Holding

Clause 19 of the 1985 settlement does not supersede Clause 49 of the 1956 settlement; the two operate in different fields, and daily‑wage workers meeting the 180‑day condition are entitled to the benefits of regular time‑scale employees as provided by the 1956 clause (read with Resolution No. 8856).

Summary

The Maharashtra State Road Transport Corporation (MSRTC) and a trade union entered into an industrial settlement in 1956 (Clause 49) granting any employee who worked continuously for 180 days the benefits of a time‑scale worker. A later settlement in 1985 (Clause 19) provided for the absorption of daily‑rated workers after 180 days of service. The corporation argued that the 1985 clause and a 1978 corporate resolution (No. 8856) had superseded the 1956 clause. The workmen contended that the two clauses dealt with different matters and that the 1956 benefits remained applicable. The Supreme Court held that the 1956 and 1985 clauses operated in distinct fields; the 1985 clause did not supersede the 1956 clause, and, despite the cancellation of Clause 49, the 1978 resolution substituted a provision that still entitled daily‑wage workers who completed 180 days to the benefits of regular time‑scale employees. Consequently, the workmen were entitled to those benefits, though absorption under Clause 19 was a separate issue. The appeals filed by the corporation were dismissed.

Issues considered

Whether Clause 49 of the 1956 industrial settlement was superseded by Clause 19 of the 1985 settlement and/or by Resolution No. 8856 dated 31‑August‑1978.
Whether daily‑rated or casual workers who have completed 180 days of aggregate service are entitled to the benefits of regular time‑scale employees under the 1956 settlement.
Whether the two settlement clauses operate in different fields, thereby precluding any implied supersession.

Legislation cited

Road Transport Corporation Act, 1950

Subjects

industrial settlementtime scale of paydaily rated workersabsorptionbenefits entitlementsupersession of clausesunfair labour practiceservice conditions

Judgment

MAHARASHTRA STATE ROAD TRANSPORT CORP. A
v.
,:;y
PREM LAL

FEBRUARY 27, 2007
;...
[S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.] B

Service Law

Agreement between Corporation and Trade Union providing time scale
of pay to ad-hoc employees working continuously for 180 days-Subsequent c
agreement providing absorption of daily rated workmen after completion of
180 days continuous service-Daily rated and ad-hoc employee claiming
parity of wages with regular employees-Corporation apposing claim
contending that earlier settlement stood superseded by subsequent settlement-
Held, the two settlements operated in different fields and the subsequent D
settlement did not supersede earlier settlement-There is difference between
statuo· of an employee on one hand and benefits accruing to workmen on the
other land-In the facts, held, casual or daily rated workmen entitled to
J benefits admissible to regular employees on time scale of pay subject to their
satisfoing the conditions prescribed therein.
E
Appellant-Corporation and Trade Union representing the employees
entered into industrial settlement in 1956 and clause 49 of the said settlement
provided that all employees working for 180 days including weekly offs and
other holidays continuously, were to be brought on the time scale of pay and
were to be given all benefits available to time scale workers. Subsequently, in
1985 another settlement was arrived and clause 19 of said settlement provided F
for absorption of daily rated workmen after completion of 180 days of

. ' -< continuous service. The Industrial Court upon complaint filed by an employee
appointed in 1988 held that the Corporation had engaged in unfair labour
practice by not bringing the complainant on time scale of pay in terms of clause
49 of 1956 Settlement and directed the Corporation to fix pay of the complainant G
in the time scale. Appellant-Corporation challenged the order passed by the
Industrial Court before the High Court which was rejected .

'
. Appellant-Corporation inter alia contended that clause 49 of 1956
Settlement stood superseded by clause 19of1985 Settlement; that clause 49
309 H
310 SUPREME COURT REPORTS [2007] 3 S.C.R.

A of 1956 Settlement was cancelled and revised in the Joint Committee Meeting
held on 15.4.1978; and that decision of the Joint Committee dated 15.4.1978
stood approved by Resolution No. 8856 of the Corporation dated 31.8.1978. -+:,

Workmen inter a/ia contended that clause 49of1956 Settlement and
clause 19of1985 settlement operated in different fields and, therefore, there ~
B was no question of clause 49 of 1956 s~ttlement being superseded by clause
19 of 1985 Settlement; and in the alternative that when the Joint Committee
cancelled clause 49 of 1956 Settlement, the said clause was replaced by new
clause accepted by Corporation under Resolution No. 8856 providing that
casual or daily wage employees shall be entitled to benefits admissible to

c regular employees on time scale of pay provided they satisfy the conditions
prescribed for their entitlement.

Dismissing the appeals, the Court

HELD: 1. Clause 49 of 1956 Settlement and Clause 19 of 1985
Settlement operated in different fields and consequently Clause 19 of 1985
D
Settlement did not supersede Clause 49 of 1956 Settlement. There is a
difference between the status of an employee on one hand and the benefits
accruing to the workmen on the other hand. In 1956 the Union presented to
the Corporation various demands. One of the demands was abolition of the ..
daily-wage system. Under Clause 49of1956 the Corporation agreed to give
E to the workmen all the benefits available to a time scale worker. On the other
hand, under Clause 19of1985 Settlement, subject to a worker fulfilling the
eligibility criteria, the Corporation agreed to absord daily rated workmen who
completed 180 days of service. Therefore, the High Court was right in holding
that the above two clauses operated in different fields and, therefore, there
was no question of Clause 19 of 1985 Settlement superseding Clause 49 of
F
1956 Settlement. Under Clause 49 of 1956 Settlement, the Corporation
agreed to provide benefits to employees working for 180 days continuously to
be given all benefits available to time scale workers. !Para 8] 1316-A-Fl ~

2. It is true that the Union had agreed to the cancellation of Clause 49.
G However, the Union had also placed their demand for substitution of Clause
49 and the Corporation agreed to that substitution vide Resolution No. 8856
passed by the Corporation under which persons in employment casually or
on daily-wages as on the date of the Resolution as also those who were to be
employed thereafter, were entitled to be appointed temporarily in ephemeral
.'

vacancies in the time scale of pay on completion of 180 days aggregate service
H
MAHARASHTRA STATE ROAD TRANSPORT CORPN v. PREMLAL [KAPADIA, .I.] 311
in a financial year. Under the said Resolution they were entitled to the benefits A
admissible to regular employees on time scale of pay subject to their satisfying
the conditions prescribed for the entitlement. In the present case the workmen
are not seeking absorption. They are seeking benefits admissible to regular
employees on time scale of pay. In the present case, the respondent-workmen
are in the service after 31.8.78. In the circumstances, notwithstanding B
cancellation of Clause 49of1956 Settlement the workmen herein would be
entitled to all benefits admissible to regular employees working in the
Corporation on time scale of pay provided they satisfy the eligibility criteria
of having worked for aggregate service of 180 days and subject to their
satisfying all the conditions prescribed for their entitlement in terms of the
above Resolution No. 8856 read with Clause 19 of 1985 Settlement. C
(Para I0] (317-F-B(

CIVIL APPELLATE JURISDICTION : Civil Appeal No, 1046 of2007.

From the common final Judgment and Order dated 25.4.2003 of the High
Court of Judicature at Bombay, Nagpur Bench, Nagpur in LP.A. No. 36/1999. D
With C.A. Nos. I047, 1064, I074, 1048, 1049, 1050, 1051, 1052, I053, 1054,
. 1056, 1057, 1058, 1059, 1060, 1062, 1(163, 1065, 1067, 1068, 1069, 1070, 1055,
1071, 1072, 1073, 1061and1066/2007.
• Altaf Ahmed, R.S. Hedge, Chandra Prakash, Rahul Tyagi, P.P. Singh for E
the Appellant.

V. Prakash, K. Sarada Devi, Shivaji M. Jadhav, Himanshu Gupta, Brij
kishor Sah, Rahul Joshi, B. Sunita Rao and Shanti Bhushan Chaubey for the
Respondent.
F
The Judgment of the Court was delivered by
..-
KAPADIA, J. I. Leave granted.

2. A short question which arises for determination in these civil appeals
filed by the employer is : whether Clause 49 of 1956 Settlement stood replaced G
by Clause 19 of 1985 Settlement and by Resolution No.8856 dated 31.8.78

'
. passed by the appellant-Corporation .

3. Appellant-Corporation is a State Road Transport Undertaking
incorporated under Road Transport Corporation Act, 1950. Apart from State
Transport Employees Service Regulations framed under Section 45 of Road H
312 SUPREME COURT REPORTS (2007] 3 S.C.R.

A Transport Corporation Act, 1950, the service conditions of the employees are
also regulated J;>y Industrial Settlement signed between the Corporation and
various trade Unions representing employees. Several demands were raised
in I956 on behalf of the workmen. One such demand was under Item No.49
of the Demand Notice for abolition of Daily Wage System. It appears that
large number of workmen were continued for several years in the Corporation·
B on ad-hoc basis. They were paid daily-wages. Therefore, there were
unwarranted interruptions and breaks in their service which ultimately resulted
in Unions' raising the above demand. Under 1956 Settlement all empk>yees
working for 180 days including weekly offs and other holidays continuously,
were to be brought on the time scale of pay and they were to be given all
C the benefits available to the time scale workers. This Settlement was arrived
at on 25.4.56. Even after 1956 various settlements were arrived at between the
Corporation and its employees. ft:ccording to the appellant, Clause 49 of 1956
Settlement was cancelled and revised in the Joint Committee Meeting held on
15.4.1978. Accc,rding to the Corporation, the Joint Committee was empowered
to do so by virtue of Clause 9 of 1968 Settlement. According to the appellant-
0 Corporation, in any event the decision of the Joint Committee dated 15.4.78
stood approved by Resolution No.8856 of the Corporation dated 31.8.1978
under which persons in employment of daily-wages as on 31. 7. 78 and those
·who were to be employed on daily-wages thereafter were to be appointed on
temporary b:isis in ephemeral vacancies in time scale of pay as from 31.7.78 •
E or thereafter provided they completed aggregate service of 180 days in any
one financial year commencing from 1.4. 73 onwards. According to the
appellant-Corporation, in 1985 a new settlement was arrived at under which
absorption of daily rated workmen after completion of 180 days continuous
service vide Clause 19 stood included. According to the appellant-Corporation,
Clause 49 of 1956 Settlement stood superseded by Clause 19of1985 Settlement.
F On behalf of the workmen the argument put forward was that Clause 49 of
1956 Settlement and Clause 19 of 1985 Settlement operated in different fields
and, therefore, there was no question of Clause 49 of 1956 being superseded
by Clause 19 of 1985 Settlement. It was also submitted that Joint Committee
was not authorized to cancel and revise Clause 49 of 1956 Settlement. It was
G submitted that Joint Committee was constituted to implement Clause 49 of
1956 Settlement and not to cancel or revise the said clause and, therefore, the
Corporation was not entitled to replace Clause 49 of 1956 by Clause 19 of 1985
Settlement.

4. The basic controversy in the preser.t matter, therefore, is the true
H scope and extent of the above two Clauses, namely, Clause 49 of 1956
MAHARASHTRA STATE ROAD TRANSPORTCORPN v. PREMLAL [KAPADIA, J.] 3 J3
Settlement and Clause 19 of 1985 Settlement. A
5. Before examining the above two Clauses it may be mentioned that in
the present case we are concerned with employees who have been appointed
after 31.8.78. This aspect is important because one of the argument advanced
on behalf of the Corporation is that Clause 49of1956 stood deleted on 15.4.78
pursuant to the decision of the Joint Committee which decision was approved B
by the Corporation vide Resolution No.8856 dated 31.8.78 and, therefore, in
any event Clause 49of1956 did not operate after 15.4.78. On the other hand,
the workmen contended that even assuming for the sake of argument that the
Joint Committee had the authority to revise Clause 49 of 1956 Settlement even
then when the Joint Committee cancelled Clause 49 of 1956 Settlement the C
said clause was replaced by a new clause, accepted by the Corporation under
Resolution No.8856, under which it was agreed that persons in employment,
casual or on daily-wages, as on the date of the said Resolution, shall be
appointed temporarily in ephemeral vacancies in time scale of pay with effect
from the date of the Resolution or from the date of their completion of 180
days aggregate service in a financial year; they shall be entitled to the D
benefits admissible to regular employees on time scale of pay provided they

.. satisfy the conditions prescribed for their entitlement.

6. As stated above the basic controversy in the present civil appeals
• is: whether Clause 49 of 1956 Settlement stood superseded by Clause 19 of
1985 settlement and whether in any event Clause 49 of 1956 Settlement stood E
terminated vide Resolution No.8856 of the Corporation dated 31.8. 78. At this
stage, it may be noted that the controversy arose because a complaint was
filed before the Industrial Court at Nagpur Bench in Complaint (ULPN) No.8
of 1992 by one of the employees of the Corporation stating that he was
appointed as a daily rated workman on 11.2.88 at the rate ofRs.11.76 per day; F
that he has been continuously working with the Corporation without any
break; that though he was working as a regular employee he was paid wages
which had no parity with regular employee; that he was not made permanent
in order to deprive him all the benefits of permanency and that he was entitled
to be appointed on time scale of pay on completion of 180 days of continuous
service in terms of Clause 49 of 1956 Settlement. In the said complaint after G
noting the aforestated submissions advanced on behalf of the Corporation,
the Industrial Court held, that, as per Clause 49 of 1956 Settlement the
workman who was a daily rated workman had put continuous service of 180
days and, therefore, in terms of Clause 49 of 1956 Settlement the complainant
was entitled to be appointed on time scale of pay and he was also entitled H
for all the benefits available to the time scale worker. The Industrial Court
314 SUPREME COURT REPORTS [2007) 3 S.C.R.

A gave a declaration vide order dated 27.2.97 that the Corporation had engaged
in unfair labour practice under Item No.9 of Schedule IV ofMRTU and PULP ~
Act 1971 by not brining the complainant on time scale of pay in terms of
Clause 49 of 1956 Settlement. By the said order the Corporation was directed
to fix the pay of the complainant in the time scale not from the date of
B appointment but from 6.1.92 (the date on which the complaint was filed).

7. In order to resolve the dispute we quote hereinbelow Clause 49 of
1956 Settlement, Resolution No.8856 of the Corporation dated 31.8. 78 and
clause 19 of 1985 Settlement:

"Clause 49 of the 1956 Settlement -
c
49. All employees working for 180 days including weekly off and other
holidays continuously will be brought on the time scale of pay and
will get all the benefits available to time scale workers. Any absence
on account of authorized leave will not be treated as break for the
above purpose and will not also count for service.
D
Resolution No.8856 dated 31.8.1978

Item No.17:

Absorption on time scale of employees working on daily-wages
E from Ist April 1973 onwards. '
Item No.18:

Working hours and wage structure of daily rated employees.
(Items 17 and 18 were considered together).

F Resolution 8856:

I. Item 17 (regarding absorption on time scale of employees working
on daily-wages from 1st Aril 1973 onwards) and item 18 (regarding
giving retrospective effect from 1st January 1977 to the decision of
the Joint committee regarding the revision of the daily rate of wages
G taken at its meeting held on 5th August 1978) being disagreed items
of the Joint Committee, the Corporation gave a personal hearing to
Sarvashri Bhau Phatak, Bhingardeve and Choube, General Secretaries
the Maharashtra S.T. Kamgar Sanghatana, Maharashtra S.T. Workers'
Federation and Maharashtra Motor Kamgar Federation, respectively,
in these matters. They explained in regard to item No.17 that the
H
MAHARASHTRA STATE ROAD TRANSPORTCORPN v. PREMLAL [KAPADIA, J.] 3 J5
persons working on daily-wages are denied certain essential and A

•
..... reasonable facilities provided to the employees on time scale and it
was necessary to do justice to them .

II-A. Thereafter the Corporation considered the two demands and
decided as under:-
B
(I) The present Clause No.49 in the Settlement dated 28th May
1956 shall stand cancelled.
(2) The persons in employment casually or on daily-wages as on
the date of this Resolution as also those who may this be
employed thereafter shall, if they have already completed or will
complete an aggregate service of 180 days in any one financial
c
year commencing from !st April 1973, be appointed temporarily
in ephemeral vacancies in time scale of pay of the post in which
they were appointed with effect from the date of this Resolution
or from the date of their completion of 180 days aggregate service
in a financial year as the case may be, and shall also be entitled D
from the relevant date to the following benefits admissible to
regular employees on time scale of pay provided they satisfy all
the conditions prescribed for their entitlement:-
}

, (i) uniforms,
(ii) washing allowances, E
(iii) medical facilities,
(iv) family free pass, and
(v) periodical increments.
F
(3) The Corporation made it clear that the absorption of such
persons who are granted the above benefits, in regular vacancies
--./'
will be strictly according to their tum and will be subject to the
normal rules and orders in this respect.
(The above decision being in modification of the settlement would
G
need the approval of Government).

11.B. The Corporation directed that the pros and cons of the
,
~
question of paying the persons engaged on work-charged
establishment/nominal muster roll according to the time scale rate of
pay and extending the other benefits (as mentioned in II.A(2)) to them H
316 SUPREME COURT REPORTS [2007] 3 S.C.R.

A should be examined with reference to the working conditions, existing
rate of payment, etc. and a detailed note in the matter should be
submitted to the Corporation, preferably at its next meeting.

Ill. The revised rate of daily-wages as worked out on the basis
of 24 working days should be given effect to from 1st January 1977
B i.e. the date from while the Second and the Fourth Saturdays in a
month were observed as non-working days for the employees in the
Central Office and the Regional Offices.

Clause 19 of 1985 Settlement

C 19. Absorption of day-rated working after completed service of 180
days -

(i) The absorption of such workmen be made as at present, i.e.,
subject their selection at least once by competent selection committee
and availability of clear vacancies;
D (ii) As far as possible no appointment except in the category of driver
will be made in future without selection of a workmen by the Committee.

(iii) All past cases of daily wagers who are eligible for absorption will
be reviewed on the merits of each individual case and as per the laws
on the subject.
E
(iv) As regards surplus staff viz., Watchmen, the information will be
called for from the divisions and the cases after examination will be
put up to the Corporation Board for its directives."

8. According to the impugned judgment Clause 49 of 1956 Settlement
F and Clause 19 of 1985 Settlement operated in different fields and consequently
Clause 19 of 1985 Settlement did not supersede Clause 49 of 1956 Settlement.
Broadly, we agree with the decision of the High Court. In our view, there is
a difference between the status of an employee on one hand and the benefits
accruing to the workmen on the other hand. As stated above, in 1956 the
G Union presented to the Corporation various demands. One of the demands
was abolition of the daily-wage system. Under Clause 49 of 1956 the
Corporation agreed to give to the workmen all the benefits available to a time
scale worker. On the other hand, under Clause 19 of 1985 Settlement, subject
to a worker fulfilling the eligibility criteria, the Corporation agreed to absorb
daily rated workmen who completed 180 days of service. Therefore, the High
H Court was right in holding that the above two Clauses operated in different
MAHARASHTRASTATEROADTRANSPORTCORPN.1·. PREMLAL [KAPADIA.I.] 317
fields and, therefore, there was no question of Clause 19 of 1985 Settlement A
superseding Clause 49 of 1956 Settlement. Under Clause 49 of 1956 Settlement,
the Corporation agreed to provide benefits to employees working for 180 days
continuously to be given all benefits available to time scale workers.

9. The grievance of the workmen in the present case is that till today
the Corporation has not given to them the benefits available to time scale B
workers. In the present case, they are not seeking absorption. In the present
case, they are seeking wages payable to time scale workers. The topic of
absorption is covered by Clause 19 of l 985 Settlement. It states that in all past
cases all daily wagers who are eligible for absorption will be given absorption
subject to their selection by the competent Select Committee and subject to C
existence of clear vacancies. This aspect was not there in Clause 49 of 1956
Settlement. Therefore, the High Court was right in holding that the two
clauses operated in different fields. We agree with this conclusion of the High
Court in the impugned judgment. In the circumstances, in the present case
we are not required to examine the authority of the Joint Committee to cancel
Clause 49 of 1956 Settlement. In the circumstances, in the present case we are D
not required to examine the question as to whether the workmen herein are
entitled to be absorbed under Clause 19 of 1985 Settlement. These two
> aspects shall be a matter of separate adjudication. We do not wish to go into
these aspects. Suffice it to state that Clause 19 of 1985 Settlement and Clause
49 of 1956 Settlement operate in different fields and, therefore, there is no E
question of Clause 19 of 1985 superseding Clause 49 of 1956 Settlement.

10. However, as stated above, we are required also to consider the effect
of Resolution no.8856 dated 31.8.78 passed by the Corporation under which
Clause 49 of 1956 Settlement stood cancelled. It is true that the Union had
agreed to the cancellation of Clause 49. However, the Union had also placed F
their demand for substitution of Clause 49 and the Corporation agreed to that
substitution vide Resolution No.8856 passed by the Corporation under which
persons in employment casually or on daily-wages as on the date of the
Resolution as also those who were to be employed thereafter, were entitled
to be appointed temporarily in ephemeral vacancies in the time scale of pay G
on completion of 180 days aggregate service in a financial year. Under the
said Resolution they were entitled to the benefits admissible to regular
employees on time scale of pay subject to their satisfying the conditions
~- prescribed for the entitlement. As stated above, in the present case the
workmen are not seeking absorption. They are seeking benefits admissible to
regular employees on time scale of pay. In the present case, the workmen seek H
318
.
SUPREME COURT REPORTS [2007] 3 S.C.R.

A benefits admissible to those employees on time scale of pay. In the present
case, the respondent-workmen are in service after 31.8.78. In the circumstances,
notwithstanding cancellation of Clause 49 of 1956 Settlement the workmen
herein would be entitled to all benefits admissible to regular employees
working in the Corporation on time scale of pay provided they satisfy the
B eligibility criteria of having worked for aggregate service of 180 days and
subject to their satisfying all the conditions prescribed for their entitlement
in tenns of the above Resolution No.8856 read with Clause 19 of 1985 Settlement.

11. In the present case, as stated above, the workmen are not seeking
absorption. The workmen have reserved their rights to seek adjudication in
C that regard in a separate forum. Similarly, in the present case, we are not
required to go into the question of validity of Resolution No.8856 dated
31.8. 78 since in our view Clause 49 of 1956 Settlement and Clause 19 of 1985
operated in two different fields. The question of validity of Resolution No.8856
is a matter of separate challenge before a different forum. We express no
D opinion in that regard. In the present case, we are also not required to
quantify the liability of the Corporation. We are deciding this matter only on
interpretation of above two Clauses.

12. Accordingly, the civil appeals filed by the Corporation are dismissed
with no order as to costs.
E
A.KT. Appeals dismissed.