M. S. smv ANANDA v. KARNATAKA STATE ROAD TRANSPORT CORPORATION

It will be convenienf to refer in the first place to the legislative changes. On January 30, 1976 the Karnataka Contract Carriages ('Acquisition) Ordinance, 1976 was promulgated by the Governor of Karnataka under cl. (1) of Art. 213 of the Constitution. The said Or<linance was promulgated with the object of acquiring contract carriages operating in the State and for certain matters connected therewith. On the same day, i.e., on January 30, 1976 the State Government issued a notification under cl. 4(1) of the Ordinance vesting every contract carriage owned or operated by such contract carriage operator, along with permit, in the State Government abso the State lutely free from all encumbrances. On the same day, to cl. 20 of Ordinance transferring all the contract carriages that vested in State Government under the notification issued under sub-cl. ( 1) to cl. 4 of the Ordinance, 'to the Karnataka State Road Transport 'the Corporation'). Sub Corporatiem (hereinafter referred to as clause (3) to cl. 20 of the Ordinance provided for absorption of certain categories of employees of contract carriage operators in the service of the Corporation. It also provided the ratio for absorption for different categories of employees that were entitled to be absorb ed in the service of the Corporation. · C _ Government made an order under sub-cl. ( 1) The Ordinance was subsequently replaced by the Karnataka Con tract Carriages (Acquisition) Act, 1976, which was published the gazette on March 12, 1976. The Ordinance was repealed the Act, and it re-enacted the provisions of the repealed Ordinance, with a saving clause in sub-s. (2) of s. :\1, for preservation of any thing doi; ie or action taken. The Act was substantially in similar terms except for the difference that the ratio prescribed by proviso to sub-cl. (3) to cl. 20 of the Ordinance, which laid down the cate gories of persons who could be absorbed in the service of the Corpo ration,. was substantially altered! and a new ratio was inserted in the proviso to sub-s. (3) of s. 19 of the Act. Otherwise, sub-s. (3) of s. 19 of the Act and sub-cl. (3) to cl. 20 of the Ordinance were identical in every respect. Under proviso to sub-cl. (3) to cl. 20, the total strength of the employees of the erstwhile contract carriage operators allowable for absorption was 7 .9 per vehicle, while under proviso to sub-s. (3) of s. 19 of the Act the same works out to 4.45 per vehicle. Further, while under the Ordinance conductors were entitled to be absorbed, the ratio provided under the Act shows that conductors are not included in the categories of persons who can be. absorbed in the service of the Corporation. D F G • • ( M. s. SHNANANDA v. K. s. R. T. CORPN. (Sen, !.) 689 It appears that although as many as 785 contract carriages were notified for acquisition, only 601 vehicles were actually acquired. The change in the ratio of absorption from 7.9 per vehicle under sub-cl. (3) (3) to cl. 20 of the Ordinance to 4.45 per vehicle under sub-s. of s. 19 of the Act adversely affected a large number of employees of the erstwhile contract carriage operators. A large number of writ petitions were, therefore, filed in the High Court challenging the vires of the proviso to sub-s. (3) of s. 19 of the Act on various grounds, but by the judgment under appeal the High Court has repelled all the contentions. Thereafter, the remaining writ petitions were all with drawn . The appeal is against the judgment of the High Court and the employees have also directly appro~ched the Court under Art. 32. Before dealing with the contention advanced in the appeal, it is necessary to set out the relevant provisions. Sub-clause (3) to cl. 20 of the Ordinance read as follows : "20.(3) Every person who is a workman within meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) and has been immediately before the com mencement of this Ordinance exclusively connection with the acquired property, shall, on and from the notified date, become a~ employee of the corporation on the same terms and condifions. applicable to the . em ployees holding corresponding .posts in the corporation. Any person not willing to become such an employee of the cor poration shall be entitled to retrenchment compensation as provided in the Industrial Disputoo Act : employed Provided that the number of workmen that shall be come employees of the corporation under this sub-section shall not exceed the following scale, the junior most being excluded:- A B c D F

#1. Drivers 2. Conductors 3. Supervision 4. Higher Supervision staff and Managers 5. Ministerial and Secretariat staff . 6. Technical staff including Foreman • Line staff and checking Inspectors." Scale per vehicle G 1 ·5 2·65 0 ·125• 0·075 0·8 2·15 B 690 SUPREME COURT REPORTS (1980] 1 s.c.R. Sub-section (3) of s. 19 of the Act, which replaced sub-cl. (3) to cl. 20 of the Ordinance, provides : "19.(3) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947) and has been immediately before the com- mencement of this Act exclusively employed in connection with the acquired property, shall, on and from the notified date, become an employee of the corporation on the same terms and conditions applicable to the employees holding corresponding posts in the corporation. Any person not willing to become such an employee of the Corporation shall be entitled to retrenchment compensation as provided in the Industrial Disputes Act. Provided that the number of workmen that shall become em ployees of the Corporation under this sub-section shall not exceed the following scale, the junior most being excluded : -

#1. Drivers 2. Supervision staff and managers 3. Ministerial and Secretariat Staff 4. Technical staff including foreman . Scale per vehicle 1 ·5 0 ·1 0 ·1 2·75 4·45" A B C D E The saving clause to be found in sub-s. (2) of s. 31 of the Act, so far as material, runs thus : "31 (2) Notwithstanding such repeal : - (i) anything done or any action taken under Ordinance, shall be deemed to have been done or under the corresponding provisions of this Act." It is strenuously argued that it is clear from the language of sub- cl. (3)' to cl. (20) of the Ordinance that there was, by operation of law, automatic absorption of the employees of the erstwhile contract carriage operators to the extent provided therein with effect January 30, 1976, the date on which the notification was issued under sub-cl. ( 1) to cl. 4 and the date on which the Government It is submitted that the made an order under sup-cl. (1) to cl. 20. wonls "shall become an employee of the Corporation", in, sub-cl. (3) to cl. 20 are clear and unambiguous and they must result in the conse . quence thm an persons employed in connection with the acquired v. s. KUTTAN PILLAI v. RAMAKRISHNAN & ANR. (DcJai, J.) 691 .contract carriages, became employees of \he Corporation. It is said that, though the process of absorption may take time, as and when the necessary steps. were taken to fit in such employees falling within the categories mentioned in the proviso to. sub-cl. (3) to cl. 20, their absorption relates back to the notified date, i.e. January 30,. 1976. In other words, the snbmission was that the legal effect of absorption -0f such employees under sub-cl. ( 3) to cl. 20 of the Ordlliancc is antomatic. That being so, their right of absorption could not be whittled down by the subsequent enactment of the new proviso to sub-s. (3) of s. 19 of. thei Act, inasmuch as they had acquired a vested right to absorption in the ratio mentioned in sub-cl. · cl. 20 of the Ordinance. (3) The Ordinance promulgated by the Governor in the instant case was a 'legislative act' of the Governor under Art. 213(1) and, there fore, undoubtediy a temporary statute, and while it was still in force the Repealing Act was passed containing the saving cl.ause in s. 31 (2) (i) providing that, notwithstanding such repeal, 'anything done' or any 'action taken' under the repealed Ordinance shall be deemed to have been done or taken u,;der the corresponding provisions of the Act. The enquiry is, therefore, limited to the question whether any thing was done or action taken under the repealed Ordinance. If that be so, a forth.er questiOn arises on the submission whether the words 'things done' in s. 31(2)(i) reasonably interpreted can mean not only things done but also .the legal consequences flowing therefrom. In considering the effect of an expiration of a temporary Act,' it would be unsafe to lay down any inflexible rule. It certainly requires ·very clear and unmistakable language in a subsequent Act of the legis- • b.ture to revive or re-create an expired right. If, however, the right ~created by the statute· is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which it was created has expired. In order to see whether the rights .. and liabilities under the repe:i!ed Ordinance have been put an ·end to by the Act, 'the line of enqniry would be not whether_', in · the words ·of Muknerjea J. in State of Puniab v. Mohar Singh('), 'the new Act expressly keeps alive old rights ·and liabilities under. the re~aled Ordinance but whether it manifests an intention to destroy · them'. Another Hne of approach may be to see as to how far. the new Act is retrospective in operation . . · It is settled both 0n principle arid authority, that the mere right existing under the repealed Ordinance, to take advantage of the pro -vjsinns of the repealed Ordinonce, is not a right accrued. Sub-section '(!) [1955] s. c. R. 89~. A B D E .F G B • ) • t ·• 692 SUPREME COURT REPORTS [1980] 1 S.C.R. rights (2) of s. 31 of the Act was not intended to preserve abstract conferred by the repealed Ordinance. The legislature has the compe ·. tence to so r<>-strncture the Ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract" carriag<:: · It could re-enact the Ordinance according to its original services. terms, or amend or alter its provisions. _ ;: A B D c What were the 'things done' or 'action taken' under the repealed Ordinance ? The High Court rightly observes that there was neither anything done nor action taken and, therefore, the petitioners did not acquire any right to absorption under sub-cl. (3) to cl. 20. The em• ployees of the former contract carriage operators in normal course filled in the pro forma giving their service particulars, and reported to duty. This was in the mere 'hope or expectation' of acquiring a right. The submission of these 'call reports' by the employees did not subject the Corporation to a corresponding statutory obligation to absorb them in service. As a matter of fact, nothing was done while the Ordinance was in force. The Act was published on March 12, 1976. On May 29, 1976, the Corporation sent up proposals for equation former contract of posts to be filled in by the employees of carriage operators. The meeting of the Committee set up by Government for laying down, the principles for equation of posts and for determination of inter-se seniority, met on June 2, 1976. The E Committee ·decided that even in the case of helpers-cleaners, there should be a 'trade test' and; the staff cleared by the Committee for the postS of helper 'B' helper 'A' and assistant artisens should be on the • basis of their technical competence, experience, ability etc. The Com· mittee also decided that all other employees of contract carriage opera tors. who were, eligible for absorption, should . be interviewed by that · Committee for the. purpose of absorption on the basis of experience, . ability, duties and responsibilities. · , These norms were not laid down till June 2, 1976. Till their actual absorption, the employees of the erstwhile contract carriage ·operators had only an incohate right. . p '· · The distinction between what is, and what is not a right preserved by the provisions of s. 6 of the General Clauses Act is often one of great.fineness. What is unaffected by the repeal of a statute is a right acquired or accrued under it and not a mere 'hope or expectation or, or liberty to apply for, acquiring a right. In Director of Public Works the . Privy Council, v. Ho Po Sang(') Lord Morri~ speaking for · o~rved: ·"ff m!ly be, therefoce, that under some repealed enactment, a right fuui been given, but that, in reapect of it, some G H (!) [1962) 2 All E. R. 121 (P. C.j. ' M. s. SHIVANANDA v. K. s. R. T. CORPN. (Sen, J.) 693 investigation or legal proceeding is necessary. The right is It will be preserved even· if th.en unaffected and preserved. is a a· process of quantification is necessary. But there manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should be or should not be given. On a repeal the former is preserved by the Interpretation Act. The latter is not." (Emphasis supplied) • It must be mentioned that the object of s. 31 (2) (i) is to preserve only the things done and action taken under the repealed Ordinance, and not the rights and privileges acquired and accrued on the one side, and the corresponding obligation or liability incurred on the other side, so that if no right acquired under the repealed Ordinance was preserved, there is no question of any liability being enforced. A B c Further, it is significant to notice that the saving clause that we are considering in s. 31 (2) (i) of the Act, ,saves things done while the Ordinance was in force; it does not purport to preserve a right ac quired under the repealed Ordinance. It is unlike the usual saving clauses which preserve unaffected by the repeal, not only things <lone uRder the repealed enactment but also the rights acquired thereunder. It is also clear that even s. 6 of the General Clauses Act, the applica bility of which is exclnded, is not intended to preserve the abstract rights conferred by the repealed Ordinance. It only applies to specific rights given to an individual upon the happening of one or other of the events specified in the statute. Employees in excess of the sqtle prescribed for the categories specified nnder proviso to snb-s. (3) of s. 19 of the Act are clearly not entitled for absorption. Thongh sub-cl. (3) to cl. 20 of the Ordi nance provided for absorption of certain classes of employ!les in a particular ratio with effect from January 30, 1976, it does not follow that there was an automatic absorption as from that date. Every such person eligible for absorptiol). had to fulfill three conditions, viz., (1) he had to be a workman within the meaning of the Industrial Disputes Act, 1947; (2) he. should have been immediately before the com mencement of the Ordinance, exclusively employed in connection with the acquired property, and (3) he had to come within the ratio pro vided in the proviso to sub-cl. (3) to cl. 20. The whole object of inserting sub-cl. (3) to cl. 20 of the Ordinance was to obviate the un employment of persons suitable for employment. For this purpose, the Corporation had necessarily to screen the applicants. It is necessary to mention that cl. 5 of the Ordinance, which corresponds to s. 5 of the Act, provided that every contract carriage 8-625SCI/19 E F G H .... 694 SUPREME COURT REPORTS [1980].1 S.C.R. A B c D E operator shall within 15 days from the notified date or within such further time as the State Govermnent may allow, furnish to the State Government or any officer authorised by it in this behalf, complete particulars among others of persons who were in their employment It was. only after such informa- immediately before the notified date. tion was received that steps had to be taken for the purpose of as certaining as to who were entitled to be absorbed in the service of the Corporation in accordance with sub-cl. (3) to cl. 20 of the Ordinance. The authorities after collecting the necessary information had determine not only the corresponding posts to which the erstwhile em ployees of the contract carriage operators could be absorbed in the service of the Corporation but also their relative seniority, for the pur pose of excluding the employees who were in excess of the scale for the purpose of absorption. As sub·cl. ( 3) to cl. 20 itself provides that a person who is not willing to become an employee of the Corporation is entitled to re- trenchment compensation as provided for in the Industrial Disputes Act, the authorities were also required to ascertain as to whether the employee; who was entitled to be absorbed in service, was willing to It was only if the become an employee of the Corporation or not. employee was willing to be absorbed in the service of the Corporation that the Corporation could absorb him in service, provided the other conditions specified in sub-cl. (3) to cl. 20 were satisfied. Thus it is clear that several steps had to be taken by the authorities before identi- fying and determining the persons who could be absorbed in the ser- vice of the Corporation, in accordance with sub·cl. (3) to cl. 20 of the Ordinance. ' The very fact that all these various steps were necessar~ to he taken, which necessarily takes time, shows that automatic absorption of the employees of the erstwhile contract carriage operators was not legally permissible. When the Ordinance came to be replaced by the Act, the Corporation felt that the number of employees of the erst- while contract carriage operators was too large for its requirements. The legislatnre, therefore, stepped in and reduced the scale of absorp- tion in the proviso to sub-s. (3) of s. 19 from 7.9 per vehicle to 4.45 per vehicle. G • •-'~ '· .. ' This is, in our judgment, sufficient for the determination. of appeal. But, as we have formed a clear opinion on the other aspect, II we do not hesitate to express that opinion. That contention is of this nature. It is pointed out that the employees of the· erstwhile contract ,carriage operators acquired vested right to absorption in the service of .... M. s. SH!VANANDA v. K. s. R. T. CORPN. (Sen, 1.) 695 the Corporation by virtue of sub-cl. (3) to cl. 20 of the repealed Ordi nance with effect from January 30, 1976, which cannot be taken away by the proviso to sub-s. (3) of s. 19. Even' if-contrary to the decision reached by us, it were possible to• hold that they had some kind of such right, that right is expressly taken away by lature. The contention does not take note of the fact that by sub-s. ( 1) of s. 1 the Act was brought into force with effect from January 30, 1976, i.e., the date on which the Ordinance was promulgated. The Act substitutes a 'new' proviso in sub-s. (3) of s. 19 in place of the old proviso to sub-cl. (3) to cl. 20 of the Ordinance, altering the whole basis of absorption. The new proviso is given a retrospective effect, and- it now holds the field from the notified date i.e., .T anuary 30, 1976. The proviso in sub-cl. (3) to cl. 20 laying down a parti cular ratio of absorption, is pro tanto avoided by an express enactment of a 'new' proviso to sub-s. (3) of s. 19 which is entirely inconsistent with it. When an Ordinance is replaced by an Act which is made retrospective in operation, anything done or any action taken under the Ordinance stand wholly effected. In the result, the appeal as well as the writ petitions must fail and are dismissed. There shall be no order as to costs. A B c D N.V.K. Appeal and Petitions dismissed. ' • , __ /-..; - > ... .. • ...