Holding

The Industrial Tribunal’s award is within the scope of the reference and is justified; the transferred employees who opted for APSRTC’s regulations are entitled to the specified benefits, with promotion to be considered as vacancies arise and notional promotion without monetary benefit where appropriate.

Summary

The transport wing of Tirupati Tirumala Devasthanam (TTD) was transferred to the Andhra Pradesh State Road Transport Corporation (APSRTC) in 1975. Some of the 850 transferred workmen opted to be governed by APSRTC’s rules, while others did not. The workers’ union claimed that, under Clause 13 of the transfer agreement, they were entitled to benefits that accrued to TTD employees after the transfer, including selection‑grade pay, promotions, ex‑gratia bonuses and concessional bus‑tour rates. The Industrial Tribunal, acting under Section 10(1)(d) of the Industrial Disputes Act, awarded the claimants selection‑grade pay from 1‑Jan‑1975, promotion based on total service (with notional promotion where monetary benefits could not be granted), ex‑gratia on par with other APSRTC employees, and a concessional bus‑tour rate of Rs 2.50 per km. The corporation challenged the award, alleging the Tribunal exceeded its jurisdiction. The Supreme Court held that the Tribunal had acted within the limited reference, upheld its award (modifying the promotion direction), and therefore partly allowed the appeals.

Issues considered

Whether transferred employees who opted to be governed by APSRTC rules are entitled to benefits accrued to TTD employees after the transfer.
Whether the Industrial Tribunal exceeded its jurisdiction under the reference made under Section 10(1)(d) of the Industrial Disputes Act.
From which date selection‑grade monetary benefits should be payable to the transferred employees.
Whether ex‑gratia bonuses and concessional bus‑tour rates can be granted to the transferred employees on par with APSRTC staff.
How promotions should be handled for the transferred employees without disturbing existing promotions.

Legislation cited

Industrial Disputes Act, 1947s. 10(1)(d), s. 25FF, s. 9A

Subjects

industrial disputetransfer of employeesservice conditionsselection gradepromotionex-gratiaconcessional ratesIndustrial TribunalSection 10(1)(d)jurisdiction

Judgment

THE MANAG'ING DIRECTOR, A.P. STATE ROAD TRANSPORT A
CORPORATION
v.
THE PRESIDING OFFICER, INDUSTRIAL TRIBUNAL, RAMKOTE,
HYDERABAD AND ORS. ETC.

FEBRUARY I, 2001 B

[S. RAJENDRA BABU AND S.N. VARIAVA, JJ.]

labour laws:
c
Industrial Disputes Act, 1947: Section 10 (I) (d)-Reference to Industrial
Tribunal regarding entitlement of the transferees under the new employer to
benefits accruing to the employees of the former employer after the date of
transfer-Held, in such a situation, the real issue was as to what service
conditions were applicable to the transferred employees who had opted to D
abide by the regulations of the new employer~lndustrial Tribunal cannot be
said to have crossed the limits under reference.

Promotion-Some of the· transferred employees foregoing promotion
while the other were being promoted-Industrial Tribunal held that if and
when the transferees opted to be governed by the Corporation's regulations, E
they should be promoted on the basis of total service and seniority including
their service in Tirupati Tirumala Devasthanam-Such direction of the
Industrial Tribunal held to the improper-Held that such employees whose
juniors had already been promoted should be considered for promotion as
and when vacancies arise in future without disturbing the already affected
promotions-Further notional promotion be given without monetary benefits- F
Service law.

Back wages-Transport wing of the Devasthanam transferred to the
appellant Corporation in 1975-Some employees opted to be governed by
Rules and Regulations of the Corporation while the rest did not-Transferred G
workmen's claim to selection grade under consideration since prior to the
date of transfer-Said claim granted by the Corporation notionally in 1976
i.e., after the transfer with effect from 1974 i.e., before the transfer-The
monetaty benefits were to be with effect from 1978-lndustria/ Dispute
referred-Tribunal allowed the monetary benefits from the first day of the
783 H
I _...

784 SUPREME COURT REPORTS [2001] I S.C.R.

A year of the transfer-Challenge to the said award in a writ petition dismissed
by the High Court-On appeal, Held: The award called for no interference. -
Ex-gratia bonus-Industrial Tribunal held that the transferred
employees opting to be governed by the Corporation's regulations to get ex-
gratia bonus at par with the other employees of the Corporation-Held,
B finding of the Tribunal justified

Concessional rates of bus tour--Said concessional rates for the
employees of the Corporation raised to Rs. 4 per kilometer from Re. I per
kilometer-Industrial Tribunal changed the said rate to Rs. 2.50 per kilometer
C on equitable basis till the same are changed by the corporation-Finding
of the Tribunal-He/cl, justified

By an agreement entered into in 1975, the transport wing ofTirupati
Tirumala Devasthanam, along with its 850 workmen, was transferred to the
appellant Corporation. A challenge to the said transfer, by way of a writ
D petition, was dismissed by the High Court. Subsequently, appeal against the
High Court order was also dismissed. While some of the transferred workmen
opted to come under the Rules and Regulations of the appellant Corporation,
the others opted not to come under the same. The members of the workers'
Union made a demand that under Clause 13 of the transfer agreement they
were entitled to the benefits which accrued to the present TTD workers after
E the transfer. However, tlie Corporation did not agree to the demand which led
to referring of an industrial dispute under Section 10 (I) (d) of the Industrial
Disputes Act, 1947. The Tribunal held that members of the claimant Union
were not entitled to claim benefits which were conferred by the TTD
Management on its employees subsequent to the merger in 1975. The Tribunal
ordered (a) for Pay in selection grade to be fixed taking 01-01-1975 as the
F crucial date; (b) for promotion to the workmen as and when their opting to be
governed by the appellant Corporation's Regulations taking into account
their total service and seniority including the TTD service; (c) facility for
bus tour on concessional hire and (d) grant ofex-gratia bonus to the members
of the claimant Union on the basis on which the order employees of the
G appellant Corporation were paid. Appellant Corporation challenged the said
award in a writ petition which was dismissed by the High Court. Hence this
appeal.

The appellant Corporation contended that the question referred to the
Tribunal being of a Umited character as to whether the benefits accruing to
H the present TTD workers could be extended to the employees of the transport
M.D. A.P.S.R.T.C. 1·. P 0. INDUS. TRIB, RAMKOTE, 785
wing or not and having answered that the said employees have all opted for A
being governed by the Corporation rules and regulations and other service
conditions, it is not open to them to claim those benefits. It was also contended
that the direction given by the Tribunal was far beyond the scope of the
reference.

Partly allowing the appeal, the Court B
-~ HELD: I. The Tribunal has noticed that selection grade has been given
with effect from 1-1-1974 restricting the monetary benefits to be given only
from 1-1-1978; that the orders were actually issued in the year 1976, and
that the appellant Corporation had agreed to safeguard the conditions of
service of the workers. The Tribunal had further noticed that the claim in C
that regard was pending consideration before the takeover and therefore,
restricting the monetary benefits to be given only from 1-1-1978 was not
justified and the monetary benefits will have to be given with effect from
1-1-1975. This claim appears to be rightly allowed by the Tribunal and thus
calls for no interference. 1789-0-E I
D
2. With regard to ex-gratia, the direction of the Tribunal is that it shall
be paid to the members of the claimant Union on the same basis on which ex-
gratia is paid to other employees of the appellant Corporation. Inasmuch as
. .:t, the employees working in the transport wing have now opted to be governed
by the appellant Corporation's regulations and other service conditions, the E
Tribunal held that they should be treated at par from the year 1986 onwards
and they shoul~ be given similar benefits that have been given to the other
workers of the appellant Corporation earlier. This finding of the Tribunal is
justified. 1789-G-H; 790-Ai

3. With regard to the bus tour on concessional rate being@ Rs. 1.00
per kilometer, the Tribunal fixed the rate@ Rs. 2.50 per kilometer for the F
years 1985 onwards till the appellant Corporation changes the rate of hire.
The Tribunal adopted this as a rule of thumb with a view to find out an
equitable solution for the dispute between the parties. Inasmuch as the
Tribunal had found that unilateral alteration of hire rate to Rs. 4 per kilometer
was not justified adopted the rule of thumb.Thus, the discretion exercised by G
the Tribunal in this regard is not improper. 1790-A-CI

4. The direction of the Tribunal regarding promotion would give rise to
a lot of difficulties in the services inasmuch as several others have already
been promoted and given that benefit and now to consider the cases of the
members of the Union for promotion would lead to anomalous results, apart H
786 SUPREME COURT REPORTS [200 I] I S.C.R ..

A from tinanciaj burden that will arise in the case. Therefore, all that could be
done now is to consider the case of these employees for promotion as and
when vacancies arise bearing in mind whether their juniors have been
-
promoted earlier or not. In such cases, since the workmen in the Transport
wing have also opted to be governed by the appellant Corporation's regulations,
their cases will have to be examined for promotion but where promotions had
B already been given to others the same cannot be disturbed. Notional promotion
may be given to them without any monetary benefits and suitable adjustments
in seniority be made. 1790-E-G I

5. The question referred to the Tribunal though worded as to cover
C applicability of conditions of service in TTD to the members of the respondent
Union, what was really in issue is as to what conditions of service arc
applicable to them after they exercised their option to abide by the Corporation
regulations, and thereafter both parties have raised pleadings an.d adduced
evidence. Hence it cannot be said that the Tribunal travelled beyond the scope
of reference. 1790-H; 791-AJ
D
CIVIL APPELLATE JURISDICTION : Civil appeal No. 3747 of 1998.

From the Judgment and Order dated 3.12.96 of the Andhra Pradesh High
Court in W.P. No. 6464 of 1989.

E With

Civil Appeal No. 3748of1998.

L. Nageswara Rao, M.N. Rao, G.R.K. Prasad, Ms. Madhu Tewatia, Jayant
Muthraj, G. Prabhakar, G. Vidya Sagar, R. Santhana Krishnan and P.P. Singh
F for the appearing parties.

The Judgment of the Court was delivered by

RAJENDRA BABU, J. The transport wing of Tirupathi Tirumala
G Devasthanam (for short '"T.T.D.") was transferred to the Andhra Pradesh
State Road Transport Corporation (for short 'the Corporation"] under an
agreement dated 8.8.1975. It was provided in the agreement that 850 workmen
to be transferred to the Corporation. The transfer of the workmen to the
Corporation was challenged in a writ petition No. I 361 of I 976 but it was·
dismissed on 13.7. I 977 and a writ appeal filed against the said judgment was
H also confirmed. While some of the transferred T.T.D. transport workers who
M.D. A.P.S.R.T.C. v. P 0. INDUS. TRIB. RAMKOTE, fRAJENDRA BABU, J.] 787

opted to come under the Corporation Rules and Regulations were not before A.
the court, the other workers wanted to maintain their separate identity in spite
of their tn1nsfer to the Corporation and so they did not opt to come under
the Corporation Rules and Regulations. Subsequent to the transfer certain
settlements had been entered into with the Corporation by the Union of the
workmen from time to time. The members of the Union made a demand that
under clause 13 of the transfer agreement dated 8.8.1975 they were entitled B
to the benefits which accrued to the present T.T.D. workers after 8.8.1975 but
-~ the Corporation did not agree for such demand, an industrial dispute was
·raised which was referred to the Industrial Tribunal (hereinafter referred to as
'the Tribunal'] under Section I 0( I )(d) of the Industrial Disputes Act (for short
"the Act"]. The question referred to the Tribunal reads as follows : C
"Whether the former transferred T.T.D. workers (presently the APSRTC
workers) are entitled to the benefits accrued to the present T.T.D.
workers after 8.8.75 in terms of the agreement dated 8.8.75. If so, to
what extent?"
D
After notice the representatives of the Union, the Corporation and the T.T.D.
filed their statements. The Union raised several questions although the
question referred to the Tribunal was with reference to the benefits that have
accrued to the present T.T.D. workers would be applicable to the erstwhile
T.T.D. workers or not. In view of the several claims made before the Tribunal
the scope <!f the reference was to be considered. The Tribunal examined E
various contentions and raised certain issues which are :

I. Whether the second respondent TTD represented by its
Executive Officer is a proper and necessary party in this industrial
dispute?

2. Whether the members of the petitioner Union are entitled to the
F
benefits conferred on the TTD employees subsequent to I 0.8.1975
merger?

'
J. If any relief is to be granted in this industrial dispute against
whom should the award be passed?
G
4. To what relief?

The Tribunal noticed that clause 11 of the agreement indicated that the T.T.D.
reserved its right to retain vehicles, equipment and other assets as required
by them along with the required number of workers to operate them. Clause
13 stipulated that all the remaining workmen working in the transport H
788 SUPREME COURT REPORTS [200 I] I S.C.R.

A undertaking of the T.T.D. without interruption in their service are taken by the.·
Corporation and protection is given in pay and allowance, provident fund
-
contributions and gratuity in terms of Section 25FF of the Act and T.T.D.
agreed to pay such compensation if any as is liable to be paid to workmen
who do not opt to serve under the Corporation. Under clause 14 arrangement
is made for retirement benefits, provident fund and gratuity. Under clause 15
B T.T.D. agreed to continue to permit the employees to continue to reside in
their quarters subject to certain conditions. Pursuant to the take over there
was complete cessation of legal relationship between the members of the
Union and the T.T.D. and after I0.8.1975 these employees have entered into
various agreements and settlements with the Corporation and the T.T.D. was
C not a party to those agreements and none of these workers opted to be
retrenched and claimed compensation from the T.T.D., the Tribunal confined
the dispute only as against the Corporation. The entire transport wing had
been handed over to the Corporation and, therefore, Section 25FF of the Act
would be applicable. But the workmen also exercised their option in the form
indicated in Ex. M9 in which they have to give an undertaking that they shall
D abide by the rules of RTC in force from time to time subject to the workmen
rights under Section 25FF of the Act. This option form was provided pursuant
to a writ petition No. 4456 of 1975. In the circumstances, the Tribunal found
that having given categorical undertaking that they would abide by the rules
and regulations of the Corporation in force, it is not open to the members of
E the claimant Union to now cor1tend that they continued to be governed by
the T.T.D. rules and regulations and they continue to be employees of the
T.T.D .. Therefore, the Tribunal held that they are not entitled to claim benefits
which conferred by the T.T.D. Management on its employees subsequent to
I 0.8.1975. However, after rejecting several other reliefs claimed, the Tribunal
granted the following four reliefs :
F
I. Pay in the selection grade will have to be fixed taking 1.1.1975
as the crucial date.

2. Regarding promotions, it held as under :

"if and when the workers opt to be governed by A.P.S.R.T.C.
G Regulations then they may be given promotions taking into
account their total service and the seniority including the TTD
services."
3. The facility for bus tour on concessional hire, and
H 4. Ex gratia bonus should be paid to the members of the claimant
M.D. AP S RTC r. P 0 INDUS. TRIB, RAMKOTE, [RAJENDRA BABU, J] 789
Union on the same basis on which ex gratia bonus is paid to A
~
other employees of the RTC.

The matter was carried in writ petition to the High Court and the Hi~h Court
by its order made on 3.12.1996 did not interfere with the award made by the
Tribunal. It is only in regard to these four reliefs that arguments are addressed
before us. B
In this Cou11 the contentions urged before the Tribunal and the High
Court are reiterated that the question referred to the Tribunal being of a
limited character as to whether the benefits accruing to the present T.T.D.
workers could be extended to the employees of the transport wing or not and
having answered that the said employees have all opted for being governed c
by the Corporation rules and regulations and other service conditions, it is
not open to them to claim those benefits.

So far as the first question raised before us regarding selection grade
is concerned, it is noticed by the Tribunal that selection grade has been given
with effect from 1.1.1974 restricting the monetary benefits to be given only D

.. from 1.1.1978; that the orders were actually issued in the year 1976, and that
the Corporation had agreed to safeguard the conditions of service of the
workers. The Tribunal further noticed that the claim in that regard was pending
~
consideration before the take over and, therefore, restricting the monetary
benefits to be given only from 1.1.1918 was not justified and the monetary E
benefits will have to be given with effect from 1.1.1975. This claim appears
to us has been rightly allowed by the Tribunal and thus calls for no interference.

So far as ex gratia bonus is concerned, on an earlier occasion this
~- question has been raised and the matter had reached this Court in Civil
Appeal No. 4693 of 1984 and this Court disposed of the matter on 23.11.1984 F
stating that the parties had agreed that on payment of Rs. 7,50,000 by the
respondents to the petitioners within six weeks from that day as ex gratia
payment the disputes raised by the workmen of the transport wing which was
the subject matter Jf that appeal should be treated as settled and resolved
completely. The direction of the Tribunal in this regard is that ex gralia shall
G
be paid to the members of the claimant Union on the same basis on which
ex gratia is paid to other employees of the RTC. Inasmuch as the employees
working in the transport wing have now opted to be governed by the RTC
regulations and other service conditions, the Tribunal held that they should
be treated at par from the year 1986 onwards and they should be given similar
benefits that have been given to the other RTC workers earlier. Therefore, we H
790 SUPREME COURT REPORTS [200 I] I S.C.R.

A find, tliis finding recorded by the Tribunal also to be justified.
-+<-
So far as the claim for bus tour on concessional rate is concerned,
although original concessional rate was @ Re. I per kilometer , the Tribunal
fixed at Rs. 2.50 per kilometer for the years 1985 onwards till the Corporation
changes the rate of hire under Section 9A of the Act and the Tribunal
B adopted as a rule of thumb and with a view to find out an equitable solution
for the dispute between the parties. Inasmuch as the Tribunal had found that
unilateral alteration of hire rate to Rs. 4 per kilometer was not justified adopted
-.
the rule of thumb, we do not think that the discretion exercised by the
Tribunal in this regard is improper.
c Now the only question for consideration before us is with regard to the
direction given by the Tribunal regarding promotion of the employees. The
Tribunal noticed that the difficulty in regard to promotion had arisen on +
account of the fact that employees in the transport wing of the Corporation
who were erstwhile employees of the T.T.D. were retrenched to go out of
D station and, in fact, those who were promoted and posted out of station came
back to Tirupathi by giving up benefit of promotion. In these circumstances,
the Tribunal felt that if and when the workers opt to be governed by the RTC t
regulations then they may be given promotions taking into account their total
service and the seniority including the T.T.D. services. This direction would ~
E give rise to a lot of difficulties in the services inasmuch as several others have
already been promoted and given that benefit and now to consider the cases
of the members of the Union for promotion would lead to anomalous results
that apart from financial burden that will arise in the case. Therefore, all that
could be done now is to consider the cases of these employees for promotion
as and when vacancies arise bearing in mind whether their juniors have been -J.-
F promoted earlier or not. In such cases, since the workmen in the transport
wing have also opted to be governed by the RTC regulations, their cases will
have to be examined for promotion but where promotions had already been
given to others the same cannot be disturbed. Notional promotion may be
given to them without any monetary benefits and suitable adjustments in
seniority be made. Direction of this sort given in modification of the award
G
of the Tribunal would meet the requirements of justice. We order accordingly.
>---
Shri Nageswara Rao pointedly addressed that direction given by the
Tribunal is far beyond the scope of the reference. The question referred to
the Tribunal though worded as to the cover applicability of conditions of
H service in T.T.D. to the members of the respondent Union, what was really
M.D. A.P.S.R.T.C. v. P.O. INDUS. TRIB, RAMKOTE, [RAJENDRA BA!lU, l) 791
~ in issue is as to what conditions of service are appiicable to them after they A
exercised their option to abide by the Corporation regulations, and thereafter
both parties have raised pleadings and adduced evidence. Hence, we cannot
say that the Tribunal travelled beyond tile scope gf reference.

Subject to the modification of the award as stated r.bove, the award
made by the Tribunal is upheld as confinned by the High Coutt. In the B
.~ circumstances, the appeals are, therefore, partly allowed. The parties are left
to bear their respective costs.

RC.K. Appeal partyly allowed~

"