P. Subramonian Poti, J.
1. These are petitions by employees of the Life Insurance Corporation of India. In these petitions challenge is made to a notice issued under Section 9A of the Industrial Disputes Act, 1947 proposing change of conditions of service pursuant to a settlement reached between the Life Insurance Corporation and some employees of the trade unions representing certain classes of Corporation. The petitioner in O.P. No. 463 of 1972 (which petition I shall treat as the main petition for the purpose of this judgment) is a higher grade assistant in the Divisional Office at Trivandrum of the Life Insurance Corporation of India (hereinafter referred to as the Corporation). Petitioners in the other two petitions are in the cadre of assistants excepting the 5th petitioner in O.P. No. 6103 of 1971 who is a stenographer. The complaint in these petitions is about the change of service conditions effected by the Corporation which, according to the petitioners, has affected them prejudicially and particularly their chances of promotions to the higher cadre. I will now state the facts of the case in O.P. No. 463 of 1972.
2. The Life Insurance Corporation has been constituted by the Life Insurance Corporation Act, 1956, Respondents 2 to 4 in the petition are said to be Registered Trade Unions representing generally all classes of employees in Class III excepting the category of Higher Grade Assistants and also all classes in Class IV. The petitioner claims to move the petition both as higher grade assistant and in his capacity as the General Secretary of the L.I.C. Higher Grade Assistants' Association. I may state here that it was not urged at the hearing that the relief, if any, that the petitioner should obtain must be as representative of and to the benefit of all belonging to his class. L.I.C. Higher Grade Assistants' Association is a Registered Trade Union. In the counter-affidavit filed on behalf of the Corporation it is stated that as a Registered Trade Union no petition could be maintained under Article 226 of the Constitution of India. I have already noticed that it has not been urged that the petitioner is entitled to any relief in his capacity as the General Secretary of Higher Grade Assistants' Association. Therefore, I need not go into that question further.
3. The Life Insurance Corporation of India (Staff) Regulations, 1960, have been issued under Section 49 of the Life Insurance Corporation Act with the previous approval of the Central Government. Under Regulation 5 of the L.I.C. (Staff) Regulations, the staff of the Corporation has been classified into four categories : Class I Officers, Class II Development Officers, Class III Supervisory and Clerical Staff and Class IV Subordinate Staff. Regulation No. 4 provides:
The chairman may, from time to time, issue such instructions or directions as may be necessary to give effect to, and carry out, the provisions of these regulations and in order to secure effective control over the staff employed in the Corporation.
It is agreed that pursuant to the power vested in the chairman under this Regulation administrative instructions have been issued by the Chairman of the Corporation detailing the rules of promotion and recruitment procedure and it is the alteration of these rules that is complained of in the petition. According to the rules as they stood prior to Ext. P-6, the assistants could aspire for promotion to the Higher categories of both Section Heads and Higher Grade Assistants. Higher Grade Assistants were being promoted to the categories of both Superintendents and Assistant Administrative Officers. Section Heads were being promoted to the cadre of both Higher Grade Assistants and Superintendents. The Superintendents got their promotion to the cadre of Assistant Administrative Officers. Thus it is evident that promotion was on a two-tier system. The cadres of Assistants, Section Heads, Higher Grade Assistants and Superintendents are all included in Class III. The substance of the complaint in the petition is that the Corporation has effected change in the conditions of service relating to petitioners in force under administrative orders issued by the Chairman in exercise of his powers under Regulation 4 of L.I.C. (Staff) Regulation, 1960, which change resulted in abolition of the two-tier system and a fresh categorisation under Ext. P6, a settlement entered into between the Corporation and the trade unions of employees other than that of Higher Grade Assistants. According to the petitioner, the result of the new categorisation is to treat Section Heads who were in a lower category as equal to the Higher Grade Assistants thereby affecting the chances of promotions of the petitioner in that thereafter he will have to compete along with those Section Heads in the matter of promotions to higher categories. There is a similar complaint that Superintendents who had also to stand the test of promotion to the category of Assistant Administrative Officers were automatically promoted to that category by the change effected, thereby giving them a more favourable treatment. The change effected by Ext. P6 was to abolish the category of Section Heads and Superintendents with the result that that there will be only the category of Assistants, Higher Grade Assistants re-designated as Special Assistants and Assistant Administrative Officers. Possibly the objection might be not to this arrangement itself but to the transitional arrangement made with regard to those who were in the categories abolished, namely Section Heads, who were to be absorbed in the category of Special Assistants and Superintendents who were to be absorbed in the category of Assistant Administrative Officers. I shall refer to the transitional arrangement in more detail in due course. It is necessary to state here the background of the settlement reached with some of the trade unions under Ext. P6.
4. The Central Government referred certain items of Industrial dispute as between the management and staff of the Corporation to a National Tribunal under Section 7A of the Industrial Disputes Act, 1947, and these references came up before the Tribunal as N.I.T. 1 of 1969 and N.I.T. 2 of 1969. During the course of the proceedings before the Tribunal the parties concerned settled their disputes which settlement was accepted by the Tribunal and incorporated in an award passed by it.
5. One of the questions referred to the National Tribunal related to 'rules regarding promotion'. On this the Tribunal in its award observed thus:
The workmen withdraw this item from this reference. The management agree to hold discussions before 31st December, 1970 with the representatives of the four parties representing the workmen in this reference for a review of the existing rules.
The period of settlement was 1st April, 1969 to 31st March, 1973.
6. It would appear that thereafter discussions were actually held between the management and the trade unions including that of the Higher Grade Assistants. According to the petitioner the Association representing the petitioner and his category could not concur with the proposals made by the management as a result of the discussion and according to the counter-affidavit on behalf of the Corporation, at a later stage of the proceedings the Association of the Higher Grade Assistants did not co-operate in the discussions. Whatever that be, it is evident that the three associations representing the employees other than the petitioners' category came to an understanding and that formed the basis of Ext. P6 which was not a proposal concurred in by the association of which the petitioner was a member. With Ext. P6 as Annexure Ext. P5 notice purporting to be under Section 9A of the Industrial Disputes Act was served on the petitioner's association. The petitioner seems to have thereafter moved the Civil Court for relief to restrain the implementation of the proposal contained in Ext. P6 and having failed in that attempt has come to This Court by way of this petition.
7. There are several grounds of attack taken by the petitioner against Ext. P5 notice and the proposal contained in Ext. P6. It was urged in the petition and urged with considerable force before me by Sri M.K. Nambiar, appearing on behalf of the petitioner, that when a matter is referred to an Industrial Tribunal there must be a determination by the Tribunal of the question so referered, that the determination in the instant case being one that the parties should discuss the matter and reach a settlement, Ext. P6 is not enforceable as it is not a settlement reached with the concurrence of the petitioner's association and, therefore, it is unenforceable in law. It is also urged that the award recognised the different categories of Superintendents and Section Heads in addition to that of Assistants, the Higher Grade Assistants and Assistant Administrative Officers and the new rules which operate to abolish these grades must, therefore, be head to be in converavention of the award and consequently illegal. Yet another contention urged bycounsel is that Ext. P6 is in contravention of Section 49 of the Life Insurance Corporation Act, 1956 inasmuch as it is not made by the Corporation and it was not finalised with the previous approval of the Central Government. It is also urged that it is not published in the Government Gazette. Lastly, it is urged that the Corporation comes within the definition of Statefor the purpose of Part III of the Constitution of India and, therefore, the employees of the Corporation areentiled to the guarantee under Article 16 of the Constitution which guarantee has been violated in that unfair and irrational treatment has been extended to the petitioner.
8. In the counter-affidavit the Corporation takes up the stand that the Tribunal did not decide the question of the rules of promotion. That was left open for discussion and settlement. It was so discussed and when ultimately it was found that the stand of the association to which the petitioner belongs could not be accepted, it had to go forward with the proposal and come to a settlement with the other unions. It is contended that the agreement Ext. P6, in so far as it concerns the petitioner, has to be taken as a proposal to alter the conditions of service and that was why notice under Section 9A of the Industrial Disputes Act was issued. It is further contended that the award did not purport to recognise any categorisation of employees and, therefore, in the alteration to the administrative instructions effected by Ext P6 there is no contravention of the award, in answer to the contention that Section 49 of the L.I.C. Act is violated by the issue of Ext-P6 it is urged that only administrative instructions as to the mode of promotion have been issued under Regulation 4 to which I have adverted, that these administrative instructions need not be in conformity with Section 49 since it is only regulations made under Section 49 that ought to conform to this procedure and, therefore, the attack to Ext. P6 on this score is not available. It is pointed out that if the petitioner's contention is accepted it would mean that the very rules which are relied on by the petitioners as to the mode of promotion are rules which have the vice complained of in regard to Ext. P6 since they too are administrative instructions and, therefore, petitioner could not complain of any legal injury by reason of Ext. P6. Lastly the stand taken up by the Corporation is that the Corporation is not an authority coming within the meaning of the term 'State' in Article 12 of the Constitution of India and even if it be 'State' since the change effected by Ext. P6 was necessitated as a matter of policy and there was no irrational treatment by reason of Ext. P6, it is not open to challenge.
9. Now I have to advert to the facts of the two other petitions. The petitioners therein are assistants excepting the 5th petitioner in O.P. 6103 of 1971 who is a stenographer. They claim that they are possessed of qualifications which would entitle them to promotion as Higher Grade Assistants under the then existing rules. In spite of this, for many years past such promotions are said to have not been effected and now by the abolition of the category of Section Heads and the integration of this category with that of the Higher Grade Assistants their chances of promotion are said to have been very seriously affected. Their case is that, of the four unions which participated in the discussions only the All India Insurance Employees Association was a recognised union and even that was later de-recognised and, therefore, the agreement has no legal force. The complaint of the petitioners in these petitions is also that by the alterations made by Ext. P6 their chances of promotion would be affected and, therefore, the order would be discriminatory. At the hearing counsel for petitioners in these petitions adopted the argument of counsel for the petitioner in O.P. 463 of 1972.
10. I will now consider the various contentions urged by Sri M. K. Nambiar appearing for the petitioner in O.P. 463 of 1972. Counsel urged that a reference once made cannot be cancelled and, therefore, any decision embodied in the award with regard to any of the matters in dispute must be considered as final. In support of this position counsel relied on certain precedents. I do not think it is necessary to go into this, as the question here is really not whether there has been any contravention of the decision taken in an award. Ext. P4 is the relevant extract of the award and as regards the issue as to rule of promotion I have already extracted in this judgment the decision of the Tribunal. It is apparent therefrom that the issue was not pressed by either of the parties and they agreed that the matter may be left open to be settled later. Counsel would seem to suggest that it is only any agreement reached by mutual settlement by all the parties thereafter that could be enforced. On that I cannot agree. When the matter relating to promotion was left open for future discussion it meant that the parties were to meet and discuss the question later. It did not mean that if the parties did not reach an agreement there was no scope for the management to invoke its powers of altering the conditions of service unilaterally after complying with the procedure laid down in the Industrial Disputes Act. It is true that Ext. P6 would be binding as a settlement only on the parties to it. It would not bind the Association of Higher Grade Assistants who were not consenting parties to it. It seems to me that the stand taken up by the Corporation as to their competency to enforce Ext. P6 is quite sustainable. It is open to the Corporation to seek to alter the terms of service including that relating to promotion after issuing notice as contemplated in Section 9A of the Industrial Disputes Act, 1947 and taking a decision on the expiry of the period fixed in the notice. In proposing such alteration they may very well take into account what has been suggested by other unions, suggestions which are acceptable to them. Therefore, I find no want of competency in the Corporation to issue Ext. P5 notice in accordance with Section 9A of the Industrial Disputes Act. Hence I see no reason to sustain the petition on the basis of the said attack.
11. To me it appears that equally unsustainable is the contention raised that the alteration of the rule as to promotion should be held to be bad as violating the award. I have already noticed the contention in this regard. The petitioner's case appears to be that though the question of rules of promotion was left open in the award still the award indirectly recognised the categories of Section Heads and Superintendents as existing categories and that would be sufficient to make the attempt to abolish such category during the term the award was in force illegal. I have indicated earlier that categorically the question of dispute as to rules of promotion was left open. There is no recognition of the category of Section Heads or Superintendents in the award and merely because the different pay scales for these happened to be mentioned in the award as contended by counsel it does not mean that there was any adjudication in the award that these categories should continue to exist.
12. Next it is the case of the petitioner that Ext. P6 should be considered as violating Section 49 of the Life Insurance Corporation Act, 1956. Section 49(1) of the Act reads thus:
49. (1) The Corporation may, with the previous approval of the Central Government, by notification in the Gazette of India, make regulations not inconsistent with this Act and the rules made thereunder to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of this Act.
In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for among other things:
The method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents.
In view of the provision in Sub-section (1) that any regulations to be made must be with the previous approval of the Central Government and that it must be by notification in the Gazette of India, it is contended that so long as Ext. P6 is not with the approval of the Central Government and so long as it is not published in the Government Gazette it cannot be held to be valid. It is attempted to be countered by counsel Sri S. Eswara Iyer appearing for the Corporation in two ways. According to him Staff Regulations have already been issued under Section 49 of the L.I.C. Act, that enable the Chairman of the Corporation to issue such instructions as are necessary from time to time and it is in exercise of those powers that he issued Ext. P6. It is also urged that even if there be a violation of the provisions of the Staff Regulations or non-compliance therewith that is not a matter which could be taken to This Court since the Regulations issued under Section 49 would not, according to counsel, be statutory regulations, the breach of which could be complained of in a petition under Article 226 of the Constitution. There is yet another answer urged and that is that, at any rate, it is not open to the petitioner to base his claim on the existing rules since those rules also are those issued by the Chairman and, therefore, subject to the same vice as Ext. P6.
13. In Indian Airlines v. Sukhdeo Rai : (1971)ILLJ496SC , the Supreme Court was concerned with a case of challenge to the order of dismissal of an employee of the Airways (India) Limited. That arose in a suit filed by the employee alleging that the enquiry had been conducted in breach of the procedure laid down by the regulations made by the Corporation under Section 45 of the Air Corporation Act, 1953. Counsel Sri. S. Eswara Iyer relies on the following passage in the decision to support his stand that the regulation made under Section 49 of the L.I C. Act (which section corresponds materially to Section 45 of the Air Corporation Act with which the Supreme Court was concerned in that case) is not statutory. The Supreme Court said thus:
As observed earlier, under Ss. 2 and 20, the appellant-Corporation has been given the power to employ its own officers and other employees to the extent it thinks necessary on terms and conditions provided by it in regulations made under Section 45. The regulations contain the terms and conditions which govern the relationship between the Corporation and its employees. Though made under the power conferred by the statute, they merely embody the terms and conditions of service in the Corporation but do not constitute a statutory restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them. That being so, and the Corporation having undoubtedly the power to dismiss its employees, the dismissal of the respondent was with jurisdiction, and although it was wrongful in the sense of its being in breach of the terms and conditions which governed the relationship between the Corporation and the respondent it did subsist. The present case, therefore, did not fall under any of the three well recognised exceptions, and, therefore, the respondent was only entitled to damages and not to the declaration that his dismissal was null and void.
It is true that the Supreme Court held in that case that though made under the power conferred by the statute, the regulations merely embody the terms and conditions of service with the Corporation and do not constitute a statutory restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them. I cannot read that decision to mean that the Court will not be entitled to interfere in a case where the complaint is that, while conditions of service could be specified by Regulations made under Section 49 of the L.I.C. Act the conditions so prescribed have been altered by mere administrative instructions. If, as a matter of fact, the existing regulation made under Section 49 is sought to be altered by an instruction of the Chairman I do not think that it is for This Court to say that inspite of such interference there is no case for This Court to take notice of. But it is not necessary to go into this question further as I am resting my decision on other grounds. So I leave the matter there.
14. I am not also pronouncing on the contention of counsel that it is open to the Chairman to issue administrative instructions in regard to terms and conditions of the service of the employees in view of Regulation 4 which I have already noticed. It is notnecessary to decide for the purpose of this case whether Section 49 of the L.I.C. Act and Regulation 4 of the Staff Regulations enable the Chairman to make rules as to promotion as has been done by the rules embodied in the Establishment Manual. The principle that a person who comes to the Court complaining of an injury cannot succeed if the rules on which he founds his right is vitiated by the same vice as the rule, the breach of which is complained of is recognised by the decision of the Full Bench of This Court and I will now indicate how that decision applies here.
15. In Mani v. Kerala State Electricity Board (1967) K.L.T. 995, the petitioner who was an Executive Engineer in the service of the Kerala State Electricity Board challenged an order retiring the employees of the Board at the age of 55. Prior to that, 58 was the age of superannuation. That was reduced to 55 by proceedings of the Board and it was contended that the said proceedings was bad as the Board was influenced by a directive issued by the Government to the Board in taking the concerned decision. This plea was accepted and it was found that the proceedings of the Board which lowered the superannuation age to 55 was not based on an independent decision of the Board. Nevertheless the petitioner in that case did not succeed. That was because his claim to continue in service up to 58 was itself based on a similar order passed by the Board which was based on a similar directive issued by the Government. Dealing with the question the Court said thus:
This should ordinarily have entitled the petitioner to succeed ; but the learned Advocate-General confronted us with the position that Ext P8 proceedings of the Board on which the petitioner's right to continue in service up to 58 years of age was founded, is also tarred by the same brush. We were referred to the petitioner's affidavit in O.P. No. 2560 of 1966, wherein he admitted that the Board by a majority decided not to extend the benefits of any increase in the age of superannuation to its employees. We understand paragraph 8 of the counter-affidavit filed by the Board in this writ petition as a clear admission that Exts. P8 and P9, proceedings of the Board, were also issued under the influence of the Government's directive Ext. P5. Such an admission is also contained in paras 11 and 12 of the Board's counter-affidavit in O. P. 2560 of 1968 (vide Ext. P17). If so, Exts. P8 and P9 proceedings are also tainted by the same illegality which taints Ext. P14. The petitioner in such a case has no right or title to continue in service up to 58 years of age, which alone will entitle him to maintain this writ petition. Nor can we issue the high prerogative writ sought for in this case, if the effect of doing so would be to perpetuate the illegal orders Exts. P8 and P9.
What has been said by the Full Bench in that case could equally well be said in this case, and that would be sufficient to dispose of this point. If, as a matter of fact, Ext. P-6 is bad for the reason that it is merely an administrative instruction and not a Regulation within the meaning of Section 49 of the L.I.C. Act and if further it is to be said that the provision in Regulation 4 authorising the Chairman to issue such administrative instruction is bad as amounting to incompetent delegation by the authority empowered to make regulations, then, in the face of the admitted fact that the rule relating to promotions on which the petitioner's claim is founded is itself a similar administrative instruction of the Chairam and not a Regulation made under Section 49 of the L.I.C. Act, the petitioner cannot complain of any legal injury based upon such a plea. The plea must, therefore, fail.
16. Lastly, I come to a very important question which has been urged by both sides with considerable vehemence. I have to resolve here the controversy as to whether the Life Insurance Corporation of India is a 'State' within the meaning of that term in the context of Part III of the Constitution of India.
17. Whether a Corporation like the Life Insurance Corporation of India would fall within the definition of State in Article 12 is a matter which had long been in controversy. Article 12 of the Constitution defines the 'State' as including the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. Some of the Courts in India have been reading this definition applying the principle ofejusdem generis. That would mean that only authorities like the Government, the Parliament and the like would fall within the scope of the definition. This necessarily rendered the construction of the term 'State' very narrow. But the Supreme Court in Electricity Board, Rajasthan v. Mohan Lal : (1968)ILLJ257SC , noticed that, on the language of the Article, there was no scope for applying the rule of ejusdem generis since it was not possible to find any common genus running through the bodies named in that article. The earlier decisions of some of the High Courts in India applying that rule to the article was noticed and they were found to have not laid down the correct law.
18. As noticed by the Supreme Court the definition of the term 'authority' as given in Webster's Third New International Dictionary which can be applicable is-
a public administrative agency or corporation having quasi-Governmental powers and authorised to administer a revenue-producing public enterprise.
In the decision of the Supreme Court to which I have adverted, this definition has been accepted and applied and that, according to me, considerably sets at rest the controversy. Article 12, it may be remembered, defines the State for the purpose of Part III of the Constitution. There are certain fetters placed on the power of the State and certain rights conferred on it in that Part of the Constitution. A State is not free to make any law as it pleases. Laws have necessarily to be of even application to its citizens. Certain rights are conferred on the State such as the right under Article 19(2) of the Constitution to make laws restricting or abridging f,he fundamental right under Article 19(1). That is the privilege of the State. It may be profitable to keep this background in view v, considering the question whether the term 'State' has to be understood as 'any body performing Governmental or quasi-Governmental functions or whether it could only be a body which has authority over any class of citizens in the State and is authorised to enforce its sanctions against any citizen or class of citizens. In Article 12 the definition of the State for the purpose of Part III of the Constitution has evidently been intended to enlarge the scope of the terms as otherwise the meaning would have been limited to the 'State' in the narrow sense. The protection that is granted to the citizen against arbitrariness in executive as well as legislative action is apparently intended to be available not only against the State in the ordinary connotation of that term. This is only natural in a country which has before it the directive principles of State policy enumerated in Part IV of the Constitution. The definition of the term 'State' contained in Article 12 is adopted in Article 36 for the purpose of Part IV of the Constitution also. One of the functions of the State is to exercise its power to maintain law and order in the territory which it governs. In fact that has been understood for long as the main function of a State. But in a social welfare State other functions intended to achieve social and economic equality for its citizens ate of equal or perhaps more importance. The directive in Part IV that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life is followed by the provisions which enumerate particular directions the State policy should take and those directions require exercise of various functions other than police functions of the State. It has come to be accepted in any modern State that these functions could effectively be discharged by quasi-Governmental Corporations invested with the necessary authority by the State than by the State Departments, Constitution of such Corporations by enactments of Parliament and conferment of functions very often to promote the economic interest of the country is of common occurrence in India. In fact the formation of Corporations like Life Insurance Corporation is intended to implement the policy of nationalisation of trade and business in this country and the object and purpose of this is to effect economic re-adjustment in society. If that be so merely because the functions performed by quasi-Governmental bodies are of a commercial nature, it cannot be said that such authorities do not fall within the scope of the term 'State'. Commercial functions are equally well part of the sovereign functions of the State. The test as to what a 'State' is has necessarily to be applied in the context of the purpose of the definition of that term in Article 12 of the Constitution. If it be intended to secure equal justice, social, economical and political to the citizen as against the State it would only be logical to apply the definition to bodies like the Life Insurance Corporation which are performing functions essentially that of the State. It is so able to perform such functions by reason of the authority conferred by laws made by Parliament. In this context it may be necessary to notice the provision of the L.I.C. Act 1956 in brief to understand the nature and extent of the functions and powers of the Life Insurance Corporation.
19. The Corporation is a body corporate established by the Central Government. The Corporation consists of such membership as the Central Government may think fit to appoint there to and one of them is to be appointed by the Central Government to be the Chairman thereof. The Central Government is given directions as to the choice so as to see that their interests do not come into conflict with the proper functioning of the Corporation. The capital of the Corporation is five crores provided by the Central Government after due appropriation made by the Parliament by law for the purpose. The function of the Corporation is to carry on life insurance business whether in or outside India and under Section 6 the Corporation shall so exercise its powers under the Act as to secure that life insurance business is developed to the best advantage of the community. On the appointed day, namely 1st of September, 1956, all the assets and liabilities appertaining to the controlled business of all insurers stood transferred and vested in the Corporation. The service of existing employees of the insurers and of chief agent of insurers stood transferred to the Corporation. Section 13 provided that every person who bad in his possession, custody or control any books, documents, or other papers relating to such controlled business shall be liable to account for the said books, documents and papers to the Corporation and inparticular the assets of an insurer appertaining to life insurance business held in deposit by the Reserve Bank of India, or the trustees in trust shall be delivered to the Corporation. Section 14 conferred upon the Corporation the power to reduce the amounts of insurance under contracts of life insurance entered into by such insurer before the 19th day of January, 1956 in such manner and subject to such conditions as the Corporation thinks fit subject to the conditions that no such reduction shall be made except in accordance with a scheme prepared by the Corporation in this behalf, and approved by the Central Government. A right was conferred by Section 15 in the Corporation to seek relief in respect of certain transactions of the insurer. The Corporation was to be guided by such directions in the discharge of any such matters of policy involving public interest as the Central Government may give to it in writing, and if any question arose whether a direction related to a matter of policy involving public interests the decision of the Central Government thereon was to be final. The accounts of the Corporation were to be audited by auditors duly qualified. A copy of the report of the auditors was to be sent to the Central Government. If any surplus was found as a result of the investigation undertaken under Section 26 not less than 95 per cent of such surplus was to be allocated to the policy holders of the Corporation and the remainder could be utilised for such purpose and in such manner as the Central Government may determine. The report of the auditors under Section 25, the report of the actuaries under Section 26 and the report of giving an account of the activities of the Corporation under Section 27 were to be laid before the Houses of Parliament. By Section 30 of the Act the Corporation was given the exclusive privilege of carrying on life insurance business, All policies issued by the Corporation including any bonuses declared in respect thereof and, subject to the provisions contained in Section 14 the amounts assured by all policies issued by any insurer the liabilities under which had vested in the Corporation under the Act were guaranteed by the Central Government. By Section 49 the Corporation was given the power to make regulations for giving effect to the provisions of the Act.
20. The provisions which I have adverted to above would indicate that the Corporation is a body established by the Central Government, the constitution of the body itself being entirely at the discretion of the Central Government. In every one of its main activities and particularly in matters such as policy in public interest the Corporation was subject to directions from the Government and its finances were under strict watch by the Central Government. Its direction in the matter of policy was indicated in the Act itself. Therefore, to my mind, it appears to be quite evident that the Corporation is a body exercising Governmental functions namely, carrying on the life insurance business which in effect had been nationalised. That would, according to me, bs sufficient to satisfy the test for determining whether the Corporation is a State within the meaning of Article 12 of the Constitution. If for any reason a stricter view is taken of the scope of the term 'State' and the further requirement that in order to constitute a State the body concerned must have authority over a class of citizens, that too 1 think is satisfied in the present instance in view of some of the provisions in the L.I.C. Act. I may refer here in particular to the provisions in Sections 13 and 14 of the L.I.C. Act. Section 13 casts a duty on third parties as to delivery of property and documents in their possession and Section 14 gives the right to the Corporation to reduce the amounts of insurance under contracts of life insurance under certain circumstances. These are necessarily provisions which affect the rights of third parties and, therefore, in any view of the matter it appears to me that Life Insurance Corporation must be considered as 'State'.
21. The Supreme Court said in Electricity Board, Rajasthan. Mohan Lal A.I.R. 1967 S.C. 1857, after referring to the definition of the meaning of the term 'authority' as defined by Webster's Third New International Dictionary, thus:
This dictionary meaning of the word 'authority' is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out Governmental or quasi-Governmental functions.
The Supreme Court further said:
The expression 'other authorities' is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India, and we do not see any reason to narrow down this meaning in the context in which the words 'other authorities' are used in Article 12 of the Constitution.
Later in the same judgment Bhargava, J. said thus:
Under the Constitution, the State is itself envisaged as having the right to carry on the trade or business as mentioned in Article 19(1)(g). In Part IV, the State has been given the same meaning as in Article 12 and one of the directive principles laid down in Article 46 is that the State shall promote with special care the educational and economic interest of the weaker sections of the people. The State, as defined in Article 12, is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under Article 298 to carry on the trade or business. The circumstances that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word 'State' used in Article 12,
Of course, in that judgment in considering whether the Board came within the definition of 'State' the Court took into account also the fact that the Board had power to give directions, the non-compliance with which was a criminal offence. But I do not see that decision as an authority for the position that such a body would be brought within the definition of 'State' only if it has powers of giving directions, the non-compliance with which would be punishable. The essential requisite, according to me, is what is indicated in that judgment in the extract I have already cited earlier namely, the conferment on the body created by a statute of Governmental or quasi-Governmental functions. Once it is accepted that the functions performed by the Corporation is that which would ordinarily be the functions of a Government in a social welfare State, it would be quite in accordance with the spirit of Part III of the Constitution to term that body as 'State.'
22. I am aware that the High Court of Bombay has taken a view directly against the view I have expressed in this judgment in regard to the question whether Life Insurance Corporation is a 'State'. A Division Bench of that Court in Pramodrai v. Life Insurance Corporation : AIR1969Bom337 , said thus:
It is clear from the judgment of Mr. Justice Bhargava that the Supreme Court adopted the test formulated by Mr. Justice Ayyangar in Ujjam Bai's case : 1SCR778 , and held that the Electricity Board was an authority within the meaning of Article 12. It is not possible to read the judgment to say that 'authority' includes any and every autonomous body merely because it is constituted by a statute, whatever be its functions and this could not be so. The very fundamental conception of an authority is that there is in it power to command and compel its obedience either by enforcing the same or by punishing disobedience. The Electricity Board had such powers (while administering the law framed by the Parliament and, therefore, the Court held that it fell within the meaning of Article 12. If the Court intended to hold that merely because it was constituted under a statute of the Parliament or of the State Legislature and thus it fell within Article 12 the subsequent discussion could not be necessary.
Applying the test in the present case, can the Life Insurance Corporation be said to have any authority in the matter of administering any law enacted by Parliament or by the State? Or is it required to make any decision under any such law and to implement those laws Obviously it is a trading Corporation and it is not concerned with implementing any law which affects in any manner any member of the public. The prohibition for any private agency to do the same business is not by reason of any order that is made by the Life Insurance Corporation but by reason of the statute itself as we have already seen.
With respect to the learned Judges I am not able to agree with that view. The reasons have been already indicated here. It is, true that in the case before the Supreme Court the Electricity Board has such powers as commanding and compelling obedience either by enforcing the same or by punishing for disobedience. But the Supreme Court did not lay down, and according to me the Court did not intend to lay down, that such a power was a necessary requisite for satisfying the definition of State in Article 12. As I said, indications in the judgment show that performance of Governmental functions is the test. May be in the performance of such functions a body may bs empowered to compel obedience by any class of citizens. May be that again may be a circumstance which may go a long way to hold that such a body is a 'State'. But its absence need not necessarily compel an inference to the contrary. Therefore, I am unable to agree with the view taken by the Judges of the Bombay High Court.
23. This necessarily leads me to the plea of discrimination. Facts indicated in this judgment would be sufficient to show that the contention of the petitioner in O.P. 451 of 1972 is that there has been an undue preference given to Section Heads who, under the transitional arrangement, are promoted as Higher Grade Assistants and Superintendents who under the same arrangement are promoted as Assistant Administrative Officers. They are promoted with effect from 1-9-1971 provided they have a requisite minimum of service. If their service is less, but satisfies yet another requisite minimum they are promoted with effect from 1-9-1972 and all the rest are promoted from 1-9-1973. The transitional arrangement in Ext. P6 may be noticed here:
(1) Candidates who have already been placed in the ranking list for promotion to the cadre of Section Heads or Superintendents will be promoted to these cadres respectively on a priority basis and shall be placed in the scale of Special Assistants and Assistant Administrative Officers respectively at the appropriate time.
(2) Existing Section Heads and those promoted to Section Heads' cadre under (1) above will be placed in the new scale of Special Assistants by stages. Their basic pay in the Special Assistants' scale will be fixed at the stage which is equal to their basic pay in the Section Heads' scale or if there is no such stage, then at the next higher stage. For this purpose, selection shall be made on the basis of seniority in Section Heads' scale as follows:
(a) Those Section Heads who have completed 8 years' service or more as Section Heads as on 1-9-1971 shall be upgraded in the Special Assistants' scale with effect from that date.
(b) Those who have completed 5 years' service or more as Section Heads as on 1-9-1972 will be upgraded to the Special Assistants' scale with effect from that date.
(c) The remaining Section Heads will be upgraded with effect from 31-3-1973.
Note: (i) In all such cases, the date of increment will not be changed.
(ii) For the purpose of service in the cadre of Special Assistant, all Section Heads falling under (b) and (c) above will be deemed to have been upgraded with effect from 1-9-1971 or from the date of actual promotion as Section Heads, whichever is later.
(d) Notwithstanding the above, such of the existing confirmed Section Heads as are not placed in the Special Assistants' scale will be entitled to compete for promotion to the cadre of Special Assistants along with other eligible candidates for new vacancies. These will not be counted against regular vacancies in the Special Assistants' cadre.
(e) All existing confirmed Section Heads will be given an option either to elect for the upgrading in the manner prescribed above or to continue as Section Heads until 31-3-1973 and to compete with other eligible candidates for promotion to the cadre of Special Assistants before that date.
(3) Existing Superintendents will be placed in the AAO's scale of pay by stages. Their basic pay in the AAO's scale will be fixed at the stage which is equal to their basic pay in the Superintendents' scale or if there is no such stage, then at the next higher stage. Where the fixation of salary in the scale of AAO in the manner laid down herein leads to a loss of remuneration, personal allowance in consideration of such loss will be granted in terms of the relevant provisions of Regulation 57. For this purpose, selection shall be based on seniority in the Superintendents' scale as follows:
(a) Those who have completed 8 years' service as Superintendents as on 1-9-1971 will be upgraded as AAOs with effect from that date.
(b) Those who have completed 5 years service or more as Superintendents as on 1-9-1972 will be upgraded as AAO's with effect from that date.
(c) The remaining Superintendents will be upgraded with effect from 31-3-1973.
Note : (i) In all such cases the date of increment will not be changed.
(ii) For the purpose of service in the cadre of AAO, all Superintendents falling under (b) and (c) above will be deemed to have been upgraded with effect from 1-9-1971 or from the date of actual promotion as Superintendents, whichever is later.
(d) Notwithstanding the above, such of the existing confirmed Superintendents as are not placed in the AAO's scale will be entitled to compete for promotion to the cadre of AAO along with other eligible candidates for new vacancies. These will not be counted against regular vacancies in the AAO's cadre.
(e) All existing confirmed Superintendents will be given as option either to elect for the upgrading in the manner prescribed above or to continue as Superintendents until 31-3-1973 and compete with eligible candidates for promotion to the cadre of AAO before that date.
24. The petitioners in all these petitions contend that by the abolition of the cadre of Section Heads and Superintendents they have been prejudiced. Assuming that it is so that does not by itself amount to discrimination. It must further appear that the purpose of the alteration of the existing rules by Ext. P 6 is unrelated to the object or purpose intended to be achieved by it. Before I go into this, I have to consider the question whether any prejudice would be caused by Ext. P6 and if so what is the nature and extent of such prejudice.
25. I will first take up the complaint of the Higher Grade Assistants. They could aspire for promotion as Superintendents or as Assistant Administrative Officers. By upgrading the existing Section Heads who are on a lower grade, they would not suffer any loss in regard to their seniority. This is because, even after the Section Heads are brought into the cadre of Special Assistants the Section Heads would remain as juniors to the petitioners. Nevertheless they apprehend prejudice because though juniors, they may stand a better chance sometimes in a competition for promotion to yet Higher Grades and, therefore, according to the petitioner in O.P. No. 463 of 1972, he has to compete for a further promotion with another who has been unfairly treated as his equal whereas he is really not. With regard to the category of Superintendents it is the petitioner's case that by promoting them as Assistant Administrative Officers the petitioner's chances of promotions are affected. It was represented by Sri S. Easwara Iyer, after taking instruction from the Corporation, for which purpose counsel took time, that the posts of Superintendents will be additions to the category of Assistant Administrative Officers until the existing Superintendents are absorbed into the regular cadre of Assistant Administrative Officers. In other words according to counsel the possibility of petitioner's promotion to the cadre of Assistant Administrative Officers will not be affected by the promotion of Superintendents as in their case the posts of Superintendents are upgraded to the cadre of Assistant Administrative Officers.
26. Though the Higher Grade Assistants object to the abolition of the categories of Section Heads and Superintendents, the objection is really not to the abolition as such because that may not affect them but it is to the transitional arrangement. By that arrangement the Section Heads are placed in the Special Assistants' cadre in which cadre the Higher Grade Assistants are also placed. The Superintendents are placed in the Assistant Administrative Officers' cadre. According to them the Section Heads are in a lower cadre and by placing them along with the petitioners they are being given an undue benefit. As for Superintendents, petitioner would contend that though on a higher grade their chances of promotions to the cadre of Assistant Administrative Officers are not in any way better than that of the Higher Grade Assistants, as under the existing rules both will have to compete for promotion to that post and by placing them on the cadre of Assistant Administrative Officers straight a way without having to face a selection for promotion the Higher Grade Assistants have been prejudiced. It is necessary in this context to state here certain facts to understand how far the chances of promotion of Higher Grade Assistants would be affected by placing the Superintendents in the cadre of Assistant Administrative Officers and these facts are seen stated in the reply affidavit filed by the petitioner in O.P. No. 463 of 1972. I will extract here the relevant averments therein:
The contentions raised to the effect that Ext. P6 does not deny equality of opportunity in the matter of promotion is denied. It is also not correct to state that the chances of promotion of Higher Grade Assistants are not adversely affected by the abolition of the category of Superintendents. Hitherto for promotion to the cadre of AAOs the following three categories of employees were being considered:
(i) H.G.As who have passed the Fellowship Diploma of the Chartered Insurance Institute, London, or the Federation of Insurance Institute, Bombay.
These H.G.As were given automatic promotion till 1966, without any interview, although after 1966 they are also being interviewed for purposes of promotion on the plea that there is a dearth of vacancies ;
(ii) All other H.G.As who have completed five years of service as H.G.As, and
(iii) All confirmed Superintendents. After 1966 all employees belonging to these three groups were being called for interview without exception for selection to the post of AAOs. The management has shown blatant discrimination in the matter of promotion so far as the chances of H.G.As are concerned. Thus the H.G.As in category (i) had preference over Superintendents, and H.G.As in category (ii) had equal chance with Superintendents. Now by absorbing the entire cadre of Superintendents alone to the category of Assistant Administrative Officers without regard to merit, suitability, qualification and without holding any interview, the chances of H G.As have been very much adversely affected. Every year a number of H.G.As. pass the Fellowship Diploma and thereby get qualified for preferential treatment to the category of A.A.Os. by immediately coming to the category No. (i) stated above. H.G.As. get promotion to a larger percentage of vacancies than the Superintendents. H.G.As. used to get at least 60 per cent of the vacancies of A.A.Os. Another glaring contradiction in the impugned agreement which seeks to give more advantage to the Superintendents at the expense of H.G.As. is that Superintendents who would be promoted in a phased programme of three stages, namely on 1-9-1971, 1-9-1972 and 31-3-1973, would all be deemed to have been promoted with retrospective effect as from 1-9-1971 for purposes of seniority and rank in the cadre of A.A.Os. This would mean that the H.G.A. who is promoted after 1-9-1971 in the normal course will become junior to the Superintendent upgraded on 31-3-1973 and, therefore, the H.G.As. would suffer delay in getting further promotions in the class I cadre. Further, according to the rules provided by the impugned agreement for drawing panel of names of persons to be called for interview to A.A.Os.' cadre H.G.As. who had appeared for interview once, twice, thrice or more times, will not even find a place in the panel. Thus even the existing privileges of the H.G.As. are being taken away. While the management has denied that there is no such thing as automatic promotion within the Corporation, what the management has done by the impugned agreement is to grant just the very automatic promotion to all Superintendents regardless of merit, suitability and seniority and without any interview and without even assessment of the vacancy position. These automatic promotions are given effect to from a particular date, namely, 1-9-1971, even though the actual transfers to the higher category are to take place in a phased programme subsequently. I would also submit that the actual number of Superintendents who would be automatically transferred to the higher cadre of A.A.Os. remains vague and indefinite as per the new promotion policy outlined in Ext. P6. At the time the agreement was entered into there were about 850 Superintendents who are confirmed and who are, therefore, entitled as on that date to be transferred to the higher category. Besides there are a number of probationary Superintendents who are awaiting their confirmation and who would be confirmed as soon as the probation period of one year is over as all such Superintendents also who have not been promoted on 1-9-1971 or 1-9-1972 to the A.A.Os'. cadre would all be automatically absorbed to A.A.Os'. cadre on 31-3-1973 and all of them would also get seniority from 1-9-1971.
The consequences would be that about 850 posts in Class I cadre would, at a stroke, be filled up by the existing Superintendents who previously had only lesser chances of promotion than the eligible H.G.As. who number about 1800. By upgrading all the Superintendents en masse the vacancies that may arise during the next few years would be completely filled up immediately and there would be no vacancy for quite some time to come for the H.G.As. to compete for. Although the management may contend that 50 per cent of vacancies are reserved for H.G.As. under the new procedure this has only paper value in the context of no vacancies. H.G.As. are the only category of employees who have been subjected to selective process of interview for promotion under the new promotion procedure. Many of the Superintendents who have appeared for interview quite a number of times and could not get selected now get automatic promotion whereas H.G.As. who are better qualified still have to undergo the ordeal of interview and that too for a fewer vacancies (depleted mainly due to the upgrading of Superintendents). If at all the management wanted to effect rationalisation in the garb of promotion, the only intelligible and reasonable process would have been to upgrade eligible H.G.As. also to the post of A.A.Os. On the other hand they have left the H.G.As. high and dry and shown discrimination by treating equals as unequals.
27. Though Higher Grade Assistants and Superintendents are in two different cadres and in fact Superintendents' cadre is higher and is a promotion cadre for Higher Grade Assistants, the averments of the petitioner indicate that in the matter of promotion the Superintendents have to take their chance along with Higher Grade Assistants. In other words, though they are working in a higher scale of pay and are in a higher grade for the time being, Superintendents are equal to the Higher Grade Assistants in the matter of their prospects of promotion to the Assistant Administrative Officers' cadre. The complaint is that in the matter of such prospects of promotion they have been shown an unfair treatment in that, without having to stand for a test, they are automatically raised to the Assistant Administrative Officers' cadre which is an advantage they get over the Higher Grade Assistants. It is also their grievance that even assuming that the Higher Grade Assistants succeed in getting promotion by virtue of their own merit and not by automatic upgrading as in the case of Superintendents they would be juniors to the Superintendents who by that time would have been automatically upgraded. I find that there is considerable substance in this contention. Once the Superintendents are upgraded to the Assistant Administrative Officers' cadre, in the absence of any provision in the transitional arrangement to see that such upgrading would not in any way affect the seniority of the Higher Grade Assistants who get promoted to the Assistant Administrative Officers' cadre later they would necessarily become juniors to the class of Assistant Administrative Officers upgraded from the Superintendents' cadre. Thus the grievance of the petitioner in O. P. 463 of 1972 that he suffers double disadvantage is real. The Superintendents who, till then, had to take equal chance with them in the matter of promotion could be automatically promoted while the Higher Grade Assistants had to stand the test of selection under Ext. P6 rules. Even if they succeed in the selection they would be only juniors to those Superintendents who had by that time been automatically upgraded as Assistant Administrative Officers. The petitioner apprehends, and quite naturally that the class of Superintendents would automatically become seniors to the Higher Grade Assistants to be promoted by selection as Assistant Administrative Officers and that in turn would substantially place them at a great disadvantage for promotion to Class I. The plea of discrimination is based on the contention that while it may be possible to say that the abolition of the category of Superintendents was found to be necessary administratively and a transitional arrangement was also inevitable the particular transitional arrangement which gave this advantage to Superintendents has no nexus with the object to be achieved, namely, the abolition of the category of Superintendents. I have already agreed with the case of the petitioner in O. P. 463 of 1972 that the Higher Grade Assistants have been placed at a disadvantage. Now what I have to consider here is whether the arrangement so reached has any relation to the object or purpose sought to be achieved.
28. In this context I may refer to the decision of the Supreme Court in Jaisinghani v. Union of India : 65ITR34(SC) . In that case it was contended on behalf of the appellant before the Supreme Court that a seniority rule as framed in 1952 violated the guarantee under Articles 14 and 16 of the Constitution as the rule was based upon unjustifiable classification between direct recruits and promotees after they had entered into Class I, Grade II service and on the basis of that classification promotees were given seniority with weightage over direct recruits of the same year and three previous years. The attack to the rule did not succeed in that case because the Court considered that it was not right to approach this problem as if it was a case of classification of one service into two classes for the purpose of promotion and as if the promotion rule operated to the disadvantage of one of the two classes. The Court found that it was really a case of recruitment to the service from two different sources and adjustment of seniority between the recruits coming from the two sources. The Court said thus:
So far as Article 16(1) is concerned, it cannot be said that the rule of seniority proceeds on an unreasonable basis. The reason for the classification is the objective of filling the higher echelons of the Income Tax Service by experienced officers possessing not only a high degree of ability but also first rate experience. Having regard to the particular circumstances of this case, we are of opinion that the seniority rule is not unreasonable when read with the quota rule which provides for a special reservation of a small percentage of posts for the promotees who are selected by a Special Committee....
It is useful to extract the following passage also from the same judgment:
The relevant law on the subject is well settled. Under Article 16 of the Constitution, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State or to promotion from one office to a higher office thereunder. Article 16 of the Constitution is only an incident of the application of the concept of equality enshrined in Article 14 thereof. It gives effect to the doctrine of equality in the matter of appointment and promotion. It follows that there can be a reasonable classification of the employees for the purpose of appointment or promotion. The concept of equality in the matter of promotion can be predicated only when the promotees are drawn from the same source. If the preferential treatment of one source in relation to the other is based on the differences between the said two sources, and the said differences have a reasonable relation to the nature of the office or offices to which recruitment is made, the said recruitment can legitimately be sustained on the basis of a valid classification.
29. Having found that prejudice has been caused to the petitioner, in order to sustain the charge of discrimination I have necessarily to consider whether the preferential treatment of the Superintendents in relation to the Higher Grade Assistants is based on a difference between the said two categories and further whether the said difference has a reasonable relation to the purpose for which the classification is made. While abolition of the category of Superintendents may be advisable and, therefore, the Court may not be in a position to say that it ought not to have been done, if a differential treatment to the category of Higher Grade Assistants in the matter of their prospects of promotion was not called for to achieve the object of rationalisation then This Court will be justified in upholding the plea that there has been arbitrariness in Ext. P6. I have not been told at the bar nor is it evident from the averments in the affidavit filed on behalf of the Corporation as to what exactly are the circumstances which necessitated such a beneficial treatment to the Superintendents.I am not speaking about upgrading their posts but only about conferring other advantages. Though for the purpose of emoluments and possibly status Superintendents might have been in a higher category these had no relevance so far as the question of promotion was concerned. Both the categories had legitimate expectations to be promoted to the cadre of Assistant Administrative Officers. But neither had a right to preference over the other. It is neither shown that such preference as has been recognised in the transitional arrangement in Ext. P6 was necessary to achieve the object, namely, rationalisation of categories nor is it evident from the facts that the abolition of the category of Superintendents could not have been done otherwise than by giving such advantages to the Superintendents. Arrangements by which, notwithstanding the upgrading of the Superintendents' cadre to that of Assistant Administrative Officers, the seniority of the Higher Grade Assistants when promoted to the cadre of Assistant Administrative Officers could be secured could certainly be conceived and it does not appear that this has engaged the attention of the authorities who were responsible for Ext. P6. Therefore, I am inclined to agree with the contention that Ext. P6, in so far as it deals with the transitional arrangement, is unreasonable in the sense that it cannot be justified as necessary to achieve the purpose of implementing the promotion policy. In this view Exts. P3 and P6 are liable to be quashed to the extent they relate to the transitional arrangement with regard to the Superintendent. I may mention here that I am considering that Ext. P3 is a notice under Section 9A of the Industrial Disputes Act, 1947 though in Ext. P5 itself there is a statement that it is not necessary to issue such notice but nevertheless it is issued. At the hearing it has turned out and counsel for the Corporation did not contend otherwise that the settlement Ext. P6 is not binding on those who are not parties to it and, therefore, it could be enforced only by the change in service conditions being effected by the management and for that purpose a notice under Section 9A of the Industrial Disputes Act, 1947 was necessary. I may also mention here that Ext. P6 has only to be treated as such a notice and, therefore, whatever should follow the issue of such a notice must necessarily follow in order to make the change in the conditions of service effective. To the extent Ext. P6 proposes the transitional arrangement which is discriminatory as held by me above, Ext. P5 notice shall not be pursued.
30. What I have said here in this judgment with regard to the grievance of the Higher Grade Assistants in the matter of placing Superintendents in the cadre of Assistant Administrative Officers could apply with equal force in the case of Assistants also. In the Establishment Manual of the Corporation which contains the administrative instructions issued by the Chairman of the Corporation from time to time in regard to matters in which provision is to be made under Regulation 4 of the Staff Regulations rules regarding promotion of Assistants as Section Heads and as Higher Grade Assistants are detailed. An Assistant is eligible for promotion as a Section Head when he passes two elementary papers on departmental manuals whereas an Assistant is eligible for promotion to the cadre of Higher Grade Assistants only if he passess one of the following technical examinations:
1. Associateship of the Federation of Insurance Institutes, Bombay.
2. Associateship of the Chartered Insurrance Institute, London.
3. Intermediate Examination of the Institute of Chartered Accountants of India.
4. Three subjects of the Examination of the Institute of Actuaries, London.
It can be seen that the qualifying tests for promotion to the post of a Higher Grade Assistant are more rigorous than those prescribed for promotion to the post of a Section Head. The scale of pay of Section Head is Rs. 210-585 whereas the scale of pay of a Higher Grade Assistant is Rs. 245-650. According to the petitioner in O.P. 6180 of 1971 he passed the test for promotion to the cadre of Higher Grade Assistant in October, 1967 and the results were announced in February, 1968. Therefore, according to him without anything more he was entitled to be considered for promotion as a Higher Grade Assistant on the basis of work record ever since February, 1968. Certain facts and figures are mentioned in the petition to show that though the petitioner was not promoted it was not due to the non-availability of vacancies but as a matter of policy. According to him Section Heads who would have to stand the chance of promotion to the category of Higher Grade Assistants along with the Assistants are automatically promoted by reason of Ext. P6 with the result that they get the same unfair advantage that the Superintendents get over the Higher Grade Assistants. They become seniors in the cadre of Higher Grade Assistants redesignated as Special Assistants. He also contends that though rationalisation of the category for the sake of administrative convenience and consequential abolition of the category of Section Heads could very well be understood, for achieving that purpose it is not necessary to give this undue preference to Section Heads and, therefore, to that extent such a step is foreign to the scope of the rationalization proposed. For the reasons I have indicated when discussing the identical question concerning Superintendents, I must accept the contention of the petitioner. That is the case with the petitioners in O.P. No. 6103 of 1971 also.
31. The result is that the petitions have to be allowed and Exts. P5 and P6 in O.P. No. 463 of 1972 have to be held to be unenforceable in so far as they concern the transitional arrangement made with regard to the Superintendents as well as Section Heads. The preference given to them over the Higher Grade Assistants and Assistants respectively have to be held to be discriminatory and violative of Article 16 of the Constitution. The Life Insurance Corporation of India is directed to work out the rights of the petitioners in these petitions in the light of what I have stated here as to the enforceability of Exts. P3 and P6. In the circumstances of the case, I direct parties to suffer costs in all the three petitions.