PETITIONER:
S.P. DUBEY
Vs.
RESPONDENT:
M.P.S.R.T. CORPN. AND ANR.
DATE OF JUDGMENT23/10/1990
BENCH:
KULDIP SINGH (J)
BENCH:
KULDIP SINGH (J)
AGRAWAL, S.C. (J)
CITATION:
1991 AIR 276 1990 SCR Supl. (2) 328
1991 SCC Supl. (1) 426 JT 1990 (4) 236
1990 SCALE (2)819
CITATOR INFO :
D 1991 SC 310 (2,3)
ACT:
Road Transport Corporation Act, 1950: S. 34/M.P. State
Road Transport Corporation Employees Service Regulations.
1964: Regulation 59--Private company taken over and merged
with Corporation-Age of Superannuation of existing staff at
60 years specifically prorected-Whether amenable to State
Service Rules--Whether Regulation can override the direc-
tions issued under the Act.
HEADNOTE:
The age of superannuation for the employees of the
private transport company in which the appellant was ini-
tially employed was 60 years. When the said company was
taken over by the State on August 31, 1955, the notification
specifically provided that the existing staff would not be
adversely affected with regard to terms and conditions of
service. Again, when the services 01 the staff of the
taken-over company were transferred to the respondent-Corpo-
ration established under s. 3 of the Road Transport Corpora-
tion Act, 1950, the memorandum dated May 4, 1962 recited the
same assurance. A resolution passed by the Board of Direc-
tors of the Corporation on the same day also reiterated the
said assurance. Subsequently, when the State Government
issued directions on October 29, 1963 to the Corporation
under s. 34 of the Act the said assurance was embodied
therein too. However, Regulation 59 of the M.P. State Road
Transport Corporation Employees Service Regulations, 1964
framed by the Corporation under s. 45(2)(c) of the Act
provided that the employees of the Corporation were liable
to compulsory retirement on the date of their completion of
58 years of age unless specifically permitted to continue.
When the appellant was sought to be retired from service
in terms of Regulation 59 of the said Regulations on attain-
ing the age of 58 years with effect from June 30, 1984 by a
notice dated May 25, 1983, he challenged it by a petition
under Article 226/227 of the Constitution. It was dismissed
by the High Court on the view that on August 31, 1955 when
the appellant became State Government employee his age of
superannuation came to be governed by the statutory rules
under Article 309 of the Constitution and the age of retire-
ment of the State servants under the said rules being 58
years the appellant was rightly retired.
329
Allowing the appeal, the Court,
HELD: 1. The appellant was entitled to continue in
service upto the age of 60 years.
2.1 When the State Government takes over a private
company and gives an assurance that conditions of service of
the existing staff would not he adversely affected, it is
but fair that the State Government should honour the same.
2.2 In the instant case, the appellant was in service of
the company from 1947 to August 30, 1955 in which the age of
superannuation of the employees was 60 years. The company
was taken over by the State Government with effect from
August 31, 1955 by a notification of the same date which
specifically stated that the existing staff of the company
would not he adversely affected with regard to their condi-
tions of service. The State Service Rules which fixed the
age of superannuation at 58 years could not thus he made
applicable to the appellant and other employees of the
taken-over company.
3. Furthermore, the said assurance was also incorporated
in the directions issued by the State Government to the
Corporation under s. 34 of the Act. The Corporation could
not frame regulations contrary to the said directions and
the age of superannuation which the appellant was enjoying
under the State Government could not he altered to his
disadvantage by the Corporation. Regulation 59 framed by the
Corporation was, therefore, not applicable to the appellant.
The General Manager, Mysore State Road Transport Corpo-
ration v. Devraj Ors and Anr., [1976] 2 SCC 862, referred
to.
4. Since the appellant had already attained the age of
60 years, he was only entitled to two years emoluments. The
respondents are directed to pay the same to him within three
months. [334B]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1731 of
1986.
From the Judgment and Order dated 26.4. 1985 of the
Madhya Pradesh High Court in Misc. Petition No. 1729 of
1984.
Avadh Behari and S.K. Gambhir for the Appellant.
330
Rameshwar Nath, V.S. Dabir, Rajinder Narain for the
Respondents.
The Judgment of the Court was delivered by
KULDIP SINGH, J.S.P. Dubey, employed with the Madhya
Pradesh State Road Transport Corporation, was retired from
service on his attaining the age of 58 years. He claims that
the age of superannuation was 60 years and as such his
retirement at 58 was illegal.
We may state the necessary facts. Dubey joined service
as a junior clerk with the Central Provinces Transport
Service Limited (hereinafter called the company) in the year
1947. The Board of Directors of the company by a resolution
dated July 30, 1954 fixed the age of superannuation of all
its employees except the drivers as 60 years. The company
was purchased and taken Over by the State of Madhya Pradesh
by a notification dated August 31, 1955. The relevant part
of the said notification is as under:
“The undertaking will as from the 31st August, 1955 be
entitled ‘The Central Provinces Transport Services (under
Government Ownership)”. So far as the public is concerned
there will be no change or interruption in the course of
business and the continuity of operation will not be dis-
turbed and the existing staff will not be adversely affected
with regard to terms and conditions of their services. The
statutory instrument to be made in due course will provide,
among other things that all the rights and liabilities of
the Central Provinces Transport Services Ltd. will become
the rights and liabilities of the Central Provinces Trans-
port Services (Under Government ownership) and from a legal
point of view the staff, customers and contractors can look
to the Central Provinces Transport Services (Under Govern-
ment ownership) to discharge all the obligations and exer-
cise all the rights that at present rest with the Central
Provinces Transport Service Ltd., Rules for the conduct of
business of the above constituted Board of Management are
being published separately.”
It is thus obvious that the Government continued to
maintain the Central Provinces Transport Services as a
separate entity. The conditions of service, of the staff of
the taken-over company, were specifically protected.
331
The State of Madhya Pradesh was recoganised under the
States Reorganisation Act, 1956. The Central Government, by
a notification dated February 28, 1961, extended the provi-
sions of Road Transport Corporation Act, 1958 (hereinafter
called ‘the Act’) to the State of Madhya Pradesh with effect
from April 1, 1961. Thereafter the Madhya Pradesh Government
acting under Section 3 of the Act established the Madhya
Pradesh State Road Transport Corporation (hereinafter called
Corporation) with effect from May 21, 1962. The Madhya
Pradesh Government issued two memorandums on May 4, 1962. By
one memorandum the services of the concerned employees
including Dubey-were transferred to the Corporation and by
the second it was clarified that the said transfer was
subject to the conditions that their service would be treat-
ed as uninterrupted and their pay-scales and conditions of
service would not be affected. On the same day and Board of
Directors of the Corporation passed a resolution to the
following effect:
“Resolved that the services of the employees employed under
M.B.R. and C.P.T.S. on 31.5.1962 are transferred to the
Corporation temporarily until further orders from 1.6.1962
on the following conditions:
1. The pay scale and conditions of service are not affected
by the transfer.
2. The transfer will not be considered as interruption of
services.
3. In case of employees coming under the category
of workman as defined under the Industrial Disputes Act,
1947, the Corporation in the event of retrenchment will pay
compensation on the basis that the services had been contin-
ued and had not affected by transfer.”
The State Government issued directions dated October 29,
1963 to the Corporation under Section 34 of the Act. Rele-
vant part of the directions is as under:
“The members of the staff of the Madhya Bharat Roadways and
Central Provinces Transport Services, who have opted to
serve under the Corporation in pursuance of the notices
issued to them by the Commerce and Industry Department or
any authority of the Madhya Bharat Road-
332
ways and Central Provinces Transport Service shall be em-
ployed by the Corporation subject to such regulations as may
be made by it under Section 45(2)(c) of the ‘Road Transport
Corporation Act, 1950 ‘(Central Act LXIV of 1950), and
subject to ‘such assurance as may have been given to them by
the State Government.”
The Corporation framed-regulations called The Madhya
Pradesh State Road Transport Corporation Employees Service
Regulations, 1964.” Regulation 59 which provided the age of
superannuation was as under:
“Employees of/he State Transport are liable to compulsory
retirement on the date of their completion of fifty eight-
years of age unless specifically permitted by the Corpora-
tion to continue in service for a specified period thereaf-
ter, but he must not be retained after the age of 60 years,
without the sanction of State Government.”
The corporation issued a notice dated May 25, 1983 to
Dubey informing him that he was due to retire from service
on June 30, 1984 on attaining the age of 58 years. He chal-
lenged the said notice by way of a writ petition under
Article 226/227 of the Constitution of India before the
Madhya Pradesh High Court at Jabalpur, The High Court by its
judgment dated April 26, 1985 dismissed the writ petition.
The present appeal by way of special leave petition is
against the judgment of the High Court.
The High Court, following its earlier Division Bench
judgment, came to the conclusion that on August 31, 1955
when the appellant became State Government employee his age
of superannuation came to be governed by the statutory rules
under Article 309 of the Constitution of India operating in
respect of the Government employees of the State of Madhya
Pradesh and the age of retirement of the State servants
under the said rules being 58 years the appellant was right-
ly retired.
The appellant was in service of the company from 1947 to
August 30, 1955. Admittedly, the age of superannuation of
the company employees was 60 years. The Government of Madhya
Pradesh took over the company with effect from August 31,
1955 by a notification of the same date. The notification
specifically stated that the existing staff of the company
would not be adversely affected with regard to
333
their conditions of service. It is no doubt correct that on
August 31, 1955 rules were operating in respect of the State
Government employees according to which the age of superan-
nuation was 58 years but the persons who were service with
the company were taken into Government serving with-a spe-
cific assurance that their conditions of service were..
not to be adversely affected. When the. State Government
takes over a private company and gives an assurance of the
types it is but fair that the State Government should honour
the same. Thus, the State Service rules which fixed the age
of superannuation at 58 years could not be made applicable
to the appellant and other employees of the taken-over
company. We, therefore, do not agree with the reasoning of
the High Court.
It was then urged that on the transfer of appellant’s
service to the Corporation he was governed by the Regula-
tions framed by the Corporation under the Act and Regulation
59 provided 58 years as the age of superannuation. We do not
agree with the contention. The State Government issued
directions under Section 34 of the Act which we have repro-
duced above. The said directions are binding on the corpora-
tion. This Court in The General Manager, Mysore State Road
Transport Corporation v. Devraj ors and another, [1976] 2
SCC 862 interpreting Section 34 of the Act held as under:
“Directions given by the State Government are binding on the
corporation and it cannot depart from any general instruc-
tions issued under sub-section (1) of Section 34 except with
the previous permission of the State Government. Such in-
structions have the force of law …. Therefore breach of
the directions given by State Government in the matter of
disciplinary action against the respondents was a breach of
the statutory duty and made the action of the corporation
amenable to the jurisdiction of the High Court under Article
226 of the Constitution”.
The State Government and also the Corporation had given
assurance to the appellant and other employees who were
transferred to the Corporation that their conditions of
service would not be adversely affected. The said assurance
was incorporated in the directions issued under the Act. The
Corporation cannot frame regulations contrary to the direc-
tions issued by the State Government under Section 34 of the
Act. The age of superannution which the appellant was enjoy-
ing under the State Government could not be altered to his
disadvantage by the
334
Corporation. We are, therefore, of the view that Regulation
59 flamed by the Corporation was not applicable to the
appellant. He was entitled to continue in service upto the
age of 60 years.
We, therefore, allow the appeal with costs and set aside
the judgment of the High Court. The appellant has already
attained the age of 60 years. He is only entitled to two
years emoluments. The respondents are directed to pay the
same to the appellant within three months from today. We
quantify the costs as Rs.5,000.
P.S.S. Appeal allowed.
335