K. Ramaswamy, J. - (1.) In this appeal by special leave, by way of additional grounds with leave, the appellant impugnes Rule 5 of the Orissa Insurance Co-operative Society Ltd. Service Rules (for short 'the Rules') as unconstitutional and-void offending Article 14 of the Constitution of India. The material facts relevant to the point are that while the appellant was working as Divisional Manager at Delhi, the general insurance business was nationalised and its management was taken over by the Central Government under General Insurance (Emergency Provisions) Ordinance, 1971 replaced by Act 57 of 1972 (for short 'the Act) and vested in the custodian of the New India Assurance Co. Ltd., the management of Orissa Insurance Cooperative Society Ltd. By operation of S. 7 of the Act, the services of the appellant and others stood transferred and vested with the custodian. Under the Act, the Board of directors was empowered to terminate the service of the officer/ employee of the insurer. The appellant was kept under suspension from August 9, 1973 pending investigation into the embezzlement. Explanation was called for on October 16, 1973. In response thereto the appellant submitted his reply on December 7, 1974. While dropping the proceeding, the appellant was served with termination order dated April 17, 1975 issued by the respondent. The appellant challenged it in a writ petition in Delhi High Court witch was dismissed by a learned single Judge on November 11, 1983 and was confirmed by the Division Bench in Letters Patent Appeal No. 351/1984 dated April 23, 1984.
(2.) Section 7 of the Act provides that every whole time officer or other employee of an existing insurer employed in connection with his General Insurance business, immediately before the appointed day, shall become an officer/ employee of the Indian Insurance Co. in which the undertaking of the insurer to which the service of the officer relates has vested and would hold his office on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him, if there had been no such vesting and shall continue to do so unless and until his appointment is terminated. Section 16(1) in Chapter V provides that if the Central Govt. is of the opinion that for the more efficient carrying on of General Insurance business, it is necessary to do so, it may by notification, frame one or more schemes providing for all or any of the following matters; (e) the rationalisation or revision of pay-scales and other terms and conditions of service of officers and other employees wherever necessary. Pursuant thereto, the Central Govt. framed the New India Assurance Co. Ltd. Merger Scheme, 1973 with effect from December 31, 1973. Thereunder by Rule 3, the undertaking was transferred to the respondent; under Rule 5 the existing whole time officer etc. became the officer of the transferee company (New India Assurance Co. Ltd,) and could hold his office on the same terms and conditions as would have been admissible to him if there had been no such transfer, as referred to in paragraph 3. He shall continue to remain as officer unless and until tits employment, in the transferee company is terminated or the terms and conditions are duly altered by any other scheme framed under the Act. By notification dated April 29, 1976 the Central Govt. also framed the scheme called the General Insurance (Rationalisation of Pay-scales and other Conditions of Service of Development Step) Scheme, 1976 which came into force on May 1, 1976, the details of which are not material for the reason that service of the appellant was terminated, in terms of the existing Rule 5 of the Rules. Suffice to state that pursuant to the nationalisation under the Act and the Scheme, the appellant became the officer of the respondent.
(3.) Rule 5 reads thus: Termination of Service: "An employee whether permanent or temporary shall not leave or discontinue his service in the society without first giving 30 days notice in writing of his intention to do so, to the Principal Officer. Failure to do so will entail forfeiture of the pay of the month. In the event of the Society not having any further need of any employee's service whether permanent or temporary, which shall be decided by the Board, the Principal Officer shall give 30 days' notice in writing for termination of his service or in lieu thereof pay such employee a sum equivalent to his one month pay including allowance up to the termination of the period of notice by way of compensation provided that nothing in these rules shall affect the rights of the society to dismiss an employee under Rule 8 for misconduct etc. without any notice or salary in lieu of notice, in the manner prescribed in these rules. An employee shall ordinarily retire from the society's service on completion of his 55th year unless the Board reserves to continue him in office for such period as may be determined from time to time.";