Civil Appeal No 2411 of 1978
Appeal by Special Leave from the Judgment and order dated 26 7 1978 of the Karnataka High Court in Writ Petition No 10203 77
And ORIGINAL JURISDICTION Writ Petitions Nos
4473 4474 4415 4488 4528 and 4539 of 1978
Under Article 32 of the Constitution
D G B Rikar K R Nagaraja and Mrs Gayathri Balee for the Petitioner In WP
4473 4474 4488 453978
R B Datar and Navin Sinha for the Petitioner In WP
4415 and 4528 and for Appellant in CA 241178
V A Sayield Mohammad and N Nettar for the State of Karnataka and for Respondent No 3 in WPs
4473 4474 4488 4528 and 4539 and CA 241178
L N Sinha Attorney General K K Venugopal Additional Solicitor General V A Sayied Mohammad and Vineet Kumar for Karnataka State Road Transport Corporation in All WPs  CA
It would therefore be convenient to dispose them of by this common judgment
The short question involved in these cases is whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in service with the Karnataka State Road Transport Corporation under sub cl
3 to cl 20 of the Karnataka Contract Carriages Acquisition ordinance 1976
688 It will be convenient 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 article 213 of the Constitution
The said ordinance was promulgated with the object of acquiring contract carriages operating in the State and for certain matters connected therewith
On the same day ie on January 30 1976 the State Government issued a notification under cl
41 of the ordinance vesting every contract carriage owned or operated by such contract carriage operator along with permit in the State Government absolutely free from all encumbrances
On the same day the State Government made an order under sub cl
1 to cl 20 of the ordinance transferring all the contract carriages that vested in the State Government under the notification issued under sub cl
1 to cl 4 of the ordinance to the Karnataka State Road Transport Corporation hereinafter referred to as the Corporation 
Sub 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 absorbed in the service of the Corporation
The ordinance was subsequently replaced by the Karnataka Contract Carriages Acquisition Act 1976 Which was published in the gazette on March 12 1976
The ordinance was repealed by the Act and it re enacted the provisions of the repealed ordinance with a saving clause in sub section
2 of section 31 for preservation of anything done 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 categories of persons who could be absorbed in the service of the Corporation was substantially altered and a new ratio was inserted in the proviso to sub section
3 of section 19 of the Act
Otherwise sub section
3 of section 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 79 per vehicle while under proviso to sub section
3 of section 19 of the Act the same works out to 445 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
689 It appears that although as many as 785 contract carriages were A notified for acquisition only 601 vehicles were actually acquired
The change in the ratio of absorption from 79 per vehicle under sub cl
3 to cl 20 of the ordinance to 445 per vehicle under sub section
3 of section 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 section
3 of section 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 withdrawn
The appeal is against the judgment of the High Court and the employees have also directly approached the Court under article 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 203 Every person who is a workman within the meaning of the Central Act 14 of 1947 and has been immediately before the commencement of this ordinance 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  Provided that the number of workmen that shall become employees of the corporation under this sub section shall not exceed the following scale the junior most being excluded Scale per vehicle 1
Drivers  
15 2
Conductors 
265 3
Supervision 
0125 4
Higher Supervision staff and Managers 
0075 5
Ministerial and Secretariat staff 
08 6
Technical staff including Foreman 
275 690 Sub section 3 of section 19 of the Act which replaced sub cl
3 to cl 20 of the ordinance provides 193 Every person who is a workman within the meaning of the Central Act 14 of 1947 and has been immediately before the commencement 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 
Provided that the number of workmen that shall become employees of the Corporation under this sub section shall not exceed the following scale the junior most being excluded Scale per vehicle 1
Drivers   
15 2
Supervision staff and managers 
01 3
Ministerial and Secretariat Staff
01 4
Technical staff including foreman
275 445 The saving clause to be found in sub section
2 of section 31 of the Act so far as material runs thus 31 2 Notwithstanding such repeal i anything done or any action taken under the said ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act
 It is strenuously argued that it is clear from the language of subcl
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 from 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 made an order under sub cl
1 to cl 20
It is submitted that the words shall become an employee of the Corporation ill sub cl
3 to cl 20 are clear and unambiguous and they must result in the consequence that all persons employed in connection with the acquired 691 contract carriages became employees of the Corporation
It is said A 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 ie January 30 1976
In other words the submission was that the legal effect of absorption of such  employees under sub cl
3 to cl 20 of the ordinance is automatic
That being so their right of absorption could not be whittled down by the subsequent enactment of the new proviso to sub section
3 of section 19 of the Act inasmuch as they had acquired a vested right to absorption in the ratio mentioned in sub cl
3 to cl 20 of the ordinance
C The ordinance promulgated by the Governor in the instant case was a legislative act  of the Governor under article 2131 and therefore undoubtedly a temporary statute and while it was still in force the Repealing Act was passed containing the saving clause in section 312 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 under the corresponding provisions of the Act
The enquiry is therefore limited to the question whether anything was done or action taken under the repealed ordinance
If that be so a further question arises on the submission whether the words things done  in section 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 legislature 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 repealed ordinance have been put an end to by the Act the line of enquiry would be not whether  in the words of Mukherjea J in State of Punjab vs Mohar Singh1 the new Act expressly keeps alive old rights and liabilities under the repealed ordinance but whether it manifests an intention to  destroy them 
Another line of approach may be to see as to how far the new Act is retrospective in operation
It is settled both on principle and authority that the mere right existing under the repealed ordinance to take advantage of the pro 11 visions of the repealed ordinance is not a right accrued
Sub section 692 2 of section 31 of the Act was not intended to preserve abstract right conferred by the repealed ordinance
The legislature has the competence to so re structure the ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract carriage services
It could re enact the ordinance according to its original terms or amend or alter its provisions
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 employees of the former contract carriage operators in normal course filled in the pro form 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 of posts to be filled in by the employees of the former contract carriage operators
The meeting of the Committee set up by the Government for laying down the principles for equation of posts and for determination of inter se seniority met on June 2 1976
The 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 artisans should be on the basis of their technical competence experience ability etc
The Committee also decided that all other employees of contract carriage operators who were eligible for absorption should be interviewed by that p 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
The distinction between what is and what is not a right preserved by the provisions of section 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 of  or liberty to apply for acquiring a right
In Director of Public Works vs Ho Po Sang  Lord Morris speaking for the Privy Council observed It may be therefore that under some repealed enactment a right has been given but that in respect of it some 693 investigation or legal proceeding is necessary
The right is then unaffected and preserved
It will be preserved even if a process of quantification is necessary
But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether so to 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 section 312 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
Further it is significant to notice that the saving clause that we are considering in section 312 i of the Act saves things done while the ordinance was in force it does not purport to preserve a right acquired under the repealed ordinance
It is unlike the usual saving clauses which preserve unaffected by the repeal not only things done under the repealed enactment but also the rights acquired thereunder
It is also clear that even section 6 of the General Clauses Act the applicability of which is excluded 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 scale prescribed for the categories specified under proviso to sub section
3 of section 19 of the Act are clearly not entitled for absorption
Though sub cl
3 to cl 20 of the ordinance provided for absorption of certain classes of employees 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 absorption had to fulfill three conditions viz 1 he had to be a workman within the meaning of the  2 he should have been immediately before the commencement of the ordinance exclusively employed in connection with the acquired property and 3 he had to come within the ratio provided 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 unemployment 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 section 5 of the Act provided that every contract carriage 8 625SCI79 694 operator shall within 15 days from the notified date or within such further time as the State Government 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 immediately before the notified date
It was only after such information was received that steps had to be taken for the purpose of ascertaining 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 to determine not only the corresponding posts to which the erstwhile employees of the contract carriage operators could be absorbed in the service of the Corporation but also their relative seniority for the purpose 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 retrenchment compensation as provided for in the  the authorities were also required to ascertain as to whether the employee who was entitled to be absorbed in service was willing to become an employee of the Corporation or not
It was only if the 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 identifying and determining the persons who could be absorbed in the service of the Corporation in accordance with sub cl
3 to cl 20 of the ordinance
The very fact that all these Various steps were necessary to be 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 erstwhile contract carriage operators was too large for its requirements
The legislature therefore stepped in and reduced the scale of absorption in the proviso to sub section
3 of section 19 from 79 per vehicle to 445 per vehicle
This is in our judgment sufficient for the determination of the appeal
But as we have formed a clear opinion on the other aspect 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 695 the Corporation by virtue of sub cl
3 to cl 20 of the repealed ordinance with effect from January 30 1976 which cannot be taken away by the proviso to sub section
3 of section 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 the legislature
The contention does not take note of the fact that by sub section
1 of section 1 the Act was brought into force with effect from January 30 1976 ie the date on which the ordinance was promulgated
The Act substitutes a new  proviso in sub section
3 of section 1 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 ie January a 30 1976
The proviso in sub cl
3 to cl 20 laying down a particular ratio of absorption is pro tanto avoided by an express enactment of a new  proviso to sub section
3 of section 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
NVK Appeal and Petitions dismissed


Summary:
The Karnataka Contract Carriage Acquisition ordinance 1976 was promulgated on January 30 1976 with the object of acquiring the contract carriages operating in the State
Sub 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 and the ratio for absorption for the different categories of employees that were entitled to be absorbed
On the same day the State Government made an order under sub cl
I to cl 20 of the ordinance transferring the contract carriages that vested in the State Government to the Karnataka State Road Transport Corporation
This ordinance was subsequently replaced by the Karnataka Contract Carriages Acquisition Act 1976 which was published in the Gazette dated March 12 1976
The ordinance was repealed by the Act which re enacted the provisions of the repealed ordinance with a saving clause in sub section
2 of section 31 for presentation of any thing done or any 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 categories of persons who could be absorbed in the service of the Corporation was substantially altered and a new ratio was inserted in the proviso to sub section
3 of section 19 of the Act
Otherwise sub section
3 of section 19 of the Act and sub cl
3 to cl 20 of the ordinance were identical in every respect
Under the Proviso to sub cl
3 to cl 20 the total strength of the employees of the erstwhile Carriage operators allowable for absorption was 79 per vehicle while under the proviso to sub section
3 of section 19 of the Act the ratio worked out to 445 per vehicle
Further while under the ordinance conductors were entitled to be absorbed the ratio provided under the Act showed that conductors were not included in the categories of persons who could be absorbed in the service of Corporation
The change in the ratio of absorption from 79 per vehicle under sub cl
3 to cl 20 of the ordinance to 445 per vehicle under sub section
3 of section 19 of the Act adversely affected a large number of employees of the erstwhile contract carriage operators who filed writ petitions in the High Court 685 challenging the vires of the proviso to sub section
3 of section 19 of the Act which dismissed the writ petitions
In the appeal and the writ petitions to this Court the question for consideration was whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in the service with the Karnataka State Road Transport Corporation under sub cl
3 to cl 20 of the Karnataka Contract Carriage Acquisition ordinance 1976
Dismissing the appeal and writ petitions  HELD 1
The High Court rightly observed 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
692 C 2
The ordinance promulgated by the Governor in the instant case was a legislative act  of the Governor under article 2131 and therefore undoubtedly a temporary statute and while it was still in force the repealing Act was passed containing the saving clause in section 312i providing that notwithstanding such repeal anything done  or any action taken  under the repealed ordinance shall be deemed to have been done or taken under the corresponding provisions of the Act
691 C D 3
In considering the effect of an expiration of a temporary Act it would be unsafe to lay down any inflexible rule
It requires very clear and unmistakable language in a subsequent Act of the legislature 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 repealed ordinance have been put an end to by the Act the line of enquiry would be not whether the new Act expressly keeps alive old rights and liabilities under the repealed ordinance but whether it manifests an intention to destroy them
Another line of approach may be to see as to how far the new Act is retrospective in operation
691 F G State of Punjab vs Mohar Singh   referred to 4
i Sub section
2 of section 31 of the Act was not intended to preserve abstract rights conferred by the repealed ordinance
The legislature had the competence to so re structure the ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract carriage services
It could re enact the ordinance according to its original terms or amend or alter its provisions
692 A ii When the ordinance came to be replaced by the Act the Corporation felt that the number of employees of the erstwhile contract carriage operators was too large for its requirements
The legislature therefore stepped in and reduced the scale of absorption in the proviso to sub section
3 of section 19 from 79 per vehicle to 445 per vehicle
694G 5
The object of section 312i is to preserve only the things done and action taken under the repeated ordinance and not the rights and privileges acquired and accrued on the one side and the corresponding obligation or liability 686 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
It is unlike the usual saving clauses which presented unaffected by the repeal not only things done under the repealed enactment but also the rights acquired thereunder
693 C D 6
i Every person eligible for absorption had to fulfil three conditions viz 1 he had to be a workman within the meaning of the  2 he should have been immediately before the commencement of the ordinance exclusively employed in connection with the acquired property and 3 he had to come within the ratio provided 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 unemployment of persons suitable for employment for which purpose the Corporation had necessarily to screen the applicants
693 G ii It was only if the 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
694 E iii Thus it is clear that several steps had to be taken by the authorities before identifying and determining the persons who could be absorbed in the service of the Corporation in accordance with sub cl
3 to cl 20 of the ordinance which indicates that automatic absorption of the employees of the erstwhile contract carriage operators was not legally permissible
694 F 7
The distinction between what is and what is not a right presented by the provisions of section 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 of  or liberty to apply for acquiring a right
692 G Director of Public Works vs Ho Po Sang 1962 2 All
ER 721 PC referred to
The Act substitutes a new  proviso in sub section
3 of section 19 in place cf 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 holds the field from the notified date ie January 30 1976
The proviso in subcl
3 to cl 20 laying down a particular ratio of absorption is pro tanto avoided by an express enactment of a new  proviso to sub section
3 of section 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
695 C 9
i The employees 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
692 C ii The meeting of the Committee set up by the Government for laying down the principles for equation of posts and for determination of inter sc seniority met on June 2 1976
The Committee decided that even in the 687 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 artisans should be on the basis of their technical competence experience ability etc
The Committee also decided that all other employees of contract carriage operators 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 inchohate right
692 E F