Holding

The employees did not acquire a vested right of absorption; the saving clause only preserved actual acts, not abstract rights, so the Act’s altered ratio is valid.

Summary

The Karnataka Government promulgated the Contract Carriages (Acquisition) Ordinance, 1976 which provided that certain employees of contract carriage operators would be automatically absorbed into the Karnataka State Road Transport Corporation (KSRTC) at a ratio of 7.9 per vehicle. The Ordinance was later repealed and replaced by the Contract Carriages (Acquisition) Act, 1976, which altered the absorption ratio to 4.45 per vehicle and excluded conductors. A large number of former contract‑carriage employees claimed that they had acquired a vested right to be absorbed under the Ordinance and challenged the new ratio. The Supreme Court examined whether the saving clause in s.31(2)(i) of the Act preserved such a right and whether the change was constitutionally valid. It held that no "thing done" or "action taken" under the Ordinance gave rise to a vested right of absorption; the saving clause only protected actual acts, not abstract expectations. Consequently, the employees had no enforceable right, and the altered ratio in the Act stood. The appeal and the writ petitions were dismissed.

Issues considered

Did the employees acquire a vested right of absorption under sub‑clause (3) of clause 20 of the Karnataka Contract Carriages (Acquisition) Ordinance, 1976?
Does the saving clause in section 31(2)(i) of the Karnataka Contract Carriages (Acquisition) Act, 1976 preserve that vested right?
Is the reduction of the absorption ratio from 7.9 to 4.45 per vehicle by the Act constitutionally valid?

Legislation cited

General Clauses Act, 1897s. s.6
Industrial Disputes Act, 1947
Karnataka Contract Carriages (Acquisition) Act, 1976s. s.19(3), s. s.31(2)(i)
Karnataka Contract Carriages (Acquisition) Ordinance, 1976

Subjects

vested rightabsorptioncontract carriageordinance vs actsaving clauserepealretrospective legislationemployment lawindustrial disputesKarnataka

Judgment

684

A M. S. smvANANDA
v.
KARNATAKA STATE ROAD TRANSPORT CORPORATION
AND OTIIERS
September 18, 1979 •
B
[S. MURTAZA FAZAL ALI, P. S. KAILASAM AND A. P. SEN, JJ.]
Karnataka Contract Carri'ages (Acquisition) Ordinance, 1916, Cl. 20(3)
& Karnataka Contract Carriages (Acquisition) "Act 1976, Sections 19(3) and
31(2)-Scope and effect of-Contract carriages acquired-Wh!ther emplrryees •>
c
have a vested right of absorption.
,,
General Clauses Act 1897 (X of 1897) S. 6-Repeal of Statute-Right ·
acquired or accrued unaffected-Mere 'hope or expectation of or liberty to
qpply for acquiring a right nor preserved.

The Kamataka Contract Carriage (Acquisition) Ordinance, 1976 was
....
.
promulgated on January 30, 1976 with the object of acquiring the contract
D carriages operating in the State. Sub-clause (3) to cl. 20 of the Ordinance
provided for absorption of certain categories of employees of contract car·
riage operators in the service of the Corporation, and the ratio for absorption
for the different categories of employees that were entitled to be absorbed.
On the same day, the State Government made an order under sub-cl. (1) to
cl. 20 of the Ordinance transferring the contract carriages that vested in the
E
State Government to the Karnataka State Road Transport Corporation.
rr
This Ordinance was subsequently replaced by the Kamataka Contract
Carriages (Acquisition) Act, 1976 which was published in the Gazette dated
March 12, 1976. The Ordinance was repealed by the Act, which re·enacted
the provisions of the repealed Ordinance, With a
saving clause in sub-s. (2)
of s. 31 for preservation of any thing done or any... action taken. The Act
was substantially in similar terms, except for the difference that the ratio
F prescribed by proviso to sub-cl. (3) to cl. 20 of the Ordinance which laid
down the categories of persons who could. be absorbed in the service of the
Corporation, was substantially altered and a new ratio was inserted in the
proviso to sub·s. (3) of s. 19 of the Act. Otherwise, sub-s. (3) of s. 19 of
the Act and sub-cl. (3) to cl. 20 of the Ordinance were identical in every
respect. Under the Proviso to sub-cl. (3) to cl. 20, the total strength of the
employees of the erstwhile Carriage Operators allowable for absorption was
G 7.9 per vehicle while under the proviso to sub-s. (3) of s. 19 of the Act, the
ratio worked out to 4.45 per vehicle. Further, while under the Ordinance,
conductors were entitled to be absorbed, the ratio provided under the Act
shoWed that conductors were not included in the categories of persons who
could be absorbed in the service of Corporation.

The change in the ratio of absorption from 7.9 per vehicle under sub-cl.
H
(3) to cl. 20 of the Ordinance to 4.45 per vehicle under sub-s. (3) of s. 19
of the Act allversely affected a large number of employees of the erstwhile
contract carriage operators who filed writ petitions in the High Court,
v. s. KUTTAN PILLAI v. RAMAKRISHNAN & ANR. (Desai, l.) 685

challenging the vires of the proviso to sub-s. (3) of s. 19 of the Act, which A
dismissed the writ petitions.

In the appeal and the writ petitions to this Court the question for consi-
deration was, whether the employees of the erstwhile contract carriage operators
in the State of Karnataka acquired a vested right of absorption in the service
... with the Karnataka State Road Transport Corporation under sub-cl. (3) to
cl. 20 of the Karnataka Contract Carriage (Acquisition) Ordinance 1976. B
Dismissing the appeal and writ petitions;

HEID : 1. The High Court rightly observed that there was neither any-
1
• thing done nor action taken and, therefore, the petitioners did not acquire
any right to absorption under sub-cl. (3) to cl. 20. [692 CJ ·
2. The Ordinance promulgated by the Governor in the instant case was c
a 'legislative act'. of the Governor under Arl 213(1) and, therefore, un-
doubtedly a temporary statute, and while it was still in force the repealing Act ·
was passed containing the saving clause in s. 31(2)(i) providing that, notwith-
standing such repeal, 'anything done'' or any 'action taken' under the repealed
Ordinance shall be deemed to have be~n done or taken under the. corresponding
. provisions of the Act. [691 C-DJ
D
3. In considering the effect of an expiration of a temporary Act, it would
be unsafe to lay down any inflexible rule. It requires very clear and umnistak-
able language in a subsequent Act of the legislature to revive or re·create an
expired right. If, however, the right created by the statute is of an enduring
character and has vested in the person, that right cannot be taken away
because the statute by which. it was created has expired. In order to see
whether the rights and liabilities under the repealed Ordinance have been put E
an end to by the Act, 'the line· of enquiry would be not whether the new Act
expressly keeps alive old rights and liabilities under the repealed Ordinance
but whether it manifests an intention to destroy them. Another line of
approach may be to see as to how far the new Act is retrospective in
operation. [691 F-GJ
State of Puniab v. Mohar Singh, [1955) SCR 893, referred to F
4. (i) S~b-s. (2) of s. 31 of the Act was not intended to preserve ab•tract
_-.J> rights conferred by the repealed Ordinance. The legislature bad the compe-
tence to so re·structure the Ordinance as to meet the exigencies of the situation
obtaining after the taking over of the contract carriage services. It could
re-enact the Ordinance according to its original terms, or amend or alter its
provisions. [692 Al G
(ii) When the Ordinance came to be replaced by the Act, the Corporation
felt that the number of employees of the erstwhile contqi.ct carriage operators
was too large for its Tequirements. The legislature, therefore stepped in and
J. reduced the scale of absorption in the proviso to sub-s. (3) of s. 19 froni 7.9
per vehicle to 4.45 per vehicle. [694 GJ

5. The object of s. 31(2)(i) is to preserve only the things done and action B
taken under the repealed Ordinance and not the rights and privileges acquired
anC! accrued on the one side, and the corresponding obligation or liability
686 SUPREME COURT REPORTS [1980] 1 S.C.R.

A incurred on the other side, so that if no right acquired under the repealed~
Ordinance was preserved, there is no question of any liability being enforced.
It is unlike the usual saving clauses which preserved unaffected by the repeal,_
not only things dOne ·under the repealed enactment but also the rights acquired
thereunder. [693 C, DJ
6. (i) Every person eligible fol\ absorption had to fulfil three conditions,
B viz., (1) he had to be a workmaft. within the meaning of the IndustriaD
Disputes Act, 1947; (2) be should have been, immediately before the com-
inencement of the Ordinance, exclusively employed in connection with the
acquired property, and ( 3) he had to come within the ratio provided in the
proviso to sub-cl. (3) to cl. 20. The whole object of inserting sub-cl. (3)
to cl. 20 of the Ordinance. was to obviate the unemployment of persons
suitable for employment, for which purpose, the Corporation had necessarily
c to screen the applicants. [693 GJ
(ii) It was only if the employee was willing to be absorbed in the service
of the, Corporation that the Corporation could absorb him in service, provided
the other conditions specified in sub-cl. (3) to cl. 20 were satisfied.
[694 E]
(iii) Thus it is clear that several stepS had to be taken by the authorities
D before identifying and determining the persons who could be absorbed in1
the service of the Corporation, in accordance with sub-cl. (3) to cl. 20 of the
Ordinance, which indicates that automatic absoll'!tion of the employees of the
erstwhile contract carriage operators was not legally permissible. [694 F]
7. The distinction between what is and what is not a right preserved by
the provisions of s. 6 of the _General Clauses Act is often one of great
fineness. What is unaffected by the repeal of a statute is a right acquired
E. or accrued under it and not a mere 'hope or expectation of', or liberty to
apply for acquiring a right. [692 G]
Director of Public Works v. Ho Po Sang, [19621 2 All. ER 721 PC, refer-
red to.
8. The Act substitutes a 'new' proviso in sub-s. (3) of s. 19 in place cf the
old proviso to sub-cl. (3) to cl. 20 of the Ordinance, altering the whole basis
F of absorption. The new proviso is given a retrospective effect, and it holds
the field from the notified date i.e., January 30, 1976. The proviso in sub-
cL (3) to c1. 20 laying down a particular .ratio of absorption, is pro tan to·
avoided by an express enactment of a 'new' proviso to sub-s. (3) of s. 19
which is entirely inconsistent with it. When an Ordinance is replaced by
an Act which is made retrospective in operation, anything done or any
action taken under the Ordinance stand wholly effected. [695 CJ
G
9. (i) The employees of the former contract carriage operators in normal ..
course filled in the pro forma giving their service particulars and reported
to duty.1 This was in the mere 'hope or expectation' of acquiring a right.
The submission of these 'call reports' by the employees did not subject the
Corporation to a corresp0nding statutory obligation to absorb them in ,t
service. [692 CJ
H (ii) The meeting of the Committee set up by the Government for laying
down the principles for equation of posts and ~or- determination of inter·se
seniority, met on June 2, 1976. The Committeb decided that even ,!_n thf.:'
M. s. SHIVANANDA v. K. s. R. T. CORPN. (Sen,!.) 687

case of helpers-cleaners, there should be a 'trade test' and the staff cleared A.
by the Committee for the posts of helper 'B', helper 'A' and assistant artisans
should be on the basis of their technical competence, experience, ability etc.
The Committee also decided that all other employees of contract carriage
operators, \Vho \Vere eligible for absorption, should be interviewed by that
Committee for the purpose of absorption on the basis of experience, ability
duties and responsibilities. These norms were not laid down till June 2, 1976
• Till their actual absorption, the employees of the erstwhile contract carriage B
operators had only an inchohate right. [692 E-F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2411 of 1978.
Appeal by Special Leave from the Judgment . and Order dated
26-7-1978 of the Karnataka High Court in Writ Petition No. 10203/
n. c
And
ORIGINAL JURISDfCTION : Writ Petitions Nos. 4473-4474, 4415,
4488, 4528, and 4539 of 1978.
(Under Article 32 of the Constitution). D
G. B. Rikar, K. R. Nagaraja and Mrs. Gayathri Billee for the
Petitiouer (In WP. 4473-4474, 4488, 4539 /78).
R. B. Datar and Navin Sinha for the Petitioner (In WP. 4415
and 4528 and for Appellant in CA 2411/78).
V. A. Sayield Mohammad and N. Nettar for the State of Karna- E
taka and for Respondent No. 3 in WPs. 4473-4474, 4488, 4528 and
, and C.A. 2411/78.
4539
L. N. Sinha, Attorney General, K. K. Venugopal, Additional Soli-
citor General, V. A. 'Sayied Mohammad and Vineet Kumar for
Karnataka State Road Transport Corporation (in All W.P.s & C.A.). F
The Judgment of the Court was delivered by
SEN, J.-This appeal, by special leave, directed against a judg-
ment of the Karnataka High Court dated July 26, 1978 aud the
connected petitions under Art. 32 of the Constitution, raise a
common question. It would, therefore, be convenient to dispose G
them of by this common judgment.
The short question involved in these cases is, whether the em-
ployees of the erstwhile contract carriage operators in the State of
Karnataka acquired a vested right of absorption in service with the
Karnataka State Road Transport Corporation under sub-cl. (3) to H
cl. 20 of the Karnataka Contract Carriages (Acquisition) Ordinance,
1976.
688 SUPREME COURT REPORTS [1980] 1 s.c.R.

I A It will be convenienf to refer in the first place to the legislative
changes. On January 30, 1976 the Karnataka Contract Carriages
('Acquisition) Ordinance, 1976 was promulgated by the Governor of
Karnataka under cl. (1) of Art. 213 of the Constitution. The said
Or<linance was promulgated with the object of acquiring contract
B carriages operating in the State and for certain matters connected
therewith. On the same day, i.e., on January 30, 1976 the State
Government issued a notification under cl. 4(1) of the Ordinance
vesting every contract carriage owned or operated by such contract
carriage operator, along with permit, in the State Government abso-
lutely free from all encumbrances. On the same day, the State
· C _ Government made an order under sub-cl. ( 1) to cl. 20 of the
Ordinance transferring all the contract carriages that vested in the
State Government under the notification issued under sub-cl. ( 1) to
cl. 4 of the Ordinance, 'to the Karnataka State Road Transport
Corporatiem (hereinafter referred to as 'the Corporation'). Sub-
clause (3) to cl. 20 of the Ordinance provided for absorption of
D certain categories of employees of contract carriage operators in the
service of the Corporation. It also provided the ratio for absorption
for different categories of employees that were entitled to be absorb-
ed in the service of the Corporation.

The Ordinance was subsequently replaced by the Karnataka Con-
tract Carriages (Acquisition) Act, 1976, which was published in
the gazette on March 12, 1976. The Ordinance was repealed by
the Act, and it re-enacted the provisions of the repealed Ordinance,
with a saving clause in sub-s. (2) of s. :\1, for preservation of any-
thing doi;ie or action taken. The Act was substantially in similar
F terms except for the difference that the ratio prescribed by proviso
to sub-cl. (3) to cl. 20 of the Ordinance, which laid down the cate-
gories of persons who could be absorbed in the service of the Corpo-
ration,. was substantially altered! and a new ratio was inserted in the
proviso to sub-s. (3) of s. 19 of the Act. Otherwise, sub-s. (3) of s.
19 of the Act and sub-cl. (3) to cl. 20 of the Ordinance were identical
G
in every respect. Under proviso to sub-cl. (3) to cl. 20, the total
strength of the employees of the erstwhile contract carriage operators
allowable for absorption was 7 .9 per vehicle, while under proviso to
sub-s. (3) of s. 19 of the Act the same works out to 4.45 per vehicle.
Further, while under the Ordinance conductors were entitled to be

• absorbed, the ratio provided under the Act shows that conductors
are not included in the categories of persons who can be. absorbed in
the service of the Corporation.
M. s. SHNANANDA v. K. s. R. T. CORPN. (Sen, !.) 689

It appears that although as many as 785 contract carriages were A
notified for acquisition, only 601 vehicles were actually acquired. The
change in the ratio of absorption from 7.9 per vehicle under sub-cl.
(3) to cl. 20 of the Ordinance to 4.45 per vehicle under sub-s. (3)
of s. 19 of the Act adversely affected a large number of employees of
the erstwhile contract carriage operators. A large number of writ
petitions were, therefore, filed in the High Court challenging the vires B
of the proviso to sub-s. (3) of s. 19 of the Act on various grounds,
but by the judgment under appeal the High Court has repelled all the
contentions. Thereafter, the remaining writ petitions were all with-
drawn .
(
• The appeal is against the judgment of the High Court and the c
employees have also directly appro~ched the Court under Art. 32.
Before dealing with the contention advanced in the appeal, it is
necessary to set out the relevant provisions. Sub-clause (3) to cl. 20
of the Ordinance read as follows :
D
"20.(3) Every person who is a workman within the
meaning of the Industrial Disputes Act, 1947 (Central Act
14 of 1947) and has been immediately before the com-
mencement of this Ordinance exclusively employed in
connection with the acquired property, shall, on and from
the notified date, become a~ employee of the corporation
on the same terms and condifions. applicable to the . em-
ployees holding corresponding .posts in the corporation. Any
person not willing to become such an employee of the cor-
poration shall be entitled to retrenchment compensation as
provided in the Industrial Disputoo Act :
F
Provided that the number of workmen that shall be-
come employees of the corporation under this sub-section
shall not exceed the following scale, the junior most being
excluded:-
Scale per vehicle G

1. Drivers 1 ·5
2. Conductors 2·65
3. Supervision 0 ·125•
4. Higher Supervision staff and Managers 0·075
5. Ministerial and Secretariat staff . 0·8
B
6. Technical staff including Foreman 2·15
• Line staff and checking Inspectors."
690 SUPREME COURT REPORTS (1980] 1 s.c.R.

A Sub-section (3) of s. 19 of the Act, which replaced sub-cl. (3)
to cl. 20 of the Ordinance, provides :
"19.(3) Every person who is a workman within the
meaning of the Industrial Disputes Act, 1947 (Central Act
14 of 1947) and has been immediately before the com-
B mencement of this Act exclusively employed in connection
with the acquired property, shall, on and from the notified
date, become an employee of the corporation on the same
terms and conditions applicable to the employees holding
corresponding posts in the corporation. Any person not
willing to become such an employee of the Corporation shall
C be entitled to retrenchment compensation as provided in the
Industrial Disputes Act.
Provided that the number of workmen that shall become em-
ployees of the Corporation under this sub-section shall not exceed
the following scale, the junior most being excluded : -
D
Scale per vehicle

1. Drivers 1 ·5
2. Supervision staff and managers 0 ·1
3. Ministerial and Secretariat Staff 0 ·1
4. Technical staff including foreman . 2·75
E
4·45"

The saving clause to be found in sub-s. (2) of s. 31 of the Act,
so far as material, runs thus :
"31 (2) Notwithstanding such repeal : -
(i) anything done or any action taken under the said
Ordinance, shall be deemed to have been done or taken
under the corresponding provisions of this Act."
It is strenuously argued that it is clear from the language of sub-
cl. (3)' to cl. (20) of the Ordinance that there was, by operation of
law, automatic absorption of the employees of the erstwhile contract
carriage operators to the extent provided therein with effect from
January 30, 1976, the date on which the notification was issued
under sub-cl. ( 1) to cl. 4 and the date on which the Government
made an order under sup-cl. (1) to cl. 20. It is submitted that the
wonls "shall become an employee of the Corporation", in, sub-cl. (3)
to cl. 20 are clear and unambiguous and they must result in the conse-
.quence thm an persons employed in connection with the acquired
v. s. KUTTAN PILLAI v. RAMAKRISHNAN & ANR. (DcJai, J.) 691

.contract carriages, became employees of \he Corporation. It is said A
that, though the process of absorption may take time, as and when
the necessary steps. were taken to fit in such employees falling within
the categories mentioned in the proviso to. sub-cl. (3) to cl. 20, their
absorption relates back to the notified date, i.e. January 30,. 1976.
In other words, the snbmission was that the legal effect of absorption
B
-0f such employees under sub-cl. ( 3) to cl. 20 of the Ordlliancc is
• antomatic. That being so, their right of absorption could not be

)• whittled down by the subsequent enactment of the new proviso to
sub-s. (3) of s. 19 of. thei Act, inasmuch as they had acquired a
vested right to absorption in the ratio mentioned in sub-cl. (3) to
cl. 20 of the Ordinance. ·
The Ordinance promulgated by the Governor in the instant case
was a 'legislative act' of the Governor under Art. 213(1) and, there-
fore, undoubtediy a temporary statute, and while it was still in force

t the Repealing Act was passed containing the saving cl.ause in s. 31 (2)
(i) providing that, notwithstanding such repeal, 'anything done' or
any 'action taken' under the repealed Ordinance shall be deemed to D
have been done or taken u,;der the corresponding provisions of the
Act. The enquiry is, therefore, limited to the question whether any-
thing was done or action taken under the repealed Ordinance. If that
be so, a forth.er questiOn arises on the submission whether the words
'things done' in s. 31(2)(i) reasonably interpreted can mean not
E
only things done but also .the legal consequences flowing therefrom.
In considering the effect of an expiration of a temporary Act,' it
would be unsafe to lay down any inflexible rule. It certainly requires
·very clear and unmistakable language in a subsequent Act of the legis-
• b.ture to revive or re-create an expired right. If, however, the right
~created by the statute· is of an enduring character and has vested in .F
the person, that right cannot be taken away because the statute by
which it was created has expired. In order to see whether the rights
.. and liabilities under the repe:i!ed Ordinance have been put an ·end to
by the Act, 'the line of enqniry would be not whether_', in · the words
·of Muknerjea J. in State of Puniab v. Mohar Singh('), 'the new
·• Act expressly keeps alive old rights ·and liabilities under. the re~aled G
Ordinance but whether it manifests an intention to destroy · them'.
Another Hne of approach may be to see as to how far. the new Act is
retrospective in operation .
. · It is settled both 0n principle arid authority, that the mere right
existing under the repealed Ordinance, to take advantage of the pro- B
-vjsinns of the repealed Ordinonce, is not a right accrued. Sub-section
'(!) [1955] s. c. R. 89~.
692 SUPREME COURT REPORTS [1980] 1 S.C.R.

;: A (2) of s. 31 of the Act was not intended to preserve abstract rights
conferred by the repealed Ordinance. The legislature has the compe-
·. tence to so r<>-strncture the Ordinance as to meet the exigencies of
the situation obtaining after the taking over of the contract" carriag<:: ·
services. It could re-enact the Ordinance according to its original
terms, or amend or alter its provisions. _
B
What were the 'things done' or 'action taken' under the repealed
Ordinance ? The High Court rightly observes that there was neither
anything done nor action taken and, therefore, the petitioners did not
acquire any right to absorption under sub-cl. (3) to cl. 20. The em•
ployees of the former contract carriage operators in normal course
c filled in the pro forma giving their service particulars, and reported to
duty. This was in the mere 'hope or expectation' of acquiring a right.
The submission of these 'call reports' by the employees did not subject
the Corporation to a corresponding statutory obligation to absorb
them in service. As a matter of fact, nothing was done while the
Ordinance was in force. The Act was published on March 12, 1976.
D On May 29, 1976, the Corporation sent up proposals for equation
of posts to be filled in by the employees of the former contract
carriage operators. The meeting of the Committee set up by the
Government for laying down, the principles for equation of posts and
for determination of inter-se seniority, met on June 2, 1976. The
E Committee ·decided that even in the case of helpers-cleaners, there
should be a 'trade test' and; the staff cleared by the Committee for the
postS of helper 'B' helper 'A' and assistant artisens should be on the
• basis of their technical competence, experience, ability etc. The Com·
mittee also decided that all other employees of contract carriage opera-
tors. who were, eligible for absorption, should .be interviewed by that
p · Committee for the. purpose of absorption on the basis of experience,
. ability, duties and responsibilities. · ,These norms were not laid down
till June 2, 1976. Till their actual absorption, the employees of the
erstwhile contract carriage ·operators had only an incohate right. . '· ·
The distinction between what is, and what is not a right preserved
by the provisions of s. 6 of the General Clauses Act is often one of
G great.fineness. What is unaffected by the repeal of a statute is a right
acquired or accrued under it and not a mere 'hope or expectation or,
or liberty to apply for, acquiring a right. In Director of Public Works
v. Ho Po Sang(') Lord Morri~ speaking for the . Privy Council,
o~rved: ·
·"ff m!ly be, therefoce, that under some repealed enactment,
H
a right fuui been given, but that, in reapect of it, some
(!) [1962) 2 All E. R. 121 (P. C.j.

'
M. s. SHIVANANDA v. K. s. R. T. CORPN. (Sen, J.) 693

investigation or legal proceeding is necessary. The right is A
th.en unaffected and preserved. It will be preserved even· if
a· process of quantification is necessary. But there is a
manifest distinction between an investigation in respect of a
right and an investigation which is to decide whether some
right should be or should not be given. On a repeal the
former is preserved by the Interpretation Act. The latter B
is not." (Emphasis supplied)
It must be mentioned that the object of s. 31 (2) (i) is to preserve
only the things done and action taken under the repealed Ordinance,
• and not the rights and privileges acquired and accrued on the one side,
and the corresponding obligation or liability incurred on the other c
side, so that if no right acquired under the repealed Ordinance was
preserved, there is no question of any liability being enforced.
Further, it is significant to notice that the saving clause that we are
considering in s. 31 (2) (i) of the Act, ,saves things done while the
Ordinance was in force; it does not purport to preserve a right ac-
quired under the repealed Ordinance. It is unlike the usual saving
clauses which preserve unaffected by the repeal, not only things <lone
uRder the repealed enactment but also the rights acquired thereunder.
It is also clear that even s. 6 of the General Clauses Act, the applica-
bility of which is exclnded, is not intended to preserve the abstract
rights conferred by the repealed Ordinance. It only applies to specific E
rights given to an individual upon the happening of one or other of
the events specified in the statute.
Employees in excess of the sqtle prescribed for the categories
specified nnder proviso to snb-s. (3) of s. 19 of the Act are clearly
not entitled for absorption. Thongh sub-cl. (3) to cl. 20 of the Ordi-
nance provided for absorption of certain classes of employ!les in a F
particular ratio with effect from January 30, 1976, it does not follow
that there was an automatic absorption as from that date. Every such
person eligible for absorptiol). had to fulfill three conditions, viz., (1)
he had to be a workman within the meaning of the Industrial Disputes
Act, 1947; (2) he. should have been immediately before the com-
G
mencement of the Ordinance, exclusively employed in connection with
the acquired property, and (3) he had to come within the ratio pro-
vided in the proviso to sub-cl. (3) to cl. 20. The whole object of
inserting sub-cl. (3) to cl. 20 of the Ordinance was to obviate the un-
.... employment of persons suitable for employment. For this purpose,
the Corporation had necessarily to screen the applicants. H
It is necessary to mention that cl. 5 of the Ordinance, which
corresponds to s. 5 of the Act, provided that every contract carriage
8-625SCI/19
694 SUPREME COURT REPORTS [1980].1 S.C.R.

A operator shall within 15 days from the notified date or within such
further time as the State Govermnent may allow, furnish to the State
Government or any officer authorised by it in this behalf, complete
particulars among others of persons who were in their employment ..
'·
immediately before the notified date. It was. only after such informa-
tion was received that steps had to be taken for the purpose of as-
B certaining as to who were entitled to be absorbed in the service of the
Corporation in accordance with sub-cl. (3) to cl. 20 of the Ordinance. •
The authorities after collecting the necessary information had to
determine not only the corresponding posts to which the erstwhile em-
ployees of the contract carriage operators could be absorbed in the
c service of the Corporation but also their relative seniority, for the pur-
pose of excluding the employees who were in excess of the scale for
the purpose of absorption.

As sub·cl. ( 3) to cl. 20 itself provides that a person who is not
willing to become an employee of the Corporation is entitled to re-
•-'~
D trenchment compensation as provided for in the Industrial Disputes
Act, the authorities were also required to ascertain as to whether the
employee; who was entitled to be absorbed in service, was willing to
become an employee of the Corporation or not. It was only if the
employee was willing to be absorbed in the service of the Corporation
that the Corporation could absorb him in service, provided the other
E conditions specified in sub-cl. (3) to cl. 20 were satisfied. Thus it is
clear that several steps had to be taken by the authorities before identi-
fying and' determining the persons who could be absorbed in the ser-
vice of the Corporation, in accordance with sub·cl. (3) to cl. 20 of the
Ordinance.
The very fact that all these various steps were necessar~ to he
taken, which necessarily takes time, shows that automatic absorption
of the employees of the erstwhile contract carriage operators was not
legally permissible. When the Ordinance came to be replaced by the '
Act, the Corporation felt that the number of employees of the erst-
while contract carriage operators was too large for its requirements.
G The legislatnre, therefore, stepped in and reduced the scale of absorp-
tion in the proviso to sub-s. (3) of s. 19 from 7.9 per vehicle to 4.45
per vehicle.
This is, in our judgment, sufficient for the determination. of the
appeal. But, as we have formed a clear opinion on the other aspect,
II we do not hesitate to express that opinion. That contention is of this ....
nature. It is pointed out that the employees of the· erstwhile contract
,carriage operators acquired vested right to absorption in the service of
M. s. SH!VANANDA v. K. s. R. T. CORPN. (Sen, 1.) 695

the Corporation by virtue of sub-cl. (3) to cl. 20 of the repealed Ordi- A
nance with effect from January 30, 1976, which cannot be taken
away by the proviso to sub-s. (3) of s. 19. Even' if-contrary to
the decision reached by us, it were possible to• hold that they had some
kind of such right, that right is expressly taken away by the legis-
lature. The contention does not take note of the fact that by sub-s.
( 1) of s. 1 the Act was brought into force with effect from January B
30, 1976, i.e., the date on which the Ordinance was promulgated.
The Act substitutes a 'new' proviso in sub-s. (3) of s. 19 in place of
the old proviso to sub-cl. (3) to cl. 20 of the Ordinance, altering the
whole basis of absorption. The new proviso is given a retrospective
effect, and- it now holds the field from the notified date i.e., .T anuary
30, 1976. The proviso in sub-cl. (3) to cl. 20 laying down a parti-
c
cular ratio of absorption, is pro tanto avoided by an express enactment
of a 'new' proviso to sub-s. (3) of s. 19 which is entirely inconsistent
•,__ with it. When an Ordinance is replaced by an Act which is made
retrospective in operation, anything done or any action taken under
the Ordinance stand wholly effected. D
In the result, the appeal as well as the writ petitions must fail and
are dismissed. There shall be no order as to costs.

N.V.K. Appeal and Petitions dismissed.

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