S.K.DAS, J.

(1) THESE two appeals, brought on certificates granted by the High court of Bombay, raise common questions of law and for that reason, have been heard together. This judgment will govern them both.

(2) IN Civil Appeal No. 105 of 1956 the main appellant is the Barsi Light Railway Company Limited, Kurduwadi, within the State of Bombay (hereinafter called the Railway Company). The principal respondent is the President of the Barsi Light Railwaymens Union, respondent No. 1 to the appeal. The General Manager, central Railway, Bombay, and the secretary, Railway Board, New Delhi, are respondents Nos. 4 and 5. The facts, so far as they are relevant for our purpose, are these. Under an agreement dated August 1, 1895, between the secretary of State for India in council and the Railway Company, the latter constructed, maintained and worked a light railway between Barsi Town and Barsi Road Station on the railway system, known then as the Great Indian Peninsular Railway. It is not necessary to state here the various clauses of the aforesaid indenture of agreement except to mention that it contained a clause under which the secretary of State could purchase and take over the undertaking after giving the Railway Company not less than twelve calendar months notice in writing of the intention so to do. On 19/12/1952, a notice was given to the Railway Company, for and on behalf of the President of India, by the Director of the Railway Board to the effect that the undertaking of the Railway Company would be purchased and taken over as from 1/01/1954. The notice stated inter alia: `The President of India hereby gives this notice to the Company of the determination of the-original contract of the 1st day of August, 1895, and the contract of the 26th day of August, 1902, between the secretary of State in council and the Barsi Light Railway Company Ltd., and of all the contracts supplemental thereto, at the expiration of 12 calendar months next after the current month and the contracts shall terminate accordingly on the expiration of 12 calendar months next after the current month and the President of India will on the 1st day of January, 1954, purchase and take over the entire railway system of the Company including all the extension and,all the railways together with all its rolling stock, machinery, equipments buildings and property etc., and together with all other things, stores and fixtures etc., as specified and in the manner provided in clause 43 of the Indenture of the 1st August, 1895, and in clause 63 of the Indenture of the 26/08/1902.`

(3) ON 11/11/1953, the Railway Company served a notice on its workmen intimating that as a result of the government of Indias decision to terminate the contract of the Railway Company and take over the railway from 1/01/1954, the services of all the workmen of the Railway Company would be terminated with effect from the afternoon of 31/12/1953. The notice further stated that the government of India intended to employ such of the staff of the Company as would be willing to serve on the railway on terms and conditions which were to be notified later. On 15/12/1953, the Railway Board intimated the terms and conditions on which the staff of the Railway Company would be taken over and employed by government. The letter by which the terms and conditions were communicated enclosed three forms one for clerical and like categories, a second for categories of staff needing training or refresher course, and a third for workshop staff and other tradesmen requiring trade-testing. In substance, the new terms and conditions as embodied in the letter and the three forms stated that the service of the staff employed by government would be treated as continuous for certain specific purposes only, such as, contribution to provident fund, leave, passes and privilege ticket orders, educational and medical facilities etc. It was made clear, however, that the government Railway ru