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C.A.No. 4703 of 2009

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4703 of 2009

PEPSU Road Transport Corporation, Patiala …..Appellants Through its Managing Director & Anr.

Versus

S. K. Sharma & Ors. …..Respondents

J U D G M E N T

SHIVA KIRTI SINGH, J.

1. This appeal  by special  leave assails  the judgment and order dated

24.04.2006 passed by a Division Bench of High Court of Punjab and

Haryana dismissing LPA No. 700 of 2002 preferred by the appellants

and affirming the judgment of learned Single Judge dated 11.01.2002

whereby Writ Petition bearing CWP No. 11908 of 1992 preferred by

some of the respondents was allowed. Some had preferred to file suits

and  Civil  Appeals  which  were  dismissed.   Their  Regular  Second

Appeal No. 430 of 1995 was tagged with the above writ petition and

was  allowed  by  the  same  common  judgment  enabling  all  the  21

respondents to refund a part of CPF (Govt. Contribution) or agree for

adjustment, to obtain pensionary benefits.

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2. The respondents filed the writ petition in 1992 claiming that they were

appointed originally in a department of PEPSU described as PEPSU

Roadways, between January 1955 and September 1956. It is not in

dispute that in the PEPSU Roadways the respondents’ appointment

was only on  temporary basis. PEPSU Roadways lost its utility due to

creation of PEPSU Road Transport Corporation (hereinafter referred to

as the ‘Corporation’). Copy of notification dated 07.01.1956 available

on  record  shows that  Corporation  was  created  by  this  notification

under  the  provisions of  the  Road Transport  Corporation Act,  1950

enforced with effect from 10.08.1954. The State Government through

the Chief Secretary issued a letter dated 16.10.1956  informing the

General Manager, PEPSU Roadways, Patiala (with reference to PEPSU

Roadways’ communication dated 14.10.1956) that His Highness the

Rajpramukh  had  ordered  the  transfer  of  PEPSU  Roadways  to  the

PEPSU  Road  Transport  Corporation  (with  effect  from  15.10.1956

forenoon) on various terms and conditions in respect to evaluation of

the assets of the PEPSU Roadways as well as sharing the burden for

payment of the employees of the Corporation. The letter indicates that

the Corporation was requested to draw up the agreement required by

clause  (h)  of  sub-section  (2)  of  Section  19  of  the  Road  Transport

Corporation Act, 1950 and forward the same to the Government for

approval and signatures. On account of the States Reorganization Act

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the  merger  of  State  of  PEPSU  with  the  State  of  Punjab  became

effective from 01.11.1956. Through an Order no. 61 dated 30.11.1956

the Corporation admitted that PEPSU Roadways stood taken over by

the Corporation from 16.10.1956 (before noon), so the services of all

the temporary employees stood transferred to the Corporation  with

effect from 16.10.1956 on the prevailing terms and conditions till the

approval  of  new  terms  and  conditions  by  the  Corporation.  The

respondents  never  challenged  this  declaration,  got  promotions  etc.

and continued to serve the Corporation till  they all retired between

1989  and  1991.  It  is  not  in  dispute  that  PEPSU  Road  Transport

Corporation  Regulations  which  was  framed  in  1957  provided  for

Contributory Provident Fund (CPF). There was no provision for grant

of pension.  Much after the retirement of the respondents, only with

effect  from  15.06.1992  the  Corporation  framed  PRTC  Employees

Pension/Gratuity  and  General  Provident  Fund  Regulations,  1992

(hereinafter  described  as  ‘Regulations  of  1992’).  Under  these

Regulations,  for  the  first  time  pension  was  introduced  in  the

Corporation.  

3. Soon after the enforcement of Regulations of 1992 the respondents

who  had  already  received  their  retiral  benefits  under  the  1957

Regulations filed the writ petition at hand. Originally the grievance of

the respondents in the writ petition was as to why the Regulations of

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1992 have not been made retrospective but through an amendment in

1998, the writ petition was substantially amended so as to claim that

they  continued  to  be  employees  of  the  State  in  the  department  of

PEPSU  Roadways  till  PEPSU  State  was  reorganized  and  from

01.11.1956,  the  date  of  reorganization  they  became  employees  of

State  of  Punjab  with  right  to  pension  as  available  to  Government

servants. The Single Judge allowed the writ petition on the premise

that  the  respondents  had simply been transferred from the parent

department to serve in the Corporation and therefore they continued

to be Government servants because there was no order passed for

their  absorption  in  the  Corporation.  The  Letters  Patent  Appeal

preferred by the appellants was dismissed by the judgment and order

dated 24.04.2006 which is under challenge in this appeal.

4. It  is  significant  to  note  that  the  letter  of  Chief  Secretary  dated

16.10.1956  informing  the  General  Manager,  PEPSU  Roadways  of

Government’s decision on the subject of transfer of PEPSU Roadways

to the Corporation was not placed before the High Court by the writ

petitioners although it finds a specific mention in Order no. 61 dated

30.11.1956 passed by the General Manager, PEPSU Road Transport

Corporation.  Hence this  Court,  apparently  in  the  larger  interest  of

justice, by order dated 20.08.2015 permitted the appellants to place

on record the consent of the respondents and necessary documents to

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show that the respondents accepted transfer from PEPSU Roadways

to the Corporation. The additional fresh documents were filed after

service upon the respondents who were granted accommodation on

that ground on 24.11.2015. The additional documents were filed with

an affidavit on behalf of appellants and  include a copy of letter dated

16.10.1956. The respondents have not objected to the correctness and

authenticity of the additional documents and hence those documents

have been taken on record and used by learned senior counsel for the

appellants in support of his contentions.  

5. On  behalf  of  the  appellants  learned  senior  counsel  Mr.  Rakesh

Dwivedi first took us through the letter dated 16.10.1956 and also the

subsequent order dated 30.11.1956. He showed by way of illustration

that  one  of  the  respondents  Mr.  O.P.  Trehan through letter  dated

01.03.1965  had  opted  to  serve  the  Corporation.  He  also  placed

reliance on order dated 02.06.1986 of the Corporation by which Mr.

S.K. Sharma, another respondent was promoted as Sr. Depot Manager

which  he  accepted.  That  order  clearly  stipulated  that  he  will  be

governed by the rules in force and those that may subsequently be

framed  for  the  officers  of  the  Corporation.  Before  advancing

submissions in respect of issues of law, Mr. Dwivedi emphasised that

being temporary employees of PEPSU Roadways till 15.10.1956, the

respondents  under  then  prevailing  service  rules  of  the  State

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Government  were  not  entitled  to  pension  as  temporary  employees

even till their department i.e, PEPSU Roadways was merged with the

Corporation  by the decision of the State Government.  Therefore, it is

contended that they have not suffered any adverse consequences on

account of merger; rather they became permanent employees of the

Corporation, obtained promotions and on retirement availed all  the

lawfully admissible benefits of CPF and gratuity without any protest

and demur.  

6. On  behalf  of  appellants  Mr.  Dwivedi  has  advanced  the  following

submissions:

(1)  The relevant Department, PEPSU Roadways itself ceased to

exist  and  be  a  Department  and  was  merged  with  the

Corporation  totally  and  completely  by  16.10.1956.  The

Department merged along with the posts,  assets,  liabilities

and  the  respondent  employees.  There  was  no  protest  or

challenge  to  such  merger  by  way of  transfer  of  the  entire

Department to the Corporation. (2)  The word “transfer” is not used in the Government’s decision

evidenced by letter dated 16.10.1956 in the narrow sense of

“transfer  and posting”  to  another  post  or  place.  Rather,  it

connotes transfer as merger of the entire Department with

assets, liabilities, posts and employees including their service

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and hence there was no occasion or need for any order of

absorption in respect of the respondents. (3)  Since the transfer/merger of the Department was complete

much before the date 01.11.1956 when PEPSU State merged

with the State of Punjab under the States Reorganization Act,

the respondents cannot claim to have become employees of

State  of  Punjab  by  virtue  of  Section  115  of  States

Reorganization Act.  This provision could have helped them

only if the Department-PEPSU Roadways could have existed

till 01.11.1956 or if they had been simply deputed to work in

the  Corporation  under  usual  terms  of  deputation  while

retaining  their  lien  on  posts  available  under  the  State

Government.

7. Learned senior counsel for the appellants elaborated his submissions

by  contending  that  the  High  Court  erred  in  relying  upon  various

sub-sections and provisos to Section 115 of the States Reorganization

Act and such error was on account of failure to appreciate that the

respondents ceased to have for them any post in the Government due

to  complete  transfer/merger  of  the  PEPSU  Roadways  with  the

Corporation much before 01.11.1956. It was also contended that the

High Court failed to appreciate that as temporary employees with very

little  service  to  their  credit,  the  respondents  were  not  put  to  any

disadvantage on account of transfer/merger because being temporary

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employees in 1955 and 1956, they were then not entitled to pension

under  the  PEPSU  Services  Regulations  governing  pensions,

particularly  sub-rule  (a)  of  Rule  1.2  in  Chapter  1  which  contains

general rules relating to pensions for superior and inferior service. The

rule reads thus:

“Cases in which claims to pension are inadmissible 1.2 In  the  following  cases  no  claim to  pension  is admitted:-

(a) When  a  Government  servant  is  holding  an appointment of a temporary nature or is paid for definite work done for the Government without being permanently employed.”

8. Lastly, it was contended on behalf of appellants that the High Court

should  not  have  entertained  the  writ  petition  in  1992  or  allowed

substantial  amendments  in  1998  to  permit  claims  made  belatedly

after  decades  and  after  superannuation  from  the  service  of  the

Corporation. Such claims should have been rejected on the ground of

delay. In support of this plea reliance was placed upon judgment in

the case of  PEPSU Road Transport Corporation, Patiala v. Mangal

Singh and Ors.1  In this case the respondents were still in service as

the employees of the appellant Corporation when the Regulations of

1992 introduced a pension scheme but they did not exercise option

for pension within the stipulated time. Moreover, they also availed of

1  (2011) 11 SCC 702

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retiral benefits arising out of CPF and gratuity without any protest.

This Court held that the respondents on account of failure on their

part,  could not claim benefit  under the pension scheme. Particular

reliance  was placed  upon the  following  observations at  the  end  of

paragraph 35;  

“…..On the  receipt  of  CPF  amount,  the  relationship between  employee  and  employer  ceases  to  exist without  leaving  any  further  legal  right  or  obligation qua each other.”

Since most of the respondents in that case also had retired after

serving for several years since the enforcement of Regulations of 1992

and had advanced claim for pension after accepting CPF etc., in para

52  this  Court  counted  the  delay  of  about  eight  years  from  the

introduction of  pension scheme in  1992 and held  such  delay  was

unreasonable. On that basis it has been urged on behalf of appellants

that through amendment made in 1998 the respondents gave up their

claim for pension under the Regulations of 1992 and instead claimed

pensionary rights by indirectly mounting a challenge to the decision of

the State Government evident from letter dated 16.10.1956, merging

PEPSU Roadways with the Corporation. Their claim of being in the

employment  of  State  and  to  have  suffered  the  effect  of  States

Reorganization  Act  and  merger  of  PEPSU  State  with  the  State  of

Punjab on 01.11.1956 was clearly a claim made after unusual delay of

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several decades and the High Court should not have condoned such

delay.

9. In  reply,  Mr.  S.K.  Sharma  learned  counsel  for  the  respondents

advanced arguments in support of the impugned judgment. As per his

submissions, even after the transfer of Roadways Department to the

Corporation,  there  was  legal  necessity  of  issuing  formal  orders

showing absorption of respondents as employees of Corporation under

a valid resolution of the Corporation. He relied upon findings of the

High Court that there was no order or resolution for such absorption.

On behalf of respondents reliance was placed upon judgment in the

case of  Vice Chancellor, Utkal University & Ors. v. S.K. Ghosh &

Ors.2, to support the proposition that a corporate body like University

acts through formal resolution arrived at in a proper manner by the

competent  body.  The facts  of  this  case  were  entirely  different.  The

appellant before this Court was Vice-Chancellor of a University who

was  aggrieved  by  the  High  Court  judgment  interfering  with  the

cancellation of an examination through resolutions of the University

Syndicate. The  High  Court  invalidated  the  resolution  for  want  of

proper  notice  vide  agenda  for  the  meeting  as  well  as  lack  of

justification for cancellation of the examination. This Court reversed

2  AIR 1954 SC 217

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the  judgment  of  the  High  Court  on  both  counts.  The  ratio  of  the

judgment does not help the respondents.

10. Respondents  next  relied  upon  judgment  in  the  case  of  State  of

Punjab v. Nirmal Singh.3 In this case State of Punjab was aggrieved

by impugned judgment of the High Court whereby minor punishment

imposed upon Nirmal Singh was set  aside.  This Court allowed the

appeal and reversed the judgment of the High Court on a finding that

there was no requirement under the rule to grant a personal hearing

for imposition of a minor penalty and that the High Court had erred in

treating the order of the competent authority as a non-speaking order.

This case also is not relevant for deciding the controversy at hand.  

11. To  meet  the  allegation  of  delay,  reliance  was  placed  upon  S.R.

Bhanrale v.  Union of India and Ors.4 The appellant  in  that  case

retired  as  an  officer  in  the  Department  of  Telecommunications,

Government of India and received pension immediately on retirement.

For no good reasons his other retiral benefits and claims remained

unsettled in spite of several representations. After serving the notice

under Section 80 CPC and approximately after three years he moved

the Central Administrative Tribunal.  While  the matter  was pending

with this Court, upon directions of the Department, the appellant was

3  (2007) 8 SCC 108

4  (1996) 10 SCC 172

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paid some of the benefits.  At the stage of final hearing, this Court

considered the circumstances and observed that in the facts of the

case  the  Union  of  India  was  not  justified  in  raising  the  bar  of

limitation against the dues of the appellant. It cannot be claimed by

way of general rule simply on the basis of aforesaid judgment that in

all cases of claim for pension, the plea of delay or limitation cannot be

considered by a writ court. Only where the retiral benefits have been

wrongly withheld and not paid despite numerous representations and

as observed in para 4 of the aforesaid judgment the delay is not of

decade or so the Court may not appreciate a plea of limitation raised

by  the  Government.  In  the  present  case  admission  or  declaration

made by the Corporation on 30.11.1956 through Order no. 61 that

services  of  the  respondents,  i.e.,  of  all  temporary  employees  stood

transferred to the Corporation with effect from 16.10.1956 and shall

be governed by the new terms and conditions as and when approved

by the Corporation was within the knowledge of the respondents and

they accepted such orders of  the Government and the Corporation

from 1956 till their retirement and even thereafter till the enforcement

of Regulations of 1992 which led to filing of writ petition by them in

1992.  Clearly the respondents acquiesced to the entire situation and

accepted  their  status  as  employees  of  the  Corporation  leading  to

admissible  retiral  benefits.  In  such  circumstances,  the  aforesaid

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judgment  cannot  help  the  respondents.  The  appellant  Corporation

was fully justified in raising the plea of delay and latches. The High

Court erred in ignoring such plea when the delay was quite unusual.

We find no material to satisfactorily explain such delay.

12. Appearing for some of the respondents, further reply was advanced by

Mr. M.K. Dua, Advocate. He contended that as per Section 11 of the

States Reorganization Act,  the merger of  PEPSU with Punjab State

was effected on 01.11.1956 and therefore from such date, by virtue of

Section 115(1) of the States Reorganization Act the respondents were

rightly  treated  by  the  High  Court  to  have  acquired  the  status  of

Government servant in the successor State of Punjab. He referred to

pleadings  in  the  writ  petition  to  the  effect  that  in  1956  the

respondents were transferred to the Corporation without being given

any opportunity of exercising option. It was also urged that in reply

the other side did not controvert such a plea nor there was any reply

to the claim that the respondents were not issued with any formal

order  of  absorption.  He  relied  upon  judgment  of  this  Court  in

Fertilizer Corporation of India Ltd. v. Union of India & Ors.5 in

support  of  a  proposition that  unless  the  absorbing  body/authority

issues an order for absorption of a Government officer in its service on

a permanent basis, mere correspondence or any order of notification

5  (1996) 3 SCC 325

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issued  by  others  cannot  confer  benefits  of  absorption  on  such

Government  officer.  It  would  suffice  to  note  that  the  claim  of

absorption  made  by  an  individual  officer  was  being  denied  by  the

absorbing body and the proposition noted above was mooted by the

Court in the facts where such individual claim is being denied by the

concerned  organization.  The  facts  in  the  present  case  are  entirely

different.  In  support  of  same proposition  of  law reliance  has  been

placed  upon  Mysore  State  Road  Transport  Corporation  v.  A.

Krishna Rao and Anr.6 In Mysore State R.T.C. case the concerned

employee of Bangalore Transport Company Ltd. by virtue of statutory

provisions  became  employee  of  the  State.  Thereafter  there  was  no

order  of  transfer  or  merger  of  the  concerned  department  with  the

subsequently  formed Corporation.  The  Corporation  was  directed  to

take over only those employees who opted for its service. Since the

concerned respondent- employee was not given any notice of option it

was  held  that  he  could  not  claim  to  be  an  employee  of  the

Corporation.

13. Respondents  have  placed  reliance  also  upon  case  of  National

Insurance  Company Ltd.  v.  Kirpal  Singh7 to  contend  that  since

provision for payment of pension is beneficial in nature, the provision

6  1973(1) SLR 1080

7  (2014) 5 SCC 189

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ought to receive a liberal interpretation so as to serve the object of the

pension  scheme  as  well  as  any  special  scheme  like  a  voluntary

retirement  scheme.  On  facts  the  said  judgment  dealt  with  the

provisions  of  Voluntary  Retirement  Scheme  which  required

interpretation. The present case does not raise any such issue as to

interpretation of any pension scheme. Reliance was also placed upon

case  of  S.K.  Rattan  v.  Union  of  India  &  Ors.8 Para  13  of  that

judgment contains the reasons indicated by this  Court for  holding

that by sheer transfer of an employee from an institution like CBI to

another  organization,  the  officer  cannot  be  made  to  suffer  in  his

service conditions without framing appropriate rules under Article 309

of  the  Constitution  as  it  would  amount  to  discrimination  for  no

justifiable  reasons.  In  that  case,  the  submission  on  behalf  of  the

Union of India were not accepted because this Court found that till

the officer  retired from service,  no separate service rules had been

framed for the officers of the organization where he was transferred

but  in  the  case  at  hand  the  PEPSU  Road  Transport  Corporation

Regulations providing for CPF has been framed as back as in 1957.

The said judgment is therefore of no help to respondents.  Reliance

placed  upon  State  of  Haryana  &  Ors.  v.  Amar  Nath  Bansal9 is

8  (2014) 4 SCC 144

9  (1997) 10 SCC 700

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equally misconceived because in that case there was no dispute that

the respondent was an employee of the State of PEPSU and, therefore,

on  and  from  the  appointed  date  he  became  amenable  to  Punjab

Service Rules under which he was rightly retired at the prescribed

age.  In reply,  learned senior  counsel  for the appellants has rightly

taken  a  stand  that  most  of  the  cases  noted  above  on  which

respondents have placed reliance relate to individual employees who

had  been  transferred  on  deputation  and,  therefore,  are  clearly

distinguishable. They can have no application to the present matter

because  prior  to  01.11.1956  the  respondents  had  ceased  to  be

Government  servants  under  the  PEPSU  State  with  effect  from

16.10.1956 and had become servants of the Corporation.  

14. Further  reply  of  the  appellants  is  that  respondents  chose  not  to

challenge or resist the decision of the PEPSU State whereby the entire

department where they were working as temporary employee was by

transfer merged with the Corporation. They chose this course because

they had no right to post held by them and could have been out of

employment. Since the department itself ceased to exist there were no

posts on which the respondents could claim lien and in absence of

any such post or lien they cannot claim to be Government employee of

PEPSU State till 01.11.1956, the date of the merger of PEPSU State

with  Punjab.  By  placing  reliance  upon  Section  34  of  the  Road

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Transport Corporation Act, 1950, it has been urged on behalf of the

appellants that the State Government has statutory power to give the

Corporation general instructions including directions relating to the

recruitment,  conditions  of  service  and  wages  to  be  paid  to  the

employees etc. The Corporation is saddled with a statutory obligation

not to depart from such general instructions. Therefore, the letter of

Chief  Secretary  dated 16.10.1956 containing  direction  of  the  State

Government was binding upon the appellant-Corporation and as a

result without need of any individual orders of absorption the entire

establishment of the transferred department had to be taken over by

the Corporation. The absorption of the employees in law was complete

on 16.10.1956 due to such order of transfer and amalgamation. The

Corporation  had  no  option  to  seek  options  and  to  issue  orders  of

absorption  as  per  its  discretion  or  will.  The  respondents  being

temporary employees had the option either to quit the service of the

Corporation  or  challenge  the  orders  or  directions  of  the  State

Government but they chose to do neither.

15. By relying upon paragraph 54 of the unamended writ petition learned

senior  counsel  for  the  appellants  submitted  that  in  fact  the

respondents had admitted in their initial stand that PEPSU Roadways

merged  with  the  Corporation  on  16.10.1956.  A  perusal  of  said

paragraph 54 shows that  respondents  accepted the  aforesaid facts

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and their only stand was since “they did not give any option to the

effect they would not claim any pensionary benefits”, they will remain

Government employees entitled to pensionary benefits.

16. The  main  controversy  in  this  case  is  whether  the  claim  of  the

respondents, a group of twenty one employees of PEPSU Roadways

that in spite of transfer of that department to the Corporation they

continue to be actually Government servants and therefore entitled to

retiral benefits instead of CPF is acceptable or not. In this controversy,

a judgment of this Court though rendered in slightly different factual

matrix is substantially relevant and helpful. In D.R. Gurushantappa

v. Abdul Khuddus Anwar and Ors.10 an issue arose in the context of

election  of  the  Mysore  Legislative  Assembly  as  to  whether  the

respondent was holding office of  profit  under the Government.  The

respondent no. 1 of that case was initially a Government servant but

subsequently  the  Government  concern  where  he  was  working  was

taken over by a company registered under the Indian Companies Act,

1956. The shares of the company were fully owned by the Government

but  after  the  Government  undertaking  was  taken  over  by  the

company, the employees were no longer governed by the Mysore Civil

Services  Regulations,  their  conditions  of  service  came  to  be

determined  by  the  standing  orders  of  the  company.  The  first

10  1969 (1) SCC 466

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contention against respondent no. 1 was that since he was initially a

Government servant, even after the concern was taken over by the

company he would continue to be in the service of the Government.

While dealing with this issue in paragraph 3, this Court rejected the

contention in the following words:

“3. So  far  as  the  first  point  is  concerned,  reliance is placed  primarily  on  the  circumstance  that,  when  the concern  was  taken  over  by  the  Company  from  the Government  there  were  no  specific  agreements terminating the Government service of Respondent 1, or bringing  into  existence  a  relationship  of  master  and servant between the Company and Respondent 1. That circumstance, by itself,  cannot lead to the conclusion that  Respondent  1  continued  to  be  in  government service.  When the undertaking was taken over by the Company as a going concern, the employees working in the undertaking were also taken over and since, in law, the Company has to be treated as an entity distinct and separate  from  the  Government,  the  employees,  as  a result  of  the  transfer  of  the  undertaking,  became employees of the Company and ceased to be employees of the Government.”

17. In the facts of the case, we have no hesitation to hold that the High

Court erred in allowing the writ  petition and second appeal  of  the

respondents  and  in  dismissing  the  Letters  Patent  Appeal  of  the

appellants. The judgments on which the respondents have relied upon

for advancing the submission that they cannot lose the status of a

Government servant till  they are absorbed in the Corporation after

offering  an  option  in  favour  of  such  absorption  is  entirely

misconceived and inapplicable in the facts of the present case. The

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stand of the respondents could have been acceptable had there been

no decision of the PEPSU State as evidenced by the letter of Chief

Secretary dated 16.10.1956 which finds mention and reiteration by

way of admission by the Corporation in order dated 30.11.1956. There

can  be  no  such  belated  challenge  to  the  decision  of  PEPSU State

whereby  PEPSU Roadways,  one of  the  departments  came into  and

merged with the Corporation lock, stock and barrel before the merger

of PEPSU with Punjab on 01.11.1956. Hence, the provisions of the

States  Reorganization  Act  ceased  to  have  any  significance  in  the

matter  because  the  respondents  ceased  to  be  employees  of  State

Government  of  PEPSU  prior  to  01.11.1956.  They  accepted  such

merger and alteration of their service conditions without any protest.

Since  1957,  under  the  Regulations  of  the  Corporation  they

participated and contributed to the scheme of CPF and obtained the

benefits of retirement from the Corporation between 1985 and 1991

without any protest.  The High Court clearly erred in ignoring such

conduct of the respondents, the effect of the Chief Secretary’s letter

dated  16.10.1956  containing  decision  of  PEPSU  State  and  its

acceptance  by  the  Corporation  reflected  by  the  order  dated

30.11.1956. The High Court further erred in relying upon law which is

applicable when there is no merger of Government concern with the

private  concern  but  only  individual  employees  are  transferred  on

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deputation or on foreign service to other organizations/services.  The

ordinary rules providing for asking of option or issuance of letters of

absorption  depend  upon  nature  of  stipulations  which  may  get

attracted to a case of deputation. There may be similar stipulations in

case of merger by transfer. But if there are no such stipulations like in

the present case then the transferee concern like the Corporation has

no  obligation  to  ask  for  options  and  to  issue  letters  of  options  to

individual  employees  who  become  employees  of  the  transferee

organization simply by virtue of order and action of transfer of the

whole concern leading to merger. No doubt in case of any hardship,

the affected employees have the option to protest and challenge either

the merger itself or any adverse stipulation. However, if the employees

choose to accept the transition of their service from one concern to

another and acquiesce then after decades and especially after their

retirement they cannot be permitted to turn back and challenge the

entire developments after a gap of decades.  

18. On the basis of laws and facts discussed above, we are constrained to

hold that the respondents had accepted to continue as employees of

Corporation pursuant to order of merger/transfer of PEPSU Roadways

with effect from 16.10.1956 and on completing their service under the

Corporation and reaching the age of retirement they were entitled to

receive only the benefits of CPF and gratuity as admissible to them

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under  then  prevailing  regulations  of  the  Corporation.  Since  they

accepted those retiral benefits there is no relationship left between the

Corporation  and  the  respondents  and  in  such  a  situation  further

claim against the Corporation that it should treat the respondents to

be Government servants and adjust their retiral benefits accordingly

was totally  untenable and wrongly allowed by the High Court.  The

impugned  judgment  of  the  High  Court  granting  relief  to  the

respondents is therefore set aside. The second appeal and the writ

petition  of  the  respondents  shall  stand  dismissed.  This  appeal  is

accordingly allowed but the parties are left to bear their own costs.

         ……………………………………..J.                  [SHIVA KIRTI SINGH]

.…………………………………….J.       [R. BANUMATHI]

 New Delhi. August 8, 2016.

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