1. The petitioners in the present writ petition are mechanics working in respondents’ Corporation, i.e., Andhra Pradesh State Road Transport Corporation (APSRTC). They have filed the present writ petition questioning the action of the respondent Corporation as illegal, unjust and arbitrary in not granting the selection grade scale stagnation increments to them on completion of 12 years of service.

2. Facts in brief, as pleaded by the petitioners, are that all the petitioners were appointed mechanics in Krishna Region in the year 1996, except the 5th petitioner, who was appointed in 1995. All the petitioners have completed 12 years of service. In course, of time, as the record reveals, the petitioners were transferred to Guntur Region, consequent to which, they were required to forego their seniority. In any event, despite foregoing their seniority, they are, contend the petitioners, entitled to the stagnation increments on completion of 12 years, which they did. Accordingly, the petitioners approached the respondent Corporation on 12.05.2009 and again in February, 2010 renewing their request for the grant of stagnation increments, but the same was denied by the respondent Corporation.

3. As a matter of service regulations, it is placed on record that the Corporation has introduced the special grade scales to the employees who have completed 12 years as per Regulation 12(3). As per the circular, n employee who puts in 12 years of service in the same category shall be placed on special grade service and that the selection grade will come into force for such of those employees who have completed 12 years or more years of service in the category. While fixing the pay in special grade, one additional notional increment in the existing grade is required to be given and then the fixation should take place in the appropriate stage in the special grade. Thus, irrespective of seniority in the Division level, the petitioners’ seniority shall be from the date of their appointment under the recruitment regulations.

4. In the light of the above statutory scheme, it is contended that the petitioners are entitled for selection grade in accordance with the memorandum of settlement entered into between the Corporation and the NMU union dated 21.04.1989. Conceding the aspect that their seniority for all other purposes would be reckoned from their transfer to Guntur Region, the petitioners have contended that insofar as reckoning of stagnation is concerned, it is from the date of their recruitment. It has also been placed on record that on one earlier occasion, this Court has held, per a Division Bench, that the stagnation allowance has nothing to do with region-wise seniority. Incidentally, the employees whose case was considered by the Division Bench were similarly placed as the present petitioners. Thus, the petitioners are entitled to have the stagnation allowance despite their inter-regional transfers.

5. On the part of the respondent Corporation, it has been contended by filing a counter affidavit that the petitioners on transfer to Guntur Region from Krishna Region have lost their seniority and are governed by Regulation 3(C) of the APSRTC Employees (Service) Regulations, 1964, which is as follows:

“If any employee is willing to relinquish the right of his seniority in the post held by him in the seniority unit in which he is working and is willing to join on transfer in another seniority unit at his request, it shall be treated as a first appointment for transferred employee for the purpose of seniority and he will become junior most in the seniority unit to which transferred on request. His seniority shall be reckoned from the date of his joining on transfer in the later seniority unit.”

6. It has been further contended that based on the said regulation, as per the memorandum of settlement under Section 12(3) of the Industrial Disputes Act (for short ‘the Act’), instructions were issued in Circular No.PD-30/2005 dated 04.06.2005 to a