the State Transport Marathewada respectively. As a result of the reorganisation of the States under the States Reorganisa tion Ac,, 1956 the former State of Bombay Jost certain of its territories to the newly formed State of Mysore and some areas to, the State of Rajasthan. On the other hand, the State oi Bombay gained the Marathewada from the State of Hyder abad and the Vidharbha area from the State of Madhva Pra desh and certain other areas from the then existing State of Saurashlra and the State of Kutch.· To meet the situation ;;rising from these territorial changes, Parliament passed the Road Transport Corporation Amendment Act, 1956, thus amending the Road Transport Corporation Act, 1950. Sec tion 47;A which was introduced by the amending Act pro vides fqr the reconstitution, reorganisation and dissolution of the Corporations established under s.

3 of the Act. On Decem ber 3 L l 956 an order was made by the Central Government under (he provisions of this section approving a scheme for reorganisation submitted by the Government of Bombay. By thi~ scheme those areas in which the Bombay State Road transport Corporation had been operating but were transferred under States .of Mysore and Rajasthan were excluded from the area of the operation of the Bombay State Road Transport Corpo~ation. This came into force from the !st January, 1957. Another consequence of the States Reorganisation Act was that the two commercial undertakings which were known as the State Reorganisation Act I . I ' ' ':..-~J;-'._.;.--;-··": ;\ .- . ' "-'" - . ~- . ' / \ / 7 S.C.R.· ,, . SUPREThIB. COURT :REPORTS 641 Da• Gupta, J, then was v. Pnnincial 1961 Tho J!otor Tra.,,por1 Controller, the Provincial Transport Services. and . the State Transport, Marathewada •. became the commercial iindertakings of the State ·of Bombay.

Further, territorial changes occurred in the State of Bombay in the year 1960. By the Bombay Reorgani- sation Act, No. 11 of 1960, the State of Bombay was again f{.':!b;;~'!~;; g~;. divided; part of what was in the former State, was formed into a new State by the name of the State of Gujarat, while the remaining area. was named, the State of Maharashtra. In :~~~::cl,{~":" consequence of this scme: other. areas were excluded by an Nagpur and Otn.ra order under s. 47-A of the Act from the area of operation of the Bombay State Road Transport· CorjJoiation. ·The' situa- the · State Transport, Marathewada, . was operating in the Maharashtra area, the Provincial Transport Service was operating in the Vidharbha area while in the rest of the Maharashtra State the Bombay ··State Transport Corporation was operating. It was when things stood like this that the Central Government made an order on the.27th May; 1961 under s.

47-A of the Amending Act. By this. orde~ it ap- proved a scheme for the ree1rganisation of the Bombay State Road Transport COrporation and amalgamation with' it·of the two other transport undertakings of the State Government, viz .. the Provincial Transport Services, and the State Trans; port, Mara.thewada. After the reorganisation the Corporation was to be known as. the Maharashtra State Road Transport Corporation. Clause 9(1) of this Order provided' for the aboli- tion of all the posts in the· two· undertakings, the Provincial Transport Services. and. the : State Transport Marathewada; and for discharge of all persons holding such posts·from ser- vice. There was a provision, however. , giving · such people option either of taking terminal benefits .such as compensation. pension, or gratuity to which they may. be entitled under the rules applicable to them or of continuing as from the !st July 1961 in the service of the Maharashtra State Road Transport Corporation.

Sub-clause 2 of cl. 9 provided that every person who as a result of the exercise of such option· is continued in the service of the Maharashtra State Transport Corporation shall be entitled to be employed by that Corporation on· the same terms and conditions, including pay. as were applicable to him immediately before the appointed ·day and to count his service under the previous . corporations·, for ... a!L purposes .. Sub. clause 3 'of cl. 9 was in these words:.:... . . . . . . . "Nothing '.in; ,sub-paragraph (2) ·shall be deemed to ·. affect the right of the Maharashtra State Road -. Transport. Corporation, subject to the provisions . of s. 77 of the Bombay Reorganisation Act, 1960 (11 of. 1960) to determine or vary after the ap pointed day, the conditions of service of any per son who is continued.in the service of the CofPO' I.II' Jl)!SCI-21 _·ration". i_:_, . - ._ , '! : ! .• 1964 The .. lfolvr TraiMporl Controller. }.!alwrashtra State.

Bombay a11tl Of/1Pf.>J v. P·roviiicirrl Rashtriya Jlotor Kamgar 'fJnion, ),? agpur and Others Das G1lpta, .J. 642 SUPREME COURT HEPORTS [1964] "Provided that the conditions of service ap· plicable immediately before the aJtlointed day. to anv such person shall not be varied to his dis advantage. except with the previous approval of the Central Government". Notices terminatiqg services of the employees employed by the Provincial Transport Services (operating in Vidharbha) were issued. On 12th June 1961 an applica· lion was made under Art. 226 and Art. 227 of the Constitu· tion by two former employees of the Provincial Transport Services and the Union cf the workmen of that concern -::hal· !enging the validitv of the order of reorganisation made on -the 27th Mav. 1961 and the notices of ter'illination of ser· vice served on ·the employees. The following reliefs were prayed for: (a) that the notices of termination be quashed; ib) that the amalgamation of the Provincial Transport Services with the Bombay State Road Transport Corporation as direct ed under s.

47-A be not carried out, and {c) that "a writ of man damus be also issued to respondents 1 to 3 directing them to carry out the obligations under s.25-F and other provisions of retrenchment of the Industrial Disputes Act, 1947, and other provisions of law before taking any action as required by law . and also by paragraph 9 of the order even assuming that the amalgamation order is legal and proper. " Three contentions were raised in support of these prayers. lt was first urged that the order made on the 27th May violat ed the provisions of s.47-A of the Act and was therefore bad in law, The second contention was thnt the proviso to sub cl.3 of cl.9 of the order contravenes the provisions of s.77 of the Bombay Reorganisation Act. Lastly, it was contended that the a.ction taken by the Government in abolishing the posts and issuing notices of termination of services of the em ployees was bad-firstly because it contravened s.25F (b) and le) of the Industrial Disputes Act and secondly, because it contravened the provisions of s.31 of the C.P. and Berar In dustrial Disputes Settlement Act, 1947.

The High Court rejected the first contention that the Government Order violated s.47-A of the Act. It also rejected \he petitioner's contention that the action taken by the Gov ernment was bad because of contravention of s.25F (b) and (c) of the Industrial Disputes Act. The High Court was how ever of opinion that the proviso to sub-cl. 3 of cl. 9 of the order was bad in law, being in conflict with s.77 of the Bombay Reorganisation Act, but it held that the proviso was severable and its illegality did not affect the working of the ;cheme. The Hi?h Court also accepted the petitioner's contention that the action taken by the Government in issuing notices of termina tion of services on abolition of posts did not comply with the provision> of s.3 l of the C.P. and Berar Industrial Disputes 7 S.C.R. SUPRElIE COURT REPORTS 643 . • . T C .:1 a11oras11lra ._..,fate . ransport orporahon Homb"'' '""' un,,.~ Settlement Act and was accordingly invalid.

In the result, the 196# High Court quashed the Government resolution for abolition 1'1'e ~fo10, of posts and the notices of termination that were issued in J'ran.<pc.i·t consequence thereof. It also ordered the issue of a directi0n, ,1 f 0"'';·llcr,, . dtrectmg the Maharashtra State Road · ':· . '·not to take any action under the proviso to sub-paragraph , P,r,0~·· 11",011 1 (3l of paragraph 9 of the Order relating to varying the condi- 1 ,.aeu1 riya J' u vr • lions of services to the disadvantage of any of the employees Xnmyar L"nion, who were employees of the first respondent immediately be- Xaypnr and 011,era fore the appointed day, i.e., Ist July 1961." Against these orders of the High Court, the State of Mahrashtra, the Maha- rashtra State Road Transport Corporation and the Moter Transport Controller, Maharashtra, have appealed. At the hearing of the appeal nobody appeared before us on behalf of the petitioners in the High Court.

The correctness of the High Court's decision that the order of the 27th May, 19"1il did not violate s. 47-A of the Act was not challenged before us.· Nor was the High Court's decision that the Government's terminating services of action employees was not bad because of contravention of s. 25F(b) and Industrial Disputes Act, que'- tioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dis- pose of the appeal on the basis that the decision· on these points are correct. in abolishing posts and 1,,,, G,,-;,11 (c) of , J. The first contention urged in support of the appeal is that the High Court was wrong in thinking that in ordering the abolition of posts and terminating the services of employees in those posts the Government had contravened the provi sions of s. 31 of the C. P. and Berar Industrial Disputes Set tlement Act. That section is in these words:- "31.

(I) If an employer intends to effect a change in any standing orders settled under s. 30 or in res pect of any industrial matter mentioned in Sche dule II, he shall give fourteen days' notice of such intention in the prescribed form to the represen tative of employees. (2) The employer shall send a copy of the notice to the Labour Commissioner, Labour Officer and · to such other person as may be prescribed and shall a !so affix a. copy of the notice at a conspicuous place on the premises where the employees affected by the proposed change are employed and at such other places as may be specially directed by the Labour Commissioner in any case. (3) On receipt of such notice representative of employees concerned shall negotiate with the employers". L'PiD)IKCT-~l(a) 644 SUPREl\IE COURT REPORTS [1964] Dal Gupta, J. v. Provin<ial 1964 Tht.'llotor Transport Schedule II of this Act mentions a number of matters, the first of which is "Reduction intended to be of permanent or semi-permanent character in the number of persons employ- Ma/j,~':,':e;~'state, ed or tho be emJ? _e. arguf lol?I nhot dHll:ehtoCforce majeuhre". bTh 1 1 1g ourt was t at a o 1tton o Bomliay and Others ment t at preva1 eu m t e all posts amounted to permanent reduction within the mean- ing of this Item in Schedule II. If that be correct it would Raihtriya Motor, necessarily follow that the Government had to observe the N~;::;:;,,p0f::, procedure prescribed in s.

31. Admittedly, that was not done. The short question, therefore, is whether the abolition of all posts of an establishment amount to reduction of posts. In our opinion. the word reduction can only be used when something is left after reduction. To speak of abolition as a reduction of the whole thing does not sound sensible or reasonable. We are unable to agree with the High Court that the term "reduc tion in the number cf persons employed or to be employed" as mentioned in Item l of Schedule II covers abolition of all posts. In our opinion, the Government Order in abolishing the posts and terminating the services of the employees did not amount to a change within the meaning of s~ 31 of the C. P. and Berar Industrial Disputes Settlement Act. The Gov ernment was, therefore, not required to follow the procedure mentioned in s. 31. industrial undertaking the workman after such favourable This brings us to the que~,tion about the validity of the proviso to sub-cl.

3 of cl. 9 of the Order. As already indicated thf' workmen's contention was that the proviso contravened the provisions of s. 77 of the Bombay Reorganisation Act. That section contained a prcJvision . that on transfer or re employment of any workman in consequence of reconstitu tion, reorganisation, amalgamation or dissolution by any body rnrporate, cooperative society or any commercial undertaking terms and conditions of transfer service applicable shall not be less or reemployment workman than those applicable to him immediately before It was apparently ap the transfer of prehended by the workmen that though sub-cl. 3 of cl. 9 of the Order did state definitely that the right of the Maharashtra State Road Transport Corporation to determine or vary the conditions of service of any person who is continued in the service of the corporation was subject to the provisions of s. 77 of the Bombay Reorganisation Act, advantage might be taken of the proviso to the sub-clause, which seems at least at first sight to suggest that with the approval of the Central Govern .. ment tht- conditions of service of a workman might be varied to his disadvantage notwithstanding the provisions of s.

77 of the Bombay Reorganisation Act. We are informed, however. that there has been no such variation. The petition itself did that there had been any not contain any specific assertion reemployment.. - 7 S.C.R. SUPRE:~IE COURT REPORTS 645 • • f variation to the disadvantage of any workman. Only an ap- 1vu1 n, Mo'"' prehension that there might be a change in future was express- T"""P'"' ed. In the counter-affidavit the Government stated that •he a,,,,,.o/hr. Order passed in the notices issued clearly gave a guarantee that the conditions of service will not be changed. If there was any ·1!"""'."""',.,, """'· iJ111n9a11 rtnrl Otlu, rs • · v. reason to thmk that there had been any change m any cond1- tions of service or that in the immediate future there was any p,."';,.d,,l f n,, 4,i,;ya Motw . b . l.k l"h d i e .1 oo o any s~c l. c 1ange erng ma e on t e strengt o 1.:_,1111 y,1 r t.:,iinn, the impugned proviso 1t would have been necessary for us to Sagpw and Ulh•r.• examine the question about the validity of this proviso.

As h owever, no change appears to ave een ma e an 1t oes not appear that there was any apprehension of any change being made in the immediate future, we have thought it desir- able to leave this question open-particularly in view of the fact that the workmen were not represented before us in this appeal. We have, therefore, not heard full arguments on this question from the learned Counsel for the appellant. iJa.\' Ou1Jfrt, .J. I 1 . d h d d h h d b The decision of the High Court that the proviso is bad is therefore, set aside and the question is left open for decision if and when it becomes really necessary to do so. In view of our decision that the High Court erred in thinking that s. 31 of the C P. and Berar Industrial Disputes Settlement Act had to be applied the High Court's order quashing the abolition of posts and the notices of termination cannot be sustained. We accordingly allow the appeal, set aside the order of the High Court quashing the Government resolution of the 29th May, 1961 directing the abolition of posts and also its order quashing the notices of termination. As we have set aside the High Court's decision as regards the validity of the proviso to sub-cl. 3 of cl. 9 of the Order and left the matter open, the High Court's direction that no action should be taken under the proviso is also set aside. There will be no order as to costs. · Appeal allowed . •