7 S.C.R.

SUPREME COURT REPORTS 639

THE MOTOR TRANSPORT CONTROLLER. MAHA-

RASHTRA STATE, BOMBAY AND OTHERS

I'.

PROVINCIAL RASHTRIY A MOTOR KAMGAR UNION,

NAGPUR AND ORS IP. B. GAJENDRAGADKAR, c. J., K. N. WANCHOO AND K. c. DAS

GUPTA, JJ.]

Industrial Dispute-Termination of Service-Validity of nof.ice--AboMion ot al! posts of an establishment-If amounts to reduction of posts-Road Transport Corporations Act 1950(64 of 1950), as amended by Act 87 of 1956, s. 47-A-Central Provinc.s and Berar Industrial Disputes Settlement Act, 1947 (C.P. & l:lerar 23 of 1947), s. 31 Sch. II, Item 1.

As a result of the passing of the States Reorganisation Act. 1956, Vidharbha area which was in the State of Madhya Pradesh became part of the State of Bombay and when the State of Bo:nba.v was divided under the Bombay Reorganisation Act, 1950, the said area remained in the State of Maharashtra. Before 1956. the Bombay State Road Transport Corporation and Provincial Services established under the Road Transport Corporations Act. 1950, \\'ere operating in the States of Bombay and Madhya Pradesh respectively. To meet the situation arising from these territorial changes, Parliament made amendments to the Road Transport Corporations Act, 1950, by which, inter alia s. 47-A i,.vas introduced providing for the reconstitution, reorganisation and dissolution of the corporations established under the Act.

On May, 27, 1961, the Central Government made an Order under s. 47-i\ of the Act, inter alia, approving a scheme for the reorganisation of the Bombay State Road Transport Corporation and

nnalgamating with it the Provincial Transport Services v:hich had, under the Reorganisation Act, 1956, become a. commercial undertaking of the State of Bombay and which had been operating in the Vidharba area. Clause 9(1) of this provided for the abolition of all the posts in the Provincial Transport Services and for discharge of all persons. holding such posts for service but giving such people an option of continuing in the service of the Maharashtra State Road Transport Corporation. Notice ter-

1ninating the services of the persons einployed by the Provincial Trnnsport Services (operating in Vidharba) were issued. Thereupon. t\vo former employees of the Provincial Transport Services and the Union of the workmen of that concern made an application before the High Court of Bombay under Arts. 226 and 227 of the Constitution of India. challenging the validity, inter alia, of the notices of termination of service served on the employees on the ground that the action taken by the Government in abolish- _. ing the posts and issuing notices of termination ofservices of the employees was bad as it contravened, inter alia, the pro-- visions of s. 31 of the Central Provinces and Berar Industrial Di~

putes Settlement Act. 1947.

Held: Abolition of all posts of an establishment did not amount to reduction of posts within the meaning of Item 1 of the Schedule II of the Central Provinces and Berar Industrial Disputes Settlement Act._ 1947; and the Government order aboiishing the posts and terminating the services of the employees

19GI

April S

J96l

The Motor

Transport

640 SUPREl\IE COURT Rl~PORTS

[1964 J

did not aiinount to a change within the meaning of s. 31 of the Act. The Government was, therefore, not required to follow the procedure• mentioned in s. 31.

_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 Prnl.'inrial - Ra.hlriya Jfotor Special Civil Application No. 150 of 1961.

Kan11.J<Lr Unicm, Jfagpur and Otlura

Das Gupta, J,

S. v: G11pte, Additional Solicitor-General, G. B. Pai, and R. H. Dliebar, for the appellants.

The respondent did not appear.

April 3, 1964. The Judgment of the Court was delivered by

DAs. GUPTA, J.-A short point arises for consideration in this appeal. But to understand how the point arises it is necessary 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 Reorganisation 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 Hyderabad and the Vidharbha area from the State of Madhva Pradesh 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. Section 47; A which was introduced by the amending Act provides fqr the reconstitution, reorganisation and dissolution of the Corporations established under s. 3 of the Act. On December 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 the State Reorganisation Act to the States .of Mysore and Rajasthan were excluded from the area of the operation of the Bombay State Road Transport

Corpoation. 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

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7 S.C.R.· . SUPREThIB. COURT :REPORTS 641 ,,

the Provincial Transport Services. and . the State Transport, 1961 Marathewada •. became the commercial iindertakings of the Tho J!otor State of Bombay. Further, territorial changes occurred in the Tra.,, por1 State of Bombay in the year 1960. By the Bombay Reorgani- Controller, 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 v. into a new State by the name of the State of Gujarat, while Pnnincial 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- Da• Gupta, J, tion then was 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 approved a scheme for the ree1rganisation of the Bombay State Road Transport COrporation and amalgamation with' itof 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 abolition 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 postsfrom service. 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 appointed day, the conditions of service of any person who is continued.in the service of the CofPO' _ration". i_:_, . - I.II' Jl)!SCI-21 ._ ,

The .. lfolvr TraiMporl Controller. }.!alwrashtra State.

Bombay a11tl Of/1Pf.>J

Proviiicirrl Rashtriya Jlotor

Kamgar 'fJnion, ),? agpur and Others

Das G1lpta, .J.

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 disadvantage. except with the previous approval of the Central Government".

Notices terminatiqg the 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 directed under s. 47-A be not carried out, and {c) that "a writ of mandamus 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 violated the provisions of s.47-A of the Act and was therefore bad in law, The second contention was thnt the proviso to subcl.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 employees 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 Industrial 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 Government was bad because of contravention of s.25F (b) and

(c) of the Industrial Disputes Act. The High Court was however 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 termination of services on abolition of posts did not comply with the provision> of s.3 l of the C.P. and Berar Industrial Disputes

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.it consequence thereof. It also ordered the issue of a directi0n, ,1 f 0"''; llcr,, . .

T C . .:1 a11oras11lra ._.., fate dtrectmg the Maharashtra State Road ransport orporahon Homb"'' '""' un,,.~ 'not to take any action under the proviso to sub-paragraph ':· . (3l of paragraph 9 of the Order relating to varying the condi- 1, P, r, 0 ~·· 11", 0 1

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

1,,,, G,,-;,11, J. orders of the High Court, the State of Mahrashtra, the Maharashtra 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 action in abolishing posts and terminating services of employees was not bad because of contravention of s. 25F(b) and (c) of the Industrial Disputes Act, que'- tioned before us. We have, therefore, not examined the correctness or otherwise of these conclusions and shall dispose of the appeal on the basis that the decision on these points are correct.

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 provisions of s. 31 of the C. P. and Berar Industrial Disputes Settlement 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 respect of any industrial matter mentioned in Schedule II, he shall give fourteen days' notice of such intention in the prescribed form to the representative 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 the representative of employees concerned shall negotiate with the employers".

L'PiD)IKCT-l(a)

1964 Schedule II of this Act mentions a number of matters, Tht.'llotor the first of which is "Reduction intended to be of permanent Transport or semi-permanent character in the number of persons employ-

Ma/j,~':,':e;~'state, ed or tho be emJ? 1lol?I nhot dHll:ehtoCforce majeuhre". bTh 1 _e. arguf- Bomliay and Others ment t at preva1 eu m t e 1g ourt was t at a o 1tton o all posts amounted to permanent reduction within the meanv.

Provin<ial 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 Dal Gupta, J. 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 "reduction 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 Government was, therefore, not required to follow the procedure mentioned in s. 31.

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 reemployment of any workman in consequence of reconstitution, reorganisation, amalgamation or dissolution by any body rnrporate, cooperative society or any commercial undertaking or industrial undertaking the terms and conditions of service applicable to the workman after such transfer or reemployment shall not be less favourable to the workman than those applicable to him immediately before the transfer of reemployment.. It was apparently apprehended 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 thtconditions 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 not contain any specific assertion that there had been any -

7 S.C.R.

SUPRE:~IE COURT REPORTS 645

variation to the disadvantage of any workman. Only an ap- 1vu1 prehension that there might be a change in future was expressn, Mo'"' ed. In the counter-affidavit the Government stated that •he

T"""P'"' Order passed in the notices issued clearly gave a guarantee that a,,,,,.o/hr. the conditions of service will not be changed. If there was any 1!"""'."""',.,, """' • • • iJ111n9a11 rtnrl Otlu, rs reason to thmk that there had been any change m any cond1- v. tions of service or that in the immediate future there was any p,."';,.d,, l l.k l"h d f I 1 . b . d h h f n,,4, i,; ya Motw i e .1 oo o any sc l. c 1ange erng ma e on t e strengt o 1.:_,1111y,1r 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 h b d d . d iJa.\' Ou1Jfrt, .J. 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 desirable 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.

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 .