Research › Browse › Judgment

Madhya Pradesh High Court · body

1976 DIGILAW 30 (MP)

MADHYA PRADESH STATE ROAD TRANSPORT CORPORATION v. K W KELKAR

1976-02-26

J.P.BAJPAI, SHIV DAYAL

body1976
JUDGMENT : ( 1. ) THE Madhya Pradesh State Road Transport Corporation (hereinafter called the Transport Corporation) desired to have a Central Workshop at Gwalior. The Gwalior Engineering Works belongs to the M. P. State industries Corporation (hereinafter called the industries corporation.) In a meeting held on January 6, 1970, it was settled between the Industries Corporation and the Transport Corporation that the Gwalior Engineering Works would be taken over by the Transport corporation (vide minutes, annexure P-1 ). It was agreed inter alia that the transport Corporation would purchase tools and plant on cash payment at book value; that stores articles, stocks, material relating to works in progress and finished products available at the Gwalior Engineering Works would be purchased by the Transport Corporation to the extent required by them at book value; that no cash amount was required to be paid for the machinery and buildings and the then depreciated value of the machinery and buildings might be added as additional share capital of the Transport Corporation, and that the Transport Corporation would not take over debts and liabilities of the concern as on the date of transfer, nor would it take over any dues or payments to be received by the concern as on the date of transfer. It was also agreed :- "the M. P. S. R. T. C. will determine the strength of/labour and supervisory staff upto the stage of Foreman which will be required and taken over by the Corporation on the date of transfer. A list of labour and supervisory staff not needed will be made by the m. P. S. R. T. C. keeping in view the following principles:- (a) Where a particular section of the work is proposed to be closed by the m. P. S. R. T. C , all the labours of the section, including supervisory staff, would be listed as surplus. (b) Where only a portion of labour and supervisory staff of a particular section is proposed to be continued, the junior-most persons will have to be listed as surplus. (11) The M. P. S. R. T. C. will also determine strength of the administrative staff upto the category of Accounts Officer including the security staff required by the Corporation. A list of surplus staff, not required, will be prepared by M. P. S. R. T. C. on the the same principle as mentioned above. (11) The M. P. S. R. T. C. will also determine strength of the administrative staff upto the category of Accounts Officer including the security staff required by the Corporation. A list of surplus staff, not required, will be prepared by M. P. S. R. T. C. on the the same principle as mentioned above. (12) The surplus labour and staff so listed will be offered employment under m. P. S. R. T. C. at Gwalior or other place in M. P. under M. P. S. R. T. C. on a salary including D. A. not below what they are getting [at present to the extent possible and persons accepting the offer will be employed by the M. P. S. R. T. C. (13) These persons from the surplus list who do not accept the offer of M. P. S. R. T. C. for employment elsewhere or those who cannot be offered a suitable job will be retrenched by the M. P. S. R. T. C. and M. P. S. R. T. C. will take no liability or responsibility with regard to them. v (14) The labourers and members of staff including supervisory staff taken over by m. P. S. R. T. C. will be treated as persons transferred to M. P. S. R. T. C. on the condition that their existing emoluments including D. A and other benefits such as E. S. I. ,p. F. etc. will not be less than what they were getting on the date of transfer. On behalf of m. P. S. R. T. C. the above conditions were agreed to subject to the following proviso : (i) That the existing value of transferred machinery and building will be reduced from the share capital of M. P. S: R. T. C. (ii) That the number of labourers and staff to be retrenched will not exceed (100) 125. " It is not necessary to reproduce the other conditions agreed upon between the parties. ( 2. ) BY order (annexure P-2) dated April 9, 1970, the State Government accorded sanction to the transfer of the Gwalior Engineering Works to the transport Corporation on the 12 conditions stated in it. Paragraph 11 relates to surplus staff. " It is not necessary to reproduce the other conditions agreed upon between the parties. ( 2. ) BY order (annexure P-2) dated April 9, 1970, the State Government accorded sanction to the transfer of the Gwalior Engineering Works to the transport Corporation on the 12 conditions stated in it. Paragraph 11 relates to surplus staff. Paragraph 12 is in these words:- When rendered into English, it would read thus :-"with the transfer, the services of the employees to be absorbed in the M. P. State road Transport Corporation shall be treated as transferred to the Corporation on their existing conditions of service and the conditions of service available will, not be less favourable than the conditions of service available on the date of transfer. " ( 3. ) THE Transport Corporation issued the following letter of appointment (annexure P-4) to K. W. Kelkar, non-applicant No. 1 in this petition (hereinafter called the employee ). It reads as follows :- "consequent upon the transfer of the Gwalior Engineering works from the Madhya pradesh State Industries Corporation to the Madhya Pradesh State Road Transport Corporation with effect from 1-9-70, you are hereby provisionally appointed as Fitter until further orders, to serve in the M. P. S. R. T. C. on your present salary in the pay scale applicable to you at present. The M. P. S. R. T. C. reserves the right to fake further steps to examine your past record viz. personal files, service records, seniority etc. for absorbing you in the service of the M. P. S. R. T. C. The M. P. S. R. T. C. also reserves the right to absorb you on a pay in a scale comparable to that existing in the Corporation and to apply to you the conditions of service as obtaining in the M. P. S. R. T. C. " Thereupon, Kelkar filed in the Labour Court a petition under sections 31 (3), 61 and 62 of the M. P. Industrial Relations Act, 1960 contending that he was continuously in service of the Industries Corporation and the Transport Corporation but his services have been terminated with effect from September 1, 1970, and has been given provisional appointment by the Transport Corporation and that a change has been effected in his conditions of service. He, therefore, claimed notice pay and retrenchment compensation and also damages. ( 4. He, therefore, claimed notice pay and retrenchment compensation and also damages. ( 4. ) IN the Labour Court, the petition was contested by the Industries corporation as also by the Transport Corporation. The Industries Corporation denied that the service of the employee was terminated on September 1, 1970, and also denied that he was re-employed. It was asserted by the Industries corporation that the employees services were transferred to the Transport corporation. In the written statement filed by the Industries Corporation paragraph 12 (Hindi) was reproduced. It was, therefore, denied that the employee was entitled to any retrenchment compensation. ( 5. ) IN a separate written statement filed by the Transport Corporation, it was contended that the employees services were not terminated on September 1, 1970, nor was any change effected in the conditions of service; and since the employee was not retrenched, the question of payment of retrenchment compensation did not arise. In paragraph 7 of the written statement, it was explained that while appointing the employee from September 1, 1970, the word "provisionally" was used because integration remained to be effected and it was necessary to appoint the employee provisionally until the work of integration was completed. It was then alleged in the same paragraph of the written statement that since integration had been completed and the employee had been appointed on a permanent basis, there was no alteration in his service conditions. It was also maintained that the employee was not rendered unemployed even for a single day. However, in paragraph 8, it was asserted that the transport Corporation had no liability in respect of the employees previous service. ( 6. ) THE Labour Court allowed the employees petition as against the industrial Corporation and rejected it as against the Transport Corporation. It directed the Industries Corporation to pay retrenchment compensation and notice pay, The Labour Court pointed out that both the Corporations belong to the same Government but they took contradictory stands. If services are transferred from one employer to another employer, it would be deemed as if the employee was retrenched by the first employer and is entitled to get retrenchment compensation and notice pay. The Labour Court itself observed that this principle would not apply, inter alia, where the conditions of service of the labourer, after the transfer, are not less favourable. The Labour Court itself observed that this principle would not apply, inter alia, where the conditions of service of the labourer, after the transfer, are not less favourable. In paragraph 17 of its award, the Labour Court observed that it was not the employees case that the conditions of service under the Transport Corporation were less favourable than the conditions of service under the Industries Corporation. The main dispute was whether the Transport Corporation was legally bound to take into account the length of service of the employees and that there was no break in service. ( 7. ) AGGRIEVED by the order of the Labour Court, the Industries Corporation filed a revision petition before the Industrial Court under sections 66 and 67 of the M. P. Industrial Relations Act. The learned president of the Industrial court allowed the revision and set aside the order of the Labour Court, whereby retrenchment compensation and notice pay were awarded to the employee (and 85 similar employees ). At the same time it was made clear that the denial of retrenchment compensation and notice pay to the employee would not be interpreted to mean that the employee was not entitled to the length of service in the Gwalior Engineering Works, when he was transferred to the Transport corporation. ( 8. ) IN this petition under Article 226 of the Constitution the Transport corporation is aggrieved by the last-mentioned observation of the Industrial court. ( 9. ) THE facts and circumstances of the present case are similar to those of the 85 other petitions, all of which have been filed by the Transport Corporation against the Industrial Corporation and other 85 employees, who had filed petition before the Labour Court like Kelkar (the employee in the present case ). The contentions raised and the arguments advanced before us in all the 86 petitions are common. This order will, therefore, govern those 85 petitions also. ( 10. ) IT is not in dispute that either (a) these employees must get retrenchment compensation, if it is held that their services became terminated when they were transferred from the Industries Corporation to the Transport Corporation; or (b) they are entitled to all the benefits attached to the length of service, in case it is held that there was no break in their service, when they were transferred from the Industries Corporation to the Transport Corporation. The dispute is that according to the Transport Corporation, their employment with it is afresh and there is no continuity. It is urged for the Industries Corporation that their transfer necessarily means continuity so that it is not bound to pay any retrenchment compensation. If it is held that the transfer tantamounts to break in service, the Provident Found contribution would start after one year of their reemployment in the Transport Corporation. The employees contention throughout has been that if the transfer means re-employment, it amounts to alteration in service conditions which would be less favourable. They claim to be entitled to the benefits on the basis of their prior service with the Gwalior Engineering Works. ( 11. ) INDEED, there is nothing on record whereby the services of the employees were terminated in express terms, ft is remarkable that in the written statement filed by the Transport Corporation before the Labour Court, it was said in paragraph 2 that on September 1, 1970, the Transport Corporation did not terminate the services of the employee, and in paragraph 3, it is stated that the Transport Corporation did not bring about any change in the service conditions of the employee. In the same paragraph, it is further reiterated that the question of payment of retrenchment compensation under section 25-FF of the Industrial Disputes Act does not arise because the employee was not retrenched by the Transport Corporation. In paragraph 7 of the additional pleas, the Transport Corporation explained why it used the expression "provisionally" while appointing the employee with effect from September 1, 1970. The explanation is that integration had to be effected and the process of integration would take some time. However. , in paragraph 8, it was contended that the Transport Corporation has no liability which may be co-related to the prior service of the employee. ( 12. ) THUS, from the statements made in the written statement except the last mentioned, it is clear that they are not inconsistent with what the Industries corporation said in its written statement. ( 13. ( 12. ) THUS, from the statements made in the written statement except the last mentioned, it is clear that they are not inconsistent with what the Industries corporation said in its written statement. ( 13. ) ISSUE No. 8 (a), which was framed by the Labour Court was :-"whether the transfer of the employees to the State Road Transport Corporation has been on this condition that their services would be treated as transferred to the Corporation on their existing service conditions and would not be less favourable than the service conditions obtaining on the date of transfer ?" This question was answered by the Labour Court in the affirmative. ( 14. ) SHRI Dube, learned counsel for the Transport Corporation, urged before us that the Gwalior Engineering Works was taken over as a "closed concern" by the Transport Corporation and, therefore, the services of the employees would be deemed to have been terminated. ( 15. ) SHRI Mittal, learned counsel for the Industries Corporation, while opposing this petition, contended that the word "transfer" must be given its ordinary and natural meaning and there is nothing, either in annexure P-1 or annexure P-4 from which any different intention would emerge. ( 16. ) SHRI Upadhyaya, appearing for some of the employees, expressed his concern because, if there was break in service, the employees would not get the benefit of the Employees State Insurance for 12 weeks, nor would they get the provident Fund contribution for the first 12 months. ( 17. ) IT is settled law that in interpreting documents, intention of the parties to the instrument must be ascertained from the words employed in it in their ordinary natural sense and the whole of the document has to be considered. In Odgers Construction of Deeds and Statutes, the first general rule of interpretation formulated is:- "the meaning of the document or of a particular part of it is therefore to be sought for in the document itself. " Odger has cited Lord Wensleydale in Monypenny v. Monypenny (1861) 9 HLC 114 at p. 146. :- "the question is not what the parties to a deed may have intended to do by entering into that deed, but what is the meaning of the words used in that deed; a most important distinction in all cases of construction and the disregard of which often leads to erroneous conclusions. :- "the question is not what the parties to a deed may have intended to do by entering into that deed, but what is the meaning of the words used in that deed; a most important distinction in all cases of construction and the disregard of which often leads to erroneous conclusions. " In Re Meredith ex. P. Chick, (1879) 11 Ch. D 731 at p. 739. Brett L. J. , observed:- "i am disposed to follow the rule of construction which was laid down by Lord denman and Burson Parke. . . . that in construing instruments you must have regard, not to the presumed intention of the parties, but to the meaning of the words which they have used," ( 18. ) IN the minutes of the meeting between the Industries Corporation and the Transport Corporation, where the transfer of Gwalior Engineering Works from the former to the latter was decided, clause 14 is in no ambiguous terms:- "labourers and members of the staff including supervisory staff taken over by m. P. S. R. T. C. will be treated as persons transferred to M. P. S. R. T. C. " If the parties had intended that as soon as there would be transfer of Gwalior engineering Works to the Transport Corporation, the services of the labourers and members of the staff would ipso facto stand terminated, this language would not have been used. There would have been no transfer in that case and the word "re-employment" would have been used. The expression "will be treated" as persons transferred to the MPSRTC" undoubtedly means that the persons so taken over would be treated as if they were already in the service of the m. P. S. R. T. C, or in other words as if they were transferred from one department to another, or one section to another, of the same undertaking. The word "transfer" necessarily connotes continuity. Whenever there is break in service, the word "transfer" is never used. ( 19. ) ON a perusal of the entire minutes (Annexure P-1), it is abundantly clear that the Transpost Corporation would have nothing to do with those persons whom it would not take over. Separate provisions were made for such surplus staff (in clauses 11, 12 and 13 ). ( 19. ) ON a perusal of the entire minutes (Annexure P-1), it is abundantly clear that the Transpost Corporation would have nothing to do with those persons whom it would not take over. Separate provisions were made for such surplus staff (in clauses 11, 12 and 13 ). It was left to the Transport Corporation to determine the strength of the administrative staff required by it and it was about the latter that clause 14 above was incorporated. And, in the same breath, it was also provided that the staff was taken over by the Transport Corporation "on the condition that their existing emoluments including D. A. and other benefits, such as ESI, PF, etc. will not be less than what they were on the date of transfer". To this condition, the Transport Corporation agreed. In our opinion, clause 14 does not leave the matter in doubt. Clearly and definitely such staff was transferred from one undertaking to another with the clarification that the condition of service with the Transport Corporation will not be less favourable. Thus, according to the dictum in Ramkishorelal v. Kamalnarayan, AIR 1963 SC 890 . the intention was that such employees would be taken over as on transfer from industries Corporation. ( 20. ) IN Ramkishorelal v. Kamalnarayan (supra), their Lordships laid down thus:- "the golden rule of construction, it has been said, is to ascertain the intention of the parties to the instrument after considering all the words, in their ordinary, natural sense. To ascertain this intention the Court has to consider the relevant portion of the document as a whole and also to take into account the circumstances under which the particular words were used. Very often the status and the training of the parties using the words have to be taken into consideration. " ( 21. ) THE instructive pronouncement of their Lordships: "very often the status and the training of the parties using the words have to be taken into consideration", very much applies to the present case. Certain facts stated in r. C. Sharma v. Government of M. P. , AIR 1973 SC 2279 . are mark-worthy :-"prior to April 1, 1963, three undertaking namely, Gwalior Engineering Works, (2) Gwalior Potteries, and (3) Gwalior Leather Factory and Gwalior Tannery, Morar, were owned and managed by the Madhya Pradesh State. Certain facts stated in r. C. Sharma v. Government of M. P. , AIR 1973 SC 2279 . are mark-worthy :-"prior to April 1, 1963, three undertaking namely, Gwalior Engineering Works, (2) Gwalior Potteries, and (3) Gwalior Leather Factory and Gwalior Tannery, Morar, were owned and managed by the Madhya Pradesh State. The employees in these undertakings were in the service of the Madhya Pradesh State Government. These undertakings were transferred to the Madhya Pradesh Industries Corporation Ltd. hereinafter called the corporation. The employees of these undertakings thus ceased to be in the service of the State Government and became employees of the Corporation. . . . . . The Government of Madhya Pradesh had made an offer to the employees of the three undertakings which was as follows:- (1) Your present pay and scale, and other conditions of service and benefits to which you are at present entitled will not be affected by transfer. (2) The transfer of your services will not be treated as an interruption in your service. In other words you will be entitled to leave and other benefits on the same basis as if your services under the State Corporation was a continuation of your total uninterrupted services under the said undertaking. " ( 22. ) THUS, having regard to their status and training, it can safely be said that when paragraph 14 was incorporated in the minutes and also when the order of the Government was issued (in Hindi), wherein paragraph 12 also spoke of the transfer and continuance of the service conditions, the parties had the same intention to deal with the employees as in R. C. Sharmas case (supra ). In that case, no doubt, clause 2 was in so many words that the transfer would not be treated as interruption in the service and that the employee would be entitled to leave and other benefits on the same basis as if their services under the State Corporation was a continuation of the total uninterrupted services under the said undertaking. In that case, it was also observed in conclusion:- "all that that condition secured was that the employees should not suffer in the length of their service and in the enjoyment of the benefits which an uninterrupted service confers on them because of the transfer of service from the State Government to the Corporation. In that case, it was also observed in conclusion:- "all that that condition secured was that the employees should not suffer in the length of their service and in the enjoyment of the benefits which an uninterrupted service confers on them because of the transfer of service from the State Government to the Corporation. " If the parties had intended anything different, they would have employed an expressly different language. The object clearly was to create a fiction and continuity of service. ( 23. ) THE result of the above discussion is that we do not find any error in the conclusions reached by the learned President of the Industrial Court. ( 24. ) THIS petition is dismissed. We direct that the parties shall bear their own costs. The amount of security deposit shall be refunded to the petitioner. Petition dismissed.