R.M.Sahai, J. - (1.) Seeking shelter under protective canopy of equality before law and in employment guaranteed under Constitution, which has touched life of every citizen, has become a magic mirror reflecting every development in the country, uprooting every rule and law which is discriminatory or arbitrary, the petitioner, an Administrative Officer Class I of Life Insurance Corporation of India (hereinafter referred to as Corporation) has challenged validity of R. 19(2) of Staff Regulations 1977 providing for retirement of Class I and II employee at the age of 58 years being violative of Articles 14 and 16 as there is no rationale for retaining similar employees who had come on transfer from erstwhile Insurers till the age of 60 years.
(2.) Factual divergence is none. Suffice it to mention that petitioner was initially appointed in March, 1957 in Class III by Corporation. Since 1963 he is in Class I. In February, 1984 he was intimated by a notice that he shall retire on attaining the age of 58 in June, 1984. Basis for this was R. 19 of Staff Regulations, 1977, framed by the Corporation in exercise of power vested in it under Cls. (b) and (bb) of sub-sec. (2) of S. 49. Sub-rr. (l)and (2) of it so far they are relevant are extracted below. "(1) An employee belonging to Class II or Class IV and a transferred employee belonging to Class I or Class II shall retire on completion of age 60, but the competent authority may, if it is of the opinion that it is in the interest of the corporation to do so, direct such employee to retire on completion of 55 years of age or at any time thereafter, on giving him three month's notice or salary in lieu thereof. (Notified in Gazette of India; Part III S. 4 dated 21-1-1977). (2) An employee belonging to Class I or Class II appointed to the service of the Corporation on or after 1st Sept. 1956 shall retire on completion of 58 years of age, but the competent authority may if it is of the opinion that it is in the interest of the Corporation to do so, direct such employee to retire on completion of 50 years of age or at any time thereafter on giving him three month's notice or salary in lieu thereof (Notified in Gazette of India, Part III S. 4dt. 21-1-1977)." Before adverting to validity of sub-rule (2) relating to age of retirement of Class I and II, officers promoted from those appointed directly in Class III with those who had come on transfer from erstwhile insurers if Class III and promoted to Class I and II, its historical background has to be narrated to comprehend the import of submissions advanced on behalf of petitioner.
(3.) Business of Life Insurance was nationalised in 1956 by Life Insurance Corporation Act, 1956 (hereinafter referred to as Act.) S. 3 of the Act empowered Central Government to establish a Corporation called Life Insurance Corporation. The Act came into force on 18th June, 1956 and the Corporation was established on 1st Sept. 1956. Before the Corporation came into existence the Insurance business was done by private companies. Transfer of service of employees of insurers to the Corporation was regulated by S. 11 of the Act. It provides that every whole time employee of an insurer whose controlled business has been transferred to and vested in the Corporation and who was employed by the insurer wholly or mainly in connection with his controlled business immediately before the appointed day shall on and from the appointed day, that is, 1st Sept. 1956 became an employee of the Corporation and shall hold therein by the same tenure at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day if this Act had not been passed and shall continue to do unless and until his employment in the Corporation is terminated or until his remuneration, terms and conditions are duly altered by the Corporation. S. 492(b) and (bb) empowered Corporation with previous approval of the Central Government to make regulations relating to terms and conditions of service of employees of the Corporation including those who become its employees under S. 11 of the Act. First such regulations was framed by the Corporation which was known as Staff Regulations of 1956 and came into force in January, 1957. Regn. 21 of it relating to Superannuation and retirement reads as under:- "An employee shall retire at fifty five years of age provided that the appointing authority may at its discretion extend the service every year up to 60 years of age. Provided, however, that in respect of some of the employees of Insurers who are allowed to continue in service beyond age of 60 years because of the terms and conditions of employment having not been favourable in the past, the Executive Committee may at its discretion extend their service every year up to age 65." This provision, therefore, did not make any distinction between the transferred employees and those who had been recruited directly by the Corporation. It intended to achieve the objective of uniformity by providing same date of retirement for all its employees except those which were covered by the proviso. Obviously not' to affect or alter the conditions of service to prejudice of those employees who were earlier employed by Insurers. In 1957 sub-sec. (2) of S. 11 was substituted. It empowered the Government to alter conditions of service of erstwhile employees of Insurers for securing uniformity in Scales of remuneration and other conditions of service etc. On 1st June, 1957 Government of India issued an Order known as (Alteration of Remuneration and other Terms and Conditions of Service of Employees Order, 1957). Regn. 13 of this Order provided that the date of retirement of employees governed by the Regulation shall be 60 years but the Corporation may require any employee who had attained the age of 55 years to retire if his efficiency was found to be impaired. Cl. (2)of the Order provided that these regulations shall be applicable to the employees of the erstwhile Insurance Companies who had been absorbed in the service of Corporation and were in the supervisory, clerical and subordinate staff grades only. But by Cl. (16) of the Order parity in pay-scales etc. was enforced between transferred and direct appointees on or after 1st Sept., 1956. In consequence of it the petitioner, who had been appointed as an Assistant in Class III on 22nd Mar. 1967, in Pay Scale of 90T0-200/EB 15-300 was put in scale of 75-5-90-270. The impact of this order, therefore, so far the direct employees of the Corporation was that they were placed in a disadvantageous position than they were under the terms of their appointment order. On 4th Aug. 1959 an Administrative Circular was issued providing that in case of all persons (both in respect of clerical, Supervisory and subordinate cadre and officer including Field Officers), recruited on or after 1st Jan. 1959 the retirement age shall be 58 years but in case of employees appointed before 1st Dec. 1958 belonging, on the date of retirement to the clerical, Supervisory and Subordinate cadre, provision of Standing Order, 1957 shall continue to apply. From this circular it appears that the department always considered that Standing Order of 1957 which were applicable only to transferred employees were applicable to the persons appointed directly by the Corporation. In 1960 Staff Regulations were framed. Regn. 5 of this classified the employees of the Corporation into four classes designated them as Class I Officers, Class II Development Officers. Class III Supervisory and Clerical staff and Class IV subordinate staff. Cl. (19) dealt with superannuation and retirement. Sub-cls. 1 and 2 of this Clause so far they are relevant are extracted below : "(1) Transferred employee shall retire on completion of age 60; but the appointing authority may direct such employees to retire on completion of 55 years of age or any time thereafter, if his efficiency is found to have impaired. (2) An employee appointed to the service of the Corporation on or after 1st September, 1956, shall retire on completion of 58 years of age, but the appointing authority may direct such employee to retire on completion of 55 years of age or at any time thereafter, if his efficiency is found to have been impaired." This amendment for the first time obliterated the distinction between Class I and Class II and IV employees. It introduced the concept of transferred employees and the employees directly recruited in all classes and provided that a transferred employee belonging to whatever class shall retire at the age of 60 whereas the other recruited directly shall retire at the age of 58. This led to resentment in the department and the employees of Class III and IV who were appointed directly and were governed by the Industrial Disputes Act raised an industrial dispute and claimed parity in the matter of age of superannuation and in certain other matters with the transferred employees. The Officers of Class I who were not covered in the definition of workmen within the meaning of Industrial Disputes Act made representations to the appropriate authorities through their association. Industrial Dispute raised by Class III and IV employees resulted in reconciliation u/s 2(p) and S. 18(1) of the Industrial Disputes Act. The agreement entered between the Corporation and Representatives of the employees with regard to the age of retirement was; 'there will be no distinction between Class III and IV transferred employees and Class III and IV employees who entered the service of Corporation on or after 1st Sept. 1956 in regard to the retirement age which shall be 60'. It resulted into an amendment in Staff Regulations in 1966 and the agreement entered into industrial disputes proceedings were given shape of formal regulations. According to Regn. 19(1) the age of retirement of all Class III and IV employees whether transferred or directly recruited became 60 years. Therefore, the age of 58 years after 1960 continued only for Class I and II Officers appointed directly. Relevant Regn. 19(1) and (2) are extracted below : "(1) An employee belonging to Class III or Class IV and a transferred employee belonging to Class I or Class II shall retire on completion of age 60; but the appointing authority may direct such employee to retire on completion of 55 years of age or at any time thereafter, if his efficiency is found to have been impaired. (2) An employee (belonging to Class I or Class II) appointed to the service of Corporation on or after 1st Sept. 1956 shall retire on completion of 58 years of age, but the appointing authority may direct such employee to retire on completion of 55 years of age or at any time thereafter, if his efficiency is found to have been impaired." Consequently, the Officers kept on agitating and Regn. 19(2) was amended in 1969. The amended Regn. 19(2) reads as under:- "Any employee belonging to the Class I and II appointed to the service of the Corporation on completion of 58 years of age but the appointing authority may at its discretion extend his services for one year at a time up to 60 years of age. The appointing authority may, however, direct an employee to retire on completion of 55 years of age or at any time thereafter his efficiency is found to have been impaired." The result of this amendment was that the retirement age for Class I and II officers continued to be 58 years but on the discretion of the appointing authority it could be 60 years. It is averred that after 1969, that is, after the amendment of Regn. 19(2) no officer of Class I and II was retired at the age of 58 years, that is, not by regulation but by practice the retirement age of Class I and II Officers for all practical purposes became 60. No one was aggrieved In 1977, however, to the misfortune of Officers of Class I and II the Regulation was again amended by which the discretion given to the appointing authority to extend the retirement of Officers of Class I and II up to age of 60 was withdrawn. In effect the earlier position was restored and an Officer in Class I and II was to be retired at the age of 58. In para 24 of the counter-affidavit it is stated that when petitioner was appointed in Class III he was to retire at age of 55 and when he was promoted to Class I he was to retire at age of 58. And as subsequent amendments in Regulations were not retrospective he could not derive any advantage of it. A very amusing defence has been put up. It shall be adverted to later. On discrimination it is averred in para 28 that it having been held by Supreme Court that persons who were absorbed and those who were recruited constituted two different classes. The plea of discrimination was unfounded. Attempt has further been made to justify the providing of different age of retirement in paras 2, 4, 5 and 6 of Supplementary Counter-Affidavit filed by C.D. Passels. The paras are extracted below : (1) That the persons whose services stood transferred to and who became the Officers of the Corporation u/s 11(1) of the Life Insurance Corporation of India Act, 1956 were in most cases, the beneficiaries of a retirement age of 60 and even beyond while in service of the insurers whose controlled business was transferred to and vested in the Corporation under the said Act. (2) That in the light of the aforesaid facts the Corporation felt that any distinction between officers and staff, among the transferred employees, in the matter of age of retirement would be invidious and consequently, it was thought advisable to fix the age of retirement of the transferred employees irrespective of the class to which they belonged as 60 and hence the provisions of Regn. 19(1) of the Life Insurance Corporation of India (Staff) Regulations 1960, were stably amended. (3) That it may be stated here that after coming into existence of the Life Insurance Corporation of India it was necessary for it to have the expertise and experience of Officers in the employment of the erstwhile insurers whose controlled business stood transferred to and vested in the Corporation and fixing the retirement age at 55 or 58 would result in the loss of such expertise before the Corporation could build up adequate new personnel. (4) That the provision of a higher retirement of age for the transferred employees as contained in Regn. 19(1) of the (Staff) Regulations, 1960 was necessitated because of the aforesaid circumstances as could be seen from the fact that no other benefit has been conferred on the transferred employees." Extract from the office note placed before the Services and Budget Committee Meeting held on 20th Nov. 1959 has been filed as Annexure to this affidavit. As reliance has been placed on it as well it is extracted below: As regards retirement, the Government has mentioned that the Department of Expenditure has objected to raising the date of superannuation to 58 years of age on the ground that other statutory corporations are also dandling the same benefit on the analogy of the life Insurance Corporation's proposal. Standardisation Order provides that an employee shall retire at 60 year of age, but the competent authority may require an employee to retire at any time after 55 years of age if his efficiency is found to have been impaired. In the amended Regulations approved by the Board, this provision of the Standardisation Order was incorporated as far as employees in Classes III and IV are concerned but in the case of transferred officers and Field Officers the retirement age was fixed at 55 extensible 1 to 58 with a further proviso that in special circumstances only the competent authority may extend the services beyond age 58 and up to 60 years of age. The Board has also decided that administratively we shall grant extension up to 60 liberally till the end of 1963. Most of the insurers permitted their officers to continue in service up to 60 years of age and even beyond, depending upon their efficiency. There is no reason why there should be distinction between officers and staff in this matter as both of them had similar privileges with regard to retirement in the past. There is thus a strong case for extending the provisions of the Standardisation Order regarding retirement to the transferred officers also. As regards new recruits, it was thought that there was no justification to bring down the retirement age from 60 to 55 all of a sudden nor,was it considered necessary to maintain any distinction between officers and staff. All the employees have often represented that the age of retirement should be raised to 60. A compromise was, therefore, struck by fixing the age at 58. In the light of the above it is suggested that the provisions of the Standardisation Order may be extended to transferred officers and the retirement age may be retained at 58 for persons recruited on or after 1st Jan. 1950. It maybe added that this would mean a modification of the earlier decision of the Board in this matter.";