Case: Bihar State Road Transport Corporation Vs. State Of Bihar &amp; Ors

1. This appeal by special leave, is against the order of the High Court of Patna dismissing a writ petition under Articles 226 and 227 of the Constitution challenging the award passed by the Labour Court on a reference to it of an industrial dispute under Section 10 (1) of the Industrial Disputes Act. 1947.2. The reference arose from the following facts: Prior to April 20, 1959 the Government of Bihar was conducting through one of its departments, called the Rajya Transport Authority, an undertaking of road transport in the State. The said Authority appointed respondent 3 as a Head Clerk in the office of the Divisional Manager, Rajya Transport, Bhagalpur, as from July 27, 1956. The order appointing him stated that the appointment was purely temporary and was terminable without notice and without assigning any reasons. By an order dated February 18, 1959, issued by the State Transport Commissioner, Rajya Transport, he was discharged from service with immediate effect. On April 20, 1959, the State Government, in exercise of the power conferred by Section3 of the Road Transport Corporations Act, 64 ofset up as from May 1, 1959, the appellant corporation. The notification issued under Section 3 inter alia stated that the said Corporation shall, with effect from the said date, exercise all the powers and perform all the functions which are at present being exercised and performed by the Rajya Transport, Bihar". In the meantime the question of the termination of services of respondent 3 was espoused by respondent 4 before the Assistant Labour Commissioner. The conciliation proceedings having failed, the State Government referred the dispute to the Labour Court by an order date February 24, 1961.3. The Labour Court found: (a) That respondent 3 was a workman within the definition of that term in the Industrial Disputes Act and the Standing Orders governing the appellant corporation, and that though appointed a head clerk, there was no evidence to show that his work as such head clerk was managerial or supervisory, (b) That the order dated February 18, 1959 terminating the services of respondent 3 was not termination of service simpliciter, but was punitive in nature. The Labour Court relied on a letter dated January 30, 1960 addressed by the appellant corporation to the said conciliation officer that the services of respondent 3 had been terminated because "in the course of certain enquiries the Rajya Transport Department had found that Shri Sheo Prasad Sinha had committed various irregularities of the various nature in the discharge of his duties".The Labour Court held that the said alleged irregularities amounted to misconduct as defined by the said standing orders, and that therefore, the services of respondent 3 could not be terminated on the ground of those irregularities without holding a disciplinary enquiry and giving to respondent 3 therein an opportunity of being heard. No such enquiry having admittedly been held, the Labour Court held that the said order was not justified as it was not in bona fide exercise of the power to terminate the services of respondent 3. No evidence was led by the appellant corporation before the Labour Court either to prove the said irregularities or to establish that the said order was justified. The Labour Court consequently held that the said order being invalid, and therefore, inoperative, respondent 3 would be deemed to have continued to be in service. It further held that the appellant corporation was the successor-in-title of the said Rajya Transport and having taken over the erstwhile employees of the Rajya Transport, respondent 3 was deemed to be continuing in service of the appellant corporation. On these findings, the Labour Court concluded that the said order of termination was invalid, that respondent 3 was deemed to have continued in the service of Rajya Transport and thereafter of the appellant corporation, and on this basis directed the appellant corporation to reinstate respondent 3 in its service and pay compensation for the period from February to September 1959.4. The appellant corporation thereupon filed a writ petition in the High Court for quashing the said award. In support of the writ petition three questions were raised before the High Court: (1) That the services of respondent 3 were terminated before the appellant corporation was set up, and consequently, the remedy of respondent 3 was against the State Government and not against the corporation. The Labour Court had, therefore, no jurisdiction to direct the corporation to reinstate him or to pay compensation, (2) That respondent 3 was engaged in clerical work and was, therefore, not a workman as defined by the Act, (3) That the termination of the services of respondent 3 was in conformity with the terms of the contract of service, and there was, therefore, no question of the principles of natural justice being applicable to such termination. The High Court rejected all the three contentions, refused to quash the order of the Labour Court and dismissed the writ petition holding that the appellant corporation had failed to establish that there was any error of law apparent on the face of the record.

Court's reasoning:
The Labour Court, with which also the High Court agreed, came to the conclusion that the order was not one of termination of services simpliciter, but was by way of penalty imposed upon respondent 3 for aforesaid irregularities. There is nothing to show that the said conclusion was either unreasonable or perverse, and consequently, the High Court would not be entitled to interfere with such a finding in a writ for certiorari. The High Court was, therefore, right in refusing to interfere with the finding of the Labour Court in exercise of its prerogative jurisdiction.7. It is quite clear from the record that the cause of respondent 3 was taken over and espoused by the respondent union before the conciliation officer.The dispute, therefore, was an industrial dispute referable under Section 10 (1) of the Industrial Disputes Act by the Government of Bihar and the reference was a competentrightly observed by the High Court, on a proper construction of the said averment, if the termination of the services of respondent 3 was invalid, it never became operative and respondent 3, therefore, would be deemed to be continuing in the service of the Rajya Transport Authority on May 1, 1959, and therefore, on its rolls. In that view, the appellant corporation must be deemed to have taken over the services of respondent 3. The argument, however, was that the true meaning of the said averment was that only those of the employees of the Rajya Transport Authority who were actually on its rolls were taken over and not those who were deemed to be on its rolls. It is difficult to understand the distinction sought to be made between those whose names were actually on the rolls and those whose names, though not physically on the rolls, were deemed in law to be on the rolls. If respondent 3 continued in law to be in the service, it makes little difference whether his name actually figured in the rolls or not. The expression "on the rolls" must mean those who were on May 1, 1959 in the service of the Rajya Transport Authority. By reason of the order discharging him from service being illegal, respondent 3 was and must be regarded to be in the service of the said Authority, and therefore, he would be one of those whose services were taken over by the appellant corporation.Apart, therefore, from the question of the appellant corporation being the successor-in-title of the said Authority, respondent 3, in the absence of any valid termination of his services, continued and still continues to be in the service of the appellant corporation since May 1, 1959, and therefore,the corporation was bound to pay his wages including all the emoluments to which he was entitled as from May 1, 1959.For the period from February to April the Rajya Transport Authority was liable to pay his wages and other emoluments, if any, to which he was entitled. The corporation, as successor-in-title of the said Authority, became liable to pay the said wages for the said period and not from February to September 1959 as directed by the Labour Court.