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Mysore State Road Transport Corporation v. Gopinath Gundachar Char
Factual and Procedural Background
The respondent, originally a Class III employee in the Statistical Department of the Mysore State Road Transport Corporation (“the Corporation”), was temporarily promoted to act as Statistical Superintendent at Hassan in October 1961. On 21 July 1964 the Corporation’s General Manager issued a notice inviting applications for Class II junior posts of Assistant/Divisional Statisticians and Labour Welfare Officers, carrying a pay scale of Rs 220-15-400-EB-20-500 plus admissible allowances.
Contending that the Corporation lacked the authority to issue such a notice without first framing regulations under Section 45(2)(c) of the Road Transport Corporation Act, 1950 (“the Act”), the respondent filed a writ petition in the High Court of Mysore on 11 August 1964. The High Court accepted the plea and quashed the notice. The Corporation obtained special leave to appeal to the Supreme Court, leading to the present judgment.
Legal Issues Presented
- Whether, in the absence of regulations framed under Section 45(2)(c) of the Act, the Corporation nevertheless possesses the statutory power to appoint officers and servants and to prescribe their conditions of service.
- Whether the General Manager could validly issue the impugned notice without an express resolution of the Corporation authorising him to do so under Section 12(c) of the Act.
- Whether the respondent had a vested right to promotion to a Class II junior post.
Arguments of the Parties
Respondent's Arguments
- The Corporation lacked authority to issue the recruitment notice until regulations under Section 45(2)(c) had been framed with the previous sanction of the State Government.
- The General Manager had no power to issue the notice in the absence of a formal resolution by the Corporation.
- The respondent was entitled to be promoted to a Class II post and the notice interfered with that right.
Corporation's Arguments
- Sections 14(2) and 19(1)(c) of the Act confer a substantive power to appoint staff and to fix terms and conditions, independent of regulations.
- The power to frame regulations is enabling, not restrictive; the Corporation must function and therefore can appoint staff during the “time-lag” before regulations are framed.
- The General Manager, as the Chief Executive, had incidental managerial authority to invite applications.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Karnakar Mangesha Desai v. State of Mysore (1966) 1 Mysore LJ 72 | Held that the Corporation could not make appointments until regulations under Section 45(2)(c) were framed. | The Supreme Court disagreed with this view and overruled the High Court’s reliance on it. |
| Dundee Harbour Trustees v. D. & J. Nicol [1915] AC 550 | Test for determining whether statutory corporations possess a particular power—whether it is expressly conferred or necessarily implied. | Applied to interpret the Road Transport Corporation Act; the Court inferred that the power to appoint staff existed even without regulations. |
Court's Reasoning and Analysis
Justice Bachawat adopted Viscount Haldane’s approach in Dundee Harbour Trustees, focusing strictly on the statutory language. The Court reasoned as follows:
- Express and implied powers: Section 14(2) expressly authorises the Corporation to appoint officers and servants for efficient performance of its functions; Section 19(1)(c) empowers it to provide suitable service conditions.
- Role of regulations and State directions: Sections 14(3)(b), 34 and 45(2)(c) collectively require that appointments and service conditions conform to any State Government directions or regulations when such instruments exist. Their absence does not suspend the Corporation’s basic power to appoint staff.
- Administrative necessity: A “time-lag” inevitably exists between the establishment of a corporation and the framing of detailed regulations. The legislature could not have intended that the Corporation remain inoperative during this period.
- Authority of the General Manager: In the ordinary course of management, the General Manager possessed authority to issue recruitment notices; no evidence showed that appointments were actually made without proper approval.
- Respondent’s promotion claim: The record disclosed no vested right entitling the respondent to automatic promotion to a Class II post.
Holding and Implications
Appeal Allowed; High Court order set aside; respondent’s writ petition dismissed.
Direct Effect: The recruitment notice issued on 21 July 1964 stands revived, and the Corporation may proceed with appointments subject to any future State directions or regulations.
Broader Implications: The judgment clarifies that statutory corporations can exercise their express and necessarily implied staffing powers even before formal service-regulations are framed, thereby overruling contrary High Court authority. No new regulatory framework was mandated, but the decision affirms corporate autonomy during the interim period.
BACHAWAT, J.— The respondent was a Class III employee in the Statistical Department of the Mysore State Road Transport Corporation. In October 1961, he was temporarily promoted to act as Statistical Superintendent at Hassan. On July 21, 1964, the General Manager of the Corporation issued a notice inviting applications for appointments to Class II junior posts of (a) assistant/divisional statisticians, and (b) labour welfare officers on a pay of Rs 220 per month in the pay scale of Rs 220-15-400-EB-20-500 plus the usual dearness and other allowances admissible under the Rules. On August 11, 1964, the respondent filed a writ petition in the High Court at Mysore claiming that the Corporation had no power to issue the notice and praying for an order quashing it. The High Court allowed the petition and quashed the notice. The Corporation has filed this appeal by special leave. For the proper appreciation of the point in issue, it is necessary to read Sections 14, 19(1)(a), 19(1)(b), 19(1)(c), 34, 45(1) and 45(2)(c) of the Road Transport Corporation Act, 1950 (Act 64 of 1950):
“14. (1) Every Corporation shall have a Chief Executive Officer or General Manager and a Chief Accounts Officer appointed by the State Government.
(2) A Corporation may appoint such other officers and servants as it considers necessary for the efficient performance of its functions.
(3) The conditions of appointment and service and the scales of pay of the officers and servants of a Corporation shall—
(a) as respects the Chief Executive Officer or General Manager and the Chief Accounts Officer be such as may be prescribed, and
(b) as respects the other officers and servants be such as may, subject to the provisions of Section 34, be determined by regulations made under this Act.
19. (1) Subject to the provisions of this Act, a Corporation shall have power.
(a) to operate road transport services in the State and in any extended area;
(b) to provide for any ancillary service,
(c) to provide for its employees suitable conditions of service including fair wages, establishment of provident fund, living accommodation, places for rest and recreation and other amenities.
34. (1) The State Government may, after consultation with a Corporation established by such Government, give to the Corporation general instructions to be followed by the Corporation, and such instructions may include directions relating to the recruitment, conditions of service and training of its employees, wages to be paid to the employees, reserves to be maintained by it and disposal of its profits or stocks.
(2) In the exercise of its powers and performance of its duties under this Act, the Corporation shall not depart from any general instructions issued under sub-section (1) except with the previous permission of the State Government.
45. (1) A Corporation may, with the previous sanction of the State Government make regulations, not inconsistent with this Act and the rules made thereunder, for the administration of the affairs of the Corporation.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:
(c) the conditions of appointment and service and the scales of pay of officers and servants of the Corporation other than the Chief, Executive Officer or General Manager and the Chief Accounts Officer;”
2. Admittedly, no regulations were framed by the Corporation under Section 45(2)(c) prescribing the conditions of appointment and service and the scales of pay of its officers and servants. In the affidavit filed on behalf of the Corporation, it was stated that the Corporation was taking necessary steps for the framing of the regulations. The High Court following its earlier decision in Karnakar Mangesha Desai v. State of Mysore [1966] 1 Mysore Law Journal 72 held that until regulations were framed by the Corporation under Section 45(2)(c) with the previous sanction of the State Government, the Corporation could not appoint officers and servants and lay down their conditions of service. We think that the judgment of the High Court is erroneous and should be set aside.
3. In Dundee Harbour Trustees v. D. & J. Nicol [1915] AC 550, Viscount Haldane, L.C said: “The answer to the question whether a corporation created by a statute has a particular power depends exclusively on whether that power has been expressly given to it by the statute regulating it, or can be implied from the language used. The question is simply one of construction of language, and not of presumption.” Bearing in mind this statement of law, let us consider whether the appellant had the power to appoint officers and servants and to lay down their conditions of service in the absence of regulations framed under Section 45(2)(c) of the Road Transport Corporation Act, 1950. The appellant is an autonomous Corporation incorporated under the Act for the purpose of operating road transport services in the State and extended areas. For the proper discharge of its functions, it is necessary for the Corporation to appoint officers and servants. Section 14(2) expressly confers upon the Corporation the incidental power to appoint such officers and servants as it considers necessary for the efficient performance of its functions. Section 19(1)(c) empowers it to provide for its employees suitable conditions of service. Section 14(3) provides that the conditions of appointment and service and the scales of pay of its officers and servants shall be such as may subject to the provisions of Section 34 be determined by regulations made under the Act. Section 45(2)(c) empowers the Corporation to frame regulations with the previous sanction of the State Government prescribing the conditions of appointment, service and scales of pay of the officers and servants. If the State Government issues any directions under Section 34 relating to the recruitment and conditions of service of the employees, the Corporation must obey those directions. The conjoint effect of Sections 14(3)(b),34 and 45(2)(c) is that the appointment of officers and servants and their conditions of service must conform to the directions, if any, given by the State Government under Section 34 and the regulations, if any, framed under Section 45(2)(c). But until such regulations are framed or directions are given the Corporation may appoint such officers or servants as may be necessary for the efficient performance of its duties on such terms and conditions as it thinks fit. There is necessarily a time-lag between the formation of the Corporation and the framing of regulations under Section 45(2)(c). During the intervening period, the Corporation must carry on the administration of its affairs with the help of officers and servants. In the absence of clear words, it is difficult to impute to the legislature the intention that the Corporation would have no power to appoint officers and servants and fix the conditions of service unless the regulations under Section 45(2)(c) are framed.
4. There is no merit in the further contention that the General Manager had no power to issue the notice dated July 21, 1964 in the absence of any resolution by the Corporation under Section12(c) expressly authorising him to issue it. In the exercise of his general powers of management the General Manager had clearly the power to issue a notice inviting applications from intending candidates. It is not alleged that he made any appointment pursuant to the notice. The respondent also contended that he had the right to be promoted to a Class II junior post. But there is nothing on the record to show that he has any vested right of promotion to the post. Civil Miscellaneous Petition No. 3032 of 1967 filed by the respondent asking for liberty to adduce additional evidence and to raise new contentions is dismissed.
5. In the order dated August 17, 1967 granting special leave to the appellant, the Court directed that the appellant must pay the costs of the respondent in any event. In the result, the appeal is allowed, the order of the High Court is set aside and the writ petition is dismissed. The appellant shall pay the costs of the appeal to the respondent pursuant to the order dated August 17, 1967.
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