STATE OF U.P. AND ANR.versusROADWAYS MINISTERIAL STAFF ASSOCIATION U.P. AND ANR.

                       STATE OF U.P. AND ANR.                                       A.
                                       v.
      ROADWAYS MINISTERIAL STAFF ASSOCIATION U.P.
                      ANDANR.

                                 MAY 8, 1996
                                                                                    B
 (K. RAMASWAMY, FAIZAN UDDIN AND G.B. PATTANAIK, JJ.]

      Seivice Law:

     UP. State Roadways 01ganisation (Abolition of Posts and Absmption              C
of Employees) Rules, 1982.

      Rules 4, 5 and 8(ii)-Employees in UP. State Roadways 01ganisa-
tion-Abs01ption in service of UP. State Road Transport Corpora-
tion-Provisions regarding pensionmy benefits-Rules giving option to
employee on deputation who does not wish to be absorbed in se1vice of               D
Co1_poration to intin1ate the Govenunent within three 111onths front notifica-
tion of the Rules in the Gazette-Employees not exercising option-Effect
of-Held, employee is deemed to have opted for absorption in C01pora-
tion-Govenunent shall bear liability for pension, which does not include
family pension, and gralllity in propmtion to the extent of period of se1vice       E
with the Govemment rendered by an employee before the date of his being
placed on deputation with Corporation-Entire liability for family pension
should be borne by Co1poration-Tl1ree n1ontl1s' cut off pe1iod given under
the Rules is appropliate and reasonable---C01poration is liable to bear liability
of a deemed employee from the date mentioned in Rule 8(ii) read with Rule           F
4(2) and Rule 5--Employees are not entitled to count the pe1iod from the
date of deputation till date of abs01ption to be Govemment employee for
con1putation of pensiona1y benefit~Rules arc not ultra vires the Constitu-
tion.

      Constitution of India                                                         G

       A1ticles 14, 16 and 301}-Rule 8(ii) of U.P. State Roadways 01ganisa-
tion (Abolition of Posts and Abs01ptio11 of Employees) Rules, 1982 providing
for liability of UP. State Road Transp01t Corporation for pensionmy benefits
to eniployees absorbed in Co1poration-Held,-not ultra vires the Constitution.       H
                                      565
    566                      SUPREME COURT REPORTS [1996] SUPP. 2 S.C.R.

A           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9040 of
    1996.

         From the Judgment and Order uated 22.5.91 of the Allahabad High
    Court in W.P. No. 3273 of 1982.

B           KS. Chauhan and R.B. Misra for the Appellants.

            Aseem Mehrotra and A.P. Medh for the Respondents.

            The following Order of the Court was delivered :

C           Leave granted.

            We have heard counsel on both sides.

          The respondent-Association filed Writ Petition No. 3273/82 in the
    High Court of Allahabad, Lucknow Bench seeking to declare Ruic S(ii) of
D   the U.P. State Roadways Organisation (Abolition of Posts & Absorption
    of Employees) Rules, 1982 made in exercise of the power under Article
    309 of the Constitution (for short, the 'Rules'), as ultra vires and also for
    issue of a mandamus restraining the appellants from changing their status
    of Government servants as the Corporation employees. The Division Bench
E   in the impugned order held as under :

              "In view of what has been stated above, Part or Rule 8 is valid and
              the absorption rules of the employees are perfectly valid. The writ
              petition to the above extent deserves to be dismissed and regarding
              pensionary benefits it is allowed. A direction is issued to the
F             opposite parties to opt those options who were sent on deputation
              vide G.O. dated 7.6.1972 as amended by G.O. dated 5.7.1972 to
              the Corporation notwithstanding the fact that they have not at-
              tained the age of superannuation and on the date of absorption
              they will still continue in service, they will be entitled to all
              pensionary benefits and for that purpose they will be treated in
G             Government service. But for the above relief, the writ petitions are
              hereby dismissed and interim order, if any stands discharged.
               Ho\vever, there \Vill be no order as to costs. 11

            The question, therefore, is: whether the view taken by the High Court
H is correct in law? It is not in dispute that the members of the respondent-
        STATE v. ROADWAYS MINISTERIAL STAFF ASSN. U.P.                    567

Association had their status as Government employees but they had come           A
on deputation lo the Corporation. Rule 4(1) of the Rules envisages as
under:

       "4(1) An employee of the U.P. State Roadways Organisation, who
       was placed on deputation with the Corporation and who does not
       wish to be absorbed in the service of the Corporation shall, within       B
       3 months from the· notification of these Rules in the Gazette,
       intimate the Secretary to Government in the Transport Depart-
       ment that he does not wish to be so absorbed."

       Rule 5 envisages as under :
                                                                                 c
       "The relevant posts in the U.P. State Roadways Organisation shall
       stand abolished, -

           (i) Where the employee is deemed to have opted for absorption
       in the service of the Corporation, in accordance with sub-rule (2)        D
       of rule 4, from the date of expiry of three months from the date
       of notification of these rules;

            (ii) Where the employee intimates the Government his option
       being not absorbed in the service of the Corporation from the <late
       on \vhich the period of notice, as p.rovided in rule 6, expires or,. as   E
       the case may be, \vhen the services stand terminated or disjJcnsed
                                               11
       \Vith in accordance with the said rule.

       Rule 8 envisages as under :

       "On the absorption of an employee in the service of the Corpora-          F
       tion, the following consequences in regard to his services under
       the Government shall follow :

          (i) Leave account of the employee shall be transferred to the
       Corporation and the Corporatiol\ shall not be entitled to receive         G
       any contribution or compensation on this account from the
       Government.

          (ii) Government shall bear the liability for pension (which does
       not include family pension) and for gratuity, (if admissible to an
       employee), in proportion to the qualifying service in the Govern- H
    568                   SUPREME COURT REPORTS (1996[ SUPP. 2 S.C.R.

A            ment rendered by an employee before the date of his being placed
             on deputation with the Corporation the entire liability for family
             pension shall be borne by the Corporation.

                (iii) In respect of an employee who did not hold any pen-
            sionable post but was a member of an Employee's Provident Fund
B           Scheme, the liability for contribution required to be made by an
            employer, for the period prior to l.6.1972 shall be thar of the
            Government and with effect from l.6.1972, it shall be that of the
            Corporation.

c                (iv) An employee shall, from the date of his absorption,
            cease to subscribe to his General Provident Fund account, if
            any, under the Slate Government and the amount to his credit
            in the fund, together with interest thereon, according to rules,
            till the month preceding the date of transfer of his ace.aunt
            shall be transferred to his new account to be opened under
D
            the Corporation."


           A bare reading of these rules clearly indicates that a Government
    employee who was sent on deputation and who does not wish to be
    absorbed in the service of the Corporation was required to intimate within
E   three months from the notification of these Rules to the Government in
    the Transport Department that he does not wish to be so absorbed in the
    Corporation. If he fails to avail of that remedy, the Rules envisage that he
    shall be deemed to be ~bsorbed as a Corporation employee. Admittedly,
    none of the persons had exercised the option. As a result, by operation of
F   Rule 5, the employee is deemed to have opted for absorption in the service
    of the Corporation, in accordance with sub-rule (2) of Rule 14 from the
    date of expiry of three months from the date of the notification of the
    Rules. The consequence envisaged in Rule S(ii) is that the Government
    shall bear the liability for pension which does not include family pension
    and for gratuity, if admissible to an employee, in proportion to the extent
G   of the period of service with the Government rendered by an employee
    before the date of his being placed on deputation with the Corporation.
    The entire liability for the family pension shall be borne by the Corpora-
    tion. It would thus be clear that the three months' cut off period given
    under the Rules from the date of the publication of the Rules is the
H   appropriate and reasonable cut off period. Any employee who failed to
        STATE v. ROADWAYS MINISTERIAL STAFF ASSN. LI .P.                569

avail of the same, by giving notice lo the Secretary in Transport Depart-      A
ment that he did not wish to be absorbed as Corporation employee, must
be deemed to be an employee of the Corporation. Corporation, therefore,
is liable to bear the liability of a deemed employee from the date mentioned
in Ruic S(ii) read with Rule 4(2) and Rule 5 thereof. Resultantly, such
employees are nol entitled lo count the period from the dale of the
deputation till date of absorption to be the Government employee for
                                                                               B
computation of the pensionary benefits in their favour.

      The appeal is accordingly allowed and the writ petition stands dis-
missed. But in the circumstances \Vithout costs.

R.P.                                                       Appeal allowed.