Trending: Call for Papers Volume 4 | Issue 4: International Journal of Advanced Legal Research [ISSN: 2582-7340]



Merger and acquisitions often done with a view to consolidate firms for profit or decrease competition, often command less favour from the employees involved in it. Those that work in the firms going under mergers and acquisitions often fall in a vulnerable category and are prone to rescue. One such case is of Ram Pravesh Singh and Ors. vs. State of Bihar and Ors wherein in the year 1976, the Bihar Government, the Board and Rural Electrification Corporation brought into existence a society registered under the Bihar Co-operative Societies Act, known as the ‘Futwah – Phulwari sharif Gramya Vidyut Sahakari Samiti Ltd. (for short ‘the Society’) to execute a REC Scheme for better distribution of electricity to rural areas. The Board suggested to revoke the licence granted and want to merge with Board. However, thereafter, the State Government took a decision that the assets and liabilities of the society should be transferred to the Board, but not the services of the employees of the Society. Therefore, the employees of the society (appellants) filed CWJC Nos.1503 of 2000 and 14394 of 2001 seeking a direction to the Board to absorb them in equivalent posts with continuity of service and also pay their arrears of salaries, allowances and other dues. They contended that they had a right, both in law and in equity, as also a ‘legitimate expectation’ to be absorbed into the services of the Board.

Now, the question that arose was if any obligation on Board – either contractual or statutory, or on equitable considerations-to absorb the services of the appellants?

To this, the court held that, a person can be said to have a legitimate[1] expectation of a treatment, ‘if any representation or promise is made by an authority, either expressly or impliedly, or if the regular and consistent past practice of the authority gives room for such expectation in the normal course. Where the board made no such promises, the expectations has no legal role and hence the employees are not entitled to any compensation or else offered a job back in the board.

Often when the laws themselves are not able to do justice to the rights of employees, judiciary over rules them, turning in favor of the employees.

[1]2001 (49) BLJR 56, 2001 (88) FLR 864, (2001) IIILLJ 260 Pat