L. I. C. of India Appellants v. H. S. Chouhan etc. etc.
1983-07-05
K.S.SIDHU, M.L.SHRIMAL
body1983
DigiLaw.ai
JUDGMENT 1. - This judgment will deal with the 33 special appeals, listed above, form a common judgment of a learned Single judge of this court, whereby the learned Judge allowed as many as 43 petitions under Article 226 of the Constitution of India, including the 33 petitions giving rise to these appeal,, and consequently declared the Life Insurance Corporation Development Officer (Alterations of Remuneration and other Terms and Conditions of Service). Order, 1978, and the Life Insurance Corporation of India (Staff) Sixth Amendment Regulations, 1978 to be "ultra vires" and "invalid", and issued a writ restraining the respondents, who are appellants herein, from enforcing the said Order and Regulations. 2. The facts in all the writ petitions are substantially similar, and therefore it would be enough for our purpose if we state the televant facts in one of these cases. The respondent in D. B. Civil Special Appeal No. 272 of 1982 which is being taken up for the purpose of statement of facts is H. S. Chauhan. He joined the service of the Life Insurance Corporation of India (hereafter called the Corporation) in 1959. He was posted as Development Officer in the Branch Office Churu, under the Divisional Manager Jaipur and Zonal office Delhi in November 1979, when he instituted the writ petition (No. 1030 of 1979) giving rise to the D B. Civil Special Appeal No. 272 of 1982 against him. As is well known, the Life Insurance business in this country was nationalised in the year 1956. The Life Insurance Corporation Act, 1956 (No. 31 of 1956) which will hereinafter be called the Act, was published on July 1, 1956. The Central Government established the Corporation under the Act with effect from September 1,1956, which date is known under the Act as the -appointed day". Section 7 of the Act lays down that on the appointed day there shall be transferred to and vested in the Corporation all the acts and liabilities appertaining to the controlled business of all the insurers Section I 1 of the Act deals inter alia with transfer of service of existing employees of insurers to the Corporation.
Section 7 of the Act lays down that on the appointed day there shall be transferred to and vested in the Corporation all the acts and liabilities appertaining to the controlled business of all the insurers Section I 1 of the Act deals inter alia with transfer of service of existing employees of insurers to the Corporation. Section 11 (1) provides that 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 from that day become an employee of the Corporation and shall hold his office therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if the Act had not been passed. It is noteworthy that section 11 (1) further lays down that such employee shall continue to hold office in future "unless and until his employment in the Corporation is terminated or until his remuneration. terms and conditions are duly altered by the Corporation. Such employee falls within the ambit of a transferred employee" as defined in the Life Insurance Corporation of India (Staff) Regulations, 1960, and the term -transferred employee" will hereafter be used only in reference of such employees who have become employees of the Corporation by virtue of the provisions of section 11 (1) of the Act. 3. Section 11(2) of the Art is important. This sub-section gives the Central Government power to alter, whether by way of reduction or otherwise, the remuneration and other terms and conditions of service of employees to such extent and in such manner as its thinks fit. This power can be exercised by the Central Government notwithstanding anything contained in section 11 (1) noticed above, or in the Industrial Disputes Act, 1947, or in any other law, or in any award, settlement or agreement for the time being in force. There are some qualifying words in section 11 (2) which would show that such power can be exercised by the Central Government only to achieve the objectives specified therein and for no other objective. A lot of controversy centres round the scope and meaning of these words.
There are some qualifying words in section 11 (2) which would show that such power can be exercised by the Central Government only to achieve the objectives specified therein and for no other objective. A lot of controversy centres round the scope and meaning of these words. We may, therefore, reproduce here the exact words of the section which from the subject matter of controversy. They are Where the Central Government is satisfied that for the purpose of securing unformity in the scale of remuneration and other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to and vested in the Corporation, it is necessary so to do, or that in the interest of the Corporation and its policy holders, a reduction in the remuneration payable, or revision of the other terms and conditions of service applicable to employees or class of them is called for, the Central Government may ........................alter, whether by way of reduction or otherwise, the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit". Thus, the objectives for which such power may be exercised by the Central Government are (i) securing unformity in the scales of remuneration and other terms and conditions of service of transferred employees or (ii) reduction in remuneration or revision of other terms and conditions of service applicable to employees or any class of them is called for in the interest of the Corporation and its policy holders. The contention raised on behalf of the respondents in these appeals is that the words in the above quotes would show that the power conferred on the Central Government to reduce the remuneration and alter other terms and conditions of service of employees is a power conferred only in respect of transferred employees and that it has been conferred for the sole purpose of bringing about integration of service and securing uniformity in the scale of remuneration of such employees. On the other hand, learned counsel for the Corporation and other appellants contended that on a plain reading of the words of section 11 (2) as quoted above, there is no justification at all to restrict the application of section 11 (2) to transferred employees alone and that the language employed, especially the words "..
On the other hand, learned counsel for the Corporation and other appellants contended that on a plain reading of the words of section 11 (2) as quoted above, there is no justification at all to restrict the application of section 11 (2) to transferred employees alone and that the language employed, especially the words ".. or that interest of the Corporation and its policy holders, a reduction in the remuneration payable or a revision of the other terms and conditions of service applicable to employees or any class of them is called ..."is emphatic enough to cover all the employees including those recruited and appointed for the first time by the Corporation after the appointed day. 4. We shall have more to say about the controversy regarding the interpretation of section 11 (2) of the Act a little later. Before we do that, let us resume the narration of facts in Chauhan's case. His case in brief is that before he joined service in 1959, the Central Government had already exercised its power under section 11 (2) of the Act, inasmuch as, with a view to securing uniformity in the scales of remuneration and other terms and conditions of service applicable to a class of transferred employees, namely the Field Officers, subsequently designated as Development Officers, the Central Government had issued an order called the Life Insurance Corporation Field Officers (Alteration of Remuneration and other Terms and Conditions of Service) Order 1957, and thereby it had exhausted all its power under section 11 (2) of the Act with the result that it could not have valid recourse to section 11 (2) to issue any other subsequently for a similar purpose i. e., for the purpose of securing uniformity in scales of remuneration etc. mentioned above. In other words, it is contended, that the power conferred on the Central Government under section 11 (2) of the Act to reduce the remuneration and alter other terms and conditions of transferred employees of the Corporation is a transitory power which stands fully consumed and finished after its exercise even once by the Central Government.
mentioned above. In other words, it is contended, that the power conferred on the Central Government under section 11 (2) of the Act to reduce the remuneration and alter other terms and conditions of transferred employees of the Corporation is a transitory power which stands fully consumed and finished after its exercise even once by the Central Government. As a corollary of this contention, it is further submitted that after exercising this power once in 1957, the Central Government was not left with any further power to make and promulgate the Life Insurance Corporation Development Officers (Alteration of Remuneration and Other Terms and Conditions of Service) Order 1978. He has also challenged the Life Insurance Corporation of India (Staff) Regulation, 1960, since amended by the latest regulations called the Life Insurance Corporation of India (Staff) Sixth Amendment Regulations, 1978, on the allegation inter alia, that the said regulations are inconsistent with section 49 (2) (b) and (bb) of the Act. 5. Chauhan's case further goes that as a consequence of an agitation by the field workers, through their trade union, called the National Federation of Insurance Field workers of India (for short, the NFIFWI) for upward revision of pay-scales and amelioration of other terms and conditions of their service agreements were arrived at between the NFIFWI and the management of the Corporation on March 10, 1964. May 20, 1965, September 25. 1970 and November 19, 1971, respectively. It is alleged that these agreements provided for regular time- scales of pay with automatic annual increments for development officers like Chauhan, and they also fixed for them minimum work norms including the norm requiring a development officer to arrange to procure annual premium income of not less than Rs. 30,000/- and to insure at least 125 lives in each appraisal year. It is alleged that while negotiations were still in progress between the NFIFWI and the management for modification of the agreements mentioned above.
30,000/- and to insure at least 125 lives in each appraisal year. It is alleged that while negotiations were still in progress between the NFIFWI and the management for modification of the agreements mentioned above. the Central Government, in the purported exercise of its powers under section 11 (2) of the Act male and promulgated the Life Insurance Corporation Development Officers (Alteration of Remuneration and Other Terms and Conditions of Service) Order, 1976, in supersession of a similar Order made in 1957, Chauhan complained that this order of 1976 set at naught what the Development Officers had achieved through the agreements aforementioned, and that therefore same was challenged by the Development Officers in some of the High Courts other than the high Court of Rajasthan. Efforts were also made, through negotiation etc., to get the said Order rescinded, Chauhan's grievance is that which the writ petitions challenging the Order of 1976 were still pending in the High Courts and the negotiations were in progress to get that Order modified by mutual agreement, the Central Government unilaterally superseded that Order and made and promulgated in its place another Order, called the Life Insurance Corporation Development Officers (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1978. This Order will hereinafter be called the Order of 1978. It may be mentioned here that the Central Government made the order of 1978 in the purported exercise of its powers under section 11 (2) of the Act, and, as the pre-emble of the Order of 1978 would itself show, it was made and promulgated as the Central Government was, as the pre-emble puts it, satisfied that in the interest of the Corporation and its policy holders a revision of the terms and conditions of service applicable to certain class of employees of the Corporation are (sic) called for". Clause (2) of the Order of 1978 lays down that the provisions contained in that Order shall apply to transferred employees.
Clause (2) of the Order of 1978 lays down that the provisions contained in that Order shall apply to transferred employees. Sub-clause (2) of clause 4 contains a direction to the Corporation enjoining it to make appropriate provisions in the Life Insurance Corporation of India (Staff) Regulations, 1960, as amended from time to time (hereinafter called the Staff Regulations) so as to ensure that the terms and conditions of service of the Development Officers falling in the category of transferred employees were brought at par with the terms and conditions of service of the Development Officers who were recruited and appointed by the Corporation after the appointed day. In compliance with this direction and with the provisions approval of the Central Government and in the purported exercise of its powers under section 49 of the Act, the Corporation amended the Staff Regulations by making the Life Insurance Corporations of India (Staff) Sixth Amendment Regulations 1978, which will hereafter be called the Amended Staff Regulations. The amended Staff Regulations substituted schedule III of the Staff Regulations by a new schedule III which lays down work norms for Development Officers providing incentives for good performance and disincentives for bad performance. One of the salient features of the new schedule III is the provision requiring a Development Officer to work within the expense limit prescribed for his operational area. The expense limit of a Development Officer for any appraisal year is expressed as a percentage of the eligible premium of that year (22%, 23%, 24% and 25% for operational areas, A, B C and D respectively) and if a Development Officer exceeds his expense limit, he is subjected to disincentives as specified in schedule III including termination of service in the event of his repeatedly exceeding the expense limit in such a way that no further opportunity is possible to be given to him under the schedule to conform to the expense limit. Needless to say that the Staff Regulations including the Amended Staff Regulations apply to every whole-time salaried employee of the Corporation. 6. Acting on the basis of the Staff Regulations and the Amended Staff Regulations, the Zonal Manager, Northern Zonal Office served a notice, dated October 6. 1979, on Chanhan, drawing his attention to the fact that his annual remuneration for the appraisal year ending March 31, 1979 was Rs. 24645.19 as against the premium income of Rs.
6. Acting on the basis of the Staff Regulations and the Amended Staff Regulations, the Zonal Manager, Northern Zonal Office served a notice, dated October 6. 1979, on Chanhan, drawing his attention to the fact that his annual remuneration for the appraisal year ending March 31, 1979 was Rs. 24645.19 as against the premium income of Rs. 28330.4 (i.e. the cost ratio being 86.9%). with the ratio of the aggregate of the annual remuneration in the three years immediately preceding the relevent appraisal date to the aggregate of the premium income in those three years being 65.08%, and therefore calling upon him to, show cause why his services be not terminated in accordance with the provisions of the said Regulations. The clause in the Amended Staff Regulations providing for termination of service is said to be in contravention of the agreements referred to above and therefore bad in law. 7. Chauhan also challenged the order of 1978 and the Amended Staff Regulations as being violative of his fundamental rights guaranteed by Article 14, 16, 19(l)(g) of the Constitution of India. He also challenged section 1l of the Act on the ground of excessive delegation of legislative power. He attacked the Amended Staff Regulations as being the regulations in fact framed by the central Government and issued the Corporation applying its to them. He unnecessarily and against the entire law of pleadings also mind referred to a number of rulings of the High Courts and the Supreme court and thus indulged in lengthy, prolix and argumentative type of pleadings in his writ petition running into 38 foolscap pages of typed material. As already stated he prayed for a declaration that the Order of 1978 and the Amended Staff Regulations are ultra vires the Act and the Constitution of India, for an order quashing the notice as to termination of served upon him and for injunction restraining the respondents to take any action against him pursuant to the impugned notice. 8. The respondents in the writ petition, who are appellants before us, contested it and filed their return controverting all the legal pleas raised therein.
8. The respondents in the writ petition, who are appellants before us, contested it and filed their return controverting all the legal pleas raised therein. They referred to the duties of a Development Officer drawing particular attention to the fact that he is required to develop and increase the production of new life insurance business in a planned way, to recruit the train new agents so as to develop a stable agency force, and to guide, supervise and direct the activities of all such agents. They admitted that a result of negotiation between the management of the Corporation and the NFIFWI, minimum norm of performance per Development Officer was fixed at Rs. 30000/- as scheduled first year Premium Income and 125 lives for appraisal year ending on or after April 1, 1974. These norms, being the minimum norms did not serve any real purpose in so far as the ratio vis-a-vis the performance of a Development Officer was concerned. In fact, according to the appellants, the minimum norms which were to be regarded as exceptional feature, were exploited by some of the Development Officers as a shield for protection of their remuneration including allowances inspite of constantly falling production of new life insurance business in their respective operational areas. They cited an example of as many as 195 Development Officers having returned a cost ratio of over 100% in the year 1974-75. In other words, the Corporation had to pay to them by way of remuneration much more than what they were bringing to it by way of Scheduled First Year Premium Income. Under the circumstances, it became necessary in the interest of the Corporation and its policy holders to fix certain norms for the Development Officers so as to require them work in conformity with generally accepted economic standards. They referred in this connection to the recommendations of the Committee of Enquiry popularly known as the "Morarka Committee" appointed by the Government of India to enquire into the expenses of the Corporation and cited inter alia the following from the report of that committee: Their (Development Officers') job is mostly to contact agents and policy holders in the field, whereas the other categories of staff spend a fixed number of hours at their desk inside the office doing the work allotted to them.
It is therefore not possible to exercise effective day to day supervision over the work done by the Development Officer and to make sure that a Development Officer has put in the minimum quantum of effort every day. It therefore becomes necessary that their remuneration and prospects should be related to the results of the efforts they might have put in, and consequently among other things on the new business sum assured and the First Year Premium Income under their organization. 9. It was further pointed out by the appellants in their reply to the writ petition that the Morarka Committee had described the performance of the Development Officers as "extremely unsatisfactory" and "totally incommensurate with the generous terms and conditions and facilities given to them", and that committee had recommended the fixation of -'suitable norms for the new sum assured that should be procured through the Development Officers" and making provision in the rules so that the new norms are strictly enforced. They pleaded that it was in this background that the Central Government made the Order of 1976 and thereafter the Order of 1978, and the Corporation issued the Amended Staff Regulations with the previous approval of the Central Government. They pleaded that the Order of 1978 was made to remove some of the objections to the Order of 1976 raised on behalf of the Development Officers. They stressed the point that the Order of 1978 is liberal in the interest of the Development Officers as compared to the Order of 1976, and that under the former it is only a Development Officer operating at really uneconomic costs who will attract the penal provisions of the Order. 10. The appellants pleaded that the agreements between the management of the Corporation and the NFI FWI have nu statutory force and are not binding on them. They are not 'agreement:" under the Industrial Disputes Act. 1947. Even otherwise, the said agreements have been rendered ineffective by section I I of the Act. The appellants averred that a Development Officer is not a "workman" under the Industrial Disputes Act, 1917 and that as such the agreements in question do not amount to settlement under the said Act. They further pleaded that none of the provisions of the Industrial Disputes Act, 1947 is applicable to a Development Officer. 11.
The appellants averred that a Development Officer is not a "workman" under the Industrial Disputes Act, 1917 and that as such the agreements in question do not amount to settlement under the said Act. They further pleaded that none of the provisions of the Industrial Disputes Act, 1947 is applicable to a Development Officer. 11. It was also pointed out by the appellants that Chauhan is not a transferred employee inasmuch as he was recruited in 1959 and that therefore he can not legitimately complain against the statutory rules and regulations framed by the Central Government and the Corporations regulating the terms and condi- of his service with retrospective effect. 12. Thus the appellants prayed in their reply that Chauhan's writ petition deserves to be dismissed with costs. 13. As already statedy, the learned Single judge, allowed all the 43 writ petitions, including Chauhan's petition and consequently declared the Order of 1978 and the Amended Staff Regulations to be ultra vires and invalid and restrained the Central Government and the L I.C. from enforcing them. The findings of the learned Single Judge which led him to allow these writ petitions may be summarised here as follows: (i) Section 11(2) of the Act relates to transferred employees only and not to those recruited and appointed after the appointed day. It was enacted as the learned judge put it 'for transitional integration period of transfer of employees and it cannot be used now again for the purpose of a change in the conditions of service of the employees who have been recruited after the integration was over or transferred". Since the Order of 1978 also covers employees other than transferred employees, it must be struck down being ultra vires section 11 (2). Like wise the Amended Staff Regulations are also void. (ii) A development officer of the L.I.C is a "workman" within the meaning of section 2 (g) of the Industrial Disputes Act. 1947. Hence the agreements between the NFIFWI and the management of the L.I.C. amount to "settlement" within the meaning of section 2(p) of the said Act. The Industrial Disputes Act, 1947 is a special legislation as compared to the Act which is a general legislation in the field of employer employee relations, and as such the latter is displaced by the former.
The Industrial Disputes Act, 1947 is a special legislation as compared to the Act which is a general legislation in the field of employer employee relations, and as such the latter is displaced by the former. That being so the agreement arrived at between the NFI FWI and the management in accordance with the provisions of the Industrial Disputes Act, 1947, relating to the terms and conditions of service of development officers prevails over the Amended Staff Regulations issued under the Act. 14. The Life Insurance Corporation of India and the Union of India. the respondents in the writ petitions, have filed these appeals challenging the correctness of the above findings of the learned Single judge and praying that the judgment under appeal be set aside and instead the writ petitions be dismissed. We are of the view that both the findings of the learned Single Judge are erroneous and that therefore these appeals must succeed. We would first take up the question as to whether the petitioners in the writ petitions, who were, admittedly employed as development officers under the Life Insurance Corporation of India at the material time can be treated as "workmen" within the meaning of section 2 (s), industrial Disputes Act, 1947. The definition of "workman" as given in section 2 (s) in so far as it is material for our present purpose reads : 2(s). "Workman" means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory. technical or clerical work for hire or reward ..............but does not include such person: (i) omitted. or (ii) omitted or (iii) who is employed mainly in a managerial or administrative capacity, or (iv) who being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. The Supreme Court has had occasions to deal with this definition, in the context of class 11 employees of the Reserve Bank of India carrying the designations of Research Superintendents, Superintendents, and Sub-Accountants, Deputy Treasurers Assistant Treasurers. Personal Assistant to the Governor, Personal Assistant, Care fakers Grade 1. Staff 'Assistants and Supervisors, Premises section in All India Reserve Bank Employees Association and another v. Reserve Bank of India and another, AIR. 1966 S.C. 305 .
Personal Assistant to the Governor, Personal Assistant, Care fakers Grade 1. Staff 'Assistants and Supervisors, Premises section in All India Reserve Bank Employees Association and another v. Reserve Bank of India and another, AIR. 1966 S.C. 305 . The point for consideration by their Lordships was whether the duties of these officers were of a supervisory character or were merely clerical in nature. After perusing the relevant manuals and orders as respects class II officers, their Lordships held as under. Without discussing the matter too elaborately we may say that we are satisfied that employees in class II except the Personal Assistants were tightly classed by the Nationals Tribunal as employed on supervisory and not on clerical or checking duties. In view of the fact that all of them now receive even at the start "wages" in excess of Rs. 500/- per month, there is really no issue left concerning them once we have held that they are working in a supervisory capacity. 15. Let us now consider the duties of development officers of the L.I.C. in the light of the observations of the Supreme Court. It is an admitted fact that all the petitioners were development officers at the material time. A perusal of the Life Insurance Corporation of India (Staff) Regulations, 1960 issued under section 49 of the get would show that all development officers are classified as class II officers. Each one of them was drawing "wages" far in excess of Rs. 500/- per mensem at that time. The duties of a development officer, as given in the Life insurance Corporation Field Officers (Alteration of Remuneration and ether Terms and Conditions of Service) Order, 1957, may be reproduced here:- 13.
Each one of them was drawing "wages" far in excess of Rs. 500/- per mensem at that time. The duties of a development officer, as given in the Life insurance Corporation Field Officers (Alteration of Remuneration and ether Terms and Conditions of Service) Order, 1957, may be reproduced here:- 13. Duties of Development Officer shall be to : i. Develop and increase the production of new life insurance business in a planned way as far as may be practicable in the area allotted to him or in which he is allowed to work through the agents placed under his supervision by the corporation , (ii) guide, supervise and direct the activities of all such agents, (iii) recruit and train new agents so as to develop a stable agency force, (iv) act generally in such a way as to activise existing agents and motivate new agents, (v) render all such services to policy holders as condence to better policy servicing, (vi) work in the area allotted to him as a representative of the Corporation in that area and perform as such representative such other duties as the Corporation may call upon him to do. A bare glance at these duties of a development officer would at once show that they are mainly of a supervisory character. A development officer is required to recruit and train agents, supervise, motivate, activise, guide and direct the agents placed under his supervision, and thus develop and increase the production of new life insurance business and take all necessary steps which are conducive to better policy-servicing. Almost each item of the duties of a development officer either directly uses the word supervision or indirectly conveys that sense in enumerating the functions attached to his office. We have therefore no hesitation in holding that a development officer is employed certainly for a supervision work over agents, if not to manage them. If in doing his main work of supervision, a development officer is required to do some work of writing he does not by that token alone become a functionary whose main work is clerical. In May & Maker (India) Ltd. v. Their Workmen, (1961) 11 LLJ 94 (S.C.) the Supreme Court held that the employee concerned whose main work was canvassing and incidental to that work he did some clerical and manual work as well was not workman within the meaning of section 2: 16.
In May & Maker (India) Ltd. v. Their Workmen, (1961) 11 LLJ 94 (S.C.) the Supreme Court held that the employee concerned whose main work was canvassing and incidental to that work he did some clerical and manual work as well was not workman within the meaning of section 2: 16. The learned Single Judge observes in his judgment that the agents are masters of their will, that the development officers cannot supervise their work and that on the contrary the development officers are at the back and cell of the agents for canvassing business and that they act according to the convenience of the agents, clients and medical examiners. We are constrained to say that these observations are not correct and run afoul of the duties of a development officer as enumerated in the statutory regulations. Learned Single Judge has further pointed out that the duties of a development officer are of a manual, mechanical and clerical nature. This is a view far removed from the realities of the situation. It will not we possible to describe the duties of a development officer as manual mechanical or clerical, by any stretch of these words. 17. Last but not the least, this Court must bear in mind that in the All India Reserve Bank Employees Association case (supra), the Supreme Court held that the question whether a particular employee is a "workman" as defined in section 2(s) of the Industrial Disputes Act is a question of fact, at best one of mixed fact and law and will really depend on'the type of work on which the employee concerned is engaged and on several other facts. That bring so, 'it was incumbent on the development officers who filed these writ petitions to plead therein material facts which would have sustained their present claim of being "workman" as defined in section 2(s). We have very carefully perused the lengthy petitions and find that let alone pleading facts which, if proved, would have enabled the court to hold that they are "workmen" they did not even say that they are "workmen" within the purview of the definition as given in section 2(s).
We have very carefully perused the lengthy petitions and find that let alone pleading facts which, if proved, would have enabled the court to hold that they are "workmen" they did not even say that they are "workmen" within the purview of the definition as given in section 2(s). In the absence of such an averment in the writ petitions and in the absence of proof, we find it impossible to hold that the writ petitioners are "workmen" as per definition of this expression as given in section 2(s) of the industrial Disputes Act, 1947. 18. For the reasons given above, we set aside the finding of the learned Single Judge that a development officer is a workman within the meaning of section 2(s), industrial Disputes Act, 1947. Instead, we hold that he is not a workman and that therefore he cannot invoke the aid of industrial Disputes 1947. Instead, we hold that he is not a workman and that therefore he cannot invoke the aid of the Industrial Disputes Act, 1947 to protect an agreement between his union on the one side and the management on-the other from the onslaught of statutory rules and regulations framed under the Act for altering the terms and conditions-of his service. 19. Turning now to the first finding by the learned Single judge to the effect that the power conferred on the Central Government under section 11(2) of the Act to reduce the remuneration and alter other terms and conditions of service of its employees is a power exercisable only with respect to the transferred employees and that too for the sole purpose of bringing about integration of services and securing uniformity in the scales of remuneration of transferred employees, have again we are constrained to say that this finding is based on an incorrect reading of section 11(2) of the Act. We have already reproduced the relevant portion of section 11(2) in an earlier part of this judgment and would like to do it again for we feel that the language is plain enough to show that the power conferred on the Central Government to reduce the remuneration or alter the terms and conditions of service of employees of the Life Insurance Corporation is exerciseable in respect of all categories of its employees including the transferred employees as well as those who were recruited after the appointed day.
Let us read here the material portion of section 11(2). S. 11(2). Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to, and vested in the Corporation, it is necessary to do so or that in the interest of the Corporation and its policy holders. a reduction in the remuneration payable, or revision of the other terms and conditions of service applicable to employees or any class of them is called for, the Central Government may alter, whether by way of reduction or otherwise, the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit: and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months remuneration unless the contract of service with such employee provides for a shorter notice of termination. On a plain reading of the above words of section 11 (2) it will be seen that Central Government is empowered to alter, whether by way of reduction or otherwise, the remuneration and the other terms and conditions of service of all employees of the Corporation regardless of the fact whether they are transferred employees or others directly employed by the appointed day. The alteration of the terms and conditions of service of the employees of the Corporation including reduction of their remuneration as contemplated by the Legislature is intended to achieve a two-fold objective. First, such alteration may become necessary for the purpose of securing uniformity in the scales of remuneration and other terms and conditions of service applicable to transferred employees. Of course, employees directly recruited by the Corporation after the appointed day do not come within the purview of this objective. This is made clear by the Legislature itself in that it says that this particular objective has reference to insurers whose controlled business has been transferred to and vested in the Corporation". The second objective which may call for such alteration has been described by the Legislature to consist of "the interest of the Corporation and its policy-holders and this has reference not only to transferred employees but to all categories of employees.
The second objective which may call for such alteration has been described by the Legislature to consist of "the interest of the Corporation and its policy-holders and this has reference not only to transferred employees but to all categories of employees. One cannot miss the deliberate use of the words, employees of insureer whose controlled business has been transferred to or vested in the Corporation" in reference to the first objective and of entirely different words "employees or any class of them" in reference to the second objective. Had the intention of the Legislature been to limit the application of the subsection to transferred employees alone in reference to both the objectives, it would have simply used the words "such employees" in place of "them" in reference to the second objective. 20. The learned Single judge has referred to the Parliamentary Debates in the context of the deletion of the words "from time to time" which occurred in the original text I section 11 (2) of the Life Inrauance Corporation Bill, from the enactment as it was finally passed by Parliament and held on that basis that the power conferred on the Central Government to alter the terms and conditions of service of transferred employees is limited to the process of integration only and that since the Order of 1978 is process of integration of transferred employees it is void being ultra vires the powers of the Central Government under section 11 (2). In holding this view, the learned judge placed reliance on the judgment of Pathak J. in Life Insurance Corporation of India v. D.J. Bahadur, A.I.R. 1980 Supreme Court 21111 . We have carefully read that judgment and and that even Pathak J. did not attach much importance to the deletion of the words "from time to time" from the section as it was finally enacted by Parliament, Pathak J. expressly held that power under section 11 (2) can be exercised by the Central Government more than once and that deletion of the words "from time to time" is not of much consequence because, as his Lordship put it. "the intent of the legislative provision must be discovered primarily from the legislation itself". Of course, Pathak.
"the intent of the legislative provision must be discovered primarily from the legislation itself". Of course, Pathak. J. further held on his own interpretation of section 11 (2) reproduced above that the power conferred on the Central Government tinder section 11 (2) to alter the terms and conditions of service of its employees is related to transferred employees only. As against it, Koshal J. held in his separate judgment in the same case that section 11 (2) applies to L.I.C. employees generally including new recruits. In arriving at this conclusion, Koshal J. took particular notice of the use of the disjunctive "or" as it occurs between the two clauses of section 11 (2) referred to above, and held that "or" must be read as disjunctive rather than as conjunctive, Koshal, J. dissented from the judgment of Pathak J. and concluded on the basis of this reasoning that section 11 and clauses (b) and (bb) of sub-section 2 of section 49 of the Act were intended to be and do constitute an exhaustive and over-riding law governing the conditions of all employees of the Corporation including transferred employees and the fresh recruits. We find ourselves in respectful agreement with Koshal. J. for as we have already pointed out, that the language of section 11 (2) is plain, and admits of but one meaning and that meaning is that section 11 (2) confers power on the Central Government to alter by way of reduction or otherwise, the remuneration and other terms and conditions of service of not only the transferred employees but of all employees generally. In arriving at this conclusion, we have taken particular notice of the use by the Legislature of the words were ,employees or any class of them" instead of the words "such employees" in the context of the fulfilment of the second objective, i. e., the interest of the Corporation and its policy holders. 21. Mr. Garg, learned counsel for the respondents in some of these appeals referred to the heading of chapter IV of the Act in which section 11 (2) occurs as also to the marginal note of the section in support of his argument that section 11(2) is intended to apply to transferred employees alone and that it has no application to fresh recruits like Chauhan.
Chapter IV carries the heading Transfer of Existing Life Insurance Business to the Corporation" and section 11 is given the marginal note to the effect "Transfer of Service of existing employees of Insurers to the Corporation". If we were to be guided by the aforementioned heading and marginal note alone in preference to the plain language of the enacted section. we could have perhaps found some merit in the argument of Mr. Garg. But the law is well settled that marginal notes of sections and headings of chapters of an Act passed by the Parliament cannot be said to be enacted in the same sense as any part of the body of the Act. (See Maxwell on the Interpretation of Statutes (twelth edition pp-9-10). In C.I.T. v. Ahmedbhai Umarbhai & Co., AIR 1950 SC 134 , the Supreme Court referred with approval to the observations of the Privy Council in Balraj Kunwer (Thakurain) v. Jagpal Singh, 31 IA 132 , and held that the marginal notes of a section and the title of a chaper cannot be legitimately used to restrict the plain terms of an enactment In Nalinkhya v. Shyam Sander, A.I.R. 1953 S.C. 148 and (7) Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, A.I.R. 1959 S.C. 586 , the Supreme Court again held that the marginal note cannot control the meaning of the body of the section if the language employed therein is clear end unambiguous. 22. As for the Parliamentary Debate and the Ministers statement agreeing to delete the words "from time to time" from the body of section 11 of the Bill which was enacted as law without these words, we may rest content by quoting here some of the observations of the Supreme Court in Anandi Haridas & Co. Pvt. Ltd. v. Engineering Mazdoor Sangh A.I.R. 1975 S.C. 946 . This is what the Supreme Court said about the Parliamentary Debates:- As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates, Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words.
It is only where a statute is not exhaustive or where its language is ambiguos, uncertain, clouded or susceptibe of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertaining the object which the Legislature had in view in using the words in question. 23. Relying on these authorities we hold that the marginal note of section 11 and the title of chapter IV of the Act in which section 11 occurs cannot control the plain meaning of section 11 (2) which, as stated by us earlier, confers power on the Central Government to reduce the remuneration and alter the terms and conditions of service of the employees of the Corporation generally and not mere) I A particular section or category of them. 24. A perusal of the Order of 1978 issued by the Central Government in exercise of its powers under section 11 (2) of the Act would show that its application is restricted, in terms (see paragraph 2 of the said Order), to "transferred employees" only. Sub-paragraph 2 of paragraph 4 of the Order of 1978 however contains a direction to the Corporation enjoining it to make appropriate provisions in the Staff Regulations so as to ensure that the terms and conditions of service of the Development Officers falling in the category of "transferred employees' were brought at par with the terms and conditions of the Development Officers recruited after the appointed day. It was in compliance with this direction and in the purpoted exercise of its powers under section 49 of the Act and with the previous approval of the Central Government that the Corporation issued the Amended Staff Regulations, substituting the old Schedule III by a new Schedule III on the lines of the Annexure of the Order of 1978 in respect of all Development Officers including the transferred employees and the fresh recruits, and thus prescribing uniform norms of performance and a scheme of incentives and disincentives for all development officers generally.
This uniformity was brought about as a combined effect of Annexure of the Order of 1978 which applies to transferred employees only and of the Amended Staff Regulations which applies to all development officers in the service of the Corporation as on the date of publication of the Amended Staff Regulations, i. e. on December 19, 1978. It will thus be seen that the Order of 1978. issued by the Central Government in exercise of its powers under Section 11(2) of the Act is applicable, strictly speaking to transferred employees only, and that in so far as the development officers recruited after the appointed day are concerned, it does not apply to then, and instead it merely contains a direction in the form of paragraph 4 (2) enjoining the Corporation to make appropriate regulations so that the terms and conditions of service of both categories of development officers, i.e. those who fall within the category of transferred employees and those who were recruited after the appointed day are brought at par. In that sense therefore, the Order of 1978 is not open to challenge even if we were to concede for the sake of argument that the power conferred on the Central Government under section 11(2) can be exercised by it only in respect of the transferred employees and not in respect of' those who were recruited after the appointed day. We assumption, albeit say so because the Central Government itself proceeded on the anerroneous one, that an order under section 11(2) can be made by it in respect of the transferred employees alone, and therefore it took care to state in so many words in paragraph 2 of the said Order that it shall apply to the transferred employees. The petitioners cannot be heard complaining that the Order of 1978 is bad on the ground that it applies to fresh recruits also, for the Order itself states that it applies to transferred employees only. The petitioners should not be allowed to conjure up a non-existing ground just because without such a ground their challenge would not succeed. Paragraph 4 (2) of the Order of 1978 does not make the said Order applicable to fresh recruits.
The petitioners should not be allowed to conjure up a non-existing ground just because without such a ground their challenge would not succeed. Paragraph 4 (2) of the Order of 1978 does not make the said Order applicable to fresh recruits. It contains a direction to the Corporation to amend the regulations framed by it under section 49 so that both categories of development officers are brought at par in so far as the terms and conditions of their service are concerned. If the Corporation has amended the regulations in accordance with the direction. it may be open to the concerned development officers to challenge the Amended Staff Regulations on various grounds including the ground that it acted mechanically in accordance with the direction given and that it did not apply its mind to what it was doing by way of amendment of the Staff Regulations. The mere fact that the Amended Staff Regulations may be challenged on one ground or the other is no ground for holding that the Order of 1978 is ultra vires section 11(2). 25. In order to avoid the possibility of being misunderstood, we repeat that on a plain reading of the language of section 11 (2), it admits of but one construction and the same is that it confers power on the Central Government to reduce the remuneration and alter the terms and conditions of service of the employers of the Corporation generally and not merely a particular section of such employees. That bring so, the development officers cannot succeed in their challenge to the Order of 1978 on the ground that the Central Government has thereby brought the fresh recruits within the mischief of the said Order, even assuming that the fresh recruits conic within the vortex of that Order. 26. Let us now turn to the Amended Staff Regulations with a view to adjudging their validity or otherwise under section 49 of the Act. Section 49, as it stood at the time of' tile making of the Amended Staff Regulations, empowered the Corporation, with the previous approval of the Central Government, to make regulations, not in consistant with the 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 the Act.
In particular, the Corporation was empowered under clauses (b) and (bb) of sub-section of section 49 to make rules regulating the terms and conditions of service of fresh recruits as well as of the transferred employees. It was in the exercise of this power and with the previous approval of the Central Government that the Corporation made the Amended Staff Regulations regulating the terms and conditions of service of all development officers on the lines of the Annexure to the Order of 1978 and thus it brought about uniformity in such terms and conditions as applicable to both categories of development officers. The allegation that the Corporation acted mechanically in carrying out the directions of the Central Government as contained in paragraph 4 (2) of the Order of 1978 sounds puerile for, after all the Corporation could not have issued the Amended Staff Regulations without the previous approval of the Central Government and if it carried out the directions of the Central Government in adopting mutatis mutandis the Annexure as its Regulations arid while doing so it expressly stated that it had already obtained the approval of the Central Government, to the making of the Amended Staff Regulations, it is difficult to see how these Regulations can be challenged on the ground that the Corporation did not apply its mind to them. When the Act itself makes the previous approval of the Central Government as a sine qua non to the making of regulations by the Corporation under section 49, the Corporation made a judicious exercise of its discretion in carrying out the directions of the Central Government by making the regulations in accordance with those directions for if it were to deviate therefrom the Central Government would not have accorded its previous approval to the making of those regulations. 27. We may also mention here that the validity of the Order of 1978 and the Amended Staff Regulations has also been challenged on the ground of the alleged violation of the petitioners fundamental rights guaranteed by Articles 14, 16 and 19 (1) (g) of the Constitution. This argument is wholly devoid of force. The petitioners have not given any particulars in their writ petitions from which one may spell out a plea showing that between persons similarly situated and circumstances, discrimination has been made which is founded on no intelligible differentia.
This argument is wholly devoid of force. The petitioners have not given any particulars in their writ petitions from which one may spell out a plea showing that between persons similarly situated and circumstances, discrimination has been made which is founded on no intelligible differentia. In the absence of such a plea and its proof we are not prepared to entertain the argument regarding the so called discrimination. It is obvious that the development officers are a class by themselves and therefore the Central Government and the Corporation were legally justified in treating them as such for the purpose of prescribing work norms, incentives and disincentives for them. We agree with their Lordships of the Gujarat High Court (see (9) Harivadan v. L.I.C. of India. (1977 Lab.I.C. 1072) that the minimum out-turn of work prescribed by the Order of 1978 and the Amended Staff Regulations for a development officer cannot by any means amount to denial of equal opportunity in employment. Provision of incentives for good performance and disincentives for bad performance is perfectly consonant with the nature of work of a development officer in the organisational set-up of the Corporation. 28. The argument that sections 48 and 49 of the Act suffer from the vice of excessive delegation of legislative power was raised and rejected by the Supreme Court in A.N. Nochana v. Union of India, A.I.R. 1982 S.C. 1126 . We need not therefore dilate on this argument. 29. We may now refer to the Life Insurance Corporation (Amendment) Act, 1981 (No. 1 of 1981) which has inter alia inserted clause (cc) after clause (c) of sub-section 2 of section 48 of the Act with effect from June 20, 1979. The Central Government is empowered by the amendment to make rules providing for lithe terms and conditions of service of the employees and agents of the Corporation including those who become employees and agents of the Corporation on the appointed day under this Act".
The Central Government is empowered by the amendment to make rules providing for lithe terms and conditions of service of the employees and agents of the Corporation including those who become employees and agents of the Corporation on the appointed day under this Act". Sub-section 2A added after sub-section 2 of section 48 by the same amendment provides that regulations and other provisions in force immediately before Act No. I of 1981 came into force regarding the terms and conditions of service of employees and agents of the Corporation including those who became employees and agents of the Corporation on the appointed day shall be deemed to be rules under clause (cc) as newly inserted and shall have effect accordingly. This means that the Amended Staff Regulations which were in force immediately before the commencement of the Life Insurance Corporation (Amendment) Act, 1981 shall be deemed to be rules made under clause (cc) of sub-section 2 of section 48 and shall have effect as statutory rules framed and promulgated by the Central Government. The Supreme Court has already upheld the validity of the Life Insurance Corporation (Amendment) Act. 1981 including section 48, as amended thereby, in its recent judgment reported as A.N. Nochana v. Union of India. A.I.R. 1982 S.C. 1126 . The Amended Staff Regulations have thus already passed muster as rules deemed to have been framed by the Central Govt. under section 48 (2) (cc) of the Act. 30. Before closing, we may also mention here that almost all the High Courts in which the validity of the Order of 1978 or 1976 and the Staff Regulations was challenged have repelled the challenge. We may cite here some of the judgments which were brought to our notice during the course of arguments at the bar. The said judgments are reported as Humanghshu Kumar v. L.I.C. of India, 1976 Lab.I.C. 1417 (Calcutta) , Harivandan v. L.I.C. of India, 1977 Lab.I.C. 1072 (Gujarat) and K.S. Ramaswamy v. Union of India. 1977 (1) LLJ. 211 (Madras) . The Patna High Court has joined the consensus by a judgment of its Division Bench in Bipin Bihari Sinha and others v. Union of India and others, decided on September 30, 1981 . The Andhra Pradesh High Court has also taken a similar view in a batch of writ petitions decided recently. 31.
1977 (1) LLJ. 211 (Madras) . The Patna High Court has joined the consensus by a judgment of its Division Bench in Bipin Bihari Sinha and others v. Union of India and others, decided on September 30, 1981 . The Andhra Pradesh High Court has also taken a similar view in a batch of writ petitions decided recently. 31. For all these reasons, we uphold the validity of the Order of 1978 and the Amended Staff Regulations. The Special Appeals are therefore allowed and consequently the judgment of the learned Single judge is set aside. In the net result, all the writ petitions giving rise to these special appeals are dismissed with costs throughout. Counsel fee Rs. 250/- in each writ petition. *******