Murari Mohan Dutt, J.
1. This appeal is at the instance of the defendant, Indian Airlines Corporation and it arises out of a suit for declaration and recovery of money.
2. The case of the plaintiff was that he was at first appointed a Radio Officer by the Indian National Airways with effect from October, 1946. He was confirmed in the said post with effect from April 10, 1947. The defendant-Indian Airlines Corporation was formed in the year 1953 under the Air Corporations Act, 1953. The undertakings of all the existing air companies vested in the defendant-Corporation and the services of all employees working in the said undertaking including the services of the plaintiff were taken over by the defendant-Corporation. The plaintiff was promoted to the post of Senior Radio Officer by the defendant-Corporation with effect from October 1, 1960. Before the introduction of the Pilot Operated Long Range R/T which had inevitable consequence on the Radio Officers employed under the defendant-Corporation and becoming redundant, the defendant-Corporation and the All India Radio Officers' Association entered into an agreement on November 23, 1961, on the question of future employment of Radio Officers who might be declared redundant and payment of compensation to them consequent on the implementation of the Pilot Operated R/T. It was agreed by and between the parties that the defendant-Corporation would grant compensation to those Radio Officers who would accept the same in lieu of alternative employment. In terms of (6) of the said agreement as subsequently amended, the defendant-Corporation was under a legal obligation to give compensation equivalent to two months' salary for each completed year of service and a proportionate amount for any part thereof subject to a minimum of 36 months' salary to Radio Officers who would volunteer to accept compensation in lieu of alternative employment.
3. By a circular dated January 21, 1966, issued by the defendant's Operation Manager, 29 Radio Officers including the plaintiff were grounded as a result of the implementation of the said agreement. The plaintiff was then serving at the Dum Dum Air Port. Of the 29 Radio Officers, 11 Radio Officers, all of whom though junior to the plantiff, were again taken in the flying service as Radio Officers and 13 other Radio Officers, also junior to the plaintiff in service, were put on general service after giving them ground training. Although the plaintiff held a valid flying licence and was senior to the aforesaid Radio Officers, he was neither allotted flying duty nor was given any opportunity to have ground training for the purpose of being absorbed in the ground service. As the plaintiff was ignored and passed over, he had to exercise option of getting compensation which he did by his letter dated February 10, 1966 in lieu of alternative employment. In spite of several correspondence, the plaintiff was neither given any compensation nor was allowed to continue with his duties. By a letter dated April 21, 1966, the plaintiff was informed by the Secretary of the defendant-Corporation that, as he would reach the age of 55 on July 7, 1966, it was decided to retire him from service from that day. It was the case of the plaintiff that the action of the defendant-Corporation in retiring him from service after he had opted for compensation in terms of the said agreement was illegal, mala fide and was made with a view to deprive him of the compensation. He claimed that he was entitled to the payment of the sum of Rs. 52,200 as compensation. Further, he claimed that he was entitled to a sum of Rs. 5,000 which was illegally deducted by the defendant-Corporation from the provident fund of the plaintiff on the plea that he had absented himself from duty during the period from January 24, 1966 to April 24, 1966. The plaintiff, accordingly, prayed for a declaration that the order of removal and/or retirement of the plaintiff from the service of the defendant-Corporation was illegal, inoperative and void. He also prayed for a decree for a sum of Rs. 52,200 being the amount of compensation calculated on the basis of 36 months' salary as per the agreement, or in the alternative for a decree for Rs. 5,000.
4. The defendant-Corporation contested the suit. It denied the plaintiff's claim to the said sum or any sum on account of compensation. It was the case of the defendant-Corporation that an alternative employment was offered to the plaintiff in terms of the agreement dated November 23, 1961, but it was not accepted by him. It was also denied by the defendant-Corporation that the retirement notice was illegal, inoperative or void. The case of the defendant-Corporation was that some grounded Radio Officers were taken back as per its requirement. It was alleged that the plaintiff was all along absent from his duty after he was grounded. Even though the plaintiff did not work, he was offered his salary by the defendant-Corporation exgratia, but the plaintiff refused to accept the same. It was contended that the plaintiff was not entitled to any relief as claimed.
5. The learned Subordinate Judge, Second Court, Alipore came to the findings that the retirement notice was legal and valid, and that the plaintiff having received his monthly salary and allowances month by month even after he had opted for compensation, no right to compensation accrued to him. The learned Subordinate Judge, however, held that the said sum of Rs. 5,000 was illegally deducted by the defendant-Corporation from the provident fund of the plaintiff. In that view of the matter, he decreed the suit in part on contest with full cost against the defendant for the said sum of Rs. 5,000. The other reliefs claimed by the plaintiff were disallowed. Hence, this appeal.
6. The principal question that is involved in this appeal is whether the retirement notice is legal and valid. Section 45(1) of the Air Corporations Act, 1953 provides as follows :
Each of the Corporations may, with the previous approval of the Central Government, by notification in the Official Gazette, make regulations not inconsistent with this Act or the rules made therein for the administration of the affairs of the Corporation and for carrying out its functions.
Clause (b) of Sub-section (2) of Section 45 provides as follows:
(2) In particular and without prejudice to the generality of the foregoing power, any such regulations may provide for all or any of the following matters, namely :
(b) The terms and conditions of service of officers and other employees of the Corporation other than the General Manager and Officers of any other categories referred to in Section 44.
By virtue of that power conferred on it, the defendant-Corporation framed service rules for flying crew. Under Rule 12, the age of retirement of a flying crew was 58 years. There was no provision in Rule 12 for compulsory retirement of a flying crew after he attained the age of 55 years. It is the case of the defendant-Corporation that Rule 12 was amended by it and the amendment had taken effect from December 1, 1962 as approved by the Central Government by its order dated October 22,1963. It is contended on behalf of the defendant-Corporation that before the retirement notice was issued to the plaintiff, Rule 12 was amended after the approval of the Central Government. The amendment was, however, published by a notification in the Gazette of India on July 13, 1968. The notification and the amended Rule as published in the Gazette are inter alia as follows:
INDIAN AIRLINES CORPORATION New Delhi, the 26th June, 1968.
No. Fin/Rules/5-In exercise of the powers conferred by Clauses (b) and (c) of the Sub-section (2) of Section 45 of the Air Corporations Act, 1953 (27 of 1953) the Indian Airlines Corporation, with the previous approval of the Central Government, has amended Regulation 12 of the Service Rules for Flying Crew, the Service Rules for employees in Aircraft Engineering Department and the Service Rules for employees other than the Flying Crew and those in the Aircraft Engineering Department, published in the Gazette of India. Part II, dated the 12th March, 1960/ Phalguna 22, 1881, (Notification No. GSR. 302 of 15th September, 1959).
The amendments to the above mentioned regulation are hereby notified as under :
SERVICE RULES FOR FLYING CREW,
Rule 12 is amended to read as under :
Rule 12 :
Flying Crew shall be retained in the service of the Corporation only so long as they remain medically fit for flying duties but shall retire on attaining the age of 58 years. Provided that the competent authority may require an employee to retire after he attains the age of 55 years on giving three months' notice without assigning any reason.
Provided further that the retention of a Pilot, a Flight Engineer, a Flight Navigator and a Radio Officer in the service of the Corporation shall be subject to his keeping his licence current. Provided further that an employee may retire voluntarily after attaining the age of 55 years after giving three months' notice to the compentent authority.
An Air Hostess shall retire from the service of the Corporation on her attaining the age of 30 years or when she gets married, whichever is earlier. The General Manager, may, however, retain in service an unmarried Air Hostess upto the age of 35 years.
Note :-Employees who were on leave preparatory to retirement, extending beyond 1st December, 1962 or were on extension of service on that date may be permitted to continue in service upto the age of 58 years. However, the employees who had already retired on 1-12-62 or were on refused leave beyond the date of complusory retirement on the date are not entitled to resume duty under the Revised Rule.
(Approved vide Government's Communication No. 7-CA (10)/63 dated 22-10-63 to take effect from 1-12-62).
The question is whether before the publication of the amendment of Rule 12 in the Gazette, it had come into force on the day the approval of the Central Government was obtained, that is, on October 22, 1961. Section 45(1) authorises the defendant-Corpora-ration to make regulations with the approval of the Central Government by notification in the Official Gazette. It is apparent that before making regulations, two conditions are to be fulfilled, namely, (1) approval of the Central Government and (2) notification in the Official Gazette. Fulfilment of one of these two conditions will not, in our view, give any validity to any rule or regulation that may be made by the defendant-Corporation under Section 45. So long as the notification as to the amendment of Rule 12 was not published in the Gazette, it did not come into existence, even though the approval of the Central Government was obtained. The regulations can be made only by notification in the Official Gazette after the approval of the Central Government as provided in Section 45(1), and in the absence of such a notification no regulation can be made. As the notification was published in the Official Gazette on July 13, 1967, the defendant - Corporations was not entitled to give effect to the amended rule and it issue retirement notices to the employees before the said date. As the amended Rule 12 did not exist on the day the retirement notice was issued to the plaintiff, the defendant-Corporation had no authority to compel the plaintiff to retire after the completion by him of the age of 55 years.
7. It has, however, been strenuously urged on behalf of the defendant-Corporation that as the amendment of Rule 12 is to take effect retrospectively from December 1, 1962 which will appear from the notes under the amended rule, the retirement notice, though invalid to start with, became valid after the publication of the notification in the Gazette. It is true that the amended Rule 12 has been given retrospective operation, but the question is whether the defendant-Corporation had the authority to provide for retirement of its employees after the completion by them of the age of 55 years, with retrospective effect. Section 45 of the Air Corporations Act, 1953 does not confer any power on the defendant-Corporation to make regulations with retrospective effect either expressly or by necessary implication. In the Income-tax Officer v. J.M.C. Ponnoose, : 75ITR174(SC) , the Supreme Court has observed that it is open to a sovereign Legislature to enact laws which have retrospective operation. The Courts will not ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the Legislature. Parliament can delegate its legislative power within the recognised limits. Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the Legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the Courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect. In the Cannanore Spinning and Weaving Mills Ltd. v. The Collector of Customs and Central Excise. Cochin and Ors. : 1978(2)ELT375(SC) , the Supreme Court held that under Section 37 of the Central Excises and Salt Act, 1944, the rule-making authority was not invested with the power to make rules with retrospective effect. It is, therefore, well-settled that unless the rule-making authority is conferred with the power to make rules with retrospective effect, it cannot make any rule giving it a retrospective operation. Section 45 does not confer on the defendant-Corporation to make regulation with retrospective effect. It has, however, been argued on behalf of the defendant-Corporation that Section 45(2) read with Section 20(1) of the Air Corporation Act, 1953 has by necessary implication, conferred such power on the defendant-Corporation to make rules and regulations with retrospective effect. We are unable to accept this contention. Section 20(1) inter alia provides that every officer or other employee of an existing air company shall become as from the appointed day an officer or other employee as the case may be, of the Corporation in which the undertaking has vested and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights aid privileges as to pension and gratuity and Other matters as he would have held the same under the existing air company if its undertaking had not vested in the Corporation and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration, terms or conditions are duly altered by the Corporation. In our view, there is nothing in Section 20(1) which suggests that the Corporation will have the power to alter the conditions of service of the employees with retrospective effect. In these circumstances, we hold that amended Rule 12 (IX did not take effect from any date prior to its publication in the Official Gazette on July 13, 1968. The retirement notice issued to the plaintiff on April 21, 1968 was illegal and ultra vires Section 45.
8. It has been conceded on behalf of the defendant-Corporation that if the retirement notice is held to be illegal, the plaintiff would be entitled to the compensation as claimed by him. The learned Subbordinate Judge took the view that as the plaintiff had received the salary even after he had opted for compensation in accordance with the terms of the agreement, he would not be entitled to such compensation. At the same time the learned Subordinate Judge held that Clause (6) of the agreement was not happily worded and the plaintiff reasonably thought that he would get compensation from the defendant-Corporation like other grounded Radio Officers. Apart from that, the Corporation also informed the plaintiff from time to time that the plaintiff's prayer for compensation was under consideration and the decision in that regard was awaited. The learned Subordinate Judge found that the conduct of the defendant-Corporation led the plaintiff to institute the suit and to claim the said sum of No. 52,200 as compensation, and he observed that it could not be denied that there were some laches on the part of the Corporation also. In that view of the matter, he awarded full costs of the suit in favour of the plaintiff, even though he decreed the suit in part only for No. 5,000. In our opinion, in view of the said observations and findings made by the learned Subordinate Judge, the plaintiff cannot be said to have forfeited his right to claim compensation simply because he had received his salary after the exercise of option by him.
9. For the reasons aforesaid, we set aside the judgment and decree of the learned Subordinate Judge and decree the plaintiff's suit with costs. It is declared that the impugned retirement notice issued by the defendant Corporation to the plaintiff is illegal, inoperative and void. The plaintiff is entitled to recover a sum of No. 52,200 from the defendant-Corporation.
10. The appeal is allowed with costs. No order need be made on the application
of the plaintiff dated May 30, 1977 which shall be deemed to have been disposed of. As prayed for by Mr. Chunder, let there be a stay of operation of the judgment for two weeks.
Per Sharma, J.--