PETITIONER: THE MOTOR TRANSPORT CONTROLLER, MAHARASHTRA STATE, BOMBAY Vs. RESPONDENT: PROVINCIAL RASHTRIYA MOTOR KAMGAR UNION,NAGPUR AND ORS DATE OF JUDGMENT: 03/04/1964 BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. WANCHOO, K.N. CITATION: 1964 AIR 1690 1964 SCR (7) 639 ACT: Industrial Dispute--Termination of Service--Validity of notice--Abolition of all posts of an establishmeut-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 Provinces and Berar Industrial Disputes Settlement Act, 1947 (C.P. & Berar 23 of 1947), s. 31 Sch. II, Item 1. HEADNOTE: 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 Bombay 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, were 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 was 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-A of the Act, inter alia, approving a scheme for the reorganisation of the Bombay State Road Transport Corp- oration and amalgamating with it the Provincial Transport Services which 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- minating the services of the persons employed by the Provincial Transport Services (operating in Vidharba) were issued. Thereupon, two 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 abolishing the posts and issuing notices of termination of services of the employees was bad as it contravened, inter alia, the pro- visions of s. 31 of the Central Provinces and Berar Industrial Disputes 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 abolishing the posts and terminating the services of the employees. 640 did not amount 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. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 742 of 1963.
Appeal from the judgment and order dated July 4, 5, 1961 of
the Bombay High Court (Nagpur Bench) at Nagpur in Special
Civil Application No. 150 of 1961.
S. V. Gupte, Additional Solicitor-General, G. B. Pai, and
R. H. Dhebar, 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 neces-
sary to embark on a somewhat lengthy statement of facts.
Three Road Transport Corporations established under the Road
Transport Corporation Act, 1950 were operating in the States
of Bombay, Madhya Pradesh and Hyderabad in 1956 when the
States Reorganisation Act, 1956 was enacted. These three
corporations were known as the Bombay State Road Transport
Corporation, the Provincial Transport Service and the State
Transport Marathewada respectively. As a result of the
reorganisation of the States under the States Reorganisation
Act, 1956 the former State of Bombay lost 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 of 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 Saurashtra and the State of Kutch. To meet the situation
arising 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 for
the reconstitution, reorganisation and dissolution of the
Corporations established under s. 3 of the Act. On December
31, 1956 an order was made by the Central Government under
the provisions of this section approving a scheme for
reorganisation submitted by the Government of Bombay. By
this 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 Corporation.
This came into force from the 1st January, 1957. Another
consequence of the States Reorganisation Act was that the
two commercial undertakings which were known as
641
the Provincial Transport Services, and the State Transport,
Marathewada, became the commercial undertakings of the State
of Bombay. Further, territorial changes occurred in the
State of Bombay in the year 1960. By the Bombay Reorgani-
sation Act, No. II of 1960, the State of Bombay was again
divided; part of what was in the former State, was formed
into a new State by the name of the State of Gujarat, while
the remaining area was named, the State of Maharashtra. In
consequence of this some other areas were excluded by an
order under s. 47-A of the Act from the area of operation of
the Bombay State Road Transport Corporation. The situation
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 order it approved a
scheme for the reorganisation of the Bombay State Road
Transport Corporation and amalgamation with it of the two
other transport undertakings of the State Government, viz.,
the Provincial Transport Services, and the State Transport,
Marathewada. 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
posts from 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 1st 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 all purposes.
Subclause 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 Corporation”.
L/P D)ISCI–21
642
“Provided that the conditions of service ap-
plicable immediately before the appointed day,
to any such person shall not be varied to his
disadvantage. except with the previous
approval of the Central Government”.
Notices terminating the services of the employees employed
by the Provincial Transport Services (operating in
Vidharbha) were issued. On 12th June 1961 an application
was made under Art. 226 and Art. 227 of the Constitution by
two former,, employees of the Provincial Transport Services
and the Union of the workmen of that concern challenging the
validity of the order of reorganisation made on the 27th
May. 1961 and the notices of termination of service served
on the employees. The following reliefs were prayed for:
(a) that the notices of termination be quashed; (b) 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.
It 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 that the
proviso to sub cl.3 of cl.9 of the order contravenes the
provisions of s.77 of the Bombay Reorganisation Act.
Lastly, it was contended that the action 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 (c) 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 the 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 scheme. The High 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 provisions of
s.31 of the C.P. and Berar Industrial Disputes
643
Settlement Act and was accordingly invalid. In the result,
the High Court quashed the Government resolution for
abolition of posts and the notices of termination that were
issued in consequence thereof. It also ordered the issue of
a direction, directing the Maharashtra State Road Transport
Corporation “not to take any action under the proviso to
sub-paragraph (3) of paragraph 9 of the Order relating to
varying the conditions of services to the disadvantage of
any of the employees who were employees of the first
respondent immediately before the appointed day, i.e., 1st
July 1961.” Against these orders of the High Court, the
State of Mahrashtra, the Maharashtra State Road Transport
Corporation and the Motor 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, 1961 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. questioned 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 Set-
tlement Act. That section is in these words:-
“31. (1) 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 11, 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 also 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/P(1))ISCI-21(a)….
644
Schedule II of this Act mentions a number of matters, +he
first of which is “Reduction intended to be of permanent or
semi-permanent character in the number of persons employed
or to be employed not due to force majeure”. The argument
that prevailed in the High Court was that abolition of all
posts amounted to permanent reduction within the meaning of
this Item in Schedule 11. If that be correct it would
necessarily follow that the Government had to observe the
procedure prescribed in s. 31. Admittedly, that was not
done. The short question, therefore, is whether the
abolition of all 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 ,ire unable to agree
with the High Court that the term reduction in the number of
persons employed or to be employed” as mentioned in Item 1
of Schedule 11 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 question about the validity of the
proviso to sub-cl. 3 of cl. 9 of the Order. As already
indicated the workmen’s contention was that the proviso
contravened the provisions of s. 77 of the Bombay
Reorganisation Act. That section contained a provision that
on transfer or reemployment of any workman in consequence of
reconstitution. reorganisation, amalgamation or dissolution
by any body corporate, 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 Government the conditions of service of a work-man
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
645
variation to the disadvantage of any workman. Only an ap-
prehension that there might be a change in future was
expressed. In the counter-affidavit the Government stated
that the Order passed in the notices issued clearly gave a
guarantee that the conditions of service will not be
changed. If there was any reason to think that there had
been any change in any conditions of service or that in the
immediate future there was any likelihood of any such change
being made on the strength of the impugned proviso it would
have been necessary for us to examine the question about the
validity of this proviso. As however no change appears to
have been made and it does 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.
646