Bihar State Road Transport Corporation vs State of Bihar and Others

R.L. Narasimham, C.J.—This is an application under Atricles 226 and 22,7 of the Constitution against the award given by the presiding officer, labour court, Chotanagpur Division, directing the reinstatement of respondent 3 and granting other consequential reliefs.

Respondent 3, Sheo Prasad Sinha, was employed as a head clerk in the office of the Divisional Manager, Rajya Transport, Bhagalpur, from 27 July 1956. The order of appointment (annexure A) stated that the appointment was purely temporary and terminable without notice and without assigning any reason. On 18 February 1959 he was discharged from service with immediate effect (Bee annexure B). The order of discharge was issued by the State Transport Commissioner of the Rajya Transport, Bihar. On 20 April 1959, the Government of Bihar, in exercise of the powers conferred by Section 3 of the Road Transport Corporation Act, 1950 (64 of 1950;, established with effect from 1 May 1959, a statutory body known as the Bihar State Road Transport Corporation (hereinafter referred to as the corporation) throughout the State of Bihar, and further stated in the order of establishment as follows (see annexure C):

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, however, the summary discharge of respondent 3 from service was taken up by the Bihar State Road Transport Karamchari Union (respondent 4) and the matter was first agitated before the Assistant Labour Commissioner. The petitioner (the Bihar State Road Transport Corporation) informed the Assistant Labour Commissioner, Jamshedpur (annexure I to the counter-affidavit of respondent 1) on 30 January 1960 that the services of respondent 3 were terminated because

in the course of certain enquiries the Rajya Transport Department had found that Sheo Prasad Sinha had committed various irregularities of a serious nature in the discharge of his duties.

It was further asserted that at the time of the termination of his service he was a Government servant under the Rajya Transport Department and that, consequently, the labour laws would not apply in his case. But subsequently, however, the State Government themselves referred the dispute to the labour court by their order dated 24 February 1961, describing it as an industrial dispute. That Court, by its order dated 28 December 1961, held that the termination of the service of respondent 3 was not justified and directed his reinstatement and also awarded further consequential reliefs.

Sri B.C. Ghosh for the petitioner raised the following three main contentions against the award of the labour court:

(1) As respondent 3''s services were terminated prior to the constitution of the corporation, the labour court had no jurisdiction to direct the corporation to reinstate him in service or to pay compensation. Respondent 3''s remedy is against the State Government who was the employer at the time of the termination of his services.

(2) As respondent 3 was engaged in clerical work he was not a " workman " as defined in the Industrial Disputes Act. Hence the labour court had no jurisdiction to entertain or decide the dispute.

(3) The termination of the service of respondent 3 was in accordance with the terms of his contract and hence the labour court had no jurisdiction to apply the principles of natural justice and to require the holding of an enquiry for the alleged misconduct.

In my opinion, none of these contentions can prevail. It is true that on the date of termination of respondent 3''s service he was an employee of the State Government, namely, the State Rajya Transport, but when the corporation was constituted on 20 April 1959, the order of constitution expressly stated that the said corporation shall exercise all the powers and perform all the functions till then performed or exercised by the Rajya Transport, Bihar. Thus the corporation was made the successor-in-interest of the Rajya Transport and in the absence of any express provision in the order of constitution (annexure C) it would take over both the assets and liabilities of the Rajya Transport. The petitioner itself has admitted in Para. 5 of its petition as follows:

The petitioner-corporation took over such of the employees of the Rajya Transport into their service who were on their rolls on the date the petitioner-corporation came into existence, namely, 1 May 1959.

If the termination of service of an employee prior to that date is subsequently pronounced to be invalid, it necessarily follows that, in the eye of law, he continued to remain in the service of the Rajya Transport, and in pursuance of the statement made in Para. 5 quoted above, the corporation must be deemed to have taken over that employee also.

Apart from this consideration, the question as to whether the corporation is the successor of Rajya Transport for the purpose of the Industrial Disputes Act is mainly a question of fact which has to be decided on the basis of all the materials adduced in the proceedings see Anakapalla Co-operative Agricultural and Industrial Society Limited Vs. Workmen, . Though the petitioner is willing to accept the position that it is the successor so far as the assets of the Rajya Transport are concerned, it is not willing to accept the liabilities of the Rajya Transport. But in the counter-affidavit filed by the union (respondent 4) dated 4 April 1962, and by respondent 3 dated 3 April 1962, and also in the counter-affidavit filed by the Government of Bihar, dated 20 July 1962, it was asserted that the petitioner succeeded both to the rights and liabilities of the Rajya Transport. This statement was not challenged by any supplementary affidavit filed by the petitioner. On the other hand, the petitioner''s written statement filed before the labour court (annexure II to the counter-affidavit of respondent 3) does not contain any assertion to the effect that it did not succeed to the liabilities of the Rajya Transport. On the other hand, in that written statement filed by Sri A. F. Coutto, I.A.S., General Manager of the corporation, several other objections were taken in respect of the dispute. It was only for the first time in the course of arguments before the labour court that this point was raised. The question as to whether the petitioner took over the liabilities of the Rajya Transport or not is essentially a question of fact, and in view of the counter-affidavits filed by the respondents, which have not been challenged, and the stand taken by the petitioner in its written statement before the Labour Commissioner (annexure II) and also the implication arising out of Para. 5 of the petition quoted above, I must hold that the labour court was justified in its conclusion that the petitioner has taken over the liabilities also of the Rajya Transport. Hence, if it could be held that the order of termination of respondent 3''s service was invalid, the petitioner is bound to reinstate him in its service and also bound to pay compensation according to law.

As regards the second point, it must be remembered that this Court''s jurisdiction is limited to errors of law apparent on the face of the record. The learned labour court, after taking into consideration the definition of " workman " as given in the Industrial Disputes Act, and after construction of the standing orders of the petitioner and the evidence adduced by the parties, held that respondent 3 was a workman. No error of law apparent on the face of the record arises in respect of this finding1. This Court cannot, therefore, entertain the same under Article 226.

As regards the third contention, I may point out that it is now well-settled by innumerable decisions that no employer can now claim an absolute right to " hire and fire" any of its employees in accordance with the terms of the contract of employment. The labour court has jurisdiction to examine whether the termination of service of an employee was a colourable exercise of the power, that is to say, whether, while purporting to exercise the employer''s right of termination of service in accordance with the contract, the employer in substance removed the employee from service for misconduct without holding the necessary departmental enquiry and observing the rules of natural justice see in this connexion The Management of U.B. Dutt and Co. Vs. Workmen of U.B. Dutt and Co., Here, from the letter of the General Manager of the corporation (annexure I to the counter-affidavit of the State) dated 30 January 1960, it is clear that the main reason for the termination of the service of the petitioner was that his employer found that he had committed irregularities of a serious nature in the discharge of his duties. In normal circumstances for such misconduct specific charges should have been framed and the delinquent employee should have been given a reasonable opportunity of rebutting the same. This was admittedly not done; moreover, the award of the labour court shows that even before that Court, apart from some preliminary objections, the corporation did not choose to base its case on merits and did not lead any evidence at all to show that the removal of respondent 3 from service was justified on merits. The labour court was, therefore, justified in holding that there was colourable exercise of the power of termination of service of respondent 3.

For these reasons the petition is dismissed with costs. Hearing fee Rs. 100.

R.J. Bahadur, J.

I agree.