KERALA STATE ROAD TRANSPORT CORPN. versus K.O. VARGHESE AND ORS.

Citation: [2003] 3 S.C.R. 779 · Decided: 17-04-2003 · Supreme Court of India · Bench: SHIVARAJ V. PATIL · Disposal: Disposed off

Judgment (excerpt)

.. 
KERALA STATE ROAD TRANSPORT CORPN. 
A 
I' 
K.O. VARGHESE AND ORS. 
APRIL 17, 2003 
[SHIVARA1 V. PATIL AND ARIJIT PASA YAT, 11.] 
B 
Service law---Road Transport Corporation Act, 1950-Section 34-
Kera/a Service Rules, 1959-Part JIJ-Absorption of employees of Stale 
r 
Transport Department by State Road Transport Corporation-Enhancement c 
of pension rates-State Government authorizing Corporation to pay pension 
to employees as per Kera/a Service Rules-Co1poration fixing cut-off date for 
payment of enhanced pension and dearness relief due to financial stringency-
High Court holding fixing of cut-off dale irrational-On appeal, held: High 
Court not examining the effect of Corporation's instructions based on State 
Government's instructions and its impact on the authority of Corporation to D 
fix cut-off date-Hence mat/er remitled to High Court for fresh examination. 
lnte1prelation of s/alutes-Statutory construction-Adoption of statute 
by incorporation and by reference-Discussed 
Appellant-State Road Transport Corporation absorbed persons employed E 
in the State Transport Department. Their service conditions were protected 
under section 34 of the Road Transport Corporation Act, 1950. In 1978 other 
employees who opted for pension were also granted pension at par with these 
employees. State Government by letter dated 17.3.1984 authorized the 
~··· 
Corporation to pay pension to its employees in terms of Part III of Kerala F 
Service Rules, 1959 (KSR). Corporation by letter dated 5.5.1984 took note of 
the letter. In 1992 and 1994 the date from which the amount is to be paid was 
deferred since Corporation had no means to pay the enhanced rate of pension 
as per the Fifth Kerala Pay Commission. Respondents filed writ petition 
seeking declaration for pension a·nd dearness relief itt enhanced rates on par 
with the employees of the State Government. Appellant-Corporation also filed G 
writ petitions. Corporation contended that it is an instruction in terms of section 
34 of the Act while pensioners contended that the Government only allowed 
the Corporation to defer the matter for some time. High Court held that there 
was no rationale for fixing the cut-off date for payment of the enhanced pension 
and the dearness relief since Part III of the KSR had been adopted; that in the H 
779 
780 
SUPREME COURT REPORTS 
[2003] 3 S.C.R. 
A absence of any rule or regulation framed by the Corporation, KSR is applicable 
to the employees appointed by it; and that the employees transferred from State 
Transport Department are to be paid pension and dearness relief from the date 
the Government servants got it. 
In the other appeals in addition to the general questions raised, the issue 
B raised relates to the recovery of the amounts paid in excess due to wrong fixation 
orders. 
Appellants-Corporation contended that the wage structure is the domain 
of the Corporation- employer a nil it has the choice to fix the cut off date for 
C enhanced pension and dearness reliefs; that even if it is accepted for the sake 
of arguments that the letter of the Government was not an instruction in terms 
of Section 34 of the Act, yet the Corporation was not denuded of its power to 
fix the wage structure and for good and sufficient reasons it fixed the cut off 
dates, the High Court should not have interfered with it; that the take over 
document has not been considered by the High Court properly; and that whether 
D the KSR was applicable by incorporation or by reference has not been decided 
by the High Court and this may be one of the factors which was to be considered, 
but it did not have any determinative force on the issue as to whether the 
Corporation has the power to fix a different cut off date taking into account 
several relevant factors like financial stringencies etc. 
E 
Respondents contended that by take over notification whatever was given 
to the Government servants was also to be given to those employees who have 
been transferred from the Department to the Corporation; that there is no right 
to vary the cut off date, even if it is accepted that Corporation's financial health 
is failing, the old pensioners should not be deprived of their legitimate 
F entitlements of pension, thus the order of the High Court suffers from no 
infirmity; that there was no question of fixing a different cut off date as the 
Corporation by letter dated 5.5.1984 took note of the State Government's letter 
dated 17.3.1984 by which it author

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