The Kerala State Road Transport Employes' Association (CITU) and K. Kumara Pillai v. The Kerala State Road Transport Corporation and The Secretary to the Government, Transport Department

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **MONDAY, THE 6TH DAY OF JUNE 2011/16TH JYAISHTA 1933** ## **WP(C).No. 12077 of 2004 (K)** **-----------------------------------------** ## **PETITIONER(S):** **------------------------** **1. THE KERALA STATE ROAD TRANSPORT EMPLOYES' ASSOCIATION (CITU), REGD.NO.40/67 H.O. AZHIKODAN MEMORIAL BUILDING, DESHABHIMANI ROAD, THIRUVANANTHAPURAM, REP. BY ITS GENERAL SECRETARY, SHRI.K.K.DIVAKARAN.** **2. K.KUMARA PILLAI, S/O.KESAVA PILLAI, AGED 49 YEARS, WORKING AS CONDUCTOR, SPECIAL GRADE KERALA STATE ROAD TRANSPORT, CORPORATION VIKAS BHAVAN, THIRUVANANTHAPURAM.** ## **BY ADV. SRI.N.UNNIKRISHNAN** ## **RESPONDENT(S):** **---------------------------** **1. THE KERALA STATE ROAD TRANSPORT CORPORATION, TRANSPORT BHAVAN, FORT THIRUVANANTHAPURAM REP. BY THE MANAGING DIRECTOR.** **2. THE SECRETARY TO THE GOVERNMENT, TRANSPORT DEPARTMENT, SECRETRIAT THIRUVANANTHAPURAM.** **BY ADV. SRI.V.V.NANDAGOPAL NAMBIAR, SC, KSRTC BY ADV. SRI.SAJEEVKUMAR K.GOPAL, SC, KSRTC R2 BY GOVERNMENT PLEADER SRI.K.RAMESH BY ADV. SRI.K.PRABHAKARAN, SC, K.S.R.T.C. BY SRI.JAMES KOSHY.N., SC. KSRTC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06-06-2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **tss** ## **W.P.(C) NO.12077/2004** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **P1:- COPY OF BYE-LAW OF THE STAFF WELFARE FUND AMENDED IN 106TH MEETING OF THE EXECUTIVE COMMITTEE.** **P2:- COPY OF MEMORANDUM NO.LR.5/2186/04 SRS. 26.2.2004 DTD.26.2.2004 ISSUED BY TE FIRST RESPONDENT.** **P3:- COPY OF LETTER NO.AHO/TM/2004/205 DTD. 28.2.2004 SUBMITTED BY THE FIRST PETITIONER TO THE HONOURABLE MINISTER FOR TRANSPORT.** ## **RESPONDENT'S EXHIBITS:-** **NIL** **//TRUE COPY//** **P.S. TO JUDGE** **tss** ## **C.T.RAVIKUMAR, J.** ---------------------------- W.P.(C)No.12077of 2004 ---------------------------Dated 6[th] June, 2011 ## **JUDGMENT** The action on the part of the Kerala State Road Transport Corporation (for short `the Corporation') in unilaterally taking a decision to discontinue with the Staff Welfare Fund Scheme is challenged in this writ petition. Ext.P1 is the bye-law of the Staff Welfare Fund as amended in the 106[th] meeting of its Executive Committee. In fact, a decision to constitute Kerala State Road Transport Corporation Employees' Welfare Fund that is, Staff Welfare Fund Scheme with effect from 1.4.1972 was taken in the 80[th] meeting of the Board of Directors of the first respondent Corporation as per Agenda No.5. The constitution of the Executive Committee of the fund and the contribution to be made for constituting the said fund have been elaborately dealt with in Ext.P1. It is not in dispute that going by the same, the amount payable towards employees' contribution was Rs.45/- and the amount payable towards employer's contribution was Rs.10/-, in respect of each of the member employees. Going by the provisions under the bye-law the ultimate authority to consider and take decision on various matters vests with the Executive Committee of the fund. As per the bye-law the quorum of the committee is six and in case of difference of opinion the decision of the WP(C).No.12077/2004 2 majority will prevail. Ext.P1 deals with all the other aspects of the fund. As already noticed hereinbefore, the very decision to constitute a fund was taken by the Board of Directors of the Corporation and subsequently it constituted an Executive Committee and entrusted it the task of taking decisions in respect of the matters pertaining to the fund. While so, the impugned order viz., Ext.P2 order was passed by the Managing Director of the Corporation. As per the same, the Managing Director decided to discontinue with the Staff Welfare Fund. The said order is under challenge in this writ petition. In fact, prior to the institution of this writ petition, on feeling aggrieved by the decision in Ext.P2, the petitioners have moved the Minister for Transport. However, no decision was taken on their representation. It is in the said circumstances that they filed this writ petition raising challenge against Ext.P2. 2. A counter affidavit has been filed in this writ petition on behalf of the first respondent. I have heard the learned counsel appearing for the petitioner, the learned Standing Counsel for the Corporation and also the learned Government Pleader. 3. Manifold contentions have been raised to assail Ext.P2. Firstly, it is contended that the Managing Director of the Corporation is incompetent to take the decision made as per Ext.P2. Evidently, the WP(C).No.12077/2004 3 contention is founded on the fact that the Staff Welfare Fund was constituted pursuant to the decision in Agenda No.5 in the 80[th] meeting of the Board of Directors of the Corporation and the authority to deal with and take decision on matters pertaining to it, rests solely with the Executive Committee of the said Fund. After its institution, the employees had been enjoying the benefits under the Scheme for 30 years or thereabouts. A scanning of Ext.P1 would indisputably show that the Executive committee alone is competent to take any decision in all matters pertaining to the fund. Constitution of the said Executive Committee would reveal that the Managing Director of the Corporation is only one among the many members and, of course, with the duty to preside over the meetings of the committee. The representatives of the recognised unions are also members of the committee. As already noticed hereinbefore, the quorum for convening the meeting of the Executive Committee is six. In case of difference of opinion among the members of the Committee the decision of the majority will prevail. There is no case for the respondents that Ext.P2 decision was issued by the Managing Director based on any decision taken by the Executive Committee of the fund to that effect. There is also no case for the respondents that such a decision was taken pursuant to any decision taken by the Board of Directors of the Corporation. In the absence of any such contentions the contention of the petitioners that the Managing WP(C).No.12077/2004 4 Director of the Corporation was incompetent to take a decision to discontinue with the Staff Welfare Fund Scheme that too, unilaterally has to be upheld. Though such specific contentions have been raised in the writ petition, they have not been met in the counter affidavit filed on behalf of the first respondent. When the Managing Director of the Corporation is only one of the members of the Committee what was source of his power to assume the power of the Committee and to pass an order like Ext.P2, by himself. The respondents failed to bring to my attention any provision of law or authority to sustain such action. The learned counsel for the petitioners also contended that workmen under the Corporation are also members of the Staff Welfare Fund besides all Higher Division Officers. In the case of the workmen the action cannot be sustained in the light of the provisions under section 9A of the Industrial Disputes Act. The said contention is raised based on Sl.No.2 in the 4[th] schedule of the I.D. Act. That apart, relying on a Full Bench decision in _**P.V.Mani and others**_ v. _**The Union of India and others**_ ( **ILR 1985 (2) Kerala 412** ) it is contended by the learned counsel for the petitioners that the conditions of service of an employee especially one touching to a Welfare Fund could not have been discontinued without resorting to the specific, prescribed procedures contemplated under the Industrial Disputes Act. As already noticed hereinbefore, after the constitution of the fund the employees had been enjoying the said WP(C).No.12077/2004 5 benefit for a period over three decades and it was all of a sudden that Ext.P2 has been issued discontinuing with the same. When a Welfare Fund was constituted based on a decision of the Board of Directors of the Corporation such a Scheme cannot be discontinued abruptly, save with authority of law that too, in a most arbitrary manner, by the Managing Director. It is to be noted that though the incompetency of the Managing Director to issue Ext.P2 has been specifically challenged the respondents had not cared to counter the same and attempted to establish competency of the Managing Director to issue the same. There is nothing on record to show that a proper resolution was passed by the Executive Committee of the Welfare Fund Board to discontinue with the Welfare Fund and in that matter, in fact, no decision was also taken by the Board of Directors of the Corporation who constituted the said fund. In view of the position thus obtained in this case it can only be said that the action of the Managing Director in issuing Ext.P2 carrying the decision to discontinue with the Scheme is beyond the scope of his power. 4. I am constrained to hold so on careful scrutiny of the contentions raised in the counter affidavit. As stated earlier, in the counter affidavit the respondents have not chosen to refute the specific contentions raised by the petitioners regarding the competency of the WP(C).No.12077/2004 6 Managing Director to pass such an order. What has been stated in the counter affidavit is only to the effect that the Staff Welfare Fund is not a statutory fund and after the Government's order making the service under the Corporation as pensionable the Corporation thought it fit not to continue with the Welfare Fund. In paragraph 10 of the counter affidavit it has been stated as follows:- _“Though the proposal of the K.S.R.T.C. management to wind up the fund was placed before the Executive Committee meeting of the fund the same was rejected by the representatives of the Unions. Hence K.S.R.T.C. is constrained to issue Ext.P2 order.”_ ## (emphasis added) Taking note of the said specific assertion made in the counter affidavit on 27.3.2006 this Court directed the first respondent to make available the entire files leading to Ext.P2. Till date the first respondent has not produced the files that led to the issuance of Ext.P2. That apart, till today no document whatsoever was produced before this Court to show that the Board of Directors of K.S.R.T.C. had taken such a decision to wind up the Staff Welfare Fund and thereafter, decision was placed before the Executive Committee. Except the vague statement that the management of the Corporation had proposed to wind up the fund the date on which such a decision was taken by the management the details WP(C).No.12077/2004 7 to the said decision were neither stated in the affidavit nor the files pertaining the same were produced before this Court. The specific contention of the petitioners is that the decision to wind up the fund was not having the sanction of the Executive Committee though in paragraph 10 of the counter affidavit it has been stated that the decision of the management to wind up the fund was placed before the committee. In fact, paragraph 10 would suggest that it was rejected by the representatives of the unions. The details with respect to such a decision and also the date on which it was placed before the Executive Committee are also not specifically stated in the counter affidavit. Files, if any, pertaining to the same were also not made available. It is in the said context that the failure on the part of the respondents to comply with the specific directions of this Court on 27.3.2006 assumes relevance. Had the respondents got the files pertaining to the decision of the management to wind up the fund and also the decision of the Executive Committee thereon definitely they would have been placed for perusal to controvert the contention of the petitioners. In this case, despite the specific direction to that regard the files leading to Ext.P2 were not produced. The only presumption that this Court can draw, in the said circumstances, is that there was no decision as such, having force of law, to wind up the fund. If at all such a decision was taken that was not placed before the Executive Committee of the Welfare Fund. A proposal WP(C).No.12077/2004 8 is different and distinct from a decision. An incompetent authority may make proposal but, a decision can be taken only by a competent authority/person. The irresistible conclusion one can take in the said circumstances is that there was no such decision by the management of the Corporation and if at all there was such a decision that has never been placed before the Executive Committee. Even the proposal that was placed before the Committee was rejected by the representatives of the unions, going by the averments in paragraph 10. There is no case for the respondents that later, the majority of the Executive Committee agreed to the said proposal. In short, even going by the contention of the first respondent it is evident that the decision in Ext.P2 is not having the backing of authority. In the absence of anything to show that the Board of Directors of the Corporation had taken such a decision to wind up the fund and thereafter it was placed before the Executive Committee and that Ext.P2 order was issued pursuant to the decision either of the Board of Directors of the Corporation or the Executive Committee of the Fund, it invites interference. In that context, it is also relevant to note Ext.P3. Ext.P3 would suggest that the decision in Ext.P2 was taken without following the prescribed procedures and without placing such a decision before the Executive Committee. WP(C).No.12077/2004 9 5. As already noticed hereinbefore, the workmen were also members of the Welfare Fund. There is nothing on record to show that the benefit that was being enjoyed by the members of the workmen was taken away after issuing a notice as contemplated under section 9A of the Industrial Disputes Act. For all these reasons, I am of the view that Ext.P2 is unsustainable. Resultantly, it is set aside. It will be open to the first respondent Corporation to take a decision with respect to the continuance/discontinuance of the Staff Welfare Fund Scheme, in accordance with law, expeditiously. However, if no decision is taken to discontinue the same within a period of six months, from the date of receipt of a copy of this judgment, it shall be deemed that the decision to continue the scheme was taken and consequential steps shall be taken in such circumstances. The writ petition is disposed of accordingly. Sd/C.T.RAVIKUMAR Judge TKS