In the High Court of Judicature at Madras Dated: 30/10/2003 Coram The Hon'ble Mr. Justice R. Jayasimha Babu and The Hon'ble Mr. Justice S.K. Krishnan Writ Appeal No. 1542 of 1992 1. R. Rangasamy 2. C. Vasudevan 3. C. Vijayagopal 4. P. Kannaiyan ... Appellants -vs- 1. The State of Tamil Nadu, rep. by the Commissioner and Secretary to Govt. Transport Department, Fort. St. George, Chennai - 9. 2. Thiru. N. Azhagirisamy, General Manager, Nesamany Transport Corp. Ltd. Nagercoil, Kanyakumari District. 3. Thiru. P. Murugesan General Manager, Kattabomman Transport Corp. Ltd. Tirunelveli. 4. Thiru. G. Ramesh, 5. L.J. Singaravelu 6. P. Dhanakoti 7. C.T. Meyappan 8. K. Anbanathan 9. R. Ramasamy 10. G. Venkatesan 11. Y.C.C. Raghavendran 12. N. Sebapathy 13. G. Selvam 14. A. Chandrasekaran 15. D. Raghupathy 16. C.D. Lakshmaiah 17. P. Subbiah 18. V. Anbalagan 19. A.P. Ellappan 20. R. Vellaiputhiyavan 21. M. Jayarajan 22. V. Dhiravidamani 23. G. Gunasekaran 24. Rajappa Abraham 25. L. Anand 26. R. Thanikachalam 27. B. Kothandaraman 28. K.R. Gajendran 29. Naina Mohammed Noorullah 30. A. Narayanaswamy 31. R. Palaniappan 32. M. Rathinasabapathy 33. K. Ramasamy 34. Vincent Clement Fernando 35. A. Kanagaval Pandiyan 36. R. Nambirajan 37. T. Chandramouli 38. N. Bakthavatchalam 39. A. Balasubramanian 40. G. Jagadeesan 41. J. Janarthanam 42. S. Kothandapani 43. A. Jagannathan 44. Ramasubramanian 45. Dhanabalakrishnan Respondents 7 to 45 were impleaded as per order of the Court dated 24.08.2000 by R.J.B.J. & F.M.I.K.J. made in C.M.P. No: 4327 of 1997 46. Tamil Nadu State Transport Corporation Ltd., Madurai Division III, rep. by its Managing Director, Nagercoil. 47. Tamil Nadu State Transport Corporation Ltd., rep. By its Managing Director, Salem Division II, Dharmapuri. 48. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Villupuram Division II, Vellore. 49. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Madurai Division IV, Dindigul 50. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Madurai Division V, 6/377, Madurai Road, Virudhunagar. 51. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Coimbatore Division I, Coimbatore. 52. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Coimbatore Division II, Chennimalai Road, Erode. 53. Tamil Nadu State Express Transport Corporation Ltd. rep. by its Managing Director, Pallavan Salai, Chennai  2. 54. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Villupuram Division III, Kancheepuram. 55. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Salem Division I, 12, Ramakrishna Road, Pincode  636 007. 56. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Villupuram Division II, Villupuram. 57. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Kumbakonam Division II, Periyamilaguparai, Tiruchirapalli. 58. Tamil Nadu State Transport Corporation Ltd., rep. by its Managing Director, Madurai Division I, Madurai. 59. Metropolitan Transport Corporation Ltd. rep. by its Managing Director, Pallavan Salai, Chennai  2. ( *** Impleaded as per Order of the Court dated 21.01.2003 by R.J.B.J. & N.V.B.J. in W.A.M.P. Nos: 343 to 356 of 2003) 60. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Kumbakonam Division I, Railway Station New Road, Kumbakonam. 61. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Kumbakonam Division IV, Kumbakonam. 62. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Madurai Division II, Thiruvanandapuram Road, Vannarapettai Post, Tirunelveli  627 003. 63. Tamil Nadu State Transport Corporation Ltd. rep. by its Managing Director, Kumbakonam Division III, Karaikudi. ..... Respondents (*** Impleaded as per order of the Court dated 24.03.2003 by R.J.B.J. & K.R.P.J. made in W.A.M.P. Nos: 453, 522, 658 and 666 of 2003) Appeal under Clause 15 of the Letters Patent against the order of a learned single Judge of this Court dated 11.08.1992 made in W.P. No: 14449 of 1990. !For appellants : Mr. K. Alagirisami for Mr. M. Palani ^For 1st respondent : Mrs. N.G. Kalaiselvi, Addl. Govt. Pleader For respondents : Mr. N.R. Chandran, 7 to 9, 11, 13, Advocate General for 15 to 59 Mr. G. Muniratnam For respondents : M/s.Ramasubramaniam 10, 12 and 14 Associates For respondent 60 : Mr. V. Raghupathi For respondents 60 to 63 : Mr. V.R. Kamalanathan :JUDGMENT (Judgment of the Court was delivered by R.Jayasimha Babu, J.) On and after 01.01.1972 the State of Tamil Nadu registered several Transport Corporations under the Companies Act to carry on the transport service that was earlier being provided through the State Transport department, and by the private operators whose transport carriages were nationalised under the Tamil Nadu Fleet Operators Stage Carriages (Acquisition) Act, 1971. Four such Corporations were registered in 1972. By the end of the year 1980 there were eight transport Corporations, four more having been brought into existence in the years 1 973, 1974, 1975 and 1980. That number had increased to fifteen by the year 1987. Six more were added between 1992 to 1997. These 21 corporations that had been brought into existence, were, by the year 2001 reduced to 18 by amalgamating three of the Corporations. That number is proposed to be further reduced to eight by amalgamating the other ten. 2. The common Chairman of all the 18 State Transport Corporations all the shares of which are held by the State Government or it's nominees, is the Secretary to the State Transport Department. 3. Under the Articles of Association of all these companies, by Article 116, the Government is given the power to issue directions to the Board of Directors of the Corporations, which directions the Boards are required to implement. The Government may, "....... from time to time issue such directions or instructions as they may think fit in the functions and conduct of the business and affairs of the Company". The Directors are required to ".....duly comply with and give effect to such directions or instructions. 4. The total number of employees in all these corporations as of 3 0th August 2003 was 1,18,165, of whom 746 were in the managerial cadre. There are six branches in the managerial cadre - Technical, Traffic, Accounts, Personnel, and Administration, Civil, and Medicine. The managerial cadre begins at the level of Assistant Manager. At that level there were 220 Assistant Managers and an additional 276 persons with the same rank, but in the selection grade. At the next level were 183 Deputy Managers. 5. The level above that of Deputy Manager is Senior Deputy Manager (a cadre created by the State Government on 1987) of whom there were 43 in all the Corporations put together, although in four of these Corporations there was no one in the rank of Senior Deputy Manager. Managers who rank above Senior Deputy Mangers, were twenty in number. Nine of these transport Corporations do not have any officer of that rank. There are four Senior Managers for all the Corporations put together. However, 16 of the 18 Corporations do not have any officer of the rank of Senior Manager. 6. Between 1972 and 1982 all promotions at all levels including the managerial cadre were being made within the respective Corporation and were made by the management of the concerned Corporation without any interference from the State Government. The seniority lists were confined to those working in the Corporation and did not include anyone from any other Corporation. 7. In the year 1983, for the first time, the Government drew up a seniority list on its own, of officers in the managerial cadre of all the Corporations then existing, in which it fixed the seniority for persons occupying the post of Assistant Manager, Deputy Manager and Manager, the basis being the date of their entry into the concerned cadre. That was done at a time when the rules in force in the respective Corporations did not confer any power on the State Government to draw up such a seniority list with respect to the employees of those Corporations. The Corporations, however, appear to have agreed to and deputed their officers to other Corporations whenever the Government choose to 'promote' them to the higher rank and posted them to another Corporation. 8. The State Government had, in the year 1981 constituted a Committee of the Managing Directors of some of the Corporations to recommend the adoption of a uniform set of rules governing the service conditions of all the employees in all these Corporations. The Corporations had, among its employees, persons who had come into the service of the Corporations from different sources - those who had served in the transport department earlier; those who had served the owners of private buses prior to the nationalisation of those buses by the special enactment in the year 1971; and those who had been recruited by the Corporations after their formation. 9. The set of rules which the Committee recommended for adoption was finalised some time prior to the year 1985, and in December 1985, the Government addressed letters to all the Corporations requiring them to adopt the rules as drafted by that Committee. The adoption of those rules by these Corporations was done on different dates. Between 20.02.1986 to 06.06.1987, 14 of the Corporations had adopted those rules. One Corporation adopted it in the year 1992 and two others in the year 1998. The remaining Corporation adopted these rules only in the year 2003. 10. The Thanthai Periyar Transport Corporation, Villupuram Division I to which appellants 1 to 3 had been directly recruited as Assistant Managers on 17.09.1976 and in which all of three had been promoted as Deputy Managers  appellants 1 and 2 on 21.09.1982, and appellant 3 on 19.05.1983, adopted these Rules on 15.11.1986. Pattukottai Azhagiri Transport Corporation, Villupuram Division II, Vellore, in which the fourth appellant was directly recruited as Assistant Manager on 20.09.1976, and had been promoted as Deputy Manager on 19.08.1983 adopted these Rules on 28.06.1986. 11. The Rules that had been forwarded to the different transport undertakings by the Government on the 2nd December 1985 was described in the Government's letter as "Common service rules". That letter, inter alia, stated that, "All the State Transport Undertakings shall adopt these rules after placing them before their Boards. If any State Transport Undertaking for its peculiar nature, wants to modify any of these rules, it will be done only with the approval of the Board of Directors concerned. These rules will be common for all employees, except to the workers who are governed by standing orders which will prevail over the Service Rules to ensure that workers are in no way put in a disadvantageous position." 12. The nomencalture chosen by the Government for these Rules is misleading. The rules do not provide for a 'common service' for the managerial and/or supervisory cadre of all State owned Transport Corporations. The rules are only uniform service rules, identical or near identical rules being adopted by the Corporations. The employees of the Corporations are only employees of the Corporations which appointed or absorbed them. 13. Rule 1(d) of the Service Rule is material for the purposes of this case. That Rule reads as under : " RULE 1(d) : The directions or orders or instructions that may be issued by the Government or any rules and regulations that may be framed by the Government from time to time, in respect of the employees of the Corporation in particular or in respect of the employees of the Public Sector Undertakings in general, as may be implemented with or without modification by the Management of the Corporation, shall have the effect of superseding the relevant provisions of these rules, until such time the relevant provisions of these rules are suitably amended or modified or varied or altered or deleted under Rule 97 below so as to conform to such directions or orders or instructions of the Government either in toto or with such modifications as may be deemed necessary by the Board." 14. In terms of that Rule, the Service Rules which the Corporations were directed to adopt could be over ridden and would stand altered to the extent the management of the concerned Corporation implements with or without modification, any direction or order or instruction issued by the Government or any Rules and Regulations framed by the Government in respect of the employees of the Corporation in particular or in respect of employees of the Public Sector Undertakings in general. On such implementation by the management, the relevant provisions of the Service Rules would stand superseded till such time the relevant rules are suitably amended or modified so as to conform to the directions or orders or instructions of the Government either in toto or with such modifications as may be deemed necessary by the Board. 15. The service rules adopted by the Corporations, which are similar in all the Corporations, provided for the appointments being made in the managerial cadre to the post of Assistant Manager, Deputy Manager and Manager. An Assistant Manager could either be directly recruited or could be brought into that cadre by way of promotion being given to persons in the supervisory cadre with five years of experience. An Assistant Manager with six years of service was eligible for being promoted as a Deputy Manager, that post being a purely promotional post for which there is no provision for direct recruitment. The next promotion was to that of the Manager for which the Deputy Manager was required to have put in atleast seven years of service. These stipulations remain in those service rules till date and have not been changed. 16. The State Government on 10.03.1987 addressed a letter to the Managing Directors of all transport Corporations wherein revised instructions were issued by it with regard to the Managerial cadre of State Transport Undertakings. That letter, inter alia, stated that the minimum period of service for promotion to the next higher grade in the managerial cadre in the technical / traffic branch in the State Transport Undertaking thereafter would be as follows : " ------------------------------------------------------------ For Promotion Minimum period of service prescribed to become From To eligible for promotion ------------------------------------------------------------ Assistant Assistant Five years Engineer Manager Assistant Deputy six years Manager Manager Deputy Senior Deputy Four years Manager Manager Senior Deputy Manager Four years Manager Manager Senior Manager Seven years -----------------------------------------------------------" 17. The post of Senior Deputy Manger was thus introduced into the managerial cadre without any amendment having been effected to the service rules. Promotion to the post of Manager was, thereafter to be made from among the Senior Deputy Managers and not directly from Deputy Managers. The number of years of service required of a Deputy Manager for promotion to Senior Deputy Manager was prescribed as four years, and from that post of Senior Deputy Manager to Senior Manager as another four years. A new post of Senior Manager was also introduced and a period of seven years of service as Manager was made a prerequisite. That letter also provided for time bound promotion being given from the post of Assistant Engineer to Assistant Manager and from Assistant Manager to Deputy Manager on completion of the prescribed period of service of five years and six years respectively. All the Corporations were requested to take action in accordance with that letter. 18. Shortly thereafter, on 01.04.1987, the Government issued another letter to the Managing Directors of the State Transport Corporations with regard to the fixation of inter se seniority among the Deputy Managers, for promotion to the newly introduced cadre of Senior Deputy Manager. To that letter was also annexed a seniority list of Deputy Managers (Technical/Traffic), which the Government itself had prepared based on the criteria set out in that letter and limiting the number in that list to the first 30 persons which figure of 30 was mentioned as "the number of vacancies available in the Senior Deputy Manager cadre now". There is no record of any cadre strength having been fixed with regard to any of the post in the managerial cadre, either by Government or by any of the Corporations. 19. The criteria set out in that letter for determining the inter se seniority of officers in the rank of Deputy Managers reads as under : " A. The date of first appointment in the Assistant Manager Cadre should be the base for determining seniority. B. A weightage of one year for every three years of past service in the supervisory cadre should be given for the Engineering graduates. As the span of service in the supervisory group is not much and to minimise the anomaly, a weightage of 4 months for every completed year of service in the supervisory group will be treated as one year, and the service below 6 months will be left out. C. For persons absorbed from Government departments, no weightage for their service in the parent department will be given, as they have been given sufficient weightage for their permanent absorption in the State Transport Undertakings. D. For Tamil Nadu State Transport Corporation (erstwhile) employees, their Tamil Nadu Public Service Commission seniority should be maintained. E. A total service of 10 years in both the Assistant Manager and Deputy Manager cadres out of which a minimum two years of service as Deputy Manager will be insisted upon as qualifying service for promotion as Senior Deputy Manager." 20. According to the Government these criteria were evolved after discussions with the federation of officers of the State Transport Corporation, in order to ensure that all those in the managerial cadre in all the Corporation have equal opportunity in seeking higher positions in all the State Transport Corporations on the basis of criteria which recognises their longer period of service in the Corporation. 21. After the creation, by the letter of 10.03.1987, of the post of Senior Deputy Manager and Senior Manager the Government, while drawing up a common seniority list, for drawing up of which there is no provision in the service rules, adopted criteria which was at variance with what had been adopted in the year 1983 for determining the eligibility for promotion of an officer in the cadre of Deputy Manager to the post of Senior Deputy Manager for which, service in the rank of Deputy Manager was not to be the sole criterion, but was to include consideration of the service rendered as an Assistant Manager, and for determining seniority in that post of Assistant Manager, even the length of service rendered as an official in the supervisory cadre before promotion to the cadre of Assistant Manager was to be taken into account. Promotion to the post of Senior Deputy Manager was to be given despite the minimum period of four years as Deputy Manager having been prescribed, even to those who had put in only two years of service as Deputy Manager, if their total service as Assistant Manager and Deputy Manager together was ten years or more. 22. The new criteria, treats persons who belong to the same cadre namely Deputy Manager differently solely on the basis of the source of their recruitment to the lower cadre of Assistant Manager for the purpose of determining their eligibility for further promotions from Deputy Managers to Senior Deputy Managers. 23. Not only was weightage given to those who came from the Supervisory cadre for their service in supervisory cadre while fixing their seniority in the cadre of Assistant Manager, resulting in their being ranked above the direct recruits who had entered the cadre of Assistant Manager earlier, even in the higher cadre of Deputy Manager they stole a big march over those who had been promoted to that cadre earlier by obtaining promotions as Senior Deputy Managers even though their service as Deputy Managagers was less than that of the direct recruit Assistant Managers who had been promoted earlier as Deputy Managers. 24. Thus, the entire further career prospects of those who had entered the cadre of Assistant Manager by way of direct recruitment and had been promoted as Deputy Managers was adversely affected. 25. The four appellants before us are persons who had been directly recruited to the post of Assistant Manager in the year 1976 and had thereafter been promoted to the rank of Deputy Manager in 1982/1983. The first appellant had been ranked as No: 1 in the seniority list of Deputy Managers serving in the Corpo ration in which he was employed and had occupied the position at Sl. No: 26 in the seniority list that had been drawn up by the Government in May 1983 of the Deputy Managers working in all the State Transport Corporations. From that the first eighteen had been promoted as Deputy Managers before the redrawing of the list in the year 1987. The other three appellants had been ranked at serial numbers 27, 28 and 31 respectively in that list. 26. As a result of the application of the new criteria the names of all the appellants were omitted from the list of 30 Deputy Managers which the Government drew up on 1.4.1987. 27. On 25.05.1990 persons who had entered the cadre of Deputy Managers long after the appellants, were promoted as Senior Deputy Managers, by the State Government which issued the order of promotion in the purported exercise of it's power under Article 106 of Articles of Association. Subsequently, numerous others who had entered the cadre of Deputy Manager after the appellants, were promoted. 28. In 1995, during the pendency of this appeal, appellants 2 to 4 were promoted as Senior Deputy Managers. Appellant 1 continues to stagnate as Deputy Manager even after 21 years of service in that cadre. According to the State that is because of disciplinary proceedings that was taken against him. He had been given warnings on 07.05.1 979 and 08.06.1979, and had been suspended on 21.07.1982 for a day, which suspension was later treated as leave. On 01.08.1989 one increment was postponed without cumulative effect for not submitting a vehicle stoppage report and not applying for refund of tax. In respect of a charge memo issued on 16.10.1995 with regard to a recruitment made in 1986, censure was ordered on 07.12.1999. In respect of alleged irregularities that occurred in 1990 a charge memo was issued on 31 .10.1995, in which one Nambirajan was also said to have been involved, and who notwithstanding that charge memo has since been promoted as Senior Deputy Manager. On 18.11.2000 recovery from the first appellant of a sum of Rs.7070/50p was ordered. According to the Respondent State, the first appellant is eligible for promotion since 20.8.200 2. 29. Mr. K. Azhagirisamy, Learned Senior Counsel for appellants submitted that the Transport Corporations being companies registered under the Companies Act, the employees of the Corporations are employees not of the Government but of the Corporations and that the determination of their service conditions could only be made by the concerned Corporation and not by the Government notwithstanding the fact that the Government happens to own all the shares in those Corporations. 30. The further submission was that the Service Rules adopted by the Corporations did not provide for the post of Senior Deputy Manager or Senior Manager, that the rules as they stand even now only provides for the post of Assistant Manager, Deputy Manager and Manager and that the appellants, being persons who had acquired the requisite years of experience, are entitled to further promotion in accordance with those rules. 31. With regard to the seniority list drawn up by the State Government, the submission was that the Government had no power to do so as the Government has not been vested with such power under any statute and the Articles of Association of the concerned Corporations do not confer any power on the State Government to determine the service conditions of their employees much less to draw up a seniority list common to all the Corporations even when none of the Corporation are in any way inter-linked, none of the Corporations being a holding company for the other Corporations. 32. As regard to