Holding

Regulation 17(3) confers discretionary power, not a vested right, to the corporation to consider offering alternative jobs, and the court cannot compel a specific exercise of that discretion.

Summary

The Uttar Pradesh State Road Transport Corporation (SRTC) required its drivers to undergo annual medical examinations under Regulation 17(2). Regulation 17(3) allowed the corporation to dispense with the service of drivers who failed the fitness test, with a discretionary power to offer them alternative jobs. After medical tests found several drivers, including the respondents, unfit due to poor eyesight, the corporation terminated their employment and paid retrenchment compensation under Section 6(N) of the U.P. Industrial Disputes Act. The drivers challenged the termination in writ petitions; the Allahabad High Court ordered the corporation to offer them alternative positions. On appeal, the Supreme Court held that the discretion in Regulation 17(3) does not create a vested right to an alternative job, and the court cannot compel the corporation to exercise its discretion in a particular manner, though the corporation must honestly consider each case. Consequently, the Supreme Court allowed the corporation's appeal, reversed the High Court order, and directed the corporation to consider the respondents' cases without mandating a specific outcome.

Issues considered

Whether Regulation 17(3) imposes a statutory obligation on the corporation to offer alternative employment to drivers found medically unfit.
Whether a court can direct a statutory authority to exercise its discretion in a particular manner by ordering the offering of alternative jobs.
What is the scope and limits of the discretion conferred by Regulation 17(3) on the corporation.

Legislation cited

U.P. Industrial Disputes Acts. 6(N)

Subjects

administrative lawstatutory discretionemployment terminationmedical fitnessretrenchment compensationalternative employmentpublic utilityU.P. State Road Transport Corporationservice regulationswrit petition

Judgment

U.P. STATE ROAD TRANSPORT CORPORATION ANDANR.
A
v.
MOHD. ISMAIL AND ORS.

APRIL 11, 1991
-...--
B [K. JAGANNATHA SHETTY, J.S. VERMA AND
V. RAMASWAMI, JJ.]

U.P. State Road Transport Corporation Employees (Other than
Officers) Service Regulations, 1981: Regulations 17(2) and 17(3)-
Drivers-Medically examined-Found unsuitable because of ill health
or poor eye-sight-Whether services to be dispensed with or to be
c offered alternative jobs-Discretion vested in the Corporation-Exercise
thereof.

The respondents were employed as drivers in the U.P. State Road
Transport Corporation. The Corporation bas framed the U.P. State
D Road Transport Corporation Employees (other than Ofticers) Service
Regulations, 1981, Regulations 17(2) inter a/ia requires the drivers to
undergo medical test particularly vision test every year and under
Regulation 17(3) services of those drivers who fail to pass the fitness test
are to be dispensed with, with the proviso that such drivers may, in the
discretion of the Corporation, be offered alternative jobs. Pursuant to
E these Regulations, the Managing Director of the Corporation issued two
circulars dated December 19, 1986 and March U, 1987 directing the
Regional Managers to terminate the Services of the drivers who are
medically found unfit to drive the vehicles with the further direction
that such drivers should be paid benefits like retreuchment compensa-
lion under Section 6(N) of the U.P. Industrial Disputes Act.
F
The respondents were subjected to medical examination and It
was found that their eye-sights were defective. Consequently, the
Corporation discharged the respondents with immediate effect by pay-
ing them one month salary in lieu of notice and also retrenchment
compensation under the U.P. Industrial Disputes Act. The respondents
G challenged their retrenchment by means of writ petitions before the
High Court. The High Court allowed the writ petitions directing the
Corporation to offer alternative jobs to the respondents. Being aggrie-
,... -
ved, the Corporation bas preferred these appeals to this Court.

Allowing the appeals, the Court,
H

274
U.P. S.R.T.C. v. MOHD. ISMAIL 275

HELD: 1. Re1111lation 17(2) requires that the drivers have to A
undergo medical test partlculary vision test every year, or at such inter-
vals as may be prescribed by the General Manager of the Corporation.
Regulation 17(3) has two branches. The Orst branch provides power to
the Corporation to remove the driver from the service who fails to pass
the medical test. The second branch of Regulation 17(3) though styled
as proviso is an Independent and substantive provision providing dis- B
cretlon to the Corporation to offer an alternative job to the retrenched
driver. [278B-D]

2. The discretion conferred by Regulation 17(3) confers no vested
right on the retrenched workmen to get an alternative job in the Corpo-
ration. Like all other statutory discretion in the administrative law, C
Regulation 17(3) creates no legal right in favour of a person in respect
of whom the discretion Is required to be exercised other than a right to
have his case honestly considered for an alternative job by the
Corporation. [279B]

3. The Hlgh Court was in error in directing the Corporation to D
offer alternative jobs to the respondents because the Court cannot
direct the statutory authority to exercise the discretion in a particular
manner not expressly required by law and that it could only command
the statutory authority by a writ of mandamus to perform its duty by
exercising the discretion according to law. The Court cannot command
the Corporation to exercise discretion in a particular manner and in E
favour of a particular person. That would he beyond the jurisdiction or
the Court. [279D-E]

ln the Instant case, the Corporation has denied Itself the discre-
tion to offer an alternative job which the rtlllllatlon requires it to exer-
cise in individual cases of retrenchment. Although it Is open to an F
authority to which discretion has been entrusted to lay down the norms
or rules to regulate exercise or discretion, it cannot however deny
itself the discretion which the statute requires it to exercise in indi-
vidual cases. The concerned authority of the Corporation therefore
are required to consider. the cases of retrenched drivers for aiternatlve
jobs. [279F-G; 280A] G

4.1 There are two aspects to be borne in mind in exercising the
discretion. Firstly, there are constraints within which the Corporation
has to exercise its discretion and perform Its task. The Corporation Is a
public utility orpnisatlon where mediating motion Is elllciency and
effectiveness or public service. Elftclency and effectiveness of public H
276 SUPREME COURT REPORTS [ 1991] 2 S.C.R.

A service are the basic concepts which cannot be sacrificed In public
administration by any statutory corporation. The Corporation bas to
render this public service within the resource use and allocation. [280D I

4.2 The second aspect relates to the manner In which the statut-
ory discretion is to be exercised. Every discretion conferred by statute
B on a holder of public oftice must be exercised In turtherance of accomp-
lishment of purpose of the power. [280E-G]

Sharp v. Wakefield, [1891) AC 173 at 179, referred to.

S. The Corporation therefore cannot act mechanically. The dis-
cretion should not be exercised according to whim, caprice and rltnal.
c The discretion should be exercised reasonably and rationally. It should
be exercised faltbtully and impartially. There should be proper value
judgment with fairness and equity. [280H)

Therefore, it would not be improper if the discretion is exercised
n· with greater concern for and sympathetic outlook to the disabled drl·
vers subject of course to the paramount consideration of 11ood and
efficient administration. [281A-B)

CNIL APPELLAlE JURISDICTION: Civil Appeal Nos.
1756-59 of 1991.
E

From the Judgment and Order dated 17.1.1990 of the Allahabad
High Court in C.M.W.P. Nos. 10962, 10901, 10902 and 10903of1987.

Raju Rama Chandran for the Appellants.
F
Prem Malhotra for the Respondents.

The Judgment of the Court was delivered by

K. JAGANNATHA SHETTY, J. We grant Special Leave and
G proceed to dispose of these appeals.

These appeals preferred against the decision of the Allahabad
High Court raise common questions as to the scope of Regulations
17(2) and 17(3) of the U.P. State Road Transport Corporation
Employees (Other than officers) Service Regulations, 1981 ('the
H Regulations').
U.P. S.R.T.C. v. MOHD. TSMAIL [SHETTY, J.) 277

The respondents were appointed as drivers in the erstwhile U ,P.
A
Government Roadways. Upon the formation of the U .P. State Road
>--. Transport Corporation ('Corporation') they were absorbed in the
services of the Corporation. The Corporation has framed the Regula-
"lions inter a/ia prescribing medical test to drivers every year for the
purpose of assessing their suitability for the job. Pursuant to these
Regulations, the Managing Director of the Corporation issued a circu- B
lar dated December 19, 1986 stating that all drivers should be medi-
cally examined and those found unsuitable either because of ill health
..... or poor eye-sight, be not given duty and their services be dispensed
...
with, This was followed by another circular dated March 12, 1987 by
which the Managing Director directed the Regional Managers to
terminate the services of the drivers who are medically found unfit to
drive the vehicles. It was also directed in the circular that such
c
employees whose services are dispensed with should be paid benefits
like retrenchment compensation under Section 6(N) of the U .P.
Industrial Act.

- ......
In the beginning of 1987, all the respondents were subjected to
medical examination and it was found that their eye-sights were defec-
tive. In view of the medical report, the Corporation discharged them
with immediate effect by paying them one monih salary in lieu of
notice and also retrenchment compensation under the Industrial Dis-
0

putesAct.
E
The respondents .challenged their retrenchment by means of writ
....._ petitions before the Allahabad High Court. The High Court has
allowed the writ petitions directing the Corporation to offer altema-
tive jobs to the respondents,

The Corporation being aggrieved by the decision of the High F
Court has appealed to this Court.

Regulations 17(2) and 17(3) read as follows:

~)... "17(2) A person, appointed to the post of driver, will be
required to undergo medical test, particulary vision test, G
every year or at such intervals as may be prescribed by the
General Manager from time to time.

17(3) The service of a person who fails to pass the fitness
test, referred to in the sub-regualtion (2), may be dispensed
with: H
278 SUPREME COURT REPORTS [1991] 2 S.C.R.

Provided that the persons, whose services are so dispensed
A with may, in the discretion of the Corporation, lie offered
alternative job.'' '>- -~:

Regulation 17(2) requires that the drivers have to undergo medi-
cal test particularly vision test every year, or at such intervals as may
B be prescribed by the General Manager of the Corporation. Regulation
17(3) has two branches. The first branch provides power to the Corpo-
ration to remove the driver from the service who fails to pass the
medical test. The second branch of Regulation 17(3) though styled as ,_
proviso also appears to be an independent branch. It is not proviso. ,.,,
The proviso ordinarily carves out an exception from the general rule
enacted in the main provision. However, sometimes the insertion of a
c proviso by the draftsman is not strictly adhered to its legitimate use
and it may be in substance a substantive provision adding to and not
merely excepting something out of or qualifying what goes before it.
The proviso with which we are concerned in Regulation 17(3) does not

D
carve out an exception from the general rule contained in the first
branch. It is an independent and substantive provision providing dis-
cretion to the Corporation to offer an alternativejob to the retrenched
driver. This offer is to be made after the exercise of power under the
first branch of Regulation 17(3). There is therefore, no doubt that the
second branch of Regulation 17(3) is a substantive provision and not in
,._
-
the nature of a proviso to first branch thereof.
E
The first branch of Regulation 17(3) appears to be in the public
interest. The driver who is found medically unfit to drive the vehicle on
~
the public road certainly cannot be permitted to continue as a driver.
His driving licence is liable to be revoked. His continuance as driver
would, perhaps be perilous to the interests of passengers and pedest-
F rians. The Corporation therefore, has been empowered to remove him
from service as driver. At the same time, the second branch to Regula-
tion 17(3) shows concern for the person who has been removed from
service for want of medical fitness. It confers discretion on the Corpo-
ration to offer him an alternative job.
..-<
G What does this mean in practical terms? Does it mean that the
retrenched driver has a statutory right to get an alternative job? Is it
obligatory for the Corporation to offer an alternative job to the driver
who is certified to be medically unfit for the driver's job? The High
Court has expressed the view that the Corporation before terminating
the service of a driver who fails to satisfy the medical test, is obliged to
H offer him an alternative job and that _offer shall be in writing. In other
U.P. S.R.T.C. v. MOHD. ISMAIL [SHETTY, l.] 279

words, the High Court seems to be of the opinion that the proviso to
A
Regulation 17(3) imposes an obligation on the Corporation to offer an
alternative job to all those who are found medically unfit to carry on
their duties in the existing jobs.

The view taken by the High Court appears to be fallacious. The
discretion conferred by Regulation 17(3) confers no vested right on B
the retrenched workmen to get an alternative job in the Corporation.
Like all other statutory discretion in the administrative law, Regula-
tion 17(3) creates no legal right in favour of a person in respect of
whom the discretion is required to be exercised other than a right to
have his case honestly considered for an alternative job by the
Corporation.
c
The High Court was equally in error in directing the Corporation
to offer alternative job to drivers who are found to be medically unfit
before dispensing with their services. The Court cannot dictate the
decision of the statutory authority that ought to be made in the exer-
cise of discretion in a given case. The Court cannot direct the statutory D
authority to exercise the discretion in a particular manner not ex-
pressly required by law. The Court could only comma11d the statutory
authority by a writ of mandamus to perforrn its duty by exercising the
discretion according to law. Whether alternative job is to be offered or
not is a matter left to the discretion of the competent authority of the
Corporation and the Corporation has to exercise the discretion in E
individual cases. The Court cannot command the Corporation to exer-
cise discretion in a particular manner and in favour of a particular
person. That would be beyond the jurisdiction of the Court.

In the instant case, the Corporation has denied itself the discre-
tion to offer an alternative job which the regulation requires it to F
exercise in individual cases of retrenchment. As earl.ier stated, the
Managing Director has issued two circulars: (i) dated December 19,
1986 and (ii) dated March 12, 1987 directing the .Regional Managers to
dispense with the services of the drivers who are found to be medically
unfit to drive the vehicles. It is directed in the circulars that such
, "· drivers should be paid benefits like retrenchment compensation which G
they are entitled to under the U .P.. Industrial Disputes Act. The circu-
lars thus leave no scope for exercising discretion to consider the indi-
vidual cases of retrenched drivers for any alternative job. It may be
stated that the statutory discretion cannot be fettered by self-created
rules or policy. Although it is open to an authority to which discretion
has beeu entrusted to lay down the norrns or rules to regulate exercise H
280 SUPREME COURT REPORTS [1991] 2 S.C.R.

of discretion it cannot, however, deny itself the discretion which the
A
statute requires it to exercise in individual cases. The concerned
authority of the Corporation therefore, notwithstanding the said cir-
culars are required to consider the cases of retrenched drivers for
alternative jobs.

B Counsel for the respondents argued that the object of Regula-
tion 17(3) was to rehabilitate the drivers who are found to be medi-
cally unfit to drive vehicles and it is therefore, obligatory for the
authority or Officer of the Corporation to exercise discretion in favour
of such drivers by offering them alternative jobs. But counsel for the
Corporation considers that it is an absolute discretion of the Corpora-
tion to offer or not to offer an alternative job to such drivers and there
c is no compulsion in the matter.

These are, in our opinion, extreme contentions which are not
sustainable under law. There are two aspects to be borne in mind in
exercising the discretion. Firstly, there are constraints within which
D the Corporation has to exercise its discretion. The Corporation is a
public utility organisation where m!'diating motion is efficiency and
effectiveness of public service. Efficiency and effectiveness of public
service are the basic concepts which cannot be sacrificed in public
administration by any statutory corporation. The Corporation has to
render this public service within the resource use and allocation. It is
E within these constraints the Corporation has to exercise its discretion
and perform its task. The second aspect relates to the manner in which
the statutory discretion is to be exercised. The discretion allowed by
the statute to the holder of an office, as Lord Halsbury observed in
Sharp v. Wakefield, (1891] AC 173 at 179 is intended to be exercised
"according to the rules of reason and justice, not according to private
F opinion; according to law and not humour. It is to be, no arbitrary,
vague and fanciful but legal and regular. And it must be exercised
within the limits to which an honest man competent to the discharge of
his office ought to confine himself." Every discretion confeJTed by
statute on a holder of public office must be exercised in furtherance of
accomplishment of purpose of the power. The purpose of discretionary
G decision making under Regulation 17(3) was intended to rehabilitate
the disabled drivers to the extent possible and within the above said
constraints. The Corporation therefore, cannot act mechanically. The
discretion should not be exercised aceording to whim, caprice or ritual.
The discretion should be exercised reasonably and rationally. It should
be exercised faithfully and impartially. There shonld be proper value
H judgment with fairness and equity. Those drivers would have served
U.P. S.R.T.C. v. MOHD. ISMAIL [SHE1TY, J.] 281

the Corporation till their superannuation but for their unfortunate A
medical unfitness to carry on the driver's job. Therefore, it would not
be improper if the discretion is exercised with greater concern for and
sympathetic outlook to the disabled drivers subject of course to the
paramount consideration of good and efficient administration. These
are some of the relevant factors to be borne in mind in exercisi11g the B
discretion vested in the Corporation under Regualtion 17(3).

In the result we allow these appeals. In reversal of the judgment
of the High Court, we direct the Corporation to consider the cases of
-- respondents in the light of the observations made.

In the circumstances of the case, however, we make no order as C
to costs.

D.R.L.
Appeals allowed .

•