Decided on May 18,1983

MAN SINGH Appellant
UNION OF INDIA Respondents

Referred Judgements :-


Cited Judgements :-



Prakash Narain - (1.)As the main plank of the arguments, addressed on behalf of the petitioners, is the decision of the Supreme Court in LIC v. D.J. Bahadur AIR. 1980 SC. 2181, we may first consider that case. A writ petition u/Art 226 of the Constitution had been filed in the Allahabad High Court challenging a notice dt. 6.5.78 issued by LIC u/s 9 A of the Industrial Disputes Act and a notification dt. 26.5.78, issued u/s 11 (2) of the Act by the Central Gov. The writ petition was allowed by the High Court resulting in an appeal being filed by LIC in the Supreme Court. Another similar petition was pending in the Calcutta High Court which was transferred to the S.C. Both these matters were disposed of together. The challenge before the Allahabad and the Calcutta High Court, was preferred by Class III and Class IV employees who had contended that the impugned order and notification amounted to changing their conditions of service to their detriment vis-a-vis payment to them of bonus to which they had earlier become entitled through a settlement with L1C made u/s 18 of the Industrial Disputes Act. The appeal was dismissed by majority of 2:1 and the transferred petition was allowed directing issue of a writ to LIC to give effect to the terms of the settlement of 1974 relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation. Pathak, J. was one of the Hon'ble Judges constituting majority. Dealing with the provisions of S. 11 (2) of the Act the learned Judge observed that there were two limbs of that provision of law. The first limb conferred power on the Central Govt. to alter the scales of remuneration and other terms and conditions of service applicable to transferred employees. The learned Judge commented, 'Predictably when the transferred employees of different insurers were brought together in common employment under the Corporation they would have been enjoying different scales of remuneration and other terms and conditions of service. The power under this part of sub-sec. (2) is inlended for the purpose of securing uniformity among them'. With regard to the second limb the learned Judge held that it empowered the Central Govt. to reduce the remuneration payable or revise the other terms and conditions of service but the power had to be exercised when the Central Govt. was satisfied that the interests of the Corporation and its policy- holders required such reduction or revision. Answering the question whether the provision was confined to transferred employees or extends to all employees generally, it was held that the provision was confined to transferred employees, being a part of the scheme enacted in Chapter IV providing for the transfer of existing life insurance business from the insurers to the LIC. and the attendant concomitants of that process". With regard to the exercise of power u/s 11 (2), the learned Judge observed in para 69 :
"Another point is whether the power under the second limb of sub-section (2) of S. 11 cun be exercised more than once. Clearly, the answer must be in the affirmative. To effectuate the transfer appropriately and completely it may be necessary to pass through different stages, and at each stage to make a definite order. So long as the complex of orders so made is necessarily linked with the process of transfer and integration, it is immaterial that a succession of orders is made. I am not impressed by the circumstance that the original bill moved in Parliament for amending sub-section (2) of S. 11 contained the words 'from time to time' and that those words were subsequently deleted when enactment took place. The intent of the legislative provision must be discovered primarily from the legislation itself".

(2.)It may be worth noticing that Pathak, J. in terms has laid down, "while the first limb of Sec. 11 (2) provides for securing uniformity among the transferred employees in regard to their scales of remuneration and other terms and conditions of service, the second limb provides that if after such uniformity has been secured, or even in the process of securing such uniformity, the Central Govt. finds that the interests of the Corporation and its policy holders require a reduction in the remunertion payable or revision of the other terms and conditions of service applicable to those employees, it may make an order accordingly". Dealing with the notification dt. 26.5.1978, Pathak, J. had observed, "it is evident from the recital with which it opens that it is intended to apply to transferred employees only. It declares explicitly that the Central Govt. is satisfied that a revision of the terms and conditions of service of the transferred employees is considered necessary. However, there is nothing to show that the amendment is related to the process of transfer and integration". Krishna Iyer, J., the other learned Judge constituting the majority, observed in the context of nationalisation and taking over of the employees of the erstwhile insurers having different terms and conditions of service and divergent emoluments that, 'broad uniformity became a necessity. Thus, the statutory transfer of service from former employers and standarization of scales of remuneration and other conditions of employment had to be and were taken care of by S. 11 of the Life Insurance Corporation Act, 1956. The obvious purpose of this provision was to enable the Corporation initially to absorb the motley multitudes from many companies who carried with them varying incidents of service so as to fit them into a fair pattern, regardless of their antecedent contracts of employment or industrial settlements or awards'. The learned Judge did not further dilate at any great length on S, 11 (2) of the Act but went on to decide the matters in the context of, to put in in his own words 'the competing claims for dominance as between the ID Act and the LIC Act in areas of conflict'. Therefore, on the issue, as raised before us, it is the observations of Pathak, J. which will have to be relied on, being observations of one of the Hon'ble Judges constituting the majority. We cannot accept the contention on behalf of the respondents that on the issue of S. 11 (2) of the Act we can accept either the view expressed by Pathak, J. or by Koshal, J, (the learned Judge who was in minority).
(3.)Now what has Pathak, J. held ? First, that S. 11 (2) of the Act has two limbs. Secondly, the provision is meant for transferred employees. Thirdly, orders u/s 11 (2) can be passed from time to time (emphasis ours) to bring about either uniformity or to sub-serve the inletests of the LIC and its policy-holders. [S. 11 (2) is then reproduced].

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