Judgment

VAIDIALINGAM, J.: In this appeal by special leave the short question that arises for consideration is whether the State has got power to terminate the services of any member of the work-charged establishment under paragraph 11 of the Central Public Works Department Code (hereinafter to be referred as the Code) on giving one month s notice or a month s pay in lieu of notice.

2. The circumstances leading up to this appeal may be stated: A decision was taken to construct three dams right across the Mahanadi river, one at Hirakud, the second at Tikerpara and the third at Naraj as a multipurpose measure for preventing flood ravage in the Delta area, generating electricity and providing irrigation. The construction of Hirakud Dam was entrusted by the State of Orissa to the Central Waterways, Irrigation and Navigation Commission as their agent. For the purpose of the construction of Hirakud Dam, the C. W. I. N. Commission employed a large number of persons in the work-charged establishment on scales of remuneration at the rate paid by the Central Public Works Department and the service conditions of the persons so employed were governed by the provisions contained in the Code.

3. After completion of the first stage of the Hirakud Dam project, the State of Orissa decided to take over the said project from their agent the C. W. I. N. Commission with effect from April 1, 1960. The State further decided to proceed with the construction of second stage of the project through its own Public Works Department. An option was given by the State to the employees in the workcharged establishment to decide whether they would continue to work under the State on the same pay and allowances and subject to other conditions of service provided in the Code for the said work-charged establishment. The employees agreed to work under the State of Orissa and accordingly the employees were allowed to continue under the State Government.

4. The State, however, later on found that the pay allowances, and conditions of service between the work-charged personnel of the Hirakud Dam project who had been allowed to be continued and the work charged personnel in the establishment of the State Public Works Department showed a marked difference giving rise to various complications. The Hirakud Control Board recommended to the State Government to terminate the services of the work charged personnel of the Hirakud Dam by giving one month s notice with effect from March 31, 1963. Accordingly the State Government terminated the services of the said personnel with effect from March 31, 1963 by giving one month s notice; but the State also made it clear that such of those who elected to be re-employed on the scales of pay and conditions of service of the State Public Works Department would be so re-employed. On the issue of the notice by the State, 1200 out of 2300 personnel who had continued from before in the work-charged establishment left their services and the remaining 1100 agreed to be re-employed on scales of pay and conditions of service of the State Public Works Department. The employees were paid an amount equal to what they would have received by way of retrenchment compensation or by way of wages in lieu of notice.

5. Subsequently the personnel of the work-charged establishment raised a dispute contesting the termination of their services by the State. As conciliation failed, the Government by its order dated February 13, 1964 referred the dispute to the Industrial Tribunal, Orissa for adjudication.The points referred for adjudication were:

1. Whether the Retrenchment of Workmen by the authorities of Hirakud Dam Project effected in pursuance of the decision taken by the Control Board, Hirakud Dam Project on the 19th December, 1962, is valid and legal? If not, to what relief the workmen are entitled?

2. Whether the workers who are proposed to be retrenched in pursuance of the decision of the Control Board, Hirakud and are still continuing in Employment are en