- (1.) This judgment will deal with the 33 special appeals, listed above, from a common judgment of a learned single Judge of this court, whereby the learned Judge allowed as many as 43 petitions under Art. 226 of the Constitution of India, including the 33 petitions giving rise to these appeals, and consequently declared the Life Insurance Corporation Development Officers (Alterations of Remuneration and Other Terms and Conditions of Service) Order, 1978, and the Life Insurance Corporation of India (Staff) Sixth Amendment Regulations, 1978 to be "ultra vires" and "invalid'", and issued a writ restraining the respondents, who are appellants herein, from enforcing the said Order and Regulations.
(2.) The facts in all the writ petitions are substantially similar, and therefore it would be enough for our purpose if we state the relevent facts in one of these cases. The respondent in D. B. Civil Special Appeal No. 272 of 1982 which is being taken up for the purpose of statement of facts is H. S. Chauhan. He joined the service of the Life Insurance Corporation of India (hereafter called the Corporation) in 1959. He was posted as Development Officer in the Branch Office, Churu, under the Divisional Manager Jaipur and Zonal Office, Delhi in Nov. 1979, when he instituted the writ petition (No. 1030 of 1979) giving rise to the D. B. Civil Special Appeal No. 272 of 1982 against him. As is well known, the life insurance business in this country was nationalised in the year 1956. The Life Insurance Corporation Act, 1956 (No. 31 of 1956) which will hereinafter be called the Act, was published on July 1, 1956. The Central Government established the Corporation under the Act with effect from Sep. 1, 1956, which date is known under the Act as the "appointed day". S. 7 of the Act lays down that on the appointed day there shall be transferred to and vested in the Corporation all the assets and liabilities appertaining to the controlled business of all the insurers. S. 11 of the Act deals inter alia with transfer of service of existing employees of insurers to the Corporation. S. 11(1) provides that every wholetime 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 from that day become an employee of the Corporation and shall hold his office 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, gratuity and other matters as he would have held the same on the appointed day if the Act had not been passed. It is noteworthy that S. 11(1) further lays down that such employee shall continue to hold office in future "unless and until his employment in the Corporation is terminated or until his remuneration, terms and conditions are duly altered by the Corporation. Such employee falls within the ambit of a "transferred employee" as defined in the Life Insurance Corporation of India (Staff) Regulations, 1960, and the term "transferred employee" will hereafter be used only in reference of such employees who have become employees of the Corporation by virtue of the provisions of S. 11(1) of the Act.
(3.) Section 11(2) of the Act is important. This sub-section gives the Central Government power to alter, whether by way of reduction or otherwise, the remuneration and other terms and conditions of service of employees to such extent and in such manner as it thinks fit. This power can be exercised by the Central Government notwithstanding anything contained in S. 11(1) noticed above, or in the Industrial Disputes Act, 1947, or in any other law, or in any award, settlement or agreement for the time being in force. There are some qualifying words in S. 11(2) which would show that such power can be exercised by the Central Government only to achieve the objectives speficied therein and for no other objective. A lot of controversy centres round the scope and meaning of these words, W.e may, therefore, reproduce here the exact words of the section which form the subject matter of controversy. They are: "where the Central Government is satisfied that for the purpose of securing unformity in the scale of remuneration and other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to and vested in the Corporation, it is necessary so to do, or that in the interest of the Corporation and its policy-holders, a reduction in the remuneration payable, or revision of the other terms and conditions of service applicable to employees or any class of them is called for, the Central Government may.... alter, whether by way of reduction or otherwise, the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit". Thus, the objectives for which such power may be exercised by the Central Government are : (i) securing uniformity in the scales of remuneration and other terms and conditions of service of transferred employees, or (ii) reduction in remuneration or revision of other terms and conditions of service applicable to employees or any class of them is called for in the interest of the Corporation and its policy-holders. The contention raised on behalf of the respondents in those appeals is that the words in the above quotes would show that the power conferred on the Central Government to reduce the remuneration and alter other terms and conditions of service of employees is a power conferred only in respect of transferred employees and that it has been conferred for the sole purpose of bringing about integration of service and securing uniformity in the scale of remuneration of such employees. On the other hand, learned counsel for the Corporation and other appellants contended that on a plain reading of the words of S. 11(2) as quoted above; there is no justification at all to restrict the application of S. 11(2) to transferred employees alone and that the language employed, especially the words "... or that in the interest of the Corporation and its policy-holders, a reduction in the remuneration payable or a revision of the other terms and conditions of service applicable to, employees or any class of them is called for..." is emphatic enough to cover all the employees including those recruited and appointed for the first time by the Corporation after the appointed day.;