1960 (11) TMI 118 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of Section 20(1) of the Air Corporations Act, 1953, to the appellants.
2. Whether the contract of service between the appellants and Scindia Steam Navigation Co. Ltd. (Scindias) was assignable or transferable by law.
3. The obligation of the Scindias to reabsorb the appellants if they did not want to join the Indian Air Lines Corporation.

Issue-wise Detailed Analysis:

1. Applicability of Section 20(1) of the Air Corporations Act, 1953, to the Appellants:
The main contention of the appellants was that they were not governed by Section 20(1) of the Air Corporations Act, 1953. Section 20(1) stipulates that every officer or employee of an existing air company employed prior to July 1, 1952, and still in its employment immediately before the appointed day, shall become an officer or employee of the Corporation from the appointed day. The appellants argued that they were not employees of Air Services of India Limited (ASI) but were on loan from the Scindias, and thus Section 20(1) should not apply to them. However, the court found that the appellants were indeed working for the ASI, were paid by it, and were under its control, making them employees of the ASI for the purposes of Section 20(1). Consequently, as they did not exercise the option to opt-out by July 10, 1953, they became employees of the Corporation from August 1, 1953, by operation of law.

2. Whether the Contract of Service Between the Appellants and Scindias was Assignable or Transferable by Law:
The appellants argued that their contract of service with the Scindias was not assignable or transferable even by law. The court referred to the proviso in Section 20(1), which allowed employees to opt-out if they did not want to join the Corporation. The court held that even if the contract of service could not be transferred without consent, the statutory provision gave the appellants the option to not join the Corporation, thereby making the provision reasonable and in the interest of the employees. The court also noted that the appellants did not exercise this option, thus their argument lost its force.

3. The Obligation of the Scindias to Reabsorb the Appellants if They Did Not Want to Join the Indian Air Lines Corporation:
The appellants contended that even if Section 20(1) applied, the Scindias were bound to take them back. The court rejected this contention, stating that once the appellants became employees of the Corporation by operation of law on August 1, 1953, they had no further rights against the Scindias. The court emphasized that the appellants could not claim to be reabsorbed by the Scindias or seek any alternative benefits from them, as they were now legally employees of the Corporation.

Conclusion:
The court concluded that the appellants were governed by Section 20(1) of the Air Corporations Act, 1953, and became employees of the Corporation from August 1, 1953. The contract of service was effectively transferred by statutory provision, and the appellants had no further claims against the Scindias. The appeal was dismissed, and no order as to costs was made.