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PETITIONER: LIFE INSURANCE CORPORATION OF INDIA &ANOTHER ETC.

       Vs.

RESPONDENT: S.S. SRIVASTAVA & OTHERS

DATE OF JUDGMENT05/05/1987

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SINGH, K.N. (J)

CITATION:  1987 AIR 1527            1987 SCR  (3) 180  1988 SCC  Supl.    1     JT 1987 (2)   529  1987 SCALE  (1)975  CITATOR INFO :  F          1987 SC1706  (16)

ACT:     Life Insurance Corporation of India (Staff)  Regulations 1960-Retirement of Class I and Class II Employees  appointed on or after September 1, 1956 at 58 years--Whether valid and legal.     Life    Insurance   Corporation   Act,    1956---Section 11(2)--Fixation  of  60 years as age of  superannuation  for transferred employees-Whether unreasonable.     Constitution of India, 1950--Articles 14 and 16--Differ- ent ages of retirement for Class I and II  Officers--Classi- fication of employees into two categories for fixing of  age of   superannuation  depending  on  dates  of   entry   into service--Whether valid and legal.

HEADNOTE:     The  Life Insurance Corporation was established on  Sep- tember 1, 1956 under the Life Insurance Act of 1956 (Act  31 of 1956) by amalgamating about 200 insurers carrying on life insurance  business in the country. It had no  employees  of its  own to carry on the vast business which had been  taken over  and the nature of the work was such that the  Corpora- tion required the services of employees with experience  and expertise  in running life insurance business. In  order  to meet the above need, Section 11 of the Act came to be enact- ed. Sub-section (1) provided that with effect from September 1, 1956, every whole time employee of the erstwhile insurers would become an employee of the Corporation and hold  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 and gratuity and other  matters as he would have held on September 1, 1956, had the Act  not been passed.     The  conditions of service of the employees whose  serv- ices were transferred to the Corporation under Section 11(1) were not uniform. The conditions governing the retirement of those  employees  were also diverse and different.  In  some cases  the age of retirement had been fixed at 55 years,  in some  at  58 years and in some others at 60 years.  In  many cases, the insurers had permitted their employees to contin-

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ue in 181 their  services  even beyond 60 years depending  upon  their efficiency and physical capacity.     For the purposes of rationalising the pay scales of  the transferred  employees, under sub-section (2) of Section  11 the  Central Government was empowered to alter the terms  of service  of the employees as to their remuneration  in  such manner  as  it thought fit. The sub-section was  amended  by Acts 17 and 36 01’ 1957.     Clause (bb) of sub-section (2) 01’ Section 49  conferred power on the Corporation to make regulations with the previ- ous approval of the Central Government as regards ’the terms and conditions of service of persons who had become  employ- ees of the Corporation under subsection (1) 01’ Section 11’.     Under clauses (b) and (bb) of Section 49(2) 01’ the Act, Regulations  were framed prescribing the ages of  retirement of  the employees of the Corporation belonging to  different categories with the previous approval of the Central Govern- ment and were incorporated in the Life Insurance Corporation of  India (Staff) Regulations, 1960 made by the  Corporation which came into effect on July, 1960.     Under  Regulation 19(1), all transferred employees  were entitled  to remain in service till they completed 60  years of age but the appointing authority was empowered to  retire any  such transferred employee on completion of 55 years  of age  or at any time thereafter, if his efficiency was  found to  have  been impaired. Under  Regulation  19(2)  employees appointed  to  the service of the Corporation  on  or  after September, 1956, were required to retire on completion of 58 years  of age but the appointing authority was empowered  to retire any such employee on completion of 55 years of age or thereafter  if  his efficiency was found to  have  been  im- paired.     In the case of the transferred employees this regulation was  made  in conformity with  the  ’standardisation  order’ passed  in  respect of Class III and  Class  IV  transferred employees. in whose case the age of retirement was fixed  at 60  years.. The result was that the regulation made a  clear and  distinct  classification 01’ all the employees  of  the Corporation    belonging   to   all   classes    into    two groups---transferred  employees and the employees  appointed after  September 1, 1956 for purposes of the age of  retire- ment having regard to the historical reasons. 182     Consequent  upon  the  settlement arrived  at,  upon  an industrial  dispute which arose between Class III and  Class IV  employees who were appointed subsequent to September  1, 1956 in the Corporation. Regulation 19 of the Life Insurance Corporation  of  India (Staff) Regulations 1960  which  came into force w.e.f. July 1, 1960 was amended and the employees of  the  Corporation were divided  both  longitudinally  and latitudinally  insofar  as the age of  retirement  was  con- cerned.  Longitudinally, all the transferred  employees  be- longing  to  Class I and II became entitled to  continue  in service till they attained the age of 60 years, the Corpora- tion  being empowered to retire any of them  prematurely  on completion of 55 years of age if his efficiency was found to have  been impaired, and all the Class I and Class II  offi- cers appointed to the service of the Corporation on or after September 1, 1956 had to retire on completion of 58 years of age subject again to the power of the Corporation to  retire any such employee on completion of 55 years of age or at any time  thereafter  if his efficiency was found to  have  been impaired. Latitudinally, the employees were divided into two

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groups  and  all the employees belonging to  Class  III  and Class IV, irrespective of the tact whether they were  trans- ferred  employees or employees appointed after September  1, 1956  were entitled to continue in service till 60 years  of age, but the employees belonging to Class I and Class II who were appointed to the service of the Corporation on or after September  1,  1956 had to retire on the  completion  of  58 years of age subject to the usual clause relating to  prema- ture retirement.     Sub-regulation (2) of Regulation 19 was modified  empow- ering  the appointing authority to extend at its  discretion of  service of any employee of the Corporation belonging  to Class  I or Class II categories appointed to service  on  or after September 1, 1956 for one year at a time upto 60 years of age. The power to extend the service of employees belong- ing to Class I and Class II appointed on or after  September 1,  1956 beyond 58 years or’ age was withdrawn from  January 21,  1977  and the Corporation was permitted  to  retire  an employee on completion of 50 years of age.     The  first respondent joined the Corporation as a  Class III employee on March 22, 1957. Subsequently, he was promot- ed to a Class I post and ultimately as Assistant  Divisional Manager.  Since  he  was born in the month  of  June,  1926, notice was issued to him in February, 1984 of his retirement which was due on June 30, 1984 on his completing the age  of 58 years. Before the date of his retirement, he instituted a writ petition in the High Court questioning the validity  of Regulation  19(2)  of the (Staff) Regulations, 1960,  as  it stood then and prayed for the issue               183 of writ of mandamus directing the Corporation not to  retire him before he attained the age of 60 years.     It was contended by the first respondent before the High Court  that  there  was no justification  to  prescribe  two different ages of retirement one for the transferred employ- ees  belonging  to Class I and Class II categories  and  the other for the employees who joined the service of the Corpo- ration  alter  September 1, 1956 and who  also  belonged  to Class I and Class II categories, and that in regard to those who  joined the service after being appointed to  Class  III post after September 1, 1956, there could not be any  reduc- tion of age of retirement from 60 to 58 years on their being promoted  to  a Class I or Class II post. Since he  had  the right to continue in service if he had remained in Class III only  till  he attained the age of 60 years as a  Class  III employee, age of retirement could not be reduced to 58 years only because he had been promoted to a Class I post.     It was urged on behalf of the Corporation and the  Union of  India that the transferred employees and  the  employees who  joined the service after September 1, 1956 belonged  to two  distinct  and separate classes which had  been  treated differently throughout for valid reasons. Since there was no uniformity  in the establishments in which  the  transferred employees were working prior to nationalisation of the  life insurance  business, it became necessary to fix the  age  of retirement of the transferred employees on a lair, equitable and just basis. In the circumstances, the classification  of the  employees  into  two  categories,  namely,  transferred employees  and  others who joined on or after  September  1, 1956  for the purposes of age of superannuation was a  valid classification  and Articles 14 and 16 of  the  Constitution had  not  been violated. It was further submitted  that  the discrimination made between the employees belonging to Class I  and Class II on the one hand and the employees  belonging to Class III and Class IV on the other in the matter of  the

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age of superannuation was not invalid since they belonged to two  different categories of employees who were governed  by different conditions of service as regards pay, perquisites, allowances, administrative powers etc.     The High Court did not find any unconstitutionality in a rule  or  regulation providing the age of retirement  at  60 years of employees who had been absorbed from the service of the  erstwhile insurers and to that extent it held that  the grouping  being reasonable the Court might not  travel  into the  domain of legislative policy. It, however,  found  that when once a transferred employee belonging to Class III  and an emp- 184 loyee appointed after 1st September, 1956 by the Corporation to a Class III post is promoted to Class I, the  distinction of  the transferred employee and direct appointee could  not be maintained, as on promotion they became persons belonging to  the same category of employees enjoying the same  condi- tions of service. Hence the age of retirement should be  the same in the case of both such promotees. It accordingly held that  the first respondent was entitled to continue till  he attained  the  age of 60 years as other  Class  I  employees belonging to the category of transferred employees. The Writ Petition was allowed and Regulation 19(2) was struck down as being violative of Articles 14 and 16 of the Constitution of India  and  the Corporation was directed not to  retire  the first respondent before he attained the age of 60 years.     Allowing  the  appeals, by special leave,  of  the  Life Insurance Corporation of India and the Union of India,  this Court,     HELD: 1.1 The decision taken by the Corporation and  the Central Government as regards the ages of retirement of  the different  classes of the employees of the Corporation is  a bona  fide one and cannot be characterised  as  unreasonable and  it is not, therefore, liable to be upset by a  decision of the Court. [222G]     1.2 In the instant case, the High Court erred in  strik- ing down Regulation 19(2) of the L.I.C. (Staff)  Regulations 1960 as amended in the year 1977 and in directing the Corpo- ration to continue the first respondent in its service  till he completed the age of 60 years. [223A]     2.1 Classification of employees into two categories  for purposes of fixing the age of superannuation depending  upon the  date  of entry into service is not something  which  is unusual,  and such classification becomes necessary  on  ac- count  of  historical facts and the need  for  treating  the employees in a fair and just way. [220G]     2.2 Merely because the pay, allowances and other perqui- sites drawn by the transferred employees and by the  employ- ees appointed after September 1, 1956 by the Corporation are the  same, it cannot be said that the transferred  employees and  the other employees had been integrated so as  to  form one  cadre.  So far as the age of retirement  is  concerned, they  are being treated differently right from the  date  on which the Corporation was established. [221G]     2.3 In the instant case, since the classification of the employees  for  the purpose of age of  retirement  into  two categories is reasonable                185 and  not arbitrary and there is a reasonable  nexus  between the classification and the object to be attained thereby, it is  not possible to ho1d that Regulation 19(2) is  violative of Articles 14 and 16 of the Constitution. [222C]     3. The Act itself made a distinction between the  trans- ferred employees and the employees recruited to the  service

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of the Corporation after September 1, 1956 by making  amend- ments  in  Section 11 and in clauses (b) and  (bb)  of  sub- section (2) of Section 49 of the Act. In the (Staff) Regula- tions,  1956  and the (Staff) Regulations,  1960  there  was again  a distinction made between the transferred  employees and  the  employees recruited alter September 1,  1956.  The distinction between the two classes Is recognised by Parlia- ment even as late as 1981 which it amended Section 49 of the Act  by deleting clause (bb) of sub-section (2) thereof  and by  amending  Section 48. of the Act by  introducing  clause (cc) in sub-section (2) and the new sub-section (2A) in  it. At no point of time the transferred employees were integrat- ed  into one cadre alongwith employees appointed after  Sep- tember  1, 1956 as such and the transferred  employees  have retained  their  birth-marks throughout. The tact  that  the pay,  allowances and other conditions or services have  been made  the same in respect of both the transferred  employees and the employees of the Corporation recruited after Septem- ber  1, 1956 has not brought  about the integration  of  the two  Classes  of employees into one  single  cadre.  [214GH; 215A: E-F]     4.1 The determination of 58 years as age of  superannua- tion,  in  the case of the employees,  who  entered  service after September 1, 1956 by itself cannot be considered to be arbitrary  since  in almost all the public  sector  corpora- tions, Central services and the State services, 58 years age is  considered to be a reasonable age at which officers  can be directed to retire from their service. [212C]     4.2 Regarding the dIscrimination in the age or’  retire- ment between employees belonging to Class I and Class II  on the one hand and Class III and Class IV on the other, it  is true  that originally employees belonging to Class  III  and Class  IV categories amongst the transferred employees  were given the benefit of retirement at the age of 60 years,  but the employees belonging to Class III and Class IV categories after  1st  September, 1956 were required to retire  on  the completion  of 58 years of age. Pursuant to  the  settlement arrived  at between the Management and the Class III and  IV employees recruited after September 1, 1956. this  discrimi- nation was removed and Regulation 19 was amended w.e.f. June 19, 1965. [212D-F] 186     4.3  Having  regard to the lower  emoluments  and  other benefits  which  the employees belonging to  Class  III  and Class  IV are entitled to get from the Corporation  and  the higher  emoluments  and  other benefits  to  which  officers belonging  to Class I and Class II are entitled to and  also the  nature  of their work and the powers enjoyed  by  them, fixation  of different ages of retirement to  the  different classes  of  employees could not by itself be  violative  of Articles 14 and 16 of the Constitution. [212F-G]     5. Having regard to different conditions of service that were prevailing in the various establishments whose business was taken over by the Corporation, fixation of age of super- annuation  is one of the essential parts or’ the process  of transfer and integration to which sub-section (2) of Section 11 of the Act is applicable. The fixation of 60 years as the age  of superannuation in the case of transferred  employees cannot  be  considered  to be unreasonable in  view  of  the history of this case. [208C-D]     6. The transferred employees who are treated  favourably belong to a vanishing group and, perhaps, within a period of two years none of them would be in the service of the Corpo- ration. Thereafter, only one class of employees would be  in the  service  of the Corporation,  namely,  those  appointed

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subsequent  to September 1, 1956 by the Corporation  in  re- spect  of whom the Corporation has fixed the age of  retire- ment as 58 years which corresponds to the age or’ retirement in almost all the public sector establishments, the  Central Government  services  and  the  State  Government  services. [221C-E]     7.  The High Court was right in holding that it was  not discriminatory to extend the benefit of the age of 60  years to the transferred employees. However, it was not correct in holding  that  on promotion from Class III to Class  I,  the transferred  employees and the directly recruited  employees would  lose their birth-marks. The intention  of  Parliament was  that even as late as in 1981 the two groups of  employ- ees,  namely,  the transferred employees and  employees  re- cruited after September 1, 1956 in the Corporation should be kept separate. In these circumstances, the High Court was in the error in holding that when employees are recruited to  a lower grade from two sources, no favourable treatment should be  extended to recruits from one source on their  promotion to  the higher grade. The fact that an employee had  entered the service of the Corporation after September 1, 1956 in  a Class  III post and is later on promoted to a Class  I  post does not make any difference. [216E-H; 217D]              187     8.  In the instant case, when the first  respondent  was promoted  to the Class I post in 1963 the age of  retirement of  officers in the Class I post had been fixed at 58  years and  was not different from the age of retirement  of  Class III employees. It was only in 1965 under the settlement, the age of retirement of employees in Class III and Class IV who joined  service  after September 1, 1956 was  raised  to  60 years. If he felt that the conditions of service ill’  Class I  officers were likely to be prejudicial to him,  he  could have  refused the promotion offered to him. Having  accepted the promotion alongwith the higher benefits flowing from  it he  cannot  contend  after several years that  he  had  been prejudicially affected by the condition relating to the  age of retirement applicable to Class I officers appointed after September  1,  1956. That apart, the higher  emoluments  and other perquisites to which Class I employees may be entitled to  and the better conditions of work which are  enjoyed  by them substantially compensate the effect of the lowering  of the age of retirement from 60 years to 58 years. [213E-G]     Christopher Pimenta and Others v. Life Insurance  Corpo- ration  of  India, A.I.R. 1958 Bombay  451;  Life  Insurance Corporation of India v. D.J. Bahadur & Ors., [1981] 1 S.C.R. 1083;  Ram  Lal  Wadhwa & Anr. v. The  State  of  Haryana  & 0rs.,[1973] 1 S.C.R. 608; State of Punjab v. Joginder Singh, [1963]  Supp.  2 S.C.R. 169; Tejinder Singh and  Another  v. Bharat Petroleum Corporation Ltd. and Anr., [1986] 4  S.C.C. 237;  Roshan Lal Tandon v. Union of India, [1968] 1  S.C.11. 185; Miss Lena Khan v. Union of India and Ors., Jt. [1987] 2 S.C.  19;  Railway Board v. A. Pitchumani, [1972]  2  S.C.R. 187;  Manindra Chandra Sen v. Union of India & Ors.,  A.I.R. 1973 CAL. 385; M/s British Paints (India) Ltd. v. The  Work- men, [1966] 2 S.C.R. 523; Mohammad Shujat Ali & Ors. etc. v. Union  of India & Ors. etc. [1975] 1 S.C.R. 449; Workmen  of the  Bharat Petroleum Corporation Ltd.  (Refining  Division) Bombay  v.  Bharat Petroleum Corporation Ltd.  and  Another, [1984] 1 S.C.R. 251; Tamil Nadu Education Department  Minis- terial & General Subordinate Service Association v. State of Tamil Nadu & Anr., [1980] 1 S.C.R. 1026, referred to.

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JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal No.  10761077 of 1987.     From  the  Judgment  and Order dated  17.8.1985  of  the Allahabad High Court in C.M. Writ No. 6849 of 1984.     K.  Parasaran,  B.  Datta, P.P. Rao,  K.L.  Hathi,  Anil Nauriya,  S.R.  Aggarwal, Y. Ramachandran, U.J.  Rana,  R.P. Srivastava, Hem- 188 ant Sharma, P. Parmeshwaran, Ms. Sushma Suri and C.V.  Subba Rao for the Appellants.     M.K.  Ramamurthy, C.S. Vaidyanathan, S. Ravindra  Bhatt, Mohan, S.R. Setia and Probir Choudhary for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH  J. The question involved in these appeals  by special  leave  which are filed against the  judgment  dated August  17,  1985 of the High Court of  Allahabad  in  Civil Miscellaneous Writ No. 6849 of 1984 relates to the constitu- tional  validity of regulation 19(2) of the  Life  Insurance Corporation of India (Staff) Regulations, 1960  (hereinafter referred to as ’the (Staff) Regulations, 1960’), as  amended on  21.1.  1977 by the Life Insurance Corporation  of  India (hereinafter  referred to as ’the Corporation’)  which  pro- vides  that  an employee belonging to Class I  or  Class  II appointed to the service of the Corporation on or after  1st September,  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  and at any time thereafter on giving him three  months’ notice or salary in lieu thereof.     Prior to January,. 1955 there were more than 200  insur- ers carrying on life insurance business in India. As it came to the notice of the Government that the Indian life  insur- ers, with a few exceptions, were virtually controlled by few individuals who were utilising the funds of those  companies to the detriment of the industry and the policyholders,  the Government  decided to nationalise the life insurance  busi- ness. Pursuant to the said decision, the President of  India promulgated the Life Insurance (Emergency Provisions)  Ordi- nance, 1956 on January 19, 1956 providing for the vesting of the  management  of the life insurance business  (which  was called  the controlled business under the  Ordinance)  which was being carried on by any insurer in India on that day  in the Central Government and providing for its management.  On the  passing  of the said Ordinance the  management  of  the controlled business of all the insurers in India thus vested in the Central Government and pending the appointment of the custodians  for the controlled business of any  insurer  the person in charge of the management of such business  immedi- ately before the passing of the Ordinance was required to be in  charge  of  the management of the business  for  and  on behalf  of the Central Government. The  Ordinance  contained detailed  provisions for the carrying on of the life  insur- ance business by     189 the Government for the time being.The Ordinance was replaced by the Life Insurance (Emergency Provisions) Act, 1956 which was  published  on  21st of March, 1956. The  said  Act  was followed by the Life Insurance Corporation Act, 1956 (Act 31 of  1956) (hereinafter referred to as ’the Act’)  which  was published in the Gazette on 18th June, 1956. The Act, howev- er, came into force on 1st July, 1956. The Act provided  for the establishment and incorporation of the Corporation.  The Corporation  was accordingly established on  1st  September,

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1956.  Under the Act the expression ’appointed day’  is  de- fined  as the date on which the Corporation is  established. The appointed day for the purposes of the Act is, therefore, September 1. 1956. By virtue of section 7 of the Act on  the appointed day all the assets and liabilities appertaining to the  controlled business of all insurers, the management  of which it had been taken over earlier by the Central  Govern- ment,  stood transferred to and vested in  the  Corporation. When  the  Corporation thus came into existence  it  had  no employees  of its own to carry on the vast business  of  the large  number of insurers which had been taken over  by  it. It, therefore, became necessary to transfer the services  of the  existing employees of the insurers to  the  Corporation because  without  the  services of those  employees  it  was almost impossible for the Corporation to run the life insur- ance  business  in India which involved  management  of  the various offices situated in different parts of India,  serv- icing of lakhs of insurance policies, the administration  of the  assets taken over from the insurers and  several  other activities  connected with the life insurance business.  The nature  of  the  work of the Corporation was  such  that  it required  the  services  of the  employees  with  sufficient experience  and  expertise  in running  the  life  insurance business. In order to meet the above need section 11 of  the Act  came  to be enacted. Section 11 of the  Act  originally stood as follows:               "11. Transfer of service of existing employees               of insurers to the Corporation--                         (1) 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,  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 privi-               leges as to pen-                190               sion  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 so unless and until his employ-               ment in the Corporation is terminated or until               his  remuneration,  terms and  conditions  are               duly altered by the Corporation:                        Provided  that nothing  contained  in               this  sub-section  shall  apply  to  any  such               employee  who has, by notice in writing  given               to  the  Central Government prior to  the  ap-               pointed  day, intimated his intention  of  not               becoming an employee of the Corporation.                        (2)  Notwithstanding  anything   con-               tained  in sub-section (1) or in any  contract               of  service, the Central Government  may,  for               the  purposes of rationalising the pay  scales               of  employees  of  insurers  whose  controlled               business has been transferred to and vested in               it or for the purpose of reducing the remuner-               ation  payable to employees in cases where  in               the interest of the Corporation and its  policyhold ers a reduction is called for, alter the terms of service of the employees as to their remuneration in such manner as  it

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thinks  fit; and if the alteration is not acceptable to  any employee  the  Corporation may terminate his  employment  on giving him compensation equivalent to three months’ remuner- ation  unless  the contract of service  with  such  employee provides for a shorter notice of termination.          Explanation: The compensation payable to an employ- ee under this sub-section shall be in addition to and  shall not  affect any pension, gratuity, provident fund  money  or any  other  benefit to which the employee  may  be  entitled under his contract of service.          (3) If any question arises as to whether any person was a whole-time employee of an insurer or as to whether any employee  was employed wholly or mainly in  connection  with the controlled business of an insurer immediately before the appointed day the question shall be referred to the  Central Government whose decision shall be final.          (4)  Notwithstanding  anything  contained  in   the Industrial Disputes Act, 1947 (14 of 1947), or in any other      191 law  for the time being in force, the transfer of the  serv- ices of any employee of an insurer to the Corporation  shall not entitle any such employee to any compensation under that Act or other law, and no such claim shall be entertained  by any Court, tribunal or other authority."     Sub-section  (1) of section 11 of the Act provided  that every  whole-time  employee of an insurer  whose  controlled business had been transferred to and vested in the  Corpora- tion and who was employed by the insurer wholly or mainly in connection  with the controlled business immediately  before the  appointed  day, i.e., September 1, 1956, would  on  and from  the appointed day become an employee of  the  Corpora- tion, and would hold his office therein by the same  tenure, at the same remuneration and upon the same terms and  condi- tions 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 the Act had not  been  passed, and would continue to do so unless and until his  employment in  the Corporation was terminated and until  his  remunera- tion, terms and conditions were duly altered by the Corpora- tion. The proviso to that sub-section provided that  nothing contained in sub-section (1) of section 11 of the Act  would apply  to  any such employee who had by  notice  in  writing given  to the Central Government prior to September 1,  1956 intimated  his intention of not becoming an employee of  the Corporation.  The  whole-time  employees  of  the  erstwhile insurers whose services were thus transferred to the  Corpo- ration  are  hereinafter  referred to  as  ’the  transferred employees’  of the Corporation. As mentioned earlier,  there were  more than 200 insurers whose controlled  business  had been taken over by the Corporation and we are informed  that there  were  about 27,000 whole-time  employees  working  in them. The conditions of service of these transferred employ- ees  of the Corporation whose services were  transferred  to the  Corporation  under section 11(1) of the  Act  were  not uniform.  It was naturally difficult to continue  after  the establishment  of  the Corporation in the cases of  all  the transferred employees, the conditions of service enjoyed  by them  when they were in the employment of the former  insur- ers. The conditions governing the retirement of those  offi- cials with which we are concerned in these appeals were also diverse  and different. In some cases the age of  retirement had been fixed at 55 years, in some at 58 years and in  some others at 60 years. In many cases the insurers had permitted their employees to continue in their service even beyond  60 years depending upon their efficiency and physical capacity.

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The conditions of service of employees and in particular the terms of remuneration prevalent in some of the former 192 insurance  organisations  were also disadvantageous  to  the policyholders. It, therefore became necessary to bring about uniformity  in the conditions of service of the  transferred employees. Parliament therefore, enacted sub-section (2)  of section  11 of the Act which provided  that  notwithstanding anything  contained in sub-section (1) of section 11  or  in any  contract of service, the Central Government  might  for the purposes of rationalising the pay scales of employees of insurers  whose controlled business had been transferred  to and  vested in it or for the purposes of reducing the  remu- neration  payable to those employees in cases where  in  the interest  of the Corporation and its policyholders a  reduc- tion  was  called  for, alter the terms of  service  of  the employees  as  to their remuneration in such  manner  as  it thought fit and if the alteration was not acceptable to  any employee  the Corporation might terminate his employment  on giving him compensation equivalent to three months’ remuner- ation  unless  the contract of service  with  such  employee provided  for a shorter notice of termination. Doubts  arose as regards the meaning of sub-section (2) of section of  the Act.  In  Christopher Pimenta and Others v.  Life  Insurance Corporation of India, A.I.R. 1958 Bombay 451 the High  Court of  Bombay  opined that under section 11(2) of the  Act  the Central  Government could alter the terms and conditions  of service  of  the employees only as to the  remuneration  and that  the  said sub-section had no reference  to  the  other terms  and conditions of the service. The above decision  of the  Bombay  High Court was delivered on  16.4.1957.  It  is stated  that there were cases pending in other  courts  also questioning  the scope and ambit of sub-section (2) of  sec- tion 11 of the Act as it stood originally. Hence in order to remove  all  doubts the President of  India  promulgated  an ordinance (which was replaced by Act 17/1957) substituting a new sub-section in the place of the original sub-section (2) of  section II of the Act making it more  comprehensive  and thus  enabling the Central Government to alter suitably  all conditions of service of the transferred employees. The  new sub-section  (2) of section 11 of the Act was further  modi- fied  by Act 36 of 1957. Thereafter sub-section (2) of  sec- tion 11 of the Act read as follows:    "(2)  Where the Central Government is satisfied that  for the purpose of securing uniformity in the scales of remuner- ation and the other terms and conditions of service applica- ble  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 Corpora- tion and its policy-holders, a reduction in the remuneration payable, or a revision of the other terms and      193 conditions of service applicable, to employees or any  class of them is called for, the Central Government may,  notwith- standing  anything contained in sub-section (1), or  in  the Industrial  Disputes Act, 1947, or in any other law for  the time  being in force, or in any award, settlement or  agree- ment  for the time being in force, 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, and if the alteration. is not  acceptable to  any employee, the Corporation may terminate his  employ- ment by giving him compensation equivalent to three  months’ remuneration  unless the contract of service with  such  em- ployee provides for a shorter notice of termination.

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Explanation--The  compensation payable to an employee  under this  sub-section  shall be in addition to,  and  shall  not affect,  any pension, gratuity, provident fund money or  any other  benefit to which the employee may be  entitled  under his contract of service."     Section 49(1) of the Act conferred powers on the  Corpo- ration  to  make with the previous approval of  the  Central Government regulations not inconsistent with the Act and the rules made thereunder. It provided for making regulations to provide  for all matters for which provision  was  expedient for  the purposes of giving effect to the provisions of  the Act. Clause (b) of sub-section (2) of section 49 of the  Act in  particular  conferred power on the Corporation  to  make regulations as regards the method of recruitment of  employ- ees  and agents of the Corporation and the terms and  condi- tions  of such employees or agents. It was felt that  clause (b) of section 49(2) of the Act was not in terms  applicable to the transferred employees who became the employees of the Corporation  under sub-section (1) of section 11 of the  Act but only referred to the employees and agents of the  Corpo- ration  who were employed after the Corporation  was  estab- lished,  that  is, after 1st September 1956. To  remove  the above  doubt  by Act 17 of 1957 section 49 of  the  Act  was amended  by  introducing clause (bb) in sub-section  (2)  of section 49 of the Act which expressly conferred power on the Corporation  to make regulations with the previous  approval of  the Central Government as regards ’the terms and  condi- tions of service of persons who have become employees of the Corporation under sub-section (1) of section 11’. The  above clause was introduced into the Act with retrospective effect along with the new sub- 194 section (2) of section 11 of the Act. It is this to be  seen that the conditions of service of the transferred  employees were  to  be regulated by the provisions of the Act,  by  an order made by the Central Government under section 11(2)  of the  Act and the regulations made under clause (bb) of  sec- tion 49(2) of the Act. Even before clause (bb) was  actually introduced into the Act with retrospective effect by Act  17 of  1957 the Corporation had promulgated the Life  Insurance Corporation of India (Staff) Regulations, 1956  (hereinafter referred  to  as  ’the (Staff)  Regulations,  1956’).  Under regulation 21 of the (Staff) Regulations, 1956 provision was made regarding superannuation and retirement of the  employ- ees of the Corporation. Regulation 21 reads as follows: "21.  An  employee shall retire at fifty-five years  of  age provided that the appointing authority may at its discretion extend the service every year upto 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 60 because of the terms and conditions of employ- ment having not ’been favourable in the past, the  Executive Committee  may at its discretion extend their service  every year upto age 65.           Provided  further  that during  the  three  years, beginning from 1st September, 1956, the Executive  Committee may,  at  its discretion, extend the service of  a  class  I employee,  who  has completed sixty years of  age  for  such period  as may be specified but not exceeding one year at  a time if such extension is considered necessary in the inter- est of the Corporation.          Explanation--Notwithstanding anything contained  in this  Regulation,  where  an employee  has  privilege  leave earned  but not availed of as on the date of  retirement  as prescribed  in the above Regulation he may be  permitted  to

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avail  of  the leave and in that case the employee  will  be deemed to retire from service at the expiry of the leave."     The  above regulation fixed the age of retirement of  an employee  at  55  years while empowering  the  authority  to extend the service of an employee, at its discretion,  every year  upto 60 years of age. The first proviso to  regulation 21 of the (Staff) Regulations, 1956, however,          195 authorised the Corporation to allow some of the employees of insurers who were allowed to continue in service beyond  the age of 60 years for the reasons mentioned therein. The above regulation  thus made a distinction between an employee  who entered  the service of the Corporation after it was  estab- lished, i.e., after 1st September, 1956 and the  transferred employees insofar as the age of retirement was concerned.     Pursuant to the power conferred on it under  sub-section (2)  of section 11 of the Act the Central Government  issued an  order on 1.6.1957 called the Life Insurance  Corporation of  India  (Alteration  of Remuneration and  other  Terms  & Conditions  of Service of Employees) Order, 1957 which  came into  force retrospectively from 1st September,  1956.  This order  is  called the ’standardisation  order’.  This  Order applied to all transferred employees who had become  employ- ees  of the Corporation under section 11(1) of the  Act  and who  were  in supervisory, clerical and  subordinate  grades (now classified as Class III and Class IV employees) of  the erstwhile  insurers on 31st August, 1956. Clause 13  of  the above Order, which related to the age of superannuation read as follows: "13. Retirement:           The normal age of retirement shall be 60. But  the Corporation  may require any employee who has  attained  the age of 55 to retire if his efficiency is found to have  been impaired."     Clause 13 of the above Order, therefore, modified  regu- lation  21  of the (Staff) Regulations, 1956 to  the  extent indicated  therein with effect from the commencement of  the Corporation. After the promulgation of the Order the  trans- ferred employees to whom it applied were entitled to contin- ue in the service of the Corporation till they attained  the age  of 60 years subject to the Corporation  exercising  its powers to retire a transferred employee on his attaining the age  of  55 years if his efficiency was found to  have  been impaired.  In  the case of the other  employees  who  joined service  subsequent to 1st September, 1956 regulation 21  of the  (Staff) Regulations, 1956, which prescribed the age  of retirement  at 55 years subject to the appointing  authority at  its discretion extend the age of retirement to 60  years as provided therein, continued to apply. This Order  applied to the members of the staff of the Corporation belonging  to Class  III  and Class IV categories. As regards  the  trans- ferred officers belonging to the Class II category, 196 namely, the Field Officers, a standardisation order was made under  sub-section  (2)  of section 11 of the  Act  on  30th December,  1957. Clause 6 of that order originally  read  as follows: "6. Leave and retirement--In the matter of leave and retire- ment,  Field Officers shall be governed by the same  regula- tions as are applicable to Class I officers of the  Corpora- tion."     The  above clause 6 was substituted by a new  clause  on 25.11.1962 which read as follows: "6. Leave and retirement--In the matter of leave and retire- ment,  Development  Officers shall be governed by  the  Life

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Insurance Corporation of India (Staff) Regulations, 1960, as amended from time to time."     It  may be noted that the Field Officers referred to  in the former clause 6 had been redesignated as the Development Officers before it was substituted by the later clause 6  of the standardisation order. Insofar as the transferred  offi- cers  belonging to Class I were concerned, the  question  of determination  of their age of superannuation was  taken  up for  consideration by the Services and Budget  Committee  of the Corporation on 20th November, 1959. Para 9 of the office note circulated amongst the members of that committee gave a true  picture  of the conditions prevailing  then.  It  read thus: "9. 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 demanding  the  same benefit  on the analogy of the Life Insurance  Corporation’s proposal.  Standardisation Order provides that  an  employee shall retire at 60 years 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  provi- sion of the Standardisation Order was incorporated as far as employees in Classes III & IV are concerned but in the  case of  transferred officers and Field Officers, the  retirement age was fixed at 55 extensible to 58 with a further  proviso that  in special circumstances only the competent  authority may extend the services  197           beyond age 58 and upto 60 years of age. The  Board has also decided that administratively we shall grant exten- sion  upto  60 liberally till the end of 1963. Most  of  the insurers  permitted  their officers to continue  in  service upto  60 years of age and even beyond, depending upon  their efficiency. There is no reason why there should be  distinc- tion  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  provi- sions  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 compro- mise  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 January 1959. It  may  be added  that  this would mean a modification of  the  earlier decision of the Board in this matter."  After  the matter was duly considered by the  Services  and the  Budget  Committee and by the  Corporation,  regulations were  framed under clauses (b) and (bb) of section 49(2)  of the Act prescribing the ages of retirement of the  employees of  the Corporation belonging to different  categories  with the  previous  approval of the Central Government  and  were incorporated  in the (Staff) Regulations, 1960 made  by  the Corporation which came into effect on July 1, 1960.  Regula- tion  19  of the (Staff) Regulations, 1960  dealt  with  the subject of superannuation and retirement of the employees of the Corporation. It reads thus: "Superannution and Retirement:

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19(1). A transferred employee shall retire on completion  of age 60; but the appointing authority may direct such employ- ee to retire on completion of 55 years of age or at any time thereafter,  if  his efficiency is found to  have  been  im- paired. (2) An employee appointed to the service of the  198 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. ........................................     It  is seen from the above regulation that the cases  of all transferred employees were dealt with by  sub-regulation (1) of regulation 19 and the cases of employees appointed to the  service of the Corporation that year after 1st  Septem- ber,  1956 were dealt with by sub-regulation (2) of  regula- tion  19.  All the transferred employees  were  entitled  to remain  in service till they completed 60 years of  age  but the  appointing authority was empowered to retire  any  such transferred employee on completion of 55 years of age or  at any time thereafter if his efficiency was found to have been impaired.  All  employees appointed to the  service  of  the Corporation on or after 1st September, 1956 were required to retire  on completion of 58 years of age but the  appointing authority  was  empowered  to retire any  such  employee  on completion  of 55 years of age or at any time thereafter  if his efficiency was found to have been impaired. This regula- tion  was made in supersession of all other earlier  regula- tions. In the case of the transferred employees the  regula- tion was in conformity with the standardisation order passed in  respect of Class III and Class IV transferred  employees in  whose case the age of retirement was fixed at 60  years. The result was that the regulation made a clear and distinct classification  of  all  the employees  of  the  Corporation belonging  to all classes into two  groups--transferred  em- ployees  and  the employees appointed after  1st  September, 1956, for purposes of the age of retirement having regard to the  historical reasons. It would appear that an  industrial dispute  arose between the Class III and Class IV  employees who  entered the service of the Corporation on or after  1st September, 1956 and the Corporation and one of the points of dispute  related to the age of retirement.  These  employees demanded  that their age of retirement should also be  fixed at 60 years as in the case of Class III and Class IV employ- ees belonging to the category of transferred employees.  The dispute ultimately ended in a settlement which was  incorpo- rated  in  the  Memorandum of Settlement  arrived  at  under section  2(p) and section 18(1) of the  Industrial  Disputes Act,  1947 and rule 58 of the Industrial (Central)  Disputes Rules,  1957 dated 29th January, 1965. The relevant part  of the  settlement arrived at between the parties to  the  said industrial dispute as regards the age of retirement of class III and class IV emp-  199 loyees  who  entered the service of the  Corporation  on  or after 1st September, 1956 read as follows: "1. Retirement age for new employees:          There will be no distinction between Class 111  and Class IV ’transferred employees’ and Class III and Class  IV employees  who entered the service of the Corporation on  or after  1.9.1956 in regard to retirement age which  shall  be 60"     After the above settlement was arrived at regulation  19

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of  the  (Staff) Regulations, 1960, which had  been  brought into  force  with  effect from July 1,  1960,  was  suitably amended  to bring it in conformity with the settlement.  The relevant  part of the amended regulation 19 which was  noti- fied on 19.6.1965 read thus: "19(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 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  im- paired.          (2A) Notwithstanding what is stated in  sub-regula- tions  (1)  and (2) above, an employee may be  permitted  to retire at any time after he has completed age 55.               .........................."     On  account of the settlement arrived at  between  Class III and Class IV employees, who were appointed subsequent to 1st September, 1956 and the Corporation, which was  followed up  by the amendment of the (Staff) Regulations with  effect from 19.6.1965, the employees of the Corporation were divid- ed both longitudinally and latitudinally insofar as the  age of  superannuation was concerned. The longitudinal  division of the employees was as follows. All the transfer- 200 red  employees  belonging  to Class I and  Class  II  became entitled  to continue in service till they attained the  age of  60 years subject of course to the power of the  Corpora- tion  to retire any of them prematurely on completion of  55 years  of age if his efficiency was found to have  been  im- paired  and all the Class I and Class II officers  appointed to the service of the Corporation on or after 1st September, 1956 had to retire on completion of 58 years of age  subject again  to  the power of the Corporation to retire  any  such employee  on  completion of 55 years of age or at  any  time thereafter  if  his efficiency was found to  have  been  im- paired. The employees of the Corporation were divided  lati- tudinally  into two groups. All the employees  belonging  to Class III and Class IV irrespective of the fact whether they were transferred employees or employees appointed after  1st September, 1956 were entitled to continue in service till 60 years  of  age, but the employees belonging to Class  I  and Class II, who were appointed to the service of the  Corpora- tion  on or after 1st September, 1956 had to retire  on  the completion  of 58 years of age subject to the  usual  clause relating  to  premature retirement.  Sub-regulation  (2)  of regulation  19  which affected the  employees  belonging  to Class I and Class II appointed to the service of the  Corpo- ration on or after 1st September, 1956 was substituted by  a new sub-regulation which was notified on September 3,  1966. This  new sub-regulation (2) of regulation 19 read  as  fol- lows: "(2).  An employee belonging to the Class I or Class II  ap- pointed  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 at  its  discretion, extend  his service for one year at a time upto 60 years  of age.  The appointing authority may, however, direct  an  em- ployee to retire on completion of 55 years of age or at  any

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time  thereafter  if his efficiency is found  to  have  been impaired."     The  modification made by the new sub-regulation (2)  of regulation  19 empowered the appointing authority to  extend at its discretion the service of any employee of the  Corpo- ration  belonging  to  the Class I or  Class  II  categories appointed to the service of the Corporation on or after  1st September, 1956 for one year at a time upto 60 years of age. Since the Corporation found that the discretion conferred on the  appointing authority to extend the services of Class  I or  Class II officers beyond 58 years of age at its  discre- tion  was  not being exercised satisfactory but  very  often abused,  sub-regulation (2) was again amended  on  21.1.1977 withdrawing the power to extend the service of     201 employees belonging to Class I and Class 11 appointed to the service  of the Corporation on or after 1st September,  1956 beyond 58 years of age. It also provided that in the  inter- est  of  the Corporation, the Corporation  could  retire  an employee  after completion of 50 years of age. The  relevant part of regulation 19 amended on 21.1.1977 reades thus: "19(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 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 months’ notice or salary in lieu thereof. (2). An employee belonging to Class I or Class II  appointed to the service of the Corporation on or after 1st September, 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 months’  notice  or salary in lieu thereof."     The  1st Respondent S.S. Srivastava entered the  service of  the Corporation as a Class III employee on 22.3.1957  on which date he was appointed as an Assistant in the  Corpora- tion.  From the said Class III post he was promoted  to  the Class I post (since there was no necessity to pass through a Class  II post before entering a Class I post) on  8.10.1963 and was appointed as Assistant Branch Manager (Admn.).  From the post of Assistant Administrative Officer he was promoted to the post of Administrative Officer in June, 1971 and  was further   promoted  as  Assistant  Divisional   Manager   on 18.7.1978.  Since  he was born in the month of  June,  1926, notice  was issued in February, 1984 to Respondent No. 1  of his  retirement  which  was due on 30th June,  1984  on  his completing  the  age  of 58 years. Before the  date  of  his retirement, he instituted a writ petition out of which these appeals  arise in Civil Miscellaneous Writ No. 6849 of  1984 on  the file of the High Court of Allahabad questioning  the validity  of  regulation 19(2) of the  (Staff)  Regulations, 1960 as it stood then and praying for the issue of a writ in the nature of mandamus to the Corporation not to retire  him before he completed the age of 60 years. The High Court 202 issued  ’an interim order of stay of his retirement  on  May 22,  1984. Hence, he was not retired on the 30th June,  1984 as  originally notified and allowed to continue in  service. The Writ Petition was allowed striking down regulation 19(2) as being violative of Articles 14 and 16 of the Constitution of India and the Corporation was directed not to retire  the 1st  Respondent before he attained the-age of 60  years.  By

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virtue of the judgment of the High Court, the 1st Respondent continued in the service of the Corporation till he complet- ed  60 years of age. He was retired from service on 30th  of June, 1986 during the pendency of these appeals.     In the Writ Petition filed by the 1st Respondent it  was contended  that there was no justification to prescribe  two different ages of retirement one for the transferred employ- ees  belonging  to Class I and Class II categories  and  the other for the employees who joined the service of the Corpo- ration  after 1st September, 1956 and who also  belonged  to Class I and Class II categories. It was also contended  that whatever may be the position in respect of persons who  were appointed directly to any post belonging to Class I or Class II category after 1st September, 1956, as regards those  who joined the service of the Corporation on being appointed  to a  Class III post after 1st September, 1956 there could  not be  any reduction of the age of retirement from 60 years  to 58 years on their being promoted to a Class I post or  Class II post. In other words the contention of the 1st Respondent before  the  High Court was that since he had the  fight  to continue  in  service if he had remained in Class  III  only till he attained the age of 60 years as a Class III employee by virtue of the settlement and the amendment of the regula- tion 19 in the year 1965, the age of retirement in his  case could  not be reduced to 58 years only because he  had  been promoted to a Class I post. The Writ Petition was  contested by  the Corporation and the Union of India. It was urged  on behalf  of the Corporation and the Union of India  that  the transferred  employees  and  the employees  who  joined  the service  after 1st September, 1956 belonged to two  distinct and  separate  classes which had  been  treated  differently throughout for valid reasons. It was pleaded by them that on the establishment of the Corporation under the Act it became necessary  to continue the services of the employees of  the erstwhile  insurers whose life insurance business was  taken over by the Corporation to run the business of the  Corpora- tion because the Corporation had no employees of its own  in the month of September, 1956 when it was established.  Since as regards the age of retirement there was no uniformity  in the  establishments in which the transferred employees  were working  prior to the nationalisation of the life  insurance business  203 and as in some cases the age of retirement had been fixed at 55 years, in some other cases it was 58 years, in few  other cases  at  60 years and in many cases there was  no  age  of retirement and the employees could continue as long as  they were  found  to be physically and mentally  fit,  it  became necessary  to fix the age of retirement of  the  transferred employees  on a fair, equitable and just basis. The  Central Government  and  the Corporation felt that 60 years  of  age could be a proper age of retirement in the circumstances  in respect of the transferred employees and that was the reason why  by regulation 19 and the standardisation  order  issued earlier  in the case of certain classes of  transferred  em- ployees  under section 11(2) of the Act the  retirement  age was  fixed  at  60 years and this was done with  a  view  to retaining  the services of the experienced employees of  the erstwhile insurers. It was pleaded on behalf of the Corpora- tion  and the Union of India that in the  circumstances  the classification of the employees into two categories, namely, transferred  employees and others who joined the service  of the  Corporation  on or after 1st September,  1956  for  the purposes of the age of superannuation was a valid  classifi- cation  and Articles 14 and 16 of the Constitution of  India

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had  not  been  violated. It was further  pleaded  that  the discrimination made between the employees belonging to Class I  and Class II on the one hand and the employees  belonging to Class III and Class IV on the other in the matter of  the age of superannuation was not invalid since they belonged to two  distinct categories of employees who were  governed  by different conditions of service as regards pay, perquisites, allowances,  administrative  powers etc. After  heating  the arguments  of both the sides the learned Judges of the  High Court allowed the Writ Petition. The High Court did not find any  unconstitutionality in a rule or  regulation  providing the age of retirement at 60 years of employees who had  been absorbed  from the service of the erstwhile insurers and  to that extent it observed that one could say that the grouping being reasonable the Court might not travel into the  domain of  legislative policy. It, however, found that when once  a transferred employee belonging to Class III and an  employee appointed after 1st September, 1956 by the Corporation to  a Class  III post are promoted to Class I the  distinction  of transferred  employee  and  direct appointee  could  not  be maintained as on promotion they became persons belonging  to the same category of employees enjoying the same  conditions of  service. Hence the age of retirement should be the  same in the case of both such promoters. It accordingly held that the 1st Respondent was entitled to continue till he attained the age of 60 years as other Class I employees belonging  to the  category  of transferred employees.  Aggrieved  by  the judgment of 204 the  High Court the Corporation and the Union of India  have filed these appeals by special leave.     It  should  be  stated at the outset that  some  of  the questions raised before us are already covered by pronounce- ments made by this Court. The object of enacting section  11 of  the  Act is dealt with in. detail by this Court  in  the Life Insurance Corporation of India v. D.J. Bahadur &  Ors., [1981] 1 S.C.R. 1083 which unfortunately was not brought  to the  notice  of the High Court. Krishna Iyer,  J.  at  pages 1098-1099  has observed in the course of the  said  decision thus:          "The  Corporation, to begin with, had to take  over the staff of the private insurers lest they should be thrown out  of employment on nationalisation. These private  compa- nies had no homogenous policy regarding conditions of  serv- ice for their personnel, but when these heterogenous  crowds under the same management (the Corporation) divergent emolu- ments and other terms of service could not survive and broad uniformity became a necessity. Thus, the statutory  transfer of  service  from former employers  and  standardization  of scales  of remuneration and other conditions  of  employment had to be and were taken care of by s. 11 of the Life Insur- ance  Corporation  Act, 1956 (for short, the LIC  Act).  The obvious purpose of this provision was to enable the Corpora- tion  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. It was elementary that the Corporation could  not perpetuate incongruous features of service of parent  insur- ers, and statutory power had to be vested to vary, modify or supersede these contracts, geared to fair, equitable and, as far as possible, uniform treatment of the transferred staff. Unless  there be unmistakable expression of such  intention, the ID Act will continue to apply to the Corporation employ- ees. The office of s. 11 of the LIC Act was to provide for a

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smooth  take-over and to promote some common  conditions  of service in a situation where a jungle of divergent contracts of employment and industrial awards or settlements confront- ed  the State. Unless such rationalisation and  standardiza- tion were evolved the ensuing chaos would itself have  spelt confusion, conflicts and difficulties. The functional  focus of s. 11     205 of  the LIC Act will dispel scope for  interpretative  exer- cises unrelated to the natural setting in which the  problem occurs."     Pathak, J. (as he then was) in his judgment in the  same case observed at pages 1134 to 1136 thus:          "The  first question is whether the new clause  (9) of the Standardisation Order succeeds in defeating the claim of the workmen. To determine that, s. 11 of the  Corporation Act  must be examined. Sub-s. (1) guarantees to  the  trans- ferred  employee the same tenure, at the  same  remuneration and  upon the same terms and conditions on the  transfer  to the Corporation as he enjoyed on the appointed day under the insurer,  and  he is entitled to them until  they  are  duly altered by the Corporation or his employment in the Corpora- tion is terminated. The sub-section envisages alteration  by the Corporation.           Sub-s.  (2) of s. 11, by its first  limb,  confers power  on  the  Central Government to alter  the  scales  of remuneration  and  other  terms and  conditions  of  service applicable  to transferred employees. 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-s. (2) is intended for  the  purpose  of securing  uniformity among them. The second limb  of  sub-s. (2) is the source of controversy before us. It empowers  the Central  Government  to reduce the remuneration  payable  or revise the other terms and conditions of service. That power is to be exercised when the Central Government is  satisfied that the interests of the Corporation and its Policy holders require such reduction of revision. The question is  whether the  provision is confined to transferred employees only  or extends  to  all employees generally. In my opinion,  it  is confined  to transferred employees. The provision is a  part of the scheme enacted in Chapter IV providing for the trans- fer of existing life insurance business from the insurers to the  Corporation,  and the attendant  concomitants  of  that process.  There is provision for the transfer of the  assets and  liabilities  pertaining to the business,  of  provident funds, 206 superannuation  and  other like funds, of  the  services  of existing  employees of insurers to the Corporation and  also of the services of existing employees of chief agents of the insurers to the Corporation, and finally for the payment  of compensation  to the insurers for the transfer of the  busi- ness to the Corporation. They are all provisions relating to the  process of transfer. Sub-s. (2) of s. 11 is a  part  of that  process, involving as it does the integration  of  the Corporation’s  staff and labour force. While the first  limb of  the sub-section provides for securing  uniformity  among the  transferred employees in regard to the scales of  remu- neration  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  Government  finds that the  interests  of  the

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Corporation  and its policy holders require a  reduction  in the remuneration payable or revision of the other terms  and conditions of service applicable to those employees, it  may make  an order accordingly. It is true that the  words  "em- ployees  or  any class of them" in the second limb  are  not prefaced by the qualifying word "transferred" or "such". But that  was hardly necessary when regard is had to the  mosaic of  sections in which the provision is located.  Admittedly, the first limb of sub-s. (2) relates to transferred  employ- ees only, and it must be held that so does the second  limb. Both  provisions  are  intended to  constitute  a  composite process  for  rationalising the scales of  remuneration  and other terms and conditions of service of transferred employ- ees  with  a view not only to  effecting  a  standardisation between the transferred employees but also to revising their scales of remuneration, and terms and conditions of  service to a pattern which will enable the newly established  Corpo- ration to become a viable and commercially successful enter- prise. The standpoint of the second limb of the sub-section, as its language plainly indicates, is provided by the inter- ests  of  the Corporation and its policy holders.  For  that reason,  it  is open to the Central  Government  under  sub- section to ignore the guarantee contained in sub-section (1) of  s. 11 in favour of the employees, or anything  contained in  the Industrial Disputes Act, 1947, or any other law  for the  time being in force or any award, settlement or  agree- ment for the time being in force. Benefits conferred  there- under on the employees must yield  207 to the need for ensuring that the Corporation and its policy holders  do not suffer unreasonably from the burden of  such benefits. The need for such a provision arises because it is a burden by which the Corporation finds itself saddled  upon the  transfer  a burden not of its own  making.  Unless  the statute provided for such relief, the weight of that  burden could  conceivably  cripple the successful  working  of  the Corporation  from its inception as a business  organisation. It is a situation to be distinguished from what happens when the Corporation, launched on its normal course,  voluntarily assumes, in the course of its working, obligation in respect of  its employees or becomes subject to such obligations  by reason of subsequent industrial adjudication. Like any other employer, the Corporation is then open to the normal play of industrial  relations in contemporary or future  time.  That the two provisions of sub-s. (2) are linked with the process of  transfer  and integration is further  indicated  by  the circumstances  that  the power thereunder is vested  in  the Central Government. The scheme of the sections in Chapter IV indicates  generally that Parliament has appointed the  Cen- tral Government as the effective and direct  instrumentality for  bringing  about  the transfer and  integration  in  the different sectors of that process.          There is no danger of an order made by the  Central Government  under  the  second limb of  sub-section  (2)  in respect  of transferred employees being struck down  on  the ground that it violates the equality provisions of Part  111 of  the  Constitution because similar action  has  not  been taken  in respect of newly recruited employees. So  long  as such order is confined to what is necessitated by the  proc- ess  of transfer and integration, the transferred  employees constitute a reasonably defined class in themselves and form no common basis with newly recruited employees." (underlining by us)                    emphasis supplied Pathak, J. also observed at Page 1136 thus:          "Another  point  is  whether the  power  under  the

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second  limb  of sub-s. (2) of s. 11 can 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 208 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  circumstances that  the  original Bill moved in  Parliament  for  amending sub-s. (2) of s. 11 contained the words "from time to  time" and  that these words were subsequently deleted when  enact- ment  took  place. The intent of the  legislative  provision must be discovered primarily from the legislation itself."     We  have given extracts from the above  decisions  which are  fairly long since they relate to the  identical  provi- sions  of law and also cover a large part of  the  arguments urged before us.     Having  regard  to the different conditions  of  service that  were  prevailing in the various  establishments  whose business was taken over by the Corporation it can hardly  be disputed  that the fixation of age of superannuation is  one of the essential parts of the process of transfer and  inte- gration to which sub-section (2) of section 11 of the Act is applicable. The fixation of 60 years as the age of  superan- nuation  in  the  case of transferred  employees  cannot  be considered to be unreasonable in view of the history of this case.  The observation made by Pathak, J. in the  course  of his  judgment that "there is no danger of an order  made  by the Central Government under the second limb of  sub-section (2) in respect of transferred employees.being struck down on the ground that it violates the equality provisions of  Part III of the Constitution because similar action has not  been taken  in respect of newly recruited employees" is  signifi- cant. A discrimination made by a State between the employees who  are directly recruited to the service of the State  and the employees whose services are taken over by the State  on the taking over of the institutions where they were  working has  been held to be not unconstitutional by this  Court  in Ram Lal Wadhwa & Anr. v. The State of Haryana & Ors., [1973] 1 S.C.R. 608. The facts of that case were these. There  were some schools run by municipal boards and district boards  in the then State of Punjab which were taken over by the Punjab Government  with effect from October 1, 1957.  The  teachers then employed in those schools, thus became State employees. Those  teachers called ’provincialised’ teachers were to  be given  the same grades of pay and other allowances  as  were given  to their counterparts in Government  employment.  The teachers  in  Government  employment were  governed  by  the Punjab  Educational  Service Class III School  Cadre  Rules, 1955. On February 13, 1961, the Punjab Government promulgat- ed under the proviso to Article 309 of  209 the Constitution, the Punjab Educational Service (Provincia- lised  Cadre)  Class III Rules,  giving  them  retrospective effect  from October 1, 1957. By these Rules the  provincia- lised  teachers were treated as failing under a Cadre  sepa- rate and distinct from teachers in the-State Cadre  governed by  the 1955 Rules. The ’provincialised’ Cadre was to  be  a diminishing cadre to become extinct in course of time. There was  to  be  no further recruitment to that  cadre  and  all vacancies  arising in that cadre were to be  replenished  by direct recruitment to the State cadre. The transfer of  such posts to the State cadre was to be done by splitting up such

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vacant posts into blocks of 7 and 6 by rotation. Consequent- ly,  the selection grade of 15% in the State cadre  progres- sively  increased  in strength which was determined  by  the total  cadre strength while the selection grade in the  pro- vincialised  cadre progressively decreased. Thus  those  re- cruited to the State cadre had a progressively larger chance of  getting into the selection grade. In State of Punjab  v. Joginder Singh, [1963] Supp. 2 S.C.R. 169 this Court  upheld the  validity of the 196 1 Rules repelling  challenge  under Articles  14 and 16 of the Constitution. In the view of  the majority in that case the two cadres started as  independent services,  they were never integrated into one service  and, therefore,  the dissimilarity of the treatment by the  Rules was  not  a  denial Of equal opportunity.  But,  the  Punjab Government  never implemented the Rules at any time. On  the reorganisation of the erstwhile Punjab State into Punjab and Haryana on November 1, 1966, the Haryana Government put  the 1961  Rules  into operation. The petitioners  in  the  above case, i.e., Ram Lal Wadhwa & Anr. v. The State of Haryana  & Ors.,  (supra) appointed in the local bodies Schools  before ’provincialisation’,  challenged  the validity of  the  1961 Rules.  Their complaint was that the Rules created,  without any valid justification, two cadres, the State cadre and the provincialised  cadre,  the former including  not  only  the Government  School teachers but also those  recruited  after October  1, 1957 and posted in the  provincialised  schools; that by reason of having two cadres and providing for both a uniform 15 per cent for selection grade posts, coupled  with making  the  provincialised  cadre a  diminishing  one,  the result had been that teachers deemed to have been  appointed to the State cadre with effect from October 1, 1957 and even those  recruited thereafter had been promoted to the  selec- tion grade, while those in the provincialised cadre,  though senior  in  service and performed identical duties  and  had identical  scales  of pay, remained in the  ordinary  grade. According  to the petitioners in that case these  Rules  and their  implementation contravened Articles 14 and 16 of  the Constitution.  The  petitioners in that  petition  contended that  the earlier decision of this Court in State of  Punjab v. Joginder Singh, (supra) required reconsideration. In the 210 course  of its decision this Court while rejecting the  con- tention of the petitioners observed thus at pages 635-636:          "The principles on which discrimination and  breach of Arts. 14 and 16 can be said to result have been by now so well  settled  that we do not think it necessary  to  repeat them  here once again. As already seen, ever since 1937  and even  before,  the two categories of  teachers  have  always remained  distinct,  governed by different  sets  of  rules, recruited  by  different authorities and  having,  otherwise than in the matter of pay scales and qualifications, differ- ent conditions of service. This position remained as late as February  13,  1961.  On that day whereas  the  State  cadre teachers  were governed by 1955-Rules, rules had yet  to  be framed  for the provincialised cadre a diminishing  one  and bringing  about ultimately through that principle one  cadre only in the field in a phased manner. If through  historical reasons  the teachers had remained in two  separate  catego- ries, the classification of the provincialised teachers into a  separate cadre could not be said to infringe Art. 14  and Art.  16.  It was also not incumbent on  the  Government  to frame the 1961-Rules uniformly applicable to both the  cate- gories of teachers, firstly, because a rule framing authori- ty need not legislate for all the categories and can  select for which category to legislate, (see Sakhawat Ali v.  State

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of Orissa, [1955] 1 S.C.R. 1004; Madhubhai Amathalal  Gandhi v. The Union of India, [1961] 1 S.C.R. 191 and Vivian Joseph Ferreria  v.  The Municipal Corporation of  Greater  Bombay, [1972]  1  S.C.R. 70, and secondly, because it  had  already come  to a decision of gradually diminishing the  provincia- lised  cadre so that ultimately only the state  cadre  would remain  in  the  service. That was one way  of  solving  the intricate difficulty of inter se seniority. There can be  no doubt  that if there are two categories of employees, it  is within  Government’s power to recruit in one (and)  not  re- cruit  in the other. There is no right in a  government  em- ployee to compel it to make fresh appointments in the  cadre to which he belongs. It cannot also be disputed that govern- ment  had the power to make rules with retrospective  effect and therefore, could provide therein that appointments  made between  October  1,  1957 and February 13,  1961  shall  be treated  as appointments in the State cadre. That had to  be done for the simple reason that      211 the  provincialised  cadre was already  frozen  even  before October 1, 1957 and Government had decided not to make fresh appointments  in  that cadre since that cadre was  to  be  a diminishing one."     It  has to be observed in the case before us  also  that the  transferred  employees belong to a  diminishing  cadre. When the Corporation was established they were about  27,000 in  number  and we are informed today that  there  are  only about  22% of those employees in service. Already  30  years have  elapsed  from  the date of the  establishment  of  the Corporation. All the transferred employees who have  already retired  have  retired only after completion 60  years.  The remaining  transferred  employees are likely to  go  out  of office within a short period. Thereafter only the  employees who are directly recruited by the Corporation who are  about 54,000  in number would continue to remain in  its  service. The observation made by this Court in Ram Lal Wadhwa &  Anr. v  The State of Haryana & Ors., (supra) clearly  applies  to the case before us also.     As  this stage we should refer to another aspect of  the case  presented  before us which relates to 16  persons  who were appointed as the employees of the Corporation by virtue of an Order dated March 15, 1966. There was a department  in existence  in the year 1963 called Department of  Insurance. The Government and the Corporation felt that the services 16 persons who were working in the Department of Insurance were required  by the Corporation. Accordingly, the President  of India  agreed to release 16 persons from the service of  the Government  of  India to enable the Corporation  to  appoint them  in its service by the Order of the Central  Government dated  25th  February,  1964. The resignation  of  those  16 persons  from  the service of the Government  of  India  was accepted  on 15th March, 1966 and from that date those  per- sons  became the employees of the Corporation. Out of  those 16,  13 have already retired from service on  attaining  the age  of 60 years. Only three of them are now in the  service of the Corporation. One of them is no longer an employee  of the Corporation since he is holding the post of the Chairman of  the  Corporation. The second of them  is  due  to.retire within 2/3 months and only one of them would continue in the service  of the Corporation for about a period of two  years more. In the case of those 16 people the Corporation  passed a separate order fixing their age of retirement as 60  years having  regard  to the negotiations which  had  taken  place between the Corporation and the Government before the taking over of their services by the Corporation. They again belong

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to a different category altogether and 212 the  fixation of the age of retirement in their case  at  60 years  cannot be challenged by those who were  directly  re- cruited by the Corporation after September 1, 1956 as  there is no similarity between them and the said 16 officers.     The  next  question  for consideration  is  whether  the fixation  of  58 years as the age of superannuation  in  the case  of  the employees who entered the  service  after  1st September,  1956  is unreasonable. While dealing  with  this question, the Court can take judicial notice of the  differ- ent ages of retirement prevailing in the several services in India. In almost all the public sector corporations, Central services and State services 58 years age is considered to be a reasonable age at which officers can be directed to retire from their service. So, the determination of 58 years as the age  of superannuation by itself cannot be considered to  be arbitrary.     We do not also find much substance in the contention  of the  1st Respondent that there cannot be any  discrimination as  regards  the  age of retirement  between  the  employees belonging to Class I and Class II on the one hand and  Class III  and Class IV on the other. It is true  that  originally employees  belonging  to Class III and Class  IV  categories amongst the transferred employees were given the benefit  of retirement at the age of 60 years but the employees  belong- ing to Class III and Class IV categories recruited after 1st September, 1956 were required to retire on the completion of 58  years  of age. In the Settlement which  was  arrived  at between  the management and the Class III and Class  IV  em- ployees  recruited after 1st September, 1956 it  was  agreed that there should be no discrimination as regards the age of retirement between the employees belonging to Class III  and Class  IV categories amongst the transferred  employees  and the  Class  III and Class IV employees recruited  after  1st September, 1956. It was pursuant to the said settlement that regulation 19 was amended with effect from 19.6.1965. Having regard to the lower emoluments and other benefits which  the employees  belonging to Class III and Class IV are  entitled to  get from the Corporation and the higher  emoluments  and other  benefits to which officers belonging to Class  I  and Class II are entitled and also the nature of their work  and the powers enjoyed by them we are of the view that  fixation of different ages of retirement to the different classes  of employees  would not by itself be violative of  Articles  14 and 16 of the Constitution. In Tejinder Singh and Another v. Bharat Petroleum Corporation Ltd. and Anr., [1986] 4  S.C.C. 237 this Court has observed at page 239 thus:     213 "This  Court  in Workmen v. Bharat  Petroleum  Corpn.  Ltd., directed  the  retirement age of the clerical staff  of  the Refinery  Division of respondent 1 to be fixed at 60  years. Petitioners have contended that the disparity in the age  of retirement  between  two groups of employees gives  rise  to discriminatory treatment. This stand is not tenable for more than one reason. Clerical staff and officers of the  manage- ment  staff belong to separate classifications and no  argu- ment  is  necessary in support of it. Petitioners  have  not contended  and perhaps could not legitimately contend,  that the  two  classes of officers stand at par. In  the  Workmen case itself, this Court did not extend the benefit of super- annuation at the age of 60 to all clerical staff but limited the same to that category of employees working in the Refin- ery Division, Bombay. Classification on the basis of reason- able  differentia  is a well known basis and we are  of  the

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view  that the petitioners are not entitled in the facts  of the case to seek support from Article 14 for their claim."     It was, however, contended on behalf of the 1st Respond- ent  that  since he had been recruited originally  into  the Class III post and he would have had the benefit of  retire- ment  at  the  age of 60 years if he had  remained  in  that Class,  the  said  benefit cannot be denied to  him  on  his promotion to the Class I category. We do not find any  merit in this contention too. When the 1st Respondent was promoted to  the Class I post in 1963 the age of retirement of  offi- cers in the Class I post had been fixed at 58 years and  was not  different from the age of retirement of Class  III  em- ployees. It was only in 1965 under the settlement the age of retirement of employees in Class III and Class IV who joined service  after September 1, 1956 was raised to 60 years.  If he  felt that the conditions of service of Class I  officers were  likely to be prejudicial to him he could have  refused the promotion offered to him. Having accepted the  promotion along  with  the higher benefits flowing from it  he  cannot contend  after several years that he had been  prejudicially affected by the condition relating to the age of  retirement applicable to Class I officers appointed after September  1, 1956. That apart the higher emoluments and other perquisites to which Class I employees may be entitled to and the better conditions  of work which are enjoyed by them  substantially compensate the effect of the lowering of the age of  retire- ment from 60 years to 58 years. We do not find any substance in the argument urged on behalf of the 1st Respondent  rely- ing upon the judgment of this Court in Roshan Lal Tandon  v. Union  of  India, [1968] 1 S.C.R. 185 which lays  down  that when employees are  214 recruited  to a lower grade from two sources  no  favourable treatment should be extended to recruits from one source  on their  promotion to the higher grade. In the  decision,  re- ferred  to above, the facts were these. Vacancies  in  grade ’D’  of Train Examiners were filled by (a) direct  recruits, i.e.,  apprentice  train  examiners who  had  completed  the prescribed  period  of  training,  and  (b)  promoters  from skilled artisans Promotion from grade ’D’ to ’C’ was on  the basis  of  seniority cum suitability. In October,  1965  the Railway Board issued a notification by which it was provided that eighty percent of the vacancies in grade ’C’ were to be filled  up from apprentice train examiners  recruitment.  or after  April  1, 1966 and the remaining twenty per  cent  by train  examiners  from grade ’D’. The  notification  further provided  that  apprentice train examiners who  had  already been absorbed in grade ’D’ before April, 1966 should en bloc be  accommodated in grade ’C’ in the eighty per cent of  the vacancies  without undergoing any selection and with  regard to twenty per cent of the vacancies, reserved for the  other class promotion was to be on selection basis and not on  the basis  of seniority-cum-suitability. The petitioner  in  the said  case who entered Railway service in 1954 as a  skilled artisan  and was selected and confirmed in grade  ’D’  chal- lenged  that part of the notification which gave  favourable treatment to apprentice train examiners who had already been absorbed  in grade ’D’ as arbitrary and discriminatory  anti violative  of  Article 14 and 16 of the  Constitution.  This Court held that when once the direct recruits and  promoters were  absorbed in one cadre they formed one class  and  they could not be distinguished again for the purpose of  further promotion  to  the higher grade ’C’- The Court  further  ob- served  that  before the impugned  notification  was  issued there  was  only one rule of promotion  applicable  to  both

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direct recruits and promoters but by the impugned  notifica- tion  discriminatory  treatment was made in  favour  of  the apprentice train examiners who had already been absorbed  in grade ’D’. The Court, therefore, held that the  notification was  discriminatory. This decision has no relevance  to  the present  case  although the High Court has relied on  it  - in  deciding this case. We have already shown that  the  Act itself made a distinction between the transferred  employees and  the employees recruited to the service of the  Corpora- tion  after  1st  September, 1956 by  making  amendments  in section II and in clauses (b) and (bb) of sub-section (2) of section 49 of the Act. In the (Staff) Regulations, 1956  and the (Staff) Regulations, 1960 there was again a  distinction made  between  the transferred employees and  employees  re- cruited after 1st September, 1956. We find that the distinc- tion  between  the two classes is recognised  by  Parliament even  as late as 1981 when it amended section 49 of the  Act by deleting clause (bb) of sub-section (2) thereof and by  215 amending section 48 of the Act by introducing clause (cc) in subsection (2) and the new sub-section (2A) in it. After the amendment, the relevant part of section 48 reads thus:                "48. (2) ...................................               (cc).  The terms and conditions of service  of               the  employees and agents of the  Corporation,               including  those  who  became  employees   and               agents of the Corporation on the appointed day               under                                     this               Act,  ....................................                         (2A).  The  regulations  and   other               provisions as in force immediately before  the               commencement of the Life Insurance Corporation               (Amendment)  Act,  1981, with respect  to  the               terms  and conditions of service of  employees               and agents of the Corporation including  those               who became employees and agents of the  Corpo-               ration  on the appointed day under  this  Act,               shall be deemed to be rules made under  clause               (cc) of sub-section (2) and shall, subject  to               the  other  provisions of this  section,  have               effect accordingly."               (underlining by us)                     empha-               sis supplied     Clause  (cc) of section 48(2) of the Act,  however,  has been  given retrospective effect from 20th June, 1979.  Sub- section  (2A) of section 48 has given statutory  recognition to  the  (Staff) Regulations of 1960 and  in  particular  to Regulation  19(2)  as amended in 1977 which is  impugned  in these proceedings. It is thus seen that at no point of  time the  transferred  employees were integrated into  one  cadre along  with the employees appointed after September 1,  1956 as  such and the transferred employees have  retained  their birth-marks  throughout. The fact that the  pay,  allowances and  other conditions of service have been made the same  in respect of both the transferred employees and the  employees of  the Corporation recruited after 1st September, 1956  has not  brought  about the integration of the  two  classes  of employees into one single cadre. Even the High Court in  the instant  case accepts that it was just and proper to  extend the  benefit of the higher age of retirement to  the  trans- ferred  employees  but it has held that when once  a  trans- ferred  employee  is promoted he would lose the right  to  a special treatment as regards the age of superannuation.  The relevant  portion  of the judgment of the High  Court  reads thus:

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                      "A  reasonable  classification  which               prevents  a  Court from dissecting it  is  one               which  includes all persons who are  similarly               situated with respect to the purpose of law or                216               objective  which the rule or section seeks  to               achieve.  The apparent or  inherent  intention               sought  to  be achieved by the  regulation  19               framed by Corporation was to continue upto age               of  sixty years the employees of  insurers  as               the  age  of  superannuation in  some  of  the               companies was sixty and to derive benefit from               expertise and experience of employees who  had               worked with insurers. May be laudable, reason-               able and proper. But is it like that? Obvious-               ly  not. An employee in Class III  of  insurer               could  be continued upto sixty. But what  hap-               pens  when he climbs the ladder  of  promotion               and  reaches Class I. Does he still carry  the               stamp  of experience and expertise  of  having               worked  with insurer? Once a  transferred  em-               ployee of Class III and a direct appointee  in               (that) class are promoted to Class I obviously               on  merit, efficiency and seniority  then  how               can  the  distinction  of  ’transferred’   and               ’direct’ be maintained. So long employees  are               in  Class III they can be said  to  constitute               two  different  classes  of  transferred   and               direct  appointees but once they are  promoted               they  become similarly situated and  the  dis-               tinction stands obliterated. They on promotion               form one integrated cadre of Class I officers.               To segregate them here for purposes of retire-               ment is invidious when their pay, responsibil-               ity and benefits are same."     While  we agree with the first part of the  observations made  in  the above extract from the judgment  of  the  High Court, namely, that it was not discriminatory to extend  the benefit of the age of 60 years to the transferred employees, we  do  not agree with the latter part of  the  observations made therein which suggests that on promotion from Class III to  Class I the transferred employees and the  directly  re- cruited employees would lose their birth-marks. Pathak,  J., as he then was, has observed in D.J. Bahadur’s case  (supra) that  it is open to the Government to make an  order  trader section 11(2) of the Act from time to time in respect of the transferred  employees and that power is not exhausted  when it  is  exercised  once. It suggests  that  the  transferred employees  are  always amenable for separate  treatment  and they do not lose their identity. It appears to be the inten- tion of Parliament that even as late as in 1981 that the two categories  of employees, namely, the transferred  employees and  employees  recruited after 1st September, 1956  in  the Corporation should be kept separate. In these  circumstances the High Court was in error in relying upon the judgment  of this Court in Roshan Lal Tandon’s case (supra).  217     In O.P. No. 5295 of 1985 and connected cases on the file of  the High Court of Kerala which was decided on 4.2.  1987 the  claim of the employees of the Corporation belonging  to class I but appointed after 1st September, 1956 to  continue in service till they attained the age of 60 years arose  for consideration.  The  High  Court has negatived  it.  In  the course of its judgment it has referred to the judgment under appeal in this case but has only distinguished it. The  High

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Court  of Kerala was right in not following the decision  of the  High Court of Allahabad which is now under appeal.  It, however,  distinguished it on the ground that the  employees in question had not been promoted from Class III to Class  I as  it was the case here but the petitioners before  it  had continued  in Class I or Class 11 right from  the  commence- ment. We, however, approve of the reasons given by the  High Court of Kerala in holding that the employees of the  Corpo- ration  belonging  to Class I and Class II who  had  entered service  of the Corporation after 1st September,  1956  were not  entitled  to continue in service beyond the age  of  58 years. In our view the fact that an employee had entered the service  of  the Corporation after September 1,  1956  in  a Class  III post and is later on promoted to a Class  I  post does not make any difference in so far as the question which arises  for decision before us. The High Court of Delhi  has rejected two petitions in which the very question raised  in this  case  arose for consideration, namely, N.L.  Aneja  v. Union of India and Others, (Civil Writ No. 1911 of 1986) and H.S.  Kochar  v. L.I.C. of lndia & Ors., (C.W. No.  1660  of 1986)  at  the  stage of admission  itself  giving  reasons, though short, for its orders. The two decisions, referred to above, have been rendered by two different Division Benches.     We  may  also refer to one decision of the  Madras  High Court and another decision of the Calcutta High Court  which arose trader the provisions of the Banking Companies (Acqui- sition  and  Transfer of Undertakings) Act, 1970 (Act  5  to 1970)  where  again the claim of employees of the  banks  in question  who joined their service after nationalisation  to the  benefit  of the conditions prescribed in  the  case  of employees  of  the former banking companies  whose  services were  taken  over on nationalisation as regards the  age  of retirement  arose for consideration. The scheme  of  section 12(2) of the Banking Companies (Acquisition and Transfer  of Undertakings)  Act, 1970 and the scheme of section 11(1)  of the  Act, which is trader consideration before us, were  the same.  In Govindarajulu v. The Management of Union  Bank  of India  &  Ors., (Writ Petition No. 5486 of  1980)  the  High Court  of  Madras rejected the said claim  by  its  judgment dated 21.11. 1986. In Dr. Nikhil Bhushan Chandra v. Union of India & Ors., (Civil Order  218 No. 13958 (W) of 1980) decided on December 21, 1982 the High Court  of Calcutta has rejected a similar claim. We  may  at this stage refer to a recent decision of this Court in  Miss Lena  Khan v. Union of India and Ors., J.T. 1987 2  S.C.  19 decided on 30.3. 1987 in which the validity of the continua- tion of some foreign Air Hostesses beyond the prescribed age of retirement came up for consideration. The Court  rejected the petition stating that the management of Air India having taken  a  decision "to phase out U.K. incumbents  when  they attain  the  age of 45", it was not  discriminatory  to  Air Hostesses of Indian origin who were to retire at the age  of 35 years and was not unconstitutional. The principle enunci- ated  in  this  case can be applied to the  cases  of  three officers  who  belong  to the Department  of  Insurance  who joined the service of the Corporation after resigning  their posts  in  the Government of India in the year  1965,  there being no chance of any addition to their class.     Classification  of  employees into  two  categories  for purposes of fixing the age of superannuation depending  upon their  dates  of entry into service when the  necessity  for doing so arises on account of certain historical reasons  is not unknown. This Court had to deal with a case involving  a similar situation in Railway Board v. A. Pitchumani,  [1972]

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2  S.C.R. 187. Several railway companies which were  running their own railways in different parts of India were amalaga- mated  with  the Indian Railway Administration in  1947.  On such amalagamation servants of the railway companies,  whose railways were taken over, became the employees of the Indian Railway Administration. On the absorption of the services of the  servants  of the previous railway companies  it  became necessary  for  the Indian Railway Administration  to  frame rules  with regard to their conditions of service  including the determination of the age of retirement of those  railway employees.  Accordingly, rule 2046 (F.R. 56) of  the  Indian Railway Fundamental Rules had to be modified. That rule was, therefore,  substituted by a new rule on January  11,  1967. The new rule read as follows:               "2046.  (FR.  56)--(a)  Except  as   otherwise               provided  in this rule, every railway  servant               shall retire on the day he attains the age  of               fifty-eight years.                        (b).  A ministerial  railway  servant               who  entered Government service on  or  before               the 31st March, 1938 and held on that date--               (i) a lien or a suspended lien on a  permanent               post, or               219                        (ii) a permanent post in a provision-               al  substantive capacity under Clause  (d)  of               Rule  2008  and  continued to  hold  the  same               without interruption until he was confirmed in               that post,               shall  be retained in service till the day  he               attains the age of sixty years.                        NOTE: For the purpose of this Clause,               the  expression "Government Service"  includes               service  rendered in ex-company, and  ex-State               Railways,  and in a former provincial  Govern-               ment." In the above new rule every railway servant, whose case  did not  fall  under  clause (b) of that rule  was  required  to retire  on the date he attained the age of 58 years.  Clause (b), however, provided that every ministerial railway  serv- ant who had entered the Government service on or before 31st March,  1938  and  who satisfied  the  conditions  mentioned either  in  sub-clause (i) or sub-clause  (ii)  thereof  was entitled to continue in service till he attained the age  of 60 years. As may be seen from that rule, the  classification of the employees was made on the basis of the date of  entry into  the service of the Government. That clause (b) of  the said rule applied also to the employees of ex-companies  and ex-State railways which were taken over by the Indian  Rail- way Administration is clear from the note attached to clause (b) of rule 2046 which provided that for the purpose of that clause the expression ’Government Service’ included  service rendered in ex-company and ex-State railways and in a former provincial  Government.  On  December 27,  1967  the  Indian Railway  Administration  substituted the  note  attached  to clause (b) of rule 2046 by the new note which read thus:                         "For the purpose of this clause  the               expression   ’Government   Service’   includes               service  rendered in a former provincial  gov-               ernment  and in ex-company and ex State  Rail-               ways, if the rules of the Company or the State               had a provision similar to Clause (b) above." The  effect of the new note was that an employee who  satis- fied the condition in sub-section (i) or sub clause (ii)  of clause  (b)  was entitled to continue upto  60  years  after

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December 23, 1967 only if the rules of the company in  which he  was formerly working had a provision similar  to  clause (b)  of  rule 2046 which fixed the age of retirement  at  60 years. 220 The Respondent in that case, that is, A. Pitchumani while he was entitled before December 23, 1967 to continue in service till  he attained the age of 60 years as he had  joined  the service of the Madras and Southern Mahratta Railway  Company on August 16, 1927, i.e., prior to March 31, 1938 and satis- fied  the other conditions mentioned in clause (b)  of  rule 2046 could not have the benefit of that clause on and  after December 23, 1967 since in the Madras and Southern  Mahratta Railway  Company where he was formerly working there was  no rule similar to clause (b) as regards the age of retirement. He  was  asked to retire from service on April 14,  1968  on which  date he was completing the age of 58 years.  The  Re- spondent, A. Pitchumani questioned before the High Court  of Mysore  (Karnataka) the validity of the note substituted  by the Order dated December 23, 1967 which took away his  right to continue in service till he attained the age of 60  years which he otherwise possessed before the introduction of  the said  note. The High Court of Mysore struck down a  part  of the  new note only on the ground that it was  discriminatory and  directed that the Respondent, A. Pitchumani  should  be allowed to continue in the service till he completed the age of  60 years. On appeal, the judgment of the High Court  was affirmed  by  this Court in Railway Board v.  A.  Pitchumani (supra). This Court did not find fault with the  classifica- tion  that had been made between the persons  falling  under clause (a) and persons falling under clause (b) on the basis of the date of entry into service since clauses (a) and  (b) of rule 2046 had uniform application to all the employees of the  Indian Railway Administration who came within  the  re- spective clauses. It, however, agreeing with the High  Court found fault with the classification of the employees falling under clause (b) into two categories, namely, those  employ- ees belonging to a company where there was a rule similar to clause  (b) as regards the age of superannuation  and  those employees  who came from companies where there was  no  rule similar to clause (b) as regards the age of  superannuation. In Manindra Chandra Sen v. Union of India & Ors. A.I.R. 1973 CAL. 385 Sabyasachi Mukharji J., has upheld the said classi- fication of railway employees into two categories viz. those who  joined  on or before 31.3. 1938 and  those  who  joined after 31.3. 1938 for purposes of fixing the age of  superan- nuation on the basis of same historical facts which are  set out  in  detail in that judgment.  Such  classification  for purposes of fixing the age of superannuation depending  upon the date of entry into services is not, therefore, something which  is unusual and such classification becomes  necessary on account of historical facts and the need for treating the employees in a fair and just way.  221     On  behalf of the 1st Respondent reliance is  placed  on the  decision of this Court in M/s. British  Paints  (India) Ltd.  v. The Workmen, [1966] 2 S.C.R. 523 in support of  his case  that  there should be no  discrimination  amongst  the employees  of  an establishment with regard to  the  age  of superannuation.  That  decision was rendered  in  an  appeal against  an award passed by an Industrial Tribunal. In  that decision  this Court has, no doubt, observed that  generally speaking  there should not be any difference in the  age  of retirement of existing workmen and others to be employed  in future  unless  there are special  circumstances  justifying

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such difference. By making the above observation this  Court has  virtually  accepted the position that  when  there  are special circumstances justifying the difference, it is  open to fix different ages of retirement for the employees of  an establishment  in  appropriate cases. We  have  already  ex- plained  earlier  the reason for  treating  the  transferred employees differently from the employees appointed after 1st September, 1956 by the Corporation. The transferred  employ- ees  who are treated favourably belong to a vanishing  group and,  perhaps,  within a period of few years  none  of  them would be in the service of the Corporation. Thereafter  only one class of employees would be in the service of the Corpo- ration, namely, those appointed subsequent to 1st September, 1956  by the Corporation in respect of whom the  Corporation has  fixed  the age of retirement as 58 years  which  corre- sponds  to  the age of retirement in almost all  the  public sector  establishments, the Central Government services  and the State Government services.     The 1st Respondent cannot derive any assistance from the decision of this Court in Mohammad Shujat Ali & Ors. etc. v. Union  of India & Ors. etc., [1975] 1 S.C.R. 449 in  support of his case before us. In the above decision this Court  was concerned with reservation of posts for graduate Supervisors in the cadre of Assistant Engineers giving them a  preferen- tial  treatment over non-graduate Supervisors who were  also eligible to be promoted along with the graduate  Supervisors to the cadre to Assistant Engineers after the graduates  and non-graduates had been integrated into one cadre of Supervi- sors.  Merely because the pay, allowances and other  perqui- sites drawn by the transferred employees and by the  employ- ees  appointed after 1st September, 1956 by the  Corporation are the same it cannot be said that the transferred  employ- ees  and  the other employees had been integrated so  as  to form one cadre. So far as the age of retirement is concerned as  it is already shown they are being  treated  differently right  from  the date on which the  Corporation  was  estab- lished. The decision of this Court in Workmen of the Bharat Petrole- um 222 Corporation Ltd. (Refining Division) Bombay v. Bharat Petro- leum  Corporation Ltd. and Another, [1984] 1 S.C.R.  251  no doubt lays down that under the modern conditions there is  a general trend in favour of raising the age of retirement  in the  case of employees in industrial establishments. It  may be  so. We are not concerned in this case with the  question whether  the age of retirement of employees who have  joined the  service  of the Corporation after 1st  September,  1956 should  be  raised to 60 years. That is a matter  of  policy which  has  got  to be decided by the  Corporation  and  the Central Government. We are only concerned with the  question whether  the employees appointed after 1st  September,  1956 have  been  subjected to any  hostile  discrimination  while fixing  the  age of retirement contrary to  Article  14  and Article 16 of the Constitution. Since the classification  of the employees for the purpose of age of retirement into  two categories  in this case appears to us to be reasonable  and not  arbitrary and that there is a reasonable nexus  between the classification and the object to be attained thereby, it is  not possible to hold that regulation 19(2) is  violative of Article 14 and 16 of the Constitution.     We  may at this stage refer to the following passage  in Tamil Nadu Education Department Ministerial & General Subor- dinate  Service Association v. State of Tamil Nadu  &  Anr., [1980] 1 S.C.R. 1026.

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             "In  Service  Jurisprudence integration  is  a               complicated  administrative problem where,  in               doing broad justice to many, some bruise to  a               few  cannot  be ruled out. Some  play  in  the               joints,  even  some wobbing, must be  left  to               Government without fussy forensic  monitoring,               since the administration has been entrusted by               the Constitution to the Executive, not to  the               Court.  All  life,  including   administrative               life,  involves experiment, trial  and  error,               but within the leading strings of  fundamental               rights,  and, absent unconstitutional  ’exces-               ses’, judicial correction is not right.  Under               Article  32, this Court is the  constitutional               sentinel  not the national ombudsman. We  need               an  ombudsman but the court  cannot  make-do."               (page 1031)     The  decision taken by the Corporation and  the  Central Government as regards the ages of retirement of the  differ- ent  classes  of  the employees of the  Corporation  in  the instant case is a bona fide one and cannot be  characterised as unreasonable. It is not, therefore, liable to be upset by a decision of the Court. On a careful consideration of all 223 the aspects of the case we feel that the High Court erred in striking  down regulation 19(2) of the (Staff)  Regulations, 1960  as  amended  in the year 1977, and  in  directing  the Corporation  to continue the 1st Respondent in  its  service till  he completed the age of 60 years. We,  therefore,  set aside  the judgment of the High Court and dismiss  the  writ petition filed in the High Court. The appeals are according- ly     allowed.  There  shall, however, be no  order  as  to costs. N.P.V.                                               Appeals allowed. 224