In Brief
The Supreme Court held that when PEPSU Roadways department was completely merged with PEPSU Road Transport Corporation on 16 October 1956 by Government order—before PEPSU merged with Punjab on 1 November 1956—the temporary employees automatically became Corporation employees without needing separate formal absorption orders. The employees, having accepted the transfer, participated in the Corporation's pension/gratuity schemes for decades, received retiral benefits, and retired without protest, were estopped from later claiming Government servant status. The Court rejected their claim for Government pension, finding that the States Reorganization Act had no application since they ceased being Government servants before the appointed date and had acquiesced to the merger. Appeal allowed; writ petition dismissed.
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