RAJEEV AIWA AND ETC. Vs. KARNATAKA STATE ROAD TRANSPORT CORPORATION BANGALORE, AND ETC.
LAWS(KAR)-1981-6-34
HIGH COURT OF KARNATAKA
Decided on June 30,1981

Rajeev Aiwa And Etc. Appellant
VERSUS
Karnataka State Road Transport Corporation Bangalore, And Etc. Respondents

JUDGEMENT

M. Rama Jois, J. - (1.) Legality of the notices of termination of service issued by the Karnataka Road Transport Corporation (hereinafter referred to as the 'Corporation') to the petitioners, who were employees of private contract carriage operators and who had earlier been absorbed in the service of the Corporation under sub-s. (3) of S. 19 of the Karnataka Contract Carriage Acquisition Act, 1976 (hereinafter referred to as 'the Act') has been questioned in these writ petitions. As common questions of law and fact arise for consideration they are being disposed of by this common order.
(2.) The undisputed facts of the case are as follows : (i) There were large number of contract carriage motor vehicles which were being owned by operators and operated in the State. An ordinance called the Karnataka Contract Carriage Acquisition Ordinance was promulgated on 30th Jan. 1976 (hereinafter referred to as the 'Ordinance). Cl. 20 of the Ordinance provided for the acquisition of all the contract carriages. It also contained provisions for the absorption of workmen of private operators whose vehicles were acquired subject to the ratio prescribed in sub-cl. (3) of Cl. 20. The Ordinance was replaced by the Act. S. 19 of the Act corresponds to Cl. 20 of the Ordinance. Relevant portion of the Section reads : "19. Transfer of acquired property to the Corporation : (3) Every person who is a workman within the meaning of the Industrial Disputes Act, 1947 (Central Act 14 of 1947), and has been immediately before the commencement of this Act exclusively employed in connection with the acquired property, shall, on and from the notified date, become an employee of the Corporation on the same terms and conditions applicable to the employees holding corresponding posts in the corporation. Any person not willing to become such an employee of the corporation shall be entitled to retrenchment compensation as provided in the Industrial Disputes Act; Provided that the number of workmen that shall become employees of the corporation under this sub-section shall not exceed the following scale, the junior most being excluded : JUDGEMENT_34_LAWS(KAR)6_1981.htm Provided further that in the case of such persons to whom labour laws for the time being in force apply, no such termination or alteration of remuneration, terms or conditions of service shall be made except in accordance with such laws. ** ** ** (7) The transfer of an employee to the corporation under sub-section (3) shall not entitle any such employee to any compensation and no such claim shall be entertained by any Court, tribunal or other authority. (8) Save as otherwise provided in sub-sec. (3), the services of every person other than the persons, referred to in sub-sec. (3) employed in connection with the acquired property immediately before the notified date shall stand terminated on and from the notified date and if any such person whose services are so terminated is entitled to any payment by way of gratuity or retirement benefit or for any leave not availed of, or for any other benefits, such person may enforce his claim against his employer under whom he was employed in connection with the acquired property immediately before the notified date but not against the corporation." The only material difference between cl. 20 (3) of the Ordinance and S. 19 (3) of the Act is that under Cl. 20 (3) of the Ordinance, the ratio of ex-workmen required to be absorbed in the service of the Corporation was 7.9. per vehicle acquired and it also provided for absorption of Conductors, whereas under S. 19 (3) of the Act, it was reduced to 4.45 per vehicle and Conductors were altogether excluded. According to sub-sec. (3) the persons who were wholly and exclusively employed by the Ex-operators and who were 'workmen' as defined in the Industrial Disputes Act were to be absorbed into the service of the Corporation but the number of persons to be absorbed was limited to the ratio specified in the proviso. Workmen who get absorbed were not entitled to any benefit for termination of service under ex-operators in view of sub-sec. (7). Workmen who did not get absorbed were entitled to get all the terminal benefits to which they were entitled to, from their employer as is made clear by the second proviso to sub-sec. (3) and sub-sec. (8). (ii) After the Act came into force the Corporation received the list of employees from the ex-operators. The Corporation appointed a committee to scrutinise their qualification and service particulars and to decide the entitlement of every such individual for absorption under S. 19 (3) of the Act into the service of the Corporation. Accordingly, the particulars were examined. After such examination was completed the Corporation passed Resolution No. 3432 dated 26-10-1976 (Annexure-III produced in W. Ps. 16630 to 16635 of 1980 along with application, dated 8-9-1980). It reads : "165th meeting of the KSRTC held on 26-10-76. Subject No. 18. Absorption of Workers from Contract Carriage Operations, who are displaced because of Nationalisation. Resolution No. 3432. Resolved that approval be accorded for appointment of displaced employees of Contract Carriage operators whom the Committee has selected and that the orders of appointment be issued within 10 days. The Committee was also directed to proceed with the work of interview of the remaining displaced employees." Thereafter, appointments were offered to each of the petitioners in a prescribed pro form. Exhibits A-1 to A-16 produced in W. Ps. Nos. 16754 to 16781 of 1980 are such offers. It is necessary, and sufficient to reproduce one such offer. Exhibit A-1 reads:- "Karnataka State Road Transport Corporation Central Offices : Bangalore-560027. No. KST/CO/RCT/OC/139/76. Dated : 8-3-77. OFFER OF APPOINTMENT Ref: Karnataka Contract Carriage Acquisition Act, 1976. Sri Lokesh Shetty, Ex-Employee of C.P.C. Company Ltd., Mangalore, who has been interviewed by the Committee is directed to report to the Deputy General Manager and Divisional Controller, KSRTC Division, Hassan, for appointment as Junior Assistant. If you do not report within seven (7) days from the date of receipt of this offer, it will be deemed that you have no interest to join the services of KSRTC and your claim will be forfeited. Sd/- Deputy General Manager (ADM)" The offer of appointment so given were accepted by the petitioners. Thereafter, orders of appointment were issued. These are produced as Exhibits B-l to B-5. Exhibit B-l reads : "K. S. R. T. C. HASSAN DIVISION, HASSAN - 573201 No. KST/ESN/EST/RCT/6783/77-78, Date 15/20th April 77. DIVISIONAL ESTABLISHMENT ORDER NO. 346/77 In pursuance of the instructions issued by the Central Offices, the following displaced employees of the Ex-Contract Carriage Operators are hereby appointed to the posts shown in Column No. 3 on pay as shown in Col. No. 4 in the pay scale shown in Col. No. 5 plus usual dearness and other allowance as admissible under Rules in force and posted to the Traffic Section, Divisional Office, Hassan for undergoing initial Training with effect from the dates shown in Col. No. 6. The terms and conditions of appointment are as under:- (1) They will be governed by the M.G.R.T.D. Standing Orders and the Karnataka State Road Transport Corporation Servant's (C & D) Regulations 1971 and other Regulations in force and that may be enforced from time to time. (2) The appointment is expressly subject to the condition that the Employer is free to alter their service conditions at any time by Regulations or by Regulations of the Corporation. JUDGEMENT_34_LAWS(KAR)6_19812.htm (3) The Appointing Authority is always competent to discharge them or to terminate their services or dismiss them from service. Orders regarding the place of posting will be issued separately, on completion of their Training. Sd/- XXX Deputy General Manager and Divisional Controller, K. S. R. T. C. Hassan." Pursuant to such appointment orders issued to the petitioners they have been absorbed into the service of the Corporation. These absorptions took place on various dates mostly between March and September 1977. Since then the petitioners have become regular employees of the Corporation and they have been admitted to all the benefits according to the conditions of service as regulated by the regulation made by the Corporation under S. 45 of the Road Transport Corporation Act. (iii) Apart from giving appointments to the petitioners and others who were admitted in service of the Corporation it had issued offer of appointment to large number of such offers (sic) to other Ex-employees of Ex-Contract Carriage Operators. Later the Corporation declined to appoint them. There were a spate of writ petitions before this Court. The claim made in all these petitions was that every workman of Ex-Contract Carriage Operators automatically became the employee of the Corporation by virtue of Cl. 20 (3) of the Ordinance and S. 19 (3) of the Act. Another contention urged in the petitions was that the eligibility of persons for absorption should have been worked out taking employees of all the operators and juniormost should have been excluded and not operator wise as had been done by the Corporation. By the time those writ petitions were filed, the petitioners in these writ petitions had already been absorbed. The Corporation resisted the claim of the petitioners in those writ petitions on the ground that there was no automatic absorption, and number of persons who could be asborbed could not exceed the ratio prescribed in sub-sec. (3) of S. 19 of the Act. As regards the plea that eligibility for absorption should not have been determined operator wise the Corporation stated in its additional statement of objection filed in that case in paras 12 and 13 as follows:- "12. The contention of the petitioner that the eligibility of persons for being absorbed as employees of the Corporation will have to be determined taking the total number of employees of all the contract carriages in one Block is totally opposed to the scheme of the Act and would result in grotesque and unjust results. Contract Carriages are not acquired from a single individual. They are acquired from different categories of owners in terms of number of vehicles owned by them. It may be submitted that the contention which the petitioner is raising is belated and liable to be rejected on the ground of laches alone. The petitioner is estopped from raising such a plea at this belated stage. 13. It is further submitted that in the normal working of the Act the case of the persons sponsored by the owners of the acquired property has received due consideration and on such consideration a total number of 2239 employees have already been absorbed on different dates and are actually in the service of the Corporation. The contention of the petitioner that the seniority of men for eligibility for absorption should be determined on the basis of the total number of employees taken en bloc would necessarily result in the persons already employed being dislodged and a fresh determination made as regards the eligibility in terms of the ratio prescribed by the proviso to sub-sec. (3) of S. 19 of the Act. It is submitted, the contention of the petitioner is neither just nor reasonable and is totally opposed to the scheme of the Act and the purpose of providing the ratio with reference to one vehicle and with reference to the owners who are required to give the particulars about the employees working under them in connection with the property acquired." (underlining by me) The number of persons absorbed referred to in the above paragraphs includes the petitioners. The writ petition was dismissed on 26-7-1978 holding that no automatic absorption was provided for either under Cl. 20 (3) of the Ordinance or under S. 19 (3) of the Act. However, a submission was made to the following effect: "Before parting with this case, we consider it appropriate to put on record the statement made by the learned Advocate General that cases of such of the genuine employees of the contract carriage operators who are not entitled to be absorbed in the service of the Corporation having regard to the limitations imposed by sub-sec. (3) of S. 19 of the Act, will be considered for recruitment in the service of the Corporation as and when vacancies arise as it is a human problem which is required to be solved by giving the most sympathetic consideration to the employees of the erstwhile contract carriage operators who have lost their jobs consequent upon the acquisition of the contract carriages by the State." (iv) The matter was taken in appeal before the Supreme Court. There were also petitions filed under Article 32 of the Constitution before the Supreme Court. Copies to statement of objection filed before the Supreme Court in writ petition No. 4474 of 1978 and writ petition No. 4539 of 1978 are produced by the Corporation in writ petitions Nos. 16630 to 16635 of 1980 along with a memo dated 16-6-1981. Para. 14 of the said statement was similar to the statement made before this Court in writ petn. No. 10203 of 1977. It reads:- "I submit that in the normal working of the Act, the case of the persons sponsored by the owners of the acquired property has received due consideration and on such consideration a total number of 2,239 employees have already been absorbed on different dates and are actually in the service of the Corporation. The contention of the petitioners that the seniority of the candidates for eligibility for absorption should be determined on the basis of total number of employees taken en bloc would necessarily result in persons already employed being dislodged and a fresh determination made as regards the eligibility in terms of the ratio prescribed by the proviso to sub-sec. (3) of S. 19 of the Act. I say that the contentions of the petitioners are neither just nor reasonable and are totally opposed to the scheme of the Act and purpose of providing the ratio with reference to one vehicle and with reference to the owners who are required to give the particulars about the employees working under them in connection with the property acquired." The Supreme Court dismissed the appeal of Shivananda v. K.S.R.T.C. and the writ petitions by Judgment dated 18-9-1979, AIR 1980 SC 77. The only contention urged by the appellants and writ petitioners before the Supreme Court at the time of hearing was that they had acquired a vested right for absorption under sub-cl. (3) of Cl. 20 of the Ordinance (see para 2 of the Judgment). The contention was repelled. (v) Thereafter on 14th Aug. 1980, the Corporation issued the impugned notices to the petitioners. They are all cyclostyled and similar. Hence, it is sufficient to set out the contents of one such notice. Annexures D1 to D28 in W. P. are those notices. Annexure D1 reads : "Karnataka State Road Transport Corporation Central Office, Bangalore. No. KST. CO. CC. 306.80-81, Bangalore, dated 14 Aug. 1980. To, Shri M. Rajeev Alva, Junior Assistant, KSRTC, Hassan Dn., Hassan. Sub : Notice for termination of Service pursuant to the ruling of the Hon'ble Supreme Court of India Under Karnataka Contract Carriage (Acquisition) Act, 1976. As you are aware, the Hon'ble Supreme Court of India have already held in the ruling in Civil Appeal No. 2411 of 1978 dated 18-9-1979 : (reported in AIR 1980 SC 77) rendered under Karnataka Contract Carriages (Acquisition) Act, 1976 as under : "Employees in excess of the Scale prescribed for the categories specified under proviso to sub-sec. (3) of S. 19 of the Act are clearly not entitled for absorption. Though sub-cl. (3) to Cl. 20 of the Ordinance provided for absorption of certain classes of employees in a particular ratio with effect from Jan. 30, 1976, it does not follow that there was an automatic absorption as from that date. "The Act substitutes a new proviso in sub-sec. (3) of S. 19 in place of the old proviso to sub-cl. (3) of Cl. 20 of Ordinance altering the whole basis of absorption." "When an Ordinance is replaced by an Act which is made retrospective in operation anything done or any action taken under the Ordinance stands wholly effaced." In the light of the ruling of the Hon'ble Supreme Court and the provision of the Karnataka Contract Carriages (Acquisition) Act, 1976, the matter pertaining to your appointment has been examined and found that your appointment as Junior Assistant is in excess of the ratio provided in proviso to sub-sec. (3) of S. 19 of the said Act. You are not eligible for absorption in excess of the ratio laid down under the law. As such, you have no statutory right for absorption under the Act. Therefore, you are liable to be terminated from the services of the Karnataka State Road Transport Corporation. On humanitarian grounds, taking into account of your service rendered in the Corporation, though you are not entitled under law, you are offered an appointment in the category of Clerk on the terms and conditions stipulated in this Notice (over leaf). You are requested to express your willingness within 15 (fifteen) days from the date of receipt of this notice for being appointed in the category of Clerk. If your reply to this notice is not received within fifteen days from the date of receipt of this Notice, it will be presumed that you are not willing to be appointed to the category of post offered and further action as deemed necessary will be taken which may lead to termination of your services from the Corporation. Sd/- GENERAL MANAGER. TERMS AND CONDITIONS 1. The appointment is expressly subject to the condition that the employer is free to alter the service Conditions of the employee at any time by Regulations framed under S. 45 of the K.T.C. Act, 1950 and by Resolution of the Corporation passed under S. 12 of the said Act. Notwithstanding any standing orders now in force, it is expressly understood that when the Corporation frames uniform Rules/Regulations to govern the service conditions of its employees, you will be governed by such Rules/Regulations. 2. You will be governed by the K.S.R.T.C. Leave Regulations, 1964, K.S.R.T.C. Servants (Conduct & Discipline) Regulations, 1971 and other Regulations in force and also the regulations that may be enforced from time to time. 3. You are liable to be posted anywhere in the State of Karnataka. 4. The Appointing Authority is always competent to discharge or terminate, remove, or dismiss you from services under the regulations of the K.S.R.T.C." Aggrieved by such notice issued to each of the petitioners, the petitioners have presented these petitions.
(3.) The substance of the plea of all the petitioners in brief is as follows : They were all whole time workmen of Ex-Contract Carriage Operators. They have already been absorbed into the service of the Corporation in the year 1977 itself under S. 19 (3) of the Act after scrutiny of their claims. Hence, they are governed by the conditions of service contained in the Service Regulations of the Corporation. Therefore, there is no question of giving them an offer to accept lower posts of clerks or helpers or of terminating their service if they do not accept such an offer. Termination of their service is discriminatory, as they have been arbitrarily picked up for terminating the services. The respondents are equitably estopped from stating that the petitioners are not entitled to absorption. The impugned notices are opposed to the principles of natural justice as no opportunity has been given before taking a decision to terminate the appointments already given to the petitioners.;


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