Savanth (K.) vs Mysore Road Transport Corporation & Anr

Supreme Court28 February 1978Jaswant Singh · V.R. Krishnaiyer

SCC(1978) 2 SCC 378
Neutral1978 INSC 54
AIRAIR 1978 SC 1133
SCR[1978] 3 SCR 398

Ratio decidendi

The rule this decision rests on

Where an employee's pay immediately before a pay revision is less than the minimum of the revised pay scale, the initial pay must be fixed at that minimum; and where the employee has completed more than six years of service, advance increments must be granted under the formula in sub-clause (b) unless the case falls within the prohibition of the first part of sub-clause (c) of the Industrial Truce Agreement—namely, where the increase in the minimum pay over the prior pay exceeds Rs. 25/- plus one increment (Rs. 40/- in total). The second part of sub-clause (c) of the Industrial Truce Agreement, which limits the total benefit under sub-clauses (a) and (b) to Rs. 25/- plus one increment, operates only in cases where the first part of sub-clause (c) applies—that is, where the increase exceeds Rs. 40/-. The words "in other cases" at the commencement of the second part of sub-clause (c) make plain that it is a residuary provision applicable only when a case does not fall within the scope of the first part of that sub-clause.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

PETITIONER:SAVANTH (K.)

Vs.

RESPONDENT:MYSORE ROAD TRANSPORT CORPORATION & ANR

DATE OF JUDGMENT28/02/1978

BENCH:SINGH, JASWANTBENCH:SINGH, JASWANTKRISHNAIYER, V.R.

CITATION:1978 AIR 1133 1978 SCR (3) 3981978 SCC (2) 378

ACT:Fixation of Pay-Initial fixation of pay in the revisedscale-Scope and ambit of clause 4 of the Industrial TruceAgreement arrived at an January 10, 1958 between themanagement of the Mysore Government Road TransportDepartment and the representatives of the State TransportEmployees' Federation.

HEADNOTE:Consequent upon the Reorganisation of States and theformation of the enlarged Mysore State as well as theexpansion of the Mysore Government Road TransportDepartment, it was considered necessary by the members ofthe State Transport Employees Federation and the Managementof the Transport Department to have uniform pay scales,service conditions etc. for the entire Organisation of theTransport Department. Accordingly on January 10, 1958 anIndustrial Truce Agreement was concluded between themanagement of the Transport Department and therepresentatives of the State Transport Employees' Federationwhich as given retroactive effect from, April 1, 1957,Clause 4(a) of the agreement required the pay of an employeeto be fixed in the new scale at a stage next above his payin the existing scale as on 1-4-1957 (including theincrement, if any, accruing on that date). After fixationhis initial pay, in the revised scale. an employee becomeentitled under clause 4(b) of the agreement be grantedadvance increment at the rate of one increment for 3completed years of service, two increments for 4 completedyears of service and three increments for 6 or morecompleted years of service. The fixation of pay was howevermade subject to clause 4(c) which reads : "In cases wherethe minimum pay in the new scale has to be granted under subclause (a) of clause 4, the benefit of advance incrementsaccording to subclause (b) above shall not accrue when theincrease of the minimum pay in the new scale over the pay inthe existing scale exceeds Rs. 25/- plus one increment inthe new scale. In other cases, where the initial pay has tobe fixed above the minimum, the total benefit under sub-clause (a) and (b) above shall be uniformly limited to Rs.25/- plus one increment in the revised scale subject to aminimum of Rs. 51-."The initial pay in the revised scale of 175-15-325 of theappellant who joined the service on September 1, 1950 andwho on the relevant date was drawing a pay of Rs. 150/- inthe time scale of 150-10-200 was fixed @ Rs. 190/-.Dissatisfied with the fixation, the appellant made arepresentation to the management urging that his initial payin the revised scale ought to have been fixed at Rs. 220/-.On August 1, 1961, the Mysore State Road TransportCorporation was constituted and in view of the fact that theservice conditions of the employees of the erstwhileTransport Department were pro tested by Act 34 of 1951, theappellant opted for service under the Corporation and kepton pursuing the earlier representation for correct fixationof pay. His efforts having failed, he made an applicationon December 20 1965 before the Labour Court under section33(c) (2) of the Industrial Disputes Act, 1947 for properadjudication. Holding that the appellant's pay had to befixed at Rs. 220/- p.m. in the pay scale of Rs. 175-15-325with a dearness allowance @ Rs. 501- p.m. as on April 1,1957, the Labour Court by its order dated September 30, 1966allowed the claim of the appellant and directed theCorporation to pay him a sum of Rs. 3,345.29 Ds. on accountof the benefits claimed by him. When this view waschallenged before the High Court by an application underArt. 226, the High Court allowed the petition and held thatthe fixation of pay at Rs. 190/- made by the erstwhilemanagement was correct.Allowing the appeal by special leave, the Court399HELD : 1. A plain reading of clause 4 of the IndustrialTruce Agreement makes it crystal clear that the pay of theappellant as on April 1, 1957 in the then existing scale ofRs. 150-10-200 being admittedly Rs. 1501- i.e. less than theminimum pay of the revised scale of Rs. 175-15-325, it had,according to clause 4(a) of the Agreement to be fixed at Rs.175/- which is the minimum of the revised scale. Theappellant having put in more than six years' service and hiscase being clearly outside the pale of the prohibitionenvisaged by the first part of sub-clause (c) of clause 4 ofthe Agreement, he had to be granted the benefit of threeadvance increments in terms of the formula contained in sub-clause (b) of clause 4 of the Agreement which would take hisinitial pay to Rs. 220/-. [402 D-E]2. The second part of sub-clause (c) of Clause 4 of theAgreement operate only in these cases which fell within theprohibition contemplated by the first part of sub-clause (c)of clause 4 i.e. where the increase in the minimum pay inthe revised scale over the pay in the scale which existed onApril 1, 1957 exceeds Rs. 25/- plus one increment in the newscale i.e. if it exceeds Rs. 25/plus Rs. 15/- totalling Rs.40/-. As in the instant case the increase of the minimumpay in the new scale does not exceed Rs. 40/-, the secondpart of sub-clause (c) of clause 4 which is residuary cannotbe invoked by the Corporation. [402 E-G]3. The words "in other cases" occurring in the residuarypart of sub clause (c) of clause 4, make it abundantly clearthat it is only where a case does not fall within purview ofthe first part of sub-clause (c) of clause 4 that it wouldbe governed by the second part of the sub-clause. [402 H,403 Al

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1502 of1971.

(Appeal by Special Leave from the Judgment and Order dated14-12-1970 of the Mysore High Court in Writ Petition No.1176 of 1967).

E. Udayarathnam for the Appellant.

S. V. Gupte Attorney General and J. Ramamurthi forRespondent No. 1.

The Judgment of the Court was delivered byJASWANT SINGH, J. This appeal by special leave which isdirected against the-judgment and order dated December 14,1970 of the High Court of Mysore at Bangalore allowing thewrit petition No. 1176 of 1967 filed before it by the firstrespondent herein under Articles 226 and 227 of theConstitution and quashing the orders dated September 30,1966 and January 1, 1967 of the Labour Court, Bangalore madein the appellant's application No. 171 of 1965 raises aninteresting question as to the scope and ambit of clause 4of the Industrial Truce Agreement arrived at on January 10,1958 between the Management of the Mysore Government RoadTransport Department and the representatives of the StateTransport Employees' Federation.

It appears that the appellant entered the service of theBangalore Transport Company Ltd. on September 1, 1950 as aProbationary Traffic Supervisor on a salary of Rs. 80/- permensem. On completion of his probationary period, be wasconfirmed in the said post on a salary of Rs. 100/- in thepay scale of Rs. 100-10-150. By virus of the powers vestedin it under the Bangalore Road Transport Services Act No. 8of 1956, the Government of Mysore acquired the400Bangalore Transport Company Ltd. with effect from October1,1956 with the result that along with other employees ofthe Company, the appellant became a civil servant in theTransport Department of the Government of Mysore whichcatered to the transport requirements of the public. Incourse of time, the appellant was appointed as AssistantTraffic Superintendent and was given a higher pay scale ofRs. 150-10-200. On April 1, 1957 when he held that post, hewas in the pay scale of Rs. 150-10-200 and was drawing asalary of Rs. 1501- P.M. With the Re-organisation of theStates and the formation of the enlarged Mysore State aswell as the expansion of the Mysore Government RoadTransport Department (hereinafter referred to as TransportDepartment) comprising of the Hubli Region of the ex-BombayState Road Transport Corporation, the Raichur Section of theex-Hyderabad State Road Transport Department and theBangalore Transport Service of the ex-Bangalore TransportCompany Ltd. having their respective pay scales, serviceconditions etc., it was considered necessary by the membersof the State Transport Employees Federation as well as theManagement of the Transport Department to have uniform payscales, service conditions etc. for the entire Organisationof the Transport Department. Accordingly, on January 10,1958, an Industrial Truce Agreement was concluded betweenthe Management of the Transport Department and therepresentative of the Transport Employees' Federation whichwas given a retroactive effect from April 1, 1957. Clause 4of this Agreement which was intended to bring aboutuniformity of pay scales in all the divisions of the Trans-port Department provided as follows :-

"4. Weightage in the revised pay scales willbe admissible only to the regular employees ofthe Government Road Transport Department ofEx-State of Mysore and the Bangalore TransportService Unit.

(a) The pay of an employee shall be fixed inthe new scale at a stage next above his pay inthe existing scale on 1-4-1957, and, if hispresent pay is less than the minimum of therevised scale, his pay shall be fixed at suchminimum in the revised scale.

Note-The pay in the existing scale on 1-4-1957includes the increment, if any, accruing onthat date.

(b) After fixing the pay as above i.e. 4(a)lie shall be granted advance increments in therevised scale as under :

(1) For 3 completed years of service--IIncrement.

(2) For 4 completed years of service-2Increments.

(3) For 6 or more completed years ofservice-3 Increments.

Note-Service means, the entire service of theemployee irrespective of the grade held byhim.

401(c) In cases where the minimum pay in the newscale has to be granted under sub-clause (a)of clause 4, the benefit of advance incrementsaccording to subclause (b) above shall notaccrue when the increase of the minimum pay inthe new scale over the pay in the existingscale exceeds Rs. 25/- plus one increment inthe new scale. In other cases where theinitial pay has to be fixed above the minimum,the total benefit under sub-clauses (a) and

(b) above shall be uniformly limited to Rs.25/- plus one increment in the revised scalesubject to a minimum of Rs. 5

(d) The above principle shall apply in fixingthe initial pay both in substantive andofficiating appointments.

(e) When the weightage under sub-clause (b)above takes the total pay beyond the scale,the difference is treated as personal pay.

(f) The future increments will accrue from1-4-1958."

After the conclusion of the aforesaid Industrial TruceAgreement, then management of the Transport Department fixedthe initial pay of the appellant in the new scale at Rs.190/-. Dissatisfied with this fixation,the appellant made arepresentation to the management urging that his initial payin the revised scale ought to have been fixed at Rs. 220/-and that it had been wrongly fixed at Rs. 190/-.On August 1, 1961, a Corporation styled as the Mysore StateRoad Transport Corporation' (hereinafter referred to as 'theCorporation') was constituted under section 3 of the RoadTransport Corporation Act (Act 34 of 1951). By virtue of anotification issued by the Government of Mysore Undersection 34 of the Act, the Corporation took over thebusiness of the, Transport Department together with all itsliabilities as the sole successor of the Department. Inview of the fact that the said notification protected theservice conditions of the employees of the erstwhileTransport Department, the appellant opted for service underthe Corporation and kept on pursuing the earlierrepresentation made by him for fixation of his initial payas on April 1, 1957 at Rs. 220/- in terms of the first partof sub-clause (c) of clause 4 of the Industrial TruceAgreement. The efforts made by him in this behalf havingproved ineffective, the appellant made an application onDecember 2O, 1965 before the Labour Court under section330(2) of the Industrial Disputes Act, 1947 claiming thathis initial pay as on 1, 1957 had been wrongly fixed by themanagement of the Transport Department at Rs. 190/- asagainst Rs. 220/to which he was entitled by virtue of clause4 of the Industrial Truce Agreement. The appellant alsoclaimed increase in his dearness allowance in terms of thesaid agreement. Holding that the appellant's pay had to befixed at Rs. 220/-P.M. in the pay scale of Rs. 175-15325with a dearness allowance of Rs. 50/- P.M. as on April 1,1957,the Labour Court by its order dated September 30, 1966allowed the claim of the appellant and directed theCorporation to pay him a sum402of Rs. 3,345.29 p. on account of the benefit claimed by him.The Order was challenged by the Corporation before the HighCourt of Mysore by means of a writ petition under Articles226 and 227 of the Constitution. By its aforesaid judgmentand order dated December 14, 1970, the High Court allowedthe petition and held that the erstwhile management of theTransport Department was right in fixing the initial pay ofthe appellant at- Rs. 190/-. It is against this judgmentand order that the appellant has come up in appeal to thisCourt by special leave, as already stated.In the absence of the appellant who has chosen not to appeardespite service, the learned Attorney General has taken usthrough the material on the record and has urged that theHigh Court was right in reversing the order of the LabourCourt and upholding the contention of the Corporation thatthe initial pay of the appellant could be fixed only at Rs.190/- and not at Rs. 220/- as claimed by the appellant.We have given our careful consideration to the submissionsmade by the learned Attorney General but are unable to agreewith him.

A plain reading of clause 4 of the Industrial TruceAgreement reproduced above makes it crystal clear that thepay of the appellant as on April 1, 1957 in the thenexisting scale of Rs. 150-10-200 being admittedly Rs. 150/-i.e. less than the minimum pay of the revised scale of Rs.175-15-325, it had, according to clause 4(a) of theagreement, to be fixed at Rs. 175/- which is the minimum ofthe aforementioned revised scale. Now the appellant havingput in more than six years' service and his case beingclearly outside the pale of the prohibition envisaged by thefirst part of sub-clause (c) of clause 4 of the Agreement,he had to be granted the benefit of three advance incrementsin terms of the formula contained in sub-clause (b) ofclause 4 of the Agreement which would take his initial payto Rs. 220/-. The second part of sub-clause (c) of clause 4of the Agreement which is heavily relied upon on behalf ofthe Corporation has no applicability to the present case asthat part would operate only in those cases which fallwithin the prohibition contemplated by the first part ofsub-clause (c) of clause 4 i.e. where the increase in theminimum pay in the revised scale over the pay in the scalewhich existed on April 1, 1957 exceeds Rs. 25/- plus oneincrement in the new scale i.e. if it exceeds Rs. 25/- plusRs. 15/- totalling Rs. 40/-. As in the instant case theincrease of the minimum pay in the new scale does not exceedRs. 40/-, the second part of sub-clause (c) of clause 4which is residuary cannot be invoked by the Corporation.The High Court was, therefore, patently in error in holdingthat the case of the appellant was covered not by the firstpart of subclause (c) of clause 4 but by the second partthereof. In so holding, it 'Obviously overlooked thesignificance of the words "in other cases" occurring at thecommencement of the second part of sub-clause (c) of clause

4. The said words make it abundantly clear that it is onlywhere a case does not fall within the purview of the firstpart of subclause (c) of clause 4 that it would be governedby the second part403of the sub-clause. As the case of the appellant was notcovered by the ban imposed by the first part of sub-clause

(c) of clause 4 of the Industrial Truce Agreement, he could not have been denied the benefit ,of the advance increments which accrued to him under sub-clause (b) thereof. Accordingly, the order of the High Court which suffers from a patent erro r cannot be sustained.

In the result, we allow the appeal, set aside the judgment and order of the High Court and restore that of the Labour Court. In view of the fact that the appellant has failed to appear, we make no order as to costs.

S.R Appeal allowed. 404

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