APSRTC Employees Appointed In Regions Forming Part Of Telangana Will Be TSRTC Employees Following Andhra Pradesh Bifurcation : Supreme Court

The Supreme Court held that the employees of the Andhra Pradesh State Road Transport Corporation (APSRTC), who were appointed at regional levels in areas which formed part of the State of Telangana, will continue as employees of the Telangana State Road Transport Corporation (TSRTC), which is the successor corporation following the bifurcation of the State of AP.

The Supreme Court set aside the judgment of the the division bench of the Andhra Pradesh High Court which allotted the employees to the APSRTC based on the fact that they were serving in AP on 02.06.2015(date on which TSRTC was formed).  

A bench of Justices P.S. Narasimha and Pankaj Mithal held that the division bench applied incorrect law. 

Brief facts

In this case, the respondents are Class III and Class IV employees of the Andhra Pradesh State Road Transporation Corporation (APSRTC), who were working as conductors, drivers and shramiks. 

They were appointed between 2014 and 2017 in districts, and more particularly zones carved out under the Presidential Order, read with Article 371D of the Constitution. The said zones now form the part of State of Telangana which was formed under Section 3 of the Andhra Pradesh Reorganisation Act, 2014. The bifurcation also resulted in the bifurcation of the APSRTC and the Telangana State Road Transport Corporation (TSRTC) was formed on June 6, 2015.

On June 18, 2015, the Indian Government reconstituted the APSRTC Board of Directors with members from the Central Government, the State of Andhra Pradesh and the State of Telangana to determine the permanent allocation of employees between the APSRTC and TSRTC.

On August 16, 2017, the Board prepared a detailed Agenda Note which was approved on August 24. The Agenda Note sets out the modalities for allocation of state cadre, zonal and regional cadre of employees of the Corporations. However, in the meanwhile, the APSRTC issued a notification on June 6, 2017, repatriating employees who were on deputation to their parent cadres in TSRTC. 

The repatriation orders were challenged before a single judge of the High Court and were set aside on grounds that upon bifurcation, the guidelines for the allocation of employees between APSRTC and TSRTC were not finalised.

However, on an appeal preferred by the APSRTC, the High Court granted interim relief and stayed the order of the single judge on the grounds that the guidelines for the allocation of employees were jointly finalised by the APSRTC and TSRTC. It directed the respondents to report to their parent zones under the TSRTC, where they were initially appointed.

Order of the Andhra Pradesh High Court 

Subsequently, when the division bench of the High Court heard the case on payment of salaries, it adopted a different view and directed permanent allocation of the respondents in their deputational posts falling in the State of Andhra Pradesh.

Referring to proviso 3 of Section 77(2) (provision relating to other services) of the Act, it held that even though Section 77 applies to state government employees, an analogy must be adopted by the appellant for the allocation of its employees. Hence, for local, district, zonal and multi-zonal cadre employees, it will be deemed to be allotted to the successor state where they were serving on the appointed date. 

Since the employees were serving the APSRTC, the Court permanently allotted the employees to the APSRTC. This has been challenged by the concerned employees and TSRTC. By an order dated October 5, 2020, the Supreme Court stayed the judgment of the division bench.

Arguments of parties 

Senior Advocate Gourab Banerjee, for the APSRTC, submitted that the High Court's analogy with Section 77 is incorrect and the Court failed to take note of Section 82 (provision for employees of public sector undertaking) of the Act. He also submitted that the Agenda Note dated August 16 provided that Class III and Class IV employees are recruited at a regional level and belong to the respective Corporation in which the region falls after the bifurcation.

That is why, the Board found that there is no necessity for formulating guidelines for the allotment of these employees between the APSRTC and TSRTC. Banerjee added that this decision of the Board has been not challenged. 

Lastly, he stated that as per the Interim Order of the High Court, the employees have also reported to their parent zones under TSRTC. 

These arguments were supported by advocate Ruma Sarasani for TSRTC. 

Whereas, advocate G.V.R. Choudary, for employees, supported the judgment of the division bench of the High Court. Choudary submitted that the approval of the Agenda Note was only with respect to the allocation of state-cadre employees and does not extend to Class III and Class IV employees. 

Lastly, he argued that the modalities for allocation were not decided in respect of the Agenda Note.

What did the Supreme Court say?

The Supreme Court noted that the issue before it was whether the High Court's reliance on Section 77 is correct as it applies to state government employees. Or whether Section 82, which governs the services of the respondents, as it relates to employees of Public Sector Undertaking, should have been applied. 

Distinguishing the two Sections, the Court noted that the statutory mandate of Section 82 read with the Agenda Note clearly states that the respondents will continue their employment in the same region, which is under the present TSRTC. 

It said: "Pursuant to this, the Board prepared the Agenda Note dated 16.08.2017 that sets out the allocation of various kinds of employees between APSRTC and TSRTC. Upon going through the Agenda Note, we find that the Board has decided that Class III and Class IV employees, who are appointed at the regional level, are to be allocated to the Corporation in which the region falls after bifurcation. There is no dispute about the fact that the respondents were recruited at the regional level and belong to the successor state Corporation in which the region falls."

The Supreme Court further noted that the High Court incorrectly relied on Section 77 of the Act and has in fact failed to notice Section 82. It observed: "The High Court also ignored the correct enunciation of the applicable law in the order dated 18.04.2018, whereunder the respondents were directed to report at their parental zones as per the guidelines. As there is no dispute about the applicability of Section 82 even at the bar, the submission of Mr. G.V.R. Choudary that the modalities for allocation have not been decided cannot be accepted in light of the Agenda Note dated 16.08.2017."

Further, the Court noted that the division bench of the High Court failed to note that the respondents who were on deputation were not absorbed in the deputed posts. In fact, their seniority is continued in their parental zones.

Case Details: Andhra Pradesh State Road Transport Corporation & Ors v. V.V. Bramha Reddy & Anr, Civil Appeal No. 5267 of 2024

Citation : 2024 LiveLaw (SC) 665

Click here to read the judgment