Full Judgment Text
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PETITIONER:
BIHAR STATE ROAD TRANSPORT CORPORATION
Vs.
RESPONDENT:
STATE OF BIHAR & ORS.
DATE OF JUDGMENT:
19/02/1970
BENCH:
SHELAT, J.M.
BENCH:
SHELAT, J.M.
MITTER, G.K.
CITATION:
1970 AIR 1217 1970 SCR (3) 708
1970 SCC (1) 490
CITATOR INFO :
RF 1975 SC 661 (15)
R 1978 SC 979 (4)
ACT:
Industrial Dispute--Termination of service for
misconduct--Principles of natural justice--Duty to conform
to--Corporation taking over employees "on the rolls" of the
departmental undertaking--Includes those who are deemed to
be in service--Taking over power and functions of under-
taking includes regulation of conditions of service of
employees and disciplinary action-Labour Court--Jurisdiction
to go behind language of order of termination-Certiorari-
Finding of Labour Court that order of termination punitive
neither unreasonable or perverse--High Court will not be
justified in interfering.
HEADNOTE:
The third respondent was a Head Clerk in the Rajya
Transport Authority, a departmental undertaking of the
respondent State Government. His appointment was temporary
terminable without notice and without assigning any reason.
By an order dated February 18, 1959 he was discharged from
service. On April 20, 1959, the State Government, in
exercise of the power conferred under the Road Transport
Corporation Act. 1950, set up the appellant corporation and
under the notification the corporation was to "exercise all
the powers and perform all the functions" till then
exercised and performed by the Rajya Transport Authority.
In February 1961 the State Government referred the question
of termination of the third respondent’s services to the
Labour Court. The Labour Court held that he was a workman,
that the termination of service was punitive in nature in
view of the Corporation’s letter addressed to the
Conciliation Officer that the third respondent - had
committed various irregularities in the discharge of his
duties, and that the appellant Corporation was the successor
in title to the Rajya Transport Authority. The Labour
Court, therefore, held the termination illegal and directed
the Corporation to reinstate the third respondent in its
service A Writ petition in the High Court for quashing the
award was dismissed. In the appeal to this Court, it was
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contended that (1) the third respondent was not a workman as
defined in s. 2(s) of the industrial Disputes Act; (ii) the
order terminating his service was an order of termination
simpliciter and (iii) even assuming the order was illegal
his remedy was against the State Government and not against
the Corporation. Dismissing the appeal.
HELD : (i) Prima, facie the third respondent was neither
an officer nor a member of the office staff in the
administrative offices. The standing orders, therefore,
were applicable to him. The definition of workman in s.
2(s) of the Industrial Disputes Act being a comprehensive
one, the third respondent must be held to be a workman
within the meaning of S. 2(s) whose conditions of service
were governed by the standing orders,[7l2 B]
(ii) The standing orders do not provide any precedure
for dealing with an employee guilty of misconduct enumerated
therein, but it is well established that termination of
service on the ground of misconduct could only be done in
conformity with the principles of natural justice. Even
though the order of termination may be couched in terms of
an order of termination simpliciter the Labour Court is
entitled to go behind the
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apparent language of the order and consider whether the
order is termination simpliciter or is imposed by way of
punishment. The conclusion of the Labour Court that the
termination of service of respondent 3 was not one of
termination simpliciter but was by way of penalty for
irregularities committed in the discharge of duties was
neither unreasonable nor perverse and the High Court rightly
refused to Interfere with such a finding in a writ of
certiorari. [712F-713C]
(iii) Employment of staff and regulating their
condition of service, including disciplinary action, was
clearly one of the powers and functions of the Rajya
Transport Authority and this was also to be exercised and
performed by the appellant corporation under the
notification. The averment of the Corporation that it had
taken over such employees of the Rajya Transport Authority
as were "on the rolls" of the Authority only meant those
employees who were in the service of the Authority and be-
cause that termination of service of the third respondent
was held to be ,illegal he was deemed to be continuing in
the service of the Authority and hence on its rolls. The
appellant corporation must therefore be deemed to have taken
over the services of respondent 3. [713 H-714 E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1065 of
1966.
Appeal by special leave from the judgment and order
dated September 17, 1965 of the Patna High Court in Misc.
Judicial Case No. 217 of 1962.
Sarjoo Prasad, R. P. Srivastava, Saranjit Singh Jauhar
and K. K. Sinha, for the appellant.
D. Goburdhun, for respondent No. 1.
The Judgment of the Court was delivered by
Shelat J. This appeal, by special leave, is against the
order of the High Court of Patna dismissing a writ petition
under Arts. 226 and 227 of the Constitution challenging the
award passed by the Labour Court on a reference to it of an
industrial dispute under s. 10(1) of the Industrial Disputes
Act, 1947.
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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 2.0, 1959, the
State Government, in exercise of the power conferred by S. 3
of the Road Transport Corporation Act, 64 of
710
1950, set up as from May 1, 1959, the appellant corporation.
The notification issued under s. 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 dated
February 24, 1961,
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 irre-
gularities 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 the
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basis directed the appellant
711
corporation to reinstate respondent 3 in its service and pay
compensation for the period from February to September 1959.
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 hi 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.
Counsel for the appellant corporation urged before us
(a) that the respondent was, a temporary employee engaged as
a head clerk and was, therefore, not a workman as defined by
S. 2(s) of the Industrial Disputes Act, (b) that the order
terminating his services was an order of termination
simpliciter and the Labour Court was, therefore, not
entitled to interfere with or set aside such an order, and
(c) that the order having been passed by the Rajya Transport
Authority long before the corporation came into being, even
assuming that the said order was illegal, the remedy of
respondent 3 was against the State Government and not
against the corporation.
There can be no doubt that the Rajya Transport
Authority, prior to the seting up of the appellant
corporation, was carrying on the undertaking of transport
had standing orders regulating the conditions of service of
its employees. The Rajya Transport, having been Sanctioned
by the Government on a temporary basis, as is apparent from
standing order 3, its employees fell into two categories,
namely, temporary and casual. Standing order 2(d) defined
an "employee’ to mean any person employed by the Rajya
Transport Authority to do any skilled or unskilled, manual
or clerical labour on hire or for reward. There can be no
doubt that respondent 3 was an employee of the Rajya
Transport Authority. Standing order 1,
712
however, provides that the said standing, orders were to
apply only to workmen of the Rajya Transport other than
officers and office staff employed in the administrative
offices and sections. The order appointing respondent 3
shows that he was posted at the office of the Divisional
Manager at Bhagalpur. Prima facie, respondent 3 was neither
an officer nor a member of the office ,staff in the
administrative offices or sections. The standing orders,
therefore, were applicable to him. No evidence was led by
the corporation that respondent 3, as a head clerk, was
concerned with or doing managerial or supervisory duties.
The definition of a ’workman’ in s. 2 (s) of the Industrial
Dispute Act being a comprehensive one, respondent- 3 must be
held to be a workman within the meaning of s. 2(s), whose
conditions of service were ,governed by the said standing
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orders. Standing order 17 deals with the power of
termination of employment of the Rajya TransportAuthority.
That standing order provides that the Authority ’Port has
under the terms of employment the right to terminate the
services of an employee with 15 days’ notice or payment of
15 4 days’ wages in lieu of such notice subject to the
provisions of the Industrial Disputes (Amendment) Act, 1953.
It further provides that the employment of such employees as
are found guilty of misconduct may be terminated in
accordance with the provisions of the relevant standing
orders. The relevant standing order is ,standing order 18
which lays down certain acts or omissions is :amounting to
misconduct. Cls. (j) and (1), thereof, lay down that
habitual or gross neglect of work or habitual or gross
negligence or neglect of duty resulting in loss to the Rajya
Transport would be misconduct. But the standing orders do
not provide any procedure for dealing with an employee
guilty of such misconduct. It is well established that if
the Rajya Transport Authority were to terminate the services
of an employee on-the ground of any misconduct enumerated in
standing order 18, it could do so only in conformity with
the principles of natural justice. The Authority in such a
case would have, therefore, to furnish to the concerned
employee charges alleged against him and would have to
afford to him an opportunity to be heard. The letter of the
General Manager of the appellant corporation dated January
30, 1960 earlier referred to make it clear that the reason
for terminating the services of respondent 3 was, that he
had been found to have committed irregularities of a serious
nature in the discharge of his duties. That being so, the
termination of services of respondent 3 was on account of
the aforesaid irregularities in the discharge of his duties
and prima facie was by way of punishment and not termination
simpliciter. As is well established, even though the order
of termination may be couched in terms of an Order Of
termination simpliciter, a Labour Court to which an in-
dustrial dispute is referred to for adjudication is entitled
to go
713
behind the apparent language of the order in question and
consider whether the order is termination simpliciter or is
imposed by way of punishment. 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 the
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.
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 s.
10(1) of the Industrial Disputes Act by the Government of
Bihar and the reference was a competent one.
The next question is whether the appellant corporation
was the successor-in-title of the said Rajya Transport
Authority, and therefore, the obligations and liabilities of
the said Authority devolved on the appellant corporation.
The contention was that it was not such a successor-in-title
and that once the Rajya Transport Authority ceased to carry
on the said undertaking, the relationship of master and
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servant between that Authority and respondent 3 ceased, and
therefore, whatever remedy respondent 3 had would be against
that Authority and not against the appellant corporation. It
was also contended that under the terms of the notification
by which the appellant corporation was set up the
corporation took over only the powers and functions of the
said Authority and not its obligations and liabilities.
Consequently, the order of reinstatement and compensation
was contrary to law,
The appellant corporation, as aforesaid, was set up by
means of the Notification dated April 20, 1959 issued under
s, 3 of the Road Transport Corporations Act, 1950. Under
cl. 2 of that notification the appellant corporation was
empowered to exercise all the powers and perform all the
functions which were till then exercised and performed by
the Rajya Transport Authority. It is manifest that the
powers and, functions of the Rajya Transport Authority were
to carry on and conduct the transport undertaking. For that
purpose its principal function would be the administration
and management of that undertaking which would necessitate
the employment of an adequate staff of employees, Employment
of such a staff and regulating their conditions of service.
including disciplinary action, would clearly be one of the
powers
714
or functions of the, Rajya Transport Authority, which power
or function was also to be exercised and performed by the
appellant corporation under the said notification.
Furthermore, in para 5 of the writ petition filed by the
appellant corporation in the High Court, the corporation in
clear terms averred that it had taken over as from May 1,
1959 such of the employees of the Rajya Transport Authority
into, its service who were on the rolls of the said
Authority on the date it came into existence. As rightly
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 be was entitled
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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 Autho-
rity, became liable to -pay the said wages for ’the said
period and not from February to September 1959 as directed
by the Labour Court.
The proper order, therefore. would, be that respondent 3
is deemed to be in the service of the appellant corporation
from
715
May 1, 1959, and therefore, the corporation is liable to pay
his wages and emoluments as from May 1, 1959. As the
successor-in-title of the said Authority, it became also
liable to pay his wages and emoluments for the, months of
February to April 1959. Except for this modification of the
Order passed by the Labour Court the award stands. The
appeal fails and is dismissed with costs, such costs being
one hearing fee only.
Y.P. Appeal dismissed.
716