AJOY KUMAR BANERJEE & ORS. ETC. v. UNION OF INDLA & ORS. ETC

Citation: [1984] 3 S.C.R. 252

Court: Supreme Court of India

Bench: Y.V. CHANDRACHUD, R.S. PATHAK, SABYASACHI MUKHERJI

Case summary

16, Rixhr ~( CemrolGam~ mcnt to from~ Jcht-s undertilt Act-Whtthtr affects fundamrnta/ rifhUof - rmp/oyeuofcompanlu constitutedunclrr the Act. d os heina beJiund the scopeof the authority orIhe Central Government, under tbc Gtneralln>Uroncc Bu"neu(JIIarlonali<aoion) Act,...

Judgment text

I 252 l A AJOY KUMAR BANERJEE & ORS. ETC. l v. · 1-, UNION OF INDIA & ORS. ETC. B ! 12fst March, 1984 I [Y. V. CHANDRACHUD C. J. , R. S. PATI! AK Al'D SABYASACHI · MUKHARJI, JJ. ) c Constitution t>[ India 1950, Artie/~. • 14, I9(1) (g),'Artie/~ JIB & G•~~trar ! muranceBusinrss (Natia~tolisQtion) Act 1972Src. 16, Rixhr ~( CemrolGam~ mcnt to from~ Jcht-s undertilt Act-Whtthtr affects fundamrnta/ rifhUof - rmp/oyeuofcompanlu constitutedunclrr the Act. 1nc/Ju/on of on1Act In rite Ninth Srltt t unimsof oppficotion-Pit grMral insurQna tom- . POnln \ Crn f1980 rrfttllif/1/0 r~vlsioll ofpay sraltsatJ4 othtrlrrnu ondcondillonsofservice-Whtt! ttr u/11o vlru Sec. /6{2) oud;,. ,JiJ-· ·IVhttlttrsuf! rrsfrom vi" oft. tcuslvc · the Central Gov~rnment in erciseofthe powerscontained in s. 16(1) of the Act and four co:np, nies; ~riental Fire and General Insurance Company, Naliolkll Insurance Complny N•"' India Assurance Compan)' and United India Insurance Company Ltd. , wm merged into and they.

alone "ere allowed to carryOTl the busine. s of ! g by, 1974, fronted a ·• i1 '. cheme'called the General Insurance (Rationalisation and Re,·ision of Pay Sal,. and Other Cond1tionsofService orSupervisory, Clerical and Subordhate StU! ') S:h n ofpay scales and otbcr r~ ltrmsand condilionsofservice ofemploy«s working in sup:rvisory,clericJIand ! llbordioate positions 'and governed the pay scales, dearness atlowanec, other i a! Jowaoces and other t~rms and conditionsofthe general insurance emp! oyees. Plroyaph 23 or the Scheme prolrided that the new 'seal~ of pay' shall remain in force till Decnnber 31, 1976 and thereafter shall continue to be in force Wll $ well as to subserve ohe. object and purpo Uroncc Bu"neu(JIIarlonali ppropriote amendomnt , ivina power to the CentralGoVI'rn- F ment 10 frame any scheme as Itconsidersfit and proper. ·. (2900 ; :Z'JIA·BI · 1· (b) Tht! ' lh• ' · ' [1 and the time factor, hardly can r. o into the matters in detail. The pr.

lctice ofempowerinll the e•ecutive to mul t the lesislature must lay down the guid~lines, the principlesof . ,t policy for the authority to who m pow~r to make lUbordinate leglilation is mtru~Jed. The le&itimacy of delegated legislation dop. :nd upon its b Sary for the purpose ofe~er~ t ci•in&i. s lc~\Siative power. :tfcctively and compktely. Tile l latht po~icy ~nd lay down the standard which i' to be enacted into a rule of F ~· ! '""• ar. d ... -h:. t can bedolcgated is the ta1k of subordinate legislation' whkh by ( 111 \ery nJture is ancillary to the ·~tature which ddcgatcs the power to make it ~ e! f I41Ure itself in dctcrn1ining ! he c. ,tent of .! : 1 1 edtk¥O&t ets tht dclc~;ation, {277El · . . · ~~ · . . ~Dd . emstan~case, the Acl mus t be read In conjunction \\ith the Mein~· \ •bo~llliJl Claus~ No. 16 of the Dill whi~h Introduced the Ad in qucstjori. But Ac1 ,. :~· h mu,t be read in c~njun. :tion with sub·se. :tio n 2 '_'fsection 16 of the - H 11.

e&; hclearly iodk Ulllic'Sector. corporations. The: lc«islature h! lWever,is free to ··. recognise the d. tgree er- Jegislature and strike down a p. Uticular classifkation on the ground that any ·under-tnctusion namely JtJat some others h~ve been. left untouched so long as there is ilo ~iolation ofconstitufioilal rtstraints. [~85D~E] ,.. . . ' 9. : Pit~e-'mealapproach to a general problem permitted by under-inclusive classifieations, is ~ometimesjustified when it is considered that· legislatures deal · · with $uch probl~m. ·usually <>n an expc:rimental basis. It is impossible to' tell how successf~lap~rticular Jlpproach might. be, what dislocation might occur~ and ·Situatioii inight develop and what new evil might be generated in the attempt. 7\. dminisl{ative expediettts must· be forged and tested. Legislators recogniziog. these factors ll)lght wish to proceed cal! ,tiously, and courts must allow to do so. . [286B-C] Specilil CotJrts Bill, [1978) 2 S. C. R. 'p.

476 at pages 540-541, Stare of Gujorat m~d'Anr. v. Shri Ambica iJills Limited, Ahmedabad, etc. , [1974] 3lS:C. R. p. 760· and f?.. K. Garif etc. v. 'U11ion ofIndia ct Ors.! etc. , [1982] 1 S. C. R. p. 947, referred ·to. • In·the'instant case. -as there was no industrial dispute pending, the around that th~ pe. titioners'have been chosen out of a vast body of workmen to bediscri- , F . · minatea against and exclu&d from the operation of the Indu~trial Disputes- Act, is no grounlthat·therehas beenno violation of Article 14 of the Constitution. . [2860} tO. Differentiation is ttot:a! ways discriminatory. If there is a rational ne~ , orr the basis ()f which differentiation has b~n made with·the object sought'to be • achieved by particular provision, then such differenti! ltion . is n<>t discriminatory :G and does not violate· the principles of Article 14 of the Constitution. There. is ·intelligible basis ·for differentiation.

Whet~er the same result or better result ~outd have been achieved and better basis of differentiation evolveq is within the . 4omain ofle~islaturl,}and mu! t be left to the wisdom o_f the legislature. . · . . · • · · , . [21l8H-:a9Bl . . . t t •. Article 14tloes not prevo11t the Le~h\fure from introducine· a re'ft>rm ·. u i. e. by applying the Ieaislati~n to . some institu~ions or objects·or areas oJ! Ily . a«ording. to-the-e:ttigency oNh1situatiol'l ~d further classifi~ation of seliwtmn . Mn be SU&~incd on historioalreasoas or reasons of admipistrativc exipaey . o• } . A. K. BANERJEE v. UNION 257 / . . ~ . 'Piece-meal method of introducing reforms. The law need not apply to'all the· A . . - } 1lt;rs9Jfs in the sense of having a universal application to all persons.

A law can -~sustained if it deals equally with the people of[well-defined "Class-employees of "Insurance Companies as such, and suc}l a law is not open to the charge of'de~ial ··ofequal protection on the ground that it had not appliCation to other persons.. . . ~~~ B State ofKarnataka & Anr. etc. v. Ranganatha ~eddyf& fAn;. etc. [1978] I S. C. R. p. 641 at pages 672, 676 & 6~1.. , referredlto. To the in~tant case, for the purpose of rationalisation, ·the illsuriince com- ell--;-:"Interpretation ofStatutes" Twelfth Edition pp. 196-198, referred JX (:ottoo- Spinning '& Weavint Mills Co: J:. td. v. State of u. P. &,Ors. , H {1961] 3 S. C. R. t>· 185 and U. P. State Electricity Board &: Ors, v. Hari Skankt7 . rtiJAaiul Or:r. , U979] 1. S. C. R. p, il. 55, referred to. . , ' ! SUPREME COUR~ RE~ORT~ . 258 ' [1984) 3s. c ·. . ;· . ·R~ l . IS. Th~Gene. ,;llruurance Business (Nationalisation) Aci was PU . . I' A N~th Scheduleofthe Constitutionas ltcm. 9Son IOtll Aug~st 1975. / ;: 1!

1•· 'j 1 therights of the petitioners had b«n a~ectcd. by. t~e sch~me of 1980thea~· i',,, risbts would not enjoy immunityfrom bemg •crut~nased samply be~use theAct' '; : I uodet·which thescheme was framed had been put m the N_inth Schedule. In . 10 eventany right which accrued to the persons concerned praor to the plac Y ' : t of the Actin'the · N"ant1r Schedule c:~nnat• be retros~,... cavet" 1y anccted.. byCln (e) the alteration of the memorandum and articles. of association of the acquiring company for such purposes· 0 as may be necessary to give effect to the sche~e ; If) the continuance in the acquiring company of the services of all officers and other em-ployees of the Indian insurance company which has ceaSJ! e to exist by reason D ·Of the ·scheme, on the same ·tenns and conditioqs which they were getting or, as . the case may be, by which ·they were governed immediately before the.

commencement of tl~e scheme ; ·(g) therationalisation or revision of pay scales ·and other 11 · terms aqd conditions of service ott officers and other em~ _, ~ .. ployees wherever necessary ·; ·(h) the transfer to the acquiring company of the provi- ·dent, supperannuation, welfare and other funds relating to the officers and other employees of the Indian insurance company which has ceased to exist by reason of the scheme ; , (i) the continuance by or against the acquiring company of legal proceedings pendin! i.. , by . or against any Indian Q insurance company which 'bas ceased to exist ·by reason / of the scheme, and the initiation of such legal proceedings, civil or criminal, as the Indian insurance company _might have initiated if it had not ceased to exist ; ,,,(j) such incidental, consequential and supplemental H matters as are necess;ry to give fuil effect to the . Sl::heme. ·. i. ... 262 SUEREME COURT RI! PORTS [1984] 3 s. c. R... ' A. · · (2) :.. In framing· . schemes under.

sub-section _(1). the object. nf ·'the}~traF. GnveJD. ment · shall·be·to ensure1hat ultimately there are only f,_our companies (excluding the Cor- / poration) in existence and that they are so situate as to render ' . tht:ir combined services effective in all ·parts of India·. B (3) Where a scheme unrler sub-section (1) provides. ·. \ for the transfrr of any property or liabilities, than, by 'Wrtue . of th~ scheme,_ the property shall stand tFansferred to and_ vested in, and those liabilities shall be tramferred to and be· come the Jiabilities of the acquiring company. c (4) If the rationalisation or revision of any pay scalesor other terms and conditions ofservice under any scheme is not acceptable to any officer or other employee, the acquir- -ing company may terminate his employment by giving himcompensation equivalent to three months remuneration~· ·. J ;'Said A. ct, i. e. a sc! 11!

11l; mtd~ under this chapter was only for the pur- 8 pose of provicling fur the· m~rger of Indian insurance companies, and -( ·this was made Clc.. tr by Section i6(2} of the Act. Section 16(4) oUhe 'Said Act, it was co. 1tentkd on· beh'llf of the petitioners, implied that . any scheme of rationJiisation or revision of ·pay sc. tles and other ·terms could only b~ in the context of merger and amalgamation of one or more of tbe companies. In this connection mention was made in the petition ;r the "Memorandum regarding delegated 11egislation" submitted to the Parliament along with the General Insurance Business (Nationalisation) Bill, 1972 (Bill No. 60 of 1972), , which later became the aforesaid Act. It was made explicit, a~cording to the petitioners, that clause ·16 of the Bill, later Section D 16 of the Act "empowers the Central Government to frame one .

-or more schemes for the merger of one Indian insurance company with another or for the amalgamation of the two or more Indian ;insurance companies and for matter consequential to such merger )--or amalgamation, as the case might be. " It was in the afore~aid > -context of merger of companies that Section 16(l)(g) provided for • rationalisation and revision of pay scales and other terms and coll- . Oitions of service of officers and other employees wherever necessary. · ·In exercise of the powers contained in the aforesaid Section J6(1) ofthe said Act, four m~rger schemes were framed in 1973 by --the Central Government and the four companies, Oriental Fire and r;... ~nd General Insurance Company Ltd. , National Insurance Comt -. Pany Ltd. , New India Assurance CoD)pany Ltd. , and United India ,.. Insurance . Company Ltd. , into one or the other of which several _general insurance companies in the country were merged, were alone allowed tocarry- on the business. of genera[ insurance.

The G j)reamble of the scheme,"called the New India Assurance Company Limited (Merger) Scheme, 1973, had stated that'the Centntl Government was o( the opinion tha_t for the more efficient t;arrying on of ~ ~ihe general insurance business, . it was necessary to frame scheme for · the merger of certain . Indian Insurance companies in . the New H lnd ia Assurance Company Limited. The preambles Of the merger ~chemes in respect of the other three companies were on similar ·, SUPR'EME COURT REPORTS [1984. ]3 s. d. R. 1- lines. These four companies are subsidiaries of the General Insurance Corporation of India. The cotnpanie~ started functioning from . " 1st January, 1973 and the process of merger of the various com· panies into one of ,the othef four companies was completed by 1st January, 1974, when the said four schemes came into force. The ·said schemes p~ovided for the transfer of officers and employees , . B of the merged companies to the transferee Company.

The memo- x nindum and the articles of association of the four Companies were. " ~ . also . suitably altered by the said schemes. Thereafter there had beeli no merger or an:talgamation of any insurance company. The petitioners stated that there had been no reorganisation of generat . insurance business either. This position is not in dispute. . •· By a notification dated 27th May, 1974, the Ministry of Finance (Department of Revnpne l/. nd Insurance), Government of _r India, framed a 'scheme' called the General Insurance (Rationalis'a- · tionaild Revision of,Pay Scales and other CondHions of Service of D Supervisory, Clerical and Subordinate Staff) Scheme, 1974, arid the ;reamble of the scheme. stated that "whereas the Central Government is of the opinion that fot the mqre efficient carrying on genera! . t,_suiince business, it is nece~sary to' do~', therefore, in exercise or· . the. powers conferred by Section 16(l)(g) of the aforesaid Act, the ' . . . . .

· Central Government framed the $s~heme' to provide for the -.. r· wance and other allowances and service conditions. The Chief Labour Com- cmissioner (Central), Government of India; Ministry of Labour, issued concifiation notice dated 11th September, 1980 under the Industrial Disp'utes Act, 1947 to the Chairman of the General Insurance Corporation and the general secretaries of the employees' asso. ciations. _There were several meetings·. It was decided, accord· ing,.. t u~iness or merger or ama! g\mation of the companies ~ould n'ot fall within Section 16(l)(g) of the Act According to· the petitioners. lhe' only properly called 'schemes'sanctioned under Secflon 16(1) aref.. those four· 'merger 'schemes of 1973 as would b'e evident trom the · preamble to the Act. E The petitioners further contend tliat under the Life Insurance· C,orporation Act, Banking Companies· Act, etc. there were po~ers; to frame regulations independently of reorganisation. But there is no su~ power, .

according'to the petitioners, under the General' Jnsural}ce Business (Nationalisation) Act, 1972. The said notification· therefore is without the authority of law. It is, further, submitted that the present service conditions.. of the employees unn:Hrted tO oP. is. 278 [1984j 3 S. C,Jt. . . . A - J~surance ~orp. oration (Amendment)·. Act, 1981 where the·P~licy of: ''the Act as stated in the-preamble··? f· the·Amendment Act was th ' · "for securing the· intere~ts of ·the Life lnsuram;e Cor~JQrarion :~ India and its policy·holders and to control,the cost ofadministra· tion, it is ~ecessary that revision of the terms. and condition o£· B t note the decisions. Reliance . was placed on the decisionill ~he cas, ofMaJmJ Mohan Pathak v. Union of httlia & Or. fthG fl _. Life lrburance Corporation (Modification of Settlement) tiel, 1976. ~ ~ The questions involved in that decision, in the vi~·\\ \l"e htW~ takcn'as- . 1well as in the facL1 of the instant case, arc not relevant.

In last mentioned Ca~e there Was a Writ pdition which was allowed b)' the learned single Judge of th~ High Cou~t 1111d appeal was pr-eferred> from that decision. During the pendency of the appeal, th~r~ ~as· c an amendment to the Act namely, the life Insurance Corpor~uon (Modificatior ofSettlement) Act, 1976. In-the Letters Putent Appeal, the Corpo~ation stated that in view of the imptlgned Act, there wiiS no nectbctty f_or procetding with_the appeal and the Division D~oc~ ofCalcutta . H•gh Court made no order. on. the· said npp(l11. ThtS. . H ,1) (1918]3 S. C. R. 334. \~:-~~-r... ' . I . .. ;. >.. "K. Jl:\~L"RJ~I! v. W! ON (;1/uk/wr}i, J. ) . . ; 2 9 ·_. · '. rt h~lcl among otb;r things tl;at tlie rights ~r . the ~1rties had . -ccu • ed in· the JUdgment and became the basis of a Mandamus A . ~rysta1111 . . :1 b . . 'gh Coutt and 1t cou1• not e taken away by mdirect fashion ~fthe HI · d by the Act undcr. chalknge before this Court. , I. ·propose · · F. ~h-andrachud ,' J.

• as th_e l1arn~d. Chief iustice then was, sp~ak f. : for himselfand F~zal. All and Shanghai, JJ: concurred with the B I' . mg · · 1 h · · -majority vJ«:w on the b~sl:i t. J. lt t e tmpugned Act violated Article j1(2}ofthe Constitu_lion and Wds therefore void. Bhugwati, J. speak- : · iogfor himself and_on behalf o~ Iyer & Desai, JJ. was ofthe view . \. ,··that irr. espective of _wheth_cr the Impugned Act was constitutionally -, validor not, the CorporatiOn was bound to obey the writ ofMandac (· 111us issued by the High Court ·and to p:~y the bonus for the. year : 1975-76 to class Ill and Cl :m IV em;>loyees. The said. learned ~ · judg~s held that writ of Mand. \m~s w:ts ! lOt touched by the impugn- . ' · ~d Act. The other observations of the said Judges as well as the 'J -~Jlher learned Judges are not r~kvnnt in the view we have taken. In l . instant CJSe before·us we uJ n•lt have any cHe ofsettlement which D · was the subject matter there bctw tber benefits of the empioyees.

It may be noted that the applica- · tion of Industrial Disputes Act as such in· general is not . abrogated by the provisions of 1972 Act, nor made wholly inapplicable in respect of matters not covered . by any provisions of the. scheme. This aspect is important and must be borne i~ n1ind. Wrongful dismi~sal, other disciplinary proceedings, unfair labour practices, victimization etc. would _still remain unaffected by. any scheme or. any pfovision of the Act. The only relevant and material question that would have arisen, is, whether in ca? e where a statutory ceiling whith one ~f the counsel for the petitioners tried . to describe as "statutory gherao on rise of increase in emoluments and o_ther benefits with the rise in the cost of indexof prices" affected the position _under the·Industrial Disputes i\ct: 1947. •It may be noted as we have noted before that this.

is not a· case where any dispute was pending before any tribunal or before any authority ~under- the Industrial Dis_putes Act, 1947 between the workmen con- . cerned and ihe insurance companies. Though there was conciliation proceedings, the conciliation proceedings could not r~ach to any successful soluti(;m and the Coi1ciliation Officer has mad~ a report . failure of conciliation. The Goverment ·had the report Thereafter the Government has not referred the dispute to_ any industrial tribunal "ut . has framed a scheme which is the subject matter of challenge before us. It cannot, in our opinion, be said that conciliat ' tion proceedings or any proceeding under the Industrial Disputes . Act were pending ·and therefore i. n the middle of the proceedin-gs under the Industrial Disputes Act,· the Government had acted an_d, ,j framed the scheme _and as such th" same was bad and i'! Jegal. There. II were no pro·ceediogs pending under _the Industrial Disputes _Act~ 1947.

With the finding of the Conci_iiatfon Officer, the Government_ . ' ' •• • ·SUPRFJ4£ COURT REPORTS [1984] 3 s. C:R. ha(\':t\\10. options, either reaching a s-~ttleme1,1t or framiDg a 5cheinc . 1 on the one hand• Of to make a• reference to the tribunal ohhc dispute. regar~ing the points·mentioned in the demands ·of the work:-. men. T:here is .. one factual dispute which, in our opinion, is.. not ' .. ~ v. e~y material. According to the petitioners, the gated the Indus-- . trial Disputes Act, 1957 as. such. ; The question of the application of the principle of "Gen~raliir B specialibt1s non derogant" has been·. dealt with irt the case of J. K•. 1 Cotton Spi~ning & Weaving Mills Co. Ltd. v. State ofu:P. & Ors. t )' Some 9f these aspects were also ·discuss_ed in the case of U. P. State: 2 Electricity Bodrd & Ors;v. Hari Shanker Jain and Ors,( ) c Had it been ·possible to. upbold the scheme of 1980 as being: within the power of 1972. Act, it would have been also.

necessary for· us to consider whether such a scheme or Act would have been constitutionally valid . in the context of fundamental rights under Article- 14, article 19(l)(g) and artiCle 31 of the Const~tution and th~ effect of the repeal of article 31 by the 44th amendment of the Constitu-· D tion. The General Insurance. · Business (Nationalisation) ·Act was; put ~n the Nineth Schedule of the Constitution as item. 95 orr lOth- August, 1975. . The effect of putting a particular provision in the: Nineth Schedule at a particular timy has been considered by thi~ Court in the case of. of Prag fee & Oil Mills & Anr. Etc. v. Uniotl of· 3 India. nal knowledge into action in deciding. the controversy before the Courts · but if common knowledge· is a~y guide, then undoubtedly these · Hr . ' • (1) [1 ,80] 3S. C. R. 1042. ~ . ~88 . SUPREME. COURT REPORTS (1984) 3 S;C;R. emptoyeesare·veryhigbly paid in_compa~ison to m~ny ()tbers. The · object ofthe Gen~r&-1 Insurlmce B.

us~ness (Nationalisation) Act, 1972 is to run the busines~ efficiently so that the · funds available might ·be utilised for socially viable and cor~ project~ of natio~al 'importa~ce. -From O! le point of yiew the Nationalised Banks and the Insurance · Companies for. the purpose··of . applicability or otherwise of·the' . pr~yisions~of t. he Indus~rial·Dl. sputes Act . ca~not'be tre~ted as belon· ging ,to one· class: . Historical reasons . provide an intelligible.. differentia distinguishing N ationalis. ed l. Dsurance. Companies 'from,· . ihe N~tionalisea Banks. The reason suggested · by the respondents ·. was that priOT to Banks N~tio-nalisation,. Industrial disputes between \~orkroen and the Banks . were treated since 1950 on All India· basis ·c with the totality of the-banks being involved therein. Several awards. \ ·have . be~n made . treating them_ as su6idik'e Shastri Awar~, 1953.

Shastri ·Award Tribunal was·constituted·witli a :view to settle the · disputes of the workmen of tbe B~nks with all commercial Banks (excluding Co-op~rative Banks etc. ) on the ope hand and the emplo· yee~ on the other. Desai Award, 1. 962 bipartite settlement between Indian Banks Association and the Ex. change BatJks Assodati~n on . · . tb(( one hand and AU India ~ank ·Employees Associatton and AH lncfta Bank Employees Federation on the other, are· some of ·t. he examples. As against this·, prio! to·th~ Act in question bef~re us, disputes between insurance companies arid their. work! Jlen were 'il: . . settled on independent company' basis w_ith no All India ·projections ·. involved. It in. aY also be noted th. at unlike the case of some banks, · there is no existi! lg award or settlement with the petitioner-6 emplo- ~ees . of the general insurance companies . and . the fo~r insurance companies.

· The financial resources, structures and functions of the Banks are-different from thqse of the insurance companies. It may also be noted as was pointed out to us ·on behalf _of the ~espondents (hat ·Bank's Class III. and IV employees are about. 4,85,000 in 198l . as compared to irisu~ance companies which empioy. about ,25,000 ·Class Illand·class IV employees. · Therefore for' the :PUrpose . of ·raiionalisation; the insurance companies . wanted to curtail their ·emoluments _on a small scale. -It cannot be said that there are no · dist:'ing~i~hing fa~tors and that _for choosing a parti~ular . group for ' "' . e~perirneot, the respondents should be. fourid guilty o£treating people differently \llhile they' are alik~ in all ni(\terial respects. : ' . ·Differentiation ·is not always discriminatory. If there · is a -. • . rationl! l n~xus on ·ll1e. basis of which differentiation has·been made with . the object sought to be acaieved by particular. provision,. then. . Qlch .

differentiation . is noi . discriminatory and does a•t A. K'·. BANERJEE v. UNION (Mukharjil J. ) 289 A '\'! alate the principles· of article 14 of the Constitution. This principle :is too well-settlM now to be . reiterated by reference to cases. There is intelligible basis for differentiation. Whether the same result. or better, result could have been achieved and better basis of differentia- . ·tion evplved is wit~in the domain of legislature and must be left to 'tpe wisdom ~f the legislatu,re. Had it ~een held that the scheme of ·. B · 198\l was within the authodty given by· the Act, we would have rejected the challenge to the Act and the scheme under article 14 ·()f the Constitutioil. • It was also urged before us on behalf of the respondents that ·c the petitioners being employees of public sector undertakings, and ~these are economic instrumentalities pf the State and having regard· to the contents and . contour of the conc~pt ·of public employment .

as developed 'in the Iridian legal system·, an employee in a public -sector ·can be approximated with and tre~ted as a government 'l! iervant. Having regard to the principles which govern the employer D '. and employee relationship in the governmental ·sectors, . the condi- ·. tions of service of employees in public employment should be -exclusively governed by the statute and by the rules and regulations 'framed thereunder. Predication of such power would necessarily exclude the provisions oflndustrial . Disputes Act and the principles of collective bargaining just as these would exclude the principles of E ~o. ntractual relationship in such m~tters. The point is interestitJ. g. Howe~er, in the view we have taken; we neep p. ot discuss this aspect ) :any further. · . · It was further submitted on behalf of the respondent that the· ntionale, justification and the genesis of the law of nationalisation F being the creation of economic instrumentalities to -subserve the .

constitutional and adfll'tinistrative goals of governance in a social welfare society, the running of public s. ector undertakings is neither for profit earn~ng of the management nor for sharing such profits with the workmen alone but to utilise the investible . funds available G as a result of such ventures and undertakings for socially-oriented goals laid down by the governmental· policies operating on the said sectors. In this connection reference was made before us to the decision in the case. of State'ofKarnataka & Anr. etc. ·~. Rangan~tha . Reddy & Anr. etc. (l) H J. {191$] 1S. C. R. 64'1 at pages 672, 676 & 691. ·"- __. ;. ·_,.. ,__ . 29J SUPRB~IE eouar:REP. ORTS · [193-lj 3· S. C. R~- . A·... .. >(! ~pfoy'fuent in tb(! :pubHcs:ectot. undertakings e·rijoy. s. a statuh~ ··n·was submitted th. at botlfbistbtically ·as well as a matter of. Hrw, the~ ': publiC"·sectdr utidertakli)gs being the economic . insti:timeritatrties or· .

tlie Stite a~d dischargin~· the ·obligations which tlie Stafe·have, the· employees ofsuch undertakings iit principle. cannot be distinguished~ from the employees in the govetninennervices~ In this c6nnection · . • B our. atterition was drawn to the case ofSuklulevSingh & Ors. v. Bhagai·. Ram Sardar Singh . Raghuvanshf& :4nr:e) It \Y3. S urged that in all cons- _,. -. ' . :.. titutional de_mocracies, the relationship' between· the govemmcnfand. ... . · the civil service i~ exciusively gover~ed by the statutory . provisions.. -. with the power ·in the. Govern~enfto·unil:Herally alter the condi- C_tionsofservice ? ~th~ g~v~rnment em. pl9yees. Reference \vas. made't~- / . "The Law of CIVII. Servtce' by Kaplan. It was furtber ·subm1tted that. . . ::_ iri-Jndi~-· the ~aw, js tbat'. origin ·()f the Gover~ment ~ervice might be- ' contractual but once app~inted t~ a post under the Government, the· . _gove~riment servant acquires a status ~nd .. the rights and ob"iigations.. .

are no longer dependenf e given effect. to~. The parties. 'will be at · - H ·. . . >. . . . . . . • . ,. ~· [1975]3 S. C. R~ 619 at page 646. .. -·_ :. - · ·- A. K. BANERJEE v. UNION•(Mukharji, J. ) 291 • liberty to adjust theif rights as if the scheme had not been framed. A The application for intervention isallowed. Let appropriate writs be issued quashing the-~tcheme of 1980. This, however, will not prevent the Government, if it so advised, to' frame any appropriate legis~ 1ation or make·any appropriate amendment giving power to Central . Government to frame any . scheme as it considers fit and pre;>per. In . the facts and circumstances of these cases and specially in view of B the fact that petitioners had themselves'at one point of time wanted that new 1cheme be framed ·by the Central Government, we direct that parties will pay andbear theit own costs in all these matters. The rules are made absolute ~o the extetlt indicated above. N. V. :K. Petitions allowed. • • . . ) • •