GURMAIL SINGH AND ORS. ETC. ETC. versus STATE OF PUNJAB AND ORS.

Citation: [1990] SUPP. 2 S.C.R. 367 · Decided: 25-10-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Disposed off

Judgment (excerpt)

GURMAIL SINGH AND ORS. ETC. ETC. 
v. 
STATE OF PUNJAB AND ORS. 
OCTOBER 25, 1990 
[S. RANGANATHAN, .P.B. SAWANT AND 
N.M. KASLIWAL, JJ.] 
Industrial Disputes Act, 1947: Section 25F and 25FF and Punjab 
Government Notification dared November 30, 1982-Tubewells trans-
ferred to Punjab Stare Tubewell Corporation-Permanent posts 
abolished-Temporary posts disconu·nued-Rights of affected employees. 
The appellants were in service as tubewell operators in the Irriga-
tion Branch of the Public Works Department of the Punjab Govern-
ment. The State took a decision to transfer all the tubewells in this 
branch to the Punjab State Tubewell Corporation, a company wholly 
owned and managed by the State of Punjab. Consequent on this deci-
sion, a notification was issued on 30th November, 1982 abolishing all 
the posts of tubewell operators in the Irrigation Branch, and accord-
ingly notices terminating the services of the appellants were issued. 
The appellants challenged the termination notices before the High 
Court contending (i) that the notification by which the tubewells were 
transferred was ma/a fide, the only object being to frustrate certain 
claims of the petitioners which had been judicially recognised; (ii) that 
the impugned notices did not fulfill the requirements of clauses (b) and 
( c) of section 25F of the Industrial Disputes Act in so far as the compen-
sation amount of each individual was not delivered at his door, and the 
notices under clause (c) were not sent by registered post; and (iii) that, 
in case the action of the State was. upheld, the respondent Corporation 
should be held to be under an obligation to employ the appellants with 
continuity of service and under the same terms and conditions which 
they were enjoying prior to their retrenchment from the service of the 
State. 
The High Court rejected the petitions filed by the appellants. The 
High Court inter alia found that the appellants had been given all the 
benefits which they had obtained from the court. It was also found that 
the respondent corporation had made an offer of re-employment to all 
A 
B 
c 
D 
E 
F 
G 
the· appellants effective from the date of expiry of the notices of their 
retren~hment by the State Government. According to the learned 
H 
367 
A 
B 
c 
D 
E 
F 
G 
H 
368 
SUPREME COURT REPORTS 
[1990] Supp. 2 S.C.R. 
Judges, the sole object of the issuance of the notification was to get rid 
of the tubewells which were the cause of constant and ever-increasing 
loss to the State exchequer lll!ld not ;my ma/a fide or extraneous reasons. 
The services of the appellants have since been taken over by the 
Corporation. Though at one stage the Corporation had taken the stand 
that the appellants would be taken as fresh appointees in the Corpora-
tion, it had subsequently fixed them up at the same level of pay at which 
the) were in Government service immediately before retrenchment, 
and they were also being granted increments on that scale. 
There remained two grounds of dissatisfaction: (1) that the appel-
lants would be juuior in service to the tubewell operators who had been 
engaged by the Corporation on its own account before the appellants 
joined the service of the Corporation, giving the appellants the 
apprehension that their down-gradation in seniority would affect them 
in case the Corporation started closing down some of the tubewells and 
discharging -its staff, and (2) if treated as retrenched Govermnent 
' 
. 
servant, they would be able to get terminal benefits and pension only on 
the basis of their present lengths of service in the Government. 
Before this Court, the contention of the appellants in this regard 
was that the Corporation was really nothing but a Department of the 
Government, and that in such circumstances, its "corporate veil" had 
to be torn as under and its basic identity as department of the Govern-
ment recognised and given effect to. Alternatively it was argued that 
even ifthe Corporation be taken to be a separate entity, it was clearly a 
"successor" to the Govermnent Department as the Government had 
assured the Corporation that, if it suffered any losses because of the 
transfer, the losses would be inade good by the Govermnent, that hav-
ing regard to the virtual identity of the Corporation and the Govern-
ment, this was really a case of the Corporation having taken over a 
department of the Government, and that both the Irrigation Branch of 
the State Government as well as the Corpora

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