M. S. SHIVANANDA v. KARNATAKA STATE ROAD TRANSPORT CORPORATION AND OTHERS (2)

Citation: [1980] 1 S.C.R. 684

Court: Supreme Court of India

Bench: S. MURTAZA FAZAL ALI, P.S. KAILASAM, A.P. SEN

Case summary

31 (2) (i) is to preserve only the things done and action taken under the repealed Ordinance, and not the rights and privileges acquired and accrued on the one side, • and the corresponding obligation or liability incurred on the other side, so that if no right acquired under...

Judgment text

M. S. smvANANDA v. KARNATAKA STATE ROAD TRANSPORT CORPORATION AND OTIIERS September 18, 1979 • [S. MURTAZA FAZAL ALI, P. S. KAILASAM AND A. P. SEN, JJ. ] Karnataka Contract Carri'ages (Acquisition) Ordinance, 1916, Cl. 20(3) & Karnataka Contract Carriages (Acquisition) "Act 1976, Sections 19(3) and 31(2)-Scope and effect of-Contract carriages acquired-Wh! ther emplrryees • > have a vested right of absorption. ,, General Clauses Act 1897 (X of 1897) S. 6-Repeal of Statute-Right · acquired or accrued unaffected-Mere 'hope or expectation of or liberty to qpply for acquiring a right nor preserved. ..... The Kamataka Contract Carriage (Acquisition) Ordinance, 1976 was promulgated on January 30, 1976 with the object of acquiring the contract carriages operating in the State. Sub-clause (3) to cl.

20 of the Ordinance provided for absorption of certain categories of employees of contract car· riage operators in the service of the Corporation, and the ratio for absorption for the different categories of employees that were entitled to be absorbed. On the same day, the State Government made an order under sub-cl. (1) to cl. 20 of the Ordinance transferring the contract carriages that vested in the State Government to the Karnataka State Road Transport Corporation. rr This Ordinance was subsequently replaced by the Kamataka Contract Carriages (Acquisition) Act, 1976 which was published in the Gazette dated March 12, 1976. The Ordinance was repealed by the Act, which re·enacted the provisions of the repealed Ordinance, With asaving clause in sub-s. (2) of s. 31 for preservation of any thing done or any... action taken. The Act was substantially in similar terms, except for the difference that the ratio prescribed by proviso to sub-cl. (3) to cl.

20 of the Ordinance which laid down the categories of persons who could. be absorbed in the service of the Corporation, was substantially altered and a new ratio was inserted in the proviso to sub·s. (3) of s. 19 of the Act. Otherwise, sub-s. (3) of s. 19 of the Act and sub-cl. (3) to cl. 20 of the Ordinance were identical in every respect. Under the Proviso to sub-cl. (3) to cl. 20, the total strength of the employees of the erstwhile Carriage Operators allowable for absorption was 7. 9 per vehicle while under the proviso to sub-s. (3) of s. 19 of the Act, the ratio worked out to 4. 45 per vehicle. Further, while under the Ordinance, conductors were entitled to be absorbed, the ratio provided under the Act shoWed that conductors were not included in the categories of persons who could be absorbed in the service of Corporation. The change in the ratio of absorption from 7. 9 per vehicle under sub-cl. (3) to cl. 20 of the Ordinance to 4. 45 per vehicle under sub-s. (3) of s.

19 of the Act allversely affected a large number of employees of the erstwhile contract carriage operators who filed writ petitions in the High Court, v. s. KUTTAN PILLAI v. RAMAKRISHNAN & ANR. (Desai, l. ) 685 challenging the vires of the proviso to sub-s. (3) of s. 19 of the Act, which dismissed the writ petitions. In the appeal and the writ petitions to this Court the question for consideration was, whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in the service ... with the Karnataka State Road Transport Corporation under sub-cl. (3) to cl. 20 of the Karnataka Contract Carriage (Acquisition) Ordinance 1976. Dismissing the appeal and writ petitions; HEID : 1. The High Court rightly observed that there was neither any- • thing done nor action taken and, therefore, the petitioners did not acquire 1 any right to absorption under sub-cl. (3) to cl. 20. [692 CJ · 2.

The Ordinance promulgated by the Governor in the instant case was a 'legislative act'. of the Governor under Arl 213(1) and, therefore, undoubtedly a temporary statute, and while it was still in force the repealing Act · was passed containing the saving clause in s. 31(2)(i) providing that, notwithstanding such repeal, 'anything done'' or any 'action taken' under the repealed Ordinance shall be deemed to have be~n done or taken under the. corresponding . provisions of the Act. [691 C-DJ 3. In considering the effect of an expiration of a temporary Act, it would be unsafe to lay down any inflexible rule. It requires very clear and umnistakable language in a subsequent Act of the legislature to revive or re·create an expired right. If, however, the right created by the statute is of an enduring character and has vested in the person, that right cannot be taken away because the statute by which. it was created has expired.

In order to see whether the rights and liabilities under the repealed Ordinance have been put an end to by the Act, 'the line· of enquiry would be not whether the new Act expressly keeps alive old rights and liabilities under the repealed Ordinance but whether it manifests an intention to destroy them. Another line of approach may be to see as to how far the new Act is retrospective in operation. [691 F-GJ State of Puniab v. Mohar Singh, [1955) SCR 893, referred to 4. (i) S~b-s. (2) of s. 31 of the Act was not intended to preserve ab•tract rights conferred by the repealed Ordinance. The legislature bad the compe- _-. J> tence to so re·structure the Ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract carriage services. It could re-enact the Ordinance according to its original terms, or amend or alter its provisions.

[692 Al (ii) When the Ordinance came to be replaced by the Act, the Corporation felt that the number of employees of the erstwhile contqi. ct carriage operators was too large for its Tequirements. The legislature, therefore stepped in and J. reduced the scale of absorption in the proviso to sub-s. (3) of s. 19 froni 7. 9 per vehicle to 4. 45 per vehicle. [694 GJ 5. The object of s. 31(2)(i) is to preserve only the things done and action taken under the repealed Ordinance and not the rights and privileges acquired anC! accrued on the one side, and the corresponding obligation or liability incurred on the other side, so that if no right acquired under the repealed~ Ordinance was preserved, there is no question of any liability being enforced. It is unlike the usual saving clauses which preserved unaffected by the repeal,_ not only things dOne ·under the repealed enactment but also the rights acquired thereunder. [693 C, DJ 6.

(i) Every person eligible fol\ absorption had to fulfil three conditions, viz. , (1) he had to be a workmaft. within the meaning of the IndustriaD Disputes Act, 1947; (2) be should have been, immediately before the cominencement of the Ordinance, exclusively employed in connection with the acquired property, and (3) he had to come within the ratio provided in the proviso to sub-cl. (3) to cl. 20. The whole object of inserting sub-cl. (3) to cl. 20 of the Ordinance. was to obviate the unemployment of persons suitable for employment, for which purpose, the Corporation had necessarily to screen the applicants. [693 GJ (ii) It was only if the employee was willing to be absorbed in the service of the, Corporation that the Corporation could absorb him in service, provided the other conditions specified in sub-cl. (3) to cl. 20 were satisfied.

[694 E] (iii) Thus it is clear that several stepS had to be taken by the authorities before identifying and determining the persons who could be absorbed in1 the service of the Corporation, in accordance with sub-cl. (3) to cl. 20 of the Ordinance, which indicates that automatic absoll'! tion of the employees of the erstwhile contract carriage operators was not legally permissible. [694 F] 7. The distinction between what is and what is not a right preserved by the provisions of s. 6 of the _General Clauses Act is often one of great fineness. What is unaffected by the repeal of a statute is a right acquired E. or accrued under it and not a mere 'hope or expectation of', or liberty to apply for acquiring a right. [692 G] Director of Public Works v. Ho Po Sang, [19621 2 All. ER 721 PC, referred to. 8. The Act substitutes a 'new' proviso in sub-s. (3) of s. 19 in place cf the old proviso to sub-cl. (3) to cl. 20 of the Ordinance, altering the whole basis of absorption.

The new proviso is given a retrospective effect, and it holds the field from the notified date i. e. , January 30, 1976. The proviso in subcL (3) to c1. 20 laying down a particular . ratio of absorption, is pro tanto· avoided by an express enactment of a 'new' proviso to sub-s. (3) of s. 19 which is entirely inconsistent with it. When an Ordinance is replaced by an Act which is made retrospective in operation, anything done or any action taken under the Ordinance stand wholly effected. [695 CJ 9. (i) The employees of the former contract carriage operators in normal .. course filled in the pro forma giving their service particulars and reported to duty. 1 This was in the mere 'hope or expectation' of acquiring a right. The submission of these 'call reports' by the employees did not subject the Corporation to a corresp0nding statutory obligation to absorb them in ,t service.

[692 CJ (ii) The meeting of the Committee set up by the Government for laying down the principles for equation of posts and ~or- determination of inter·se seniority, met on June 2, 1976. The Committeb decided that even ,! _n thf. :' M. s. SHIVANANDA v. K. s. R. T. CORPN. (Sen,!. ) 687 case of helpers-cleaners, there should be a 'trade test' and the staff cleared A. by the Committee for the posts of helper 'B', helper 'A' and assistant artisans should be on the basis of their technical competence, experience, ability etc. The Committee also decided that all other employees of contract carriage operators, \Vho \Vere eligible for absorption, should be interviewed by that Committee for the purpose of absorption on the basis of experience, ability duties and responsibilities. These norms were not laid down till June 2, 1976 • Till their actual absorption, the employees of the erstwhile contract carriage operators had only an inchohate right.

[692 E-F] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2411 of 1978. Appeal by Special Leave from the Judgment . and Order dated 26-7-1978 of the Karnataka High Court in Writ Petition No. 10203/ n. And ORIGINAL JURISDfCTION : Writ Petitions Nos. 4473-4474, 4415, 4488, 4528, and 4539 of 1978. (Under Article 32 of the Constitution). G. B. Rikar, K. R. Nagaraja and Mrs. Gayathri Billee for the Petitiouer (In WP. 4473-4474, 4488, 4539/78). R. B. Datar and Navin Sinha for the Petitioner (In WP. 4415 and 4528 and for Appellant in CA 2411/78). V. A. Sayield Mohammad and N. Nettar for the State of Karnataka and for Respondent No. 3 in WPs. 4473-4474, 4488, 4528 and 4539 and C. A. 2411/78. , L. N. Sinha, Attorney General, K. K. Venugopal, Additional Solicitor General, V. A. 'Sayied Mohammad and Vineet Kumar for Karnataka State Road Transport Corporation (in All W. P. s & C. A. ). The Judgment of the Court was delivered by SEN, J.

-This appeal, by special leave, directed against a judgment of the Karnataka High Court dated July 26, 1978 aud the connected petitions under Art. 32 of the Constitution, raise common question. It would, therefore, be convenient to dispose them of by this common judgment. The short question involved in these cases is, whether the employees of the erstwhile contract carriage operators in the State of Karnataka acquired a vested right of absorption in service with the Karnataka State Road Transport Corporation under sub-cl. (3) to cl. 20 of the Karnataka Contract Carriages (Acquisition) Ordinance, 1976. I It will be convenienf to refer in the first place to the legislative changes. On January 30, 1976 the Karnataka Contract Carriages ('Acquisition) Ordinance, 1976 was promulgated by the Governor of Karnataka under cl. (1) of Art. 213 of the Constitution.

The said Or -strncture the Ordinance as to meet the exigencies of the situation obtaining after the taking over of the contract" carriag /-.. ; ... .. ' ...