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Himachal Pradesh High Court · body

2010 DIGILAW 731 (HP)

SURESH RANA v. STATE OF HIMACHAL PRADESH

2010-04-20

RAJIV SHARMA

body2010
JUDGMENT Rajiv Sharma, J.-Material facts necessary for the adjudication of this petition are that the petitioners were called for interviews for the post of Male / Female Health Workers in the pay scale of Rs.510-940/- ( lateron revised to Rs.1365-2410/-). However, while issuing the appointment letters, they were appointed as Male/Female Health Workers at various places in the pay scale of Rs.950-1800/- (pre-revised pay scale of Rs.400-600/-). Three batches were appointed prior to the petitioners in the years, 1983, 1985 and 1988. These batches were given appointments in the pay scale of Rs.510-940/- (lateron revised to Rs.1365-2410/- and revised to Rs.4400-7000/- w.e.f. 1.1.1996). Petitioners are placed in the same cadre. The Himachal Pradesh Multipurpose Health Workers Sangh has filed an Original Application No. 1567 of 1993 before the learned Himachal Pradesh Administrative Tribunal. The same was directed to be treated as representation to the Secretary (Health) to the Government of Himachal Pradesh by the learned Tribunal on 01.09.1993. The same was rejected by the Commissioner-Cum-Secretary (Health) on 29.09.1995. Thereafter, a meeting was held between the Multipurpose Health Workers Mahasangh and the respondent-State on 13.07.1999. The President of the Mahasangh in the meeting had stated that they had already made a commitment to forgo their arrears of pay in case the higher pay scale is released to the members of the Sangh. 2. Mr. P.P. Chauhan, learned counsel for the petitioners has strenuously argued that the petitioners are in the same cadre. According to him, they could not be discriminated against for the release of higher pay scale of Rs.1365-2410/- revised w.e.f. 01.01.1986 and scale of Rs.4400-7000/- w.e.f. 1.1.1996 on the basis of cut off date, i.e., 23.07.1990. He further contended that his clients are entitled to get the higher pay scales from the due date and the decision taken in the meeting held on 13.07.1999 is not binding. He has also assailed the cut off date, i.e., 23.07.1990. 3. Mr. R.K. Sharma, learned Senior Additional Advocate General has vehemently argued that initially the State Government has deviated from the Punjab pattern, which led to payments of higher pay scale and the same was rectified, which led to reduction of pay scale. However, to remove the anomaly, the persons, who were already granted higher pay scale of Rs.1365-2410/-, were protected and the incumbents who were appointed after 23.07.1990, were granted the pay scale of Rs.510-940/- with initial start of Rs.1000/-. However, to remove the anomaly, the persons, who were already granted higher pay scale of Rs.1365-2410/-, were protected and the incumbents who were appointed after 23.07.1990, were granted the pay scale of Rs.510-940/- with initial start of Rs.1000/-. He then argued that the agreement between the representatives of the petitioners’ association and the State Government is binding on all the parties. 4. I have heard the learned counsel for the parties and gone through the pleadings carefully. 5. Petitioners are holding the posts of Male/Femal Health Workers. The persons, appointed before 23.07.1990 and thereafter, are in the same cadre. Their conditions of service are governed by the same set of Recruitment and Promotion Rules. However, the persons who were appointed before 23.07.1990, have been granted the pay scale of Rs.510-940/-, revised to Rs.1365-2410/- w.e.f. 01.01.1986 and scale of Rs.4400-7000/-w.e.f. 01.01.1996. Petitioners, though similarly situate, have been granted the pay scale of Rs.950-1800/- with initial start of Rs.1000/-and scale of Rs.3300-6200/-w.e.f. 01.01.1996. Petitioners and the incumbents who were appointed before 23.07.1990 form a homogeneous class. Petitioners and the incumbents appointed before or after 23.07.1990 are discharging exactly the same duties. It is only on the basis of notifications dated 23.07.1990, 03.04.1991 and 02.08.1991 that a separate Class has been carved out by the respondents to deny the petitioners higher pay scale, which was being paid to the incumbents appointed before 23.07.1990. The representatives of petitioners had filed an Original Application, as noticed above, before the learned Tribunal, which was directed to be treated as representation to the Secretary (Health). The same was rejected on 29.09.1995. A meeting was held between the representatives of the petitioners’ association and the State Government on 13.07.1999. However, fact of the matter is that the State Government has taken a conscious decision to grant the petitioners and similarly situate persons pay scale of Rs.4400-7000/- w.e.f. 03.03.2000. The only ground taken by the respondents to deny the higher pay scale of Rs.4400-7000/- w.e.f. 1.1.1996 and pay scale of Rs.1365-2410/- w.e.f. 1991 is that the State Government has to incur heavy expenditure. This cannot be a ground to deny the higher salary to the petitioners, who are entitled to it on the principle of “equal pay for equal work” as well. There cannot be two pay scales in the same cadre. This cannot be a ground to deny the higher salary to the petitioners, who are entitled to it on the principle of “equal pay for equal work” as well. There cannot be two pay scales in the same cadre. The action of respondents to provide two pay scales in the same cadre for the persons who are discharging the same duties, is violative of Articles 14 and 16 of the Constitution of India. 6. Their Lordships of the Hon’ble Supreme Court in Haryana State Minor Irrigation Tubewells Corporation and others versus G.S. Uppal and others, (2008) 7 Supreme Court Cases, 375 have held that “equal pay for equal work” cannot be denied only on the ground of incurring losses. Their Lordships have held as under: “33. The plea of the appellants that the Corporation is running under losses and it cannot meet the financial burden on account of revision of scales of pay has been rejected by the High Court and, in our view, rightly so. Whatever may be the factual position, there appears to be no basis for the action of the appellants in denying the claim of revision of pay scales to the respondents. If the Government feels that the Corporation is running into losses, measures of economy, avoidance of frequent writing off of dues, reduction of posts or repatriating deputationists may provide the possible solution to the problem. Be that as it may, such a contention may not be available to the appellants in the light of the principle enunciated by this Court in M.M.R. Khan V. Union of India and Indian Overseas Bank V. Staff Canteen Workers’ Union. However, so long as the posts do exist and are manned, there appears to be no justification for granting the respondents a scale of pay lower than that sanctioned for those employees who are brought on deputation. In fact, the sequence of events discussed above clearly shows that the employees of the Corporation have been treated on a par with those in Government at the time of revision of scales of pay on every occasion.” 7. Mr. In fact, the sequence of events discussed above clearly shows that the employees of the Corporation have been treated on a par with those in Government at the time of revision of scales of pay on every occasion.” 7. Mr. R.K. Sharma, learned Senior Additional Advocate General has also tried to support the decision of the State Government to deny the higher pay scale to the petitioners, on the ground that earlier there was deviation from the Punjab pattern and the same was subsequently rectified, which has resulted in anomalous situation and, it is in these circumstances, that the pay scale of Rs.1365-2410/-was made personal to the incumbents, who were appointed before 23.07.1990. 8. Their Lordships of the Hon’ble Supreme Court in State of H.P. versus P.D. Attri and others, (1999) 3 Supreme Court Cases, 217 have held that each State has its own individualistic way of governance under the Constitution and one State is not bound to follow the rules and regulations applicable to the employees of the other State or if it had adopted the same rules and regulations, it is not bound to follow every change brought in the rules and regulations in the other State. Their Lordships have held as under: “5. The case of the respondents is not based on any constitutional or any other legal provisions when they claim parity with the posts similarly designated in the Pubjab and Haryana High Court and their pay scales from the same date. They do not allege any violation of any constitutional provision or any other provision of law. They say it is so because of “accepted policy and common practice” which, according to them, are undisputed. We do not think we can import such vague principles while interpreting the provisions of law. India is a union of States. Each State has its own individualistic way of governance under the Constitution. One State is not bound to follow the rules and regulations applicable to the employees of the other State or if it had adopted the same rules and regulations, it is not bound to follow every change brought in the rules and regulations in the other State. Each State has its own individualistic way of governance under the Constitution. One State is not bound to follow the rules and regulations applicable to the employees of the other State or if it had adopted the same rules and regulations, it is not bound to follow every change brought in the rules and regulations in the other State. The question then arises before us is whether the State of Himachal Pradesh has to follow every change brought in the States of Punjab and Haryana in regard to the rules and regulations applicable to the employees in the States of Pubjab and Haryana. The answer has to be in the negative. No argument is needed for that as anyone having basic knowledge of the Constitution would not argue otherwise. True, the State as per “policy and practice” has been adopting the same pay scales for the employees of the High Court as sanctioned from time to time for the employees of the Pubjab and Haryana High Court and it may even now follow to grant pay scales but is certainly not bound to follow. No law commands it to do so.” 9. Mr. R.K. Sharma has also contended that it is the prerogative of the State Government to fix the cut off date. In other words, he has justified the cut off date, i.e. 23.07.1990. It is true that it is the prerogative of the State Government or the employer to fix the date from which the financial benefits have to accrue, however, it is equally true that while fixing the date, relevant considerations have to be taken into consideration and the decision must be rational. The only reason assigned for fixing the cut off date, i.e. 23.07.1990 by the respondents, is the huge financial burden to be incurred by the State in case higher pay scale is granted to the petitioners. 11. Their Lordships of the Hon’ble Supreme Court in Union of India and another versus S. Thakur, (2008) 13 Supreme Court Cases 463 have held that the Courts can interfere with executive decision on these aspects if the decision is unreasonable, unjust and prejudicial to a section of the employees. Their Lordships have held as under: “8. 11. Their Lordships of the Hon’ble Supreme Court in Union of India and another versus S. Thakur, (2008) 13 Supreme Court Cases 463 have held that the Courts can interfere with executive decision on these aspects if the decision is unreasonable, unjust and prejudicial to a section of the employees. Their Lordships have held as under: “8. The plea that as restructuring of cadre and redistribution of posts was involved insofar as the Assistant Directors were concerned and therefore the policy decision taken by the State Government to give benefit of upgraded scale to an Assistant Director (Executive) with effect from 1.10.1997 should not have been interfered with by the Tribunal and by the High Court is devoid of merits. There is no dispute nor there can be any, to the principle that fixation of pay and date from which the benefit of revised pay scale would be admissible is the function of the executive and the scope of judicial review of such an administrative decision is very limited. However, it is equally well settled that the courts would interfere with the administrative decisions pertaining to pay fixation and pay parity as well as the date from which the revised pay scales would be made applicable if it is found that such a decision is unreasonable, unjust and prejudicial to a section of the employees.” 12. The cut off date, i. e., 23.07.1990 prescribed by the respondents, is declared ultra vires the Constitution being violative of Articles 14 and 16 of the Constitution of India in view of the observations made hereinabove. 13. Mr. R.K. Sharma has lastly contended that the petitioners are estopped from seeking higher pay scales from the anterior date on the basis of undertaking given by the President of the Union and its members. Petitioners, as noticed above, had a right to get the pay scales w.e.f. 01.01.1986 and 01.01.1996. Since the petitioners had been working in the same cadre, therefore, they could not be discriminated against by the respondents. Moreover, it is settled law that there cannot be waiver of fundamental/constitutional rights. 14. Their Lordships of the Hon’ble Supreme Court in Nar Singh Pal versus Union of India and others, (2000) 3 Supreme Court Cases 588 have held as under: “13. Moreover, it is settled law that there cannot be waiver of fundamental/constitutional rights. 14. Their Lordships of the Hon’ble Supreme Court in Nar Singh Pal versus Union of India and others, (2000) 3 Supreme Court Cases 588 have held as under: “13. The Tribunal as also the High Court, both appear to have been moved by the fact that the appellant had encashed the cheque through which retrenchement compensation was paid to him. They intended to say that once retrenchement compensation was accepted by the appellant, the chapter stands closed and it is no longer open to the appellant to challenge his retrenchement. Thus, we are constrained to observe, was wholly erroneous and was not the correct approach. The appellant was a casual labour who had attained the temporary status after having put in ten years of service. Like any other employee, he had to sustain himself, or may be, his family members on the wages he got. On the termination of his services, there was no hope left for payment of salary in future. The retrenchement compensation paid to him, which was only a meagre amount of Rs.6,350/-. was utilised by him to sustain himself. This does not mean that he had surrendered all his constitutional rights in favour of the respondents. Fundamental Rights under the Constitution cannot be bartered away. They cannot be compromised nor can there be any esstoppel against the exercise of Fundamntal Rights available under the Constitution. As pointed out earlier, the termination of the appellant from service was punitive in nature and was in violation of the principles of natural justice and his constitutional rights. Such an order cannot be sustained. 14. Their Lordships of the Hon’ble Supreme in Central Inland Water Transport Corporation Limited and another versus Brojo Nath Ganguly and another, (1986) 3 Supreme Court Cases 156 have held that unconscionable agreement is against the public policy. There cannot be any agreement, which violates Articles 14 and 16 of the Constitution of India. Petitioners are entitled to get the higher pay scale and the same cannot be permitted to be denied only on the ground of unconstitutional undertaking given by their President and members of the Union as per the meeting held on 13.7.1999. Their Lordships have held as under: “76. Under which head would an unconscionable bargain fall? Petitioners are entitled to get the higher pay scale and the same cannot be permitted to be denied only on the ground of unconstitutional undertaking given by their President and members of the Union as per the meeting held on 13.7.1999. Their Lordships have held as under: “76. Under which head would an unconscionable bargain fall? If it falls under the head of undue influence, it would be voidable but if it falls under the head of being opposed to public policy, it would be void. No case of the type before us appears to have fallen for decision under the law of contracts before any court in India nor has any case on all fours of a Court in any other country been pointed out to us. The word "unconscionable" is defined in the Shorter Oxford English Dictionary, Third Edition, Volume II, page 2288, when used with reference to actions. etc. as "showing no regard for conscience; irreconcilable with what is right or reasonable". An unconscionable bargain would, therefore, be one which is irreconcilable with what is right or reasonable. 78. Legislation has also interfered in many cases to prevent one party to a contract from taking undue or unfair advantage of the other. Instances of this type of legislation are usury laws, debt relief laws and laws regulating the hours of work and conditions of service of workmen and their unfair discharge from service, and control orders directing a party to sell a particular essential commodity to another. 83. Yet another theory which has made its emergence in recent years in the sphere of the law of contracts is the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power. Lord Denning M.R., appears to have been the propounder, and perhaps the originator - at least in England, of this theory. In Gillespie Brothers & Co. Ltd. v. Roy Bowles Transport Ltd., (1973) 1 QB 400. Where the question was whether an indemnity clause in a contract, on its true construction, relieved the indemnifier from liability arising to the indemnified from his own negligence, Lord Denning said (at pages 415-6) : "The time may come when this process of construing the contract can be pursued no further. The words are too clear to permit of it. Are the courts then powerless? The words are too clear to permit of it. Are the courts then powerless? Are they to permit the party to enforce his unreasonable clause, even when it is so unreasonable, or applied so unreasonably, as to unconscionable? When it gets to this point, I would say, as I said many years ago : "there is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused : John Lee & Son (Grantham) Ltd. v. Railway Executive (1949) 2 All ER 581, 584. It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so." (Emphasis supplied) In the above case the Court of Appeal negatived the defence of the indemnifier that the indemnity clause did not cover the negligence of the indemnified. It was in Lloyds Bank Ltd. v. Bundy, (1974) 3 All ER 757 that Lord Denning first clearly enunciated his theory of "inequality of bargaining power". He began his discussion on this part of the Me by stating (at page 763) : "There are cases in our books in which the courts will set aside a contract, or a transfer of property, when the parties have not met on equal terms, when the one is so strong in bargaining power and the other so weak that, as a matter of common fairness, it is not right that the strong should be allowed to push the weak to the wall. Hitherto those exceptional cases have been treated each as a separate category in itself. But I think the time has come when we should seek to find a principle to unite them. I put on one side contracts or transactions which are voidable for fraud or misrepresentation or mistake. All those are governed by settled principles. I go only to those where there has been inequality of bargaining power, such as to merit the intervention of the Court." (Emphasis supplied) He then referred to various categories of cases and ultimately deduced therefrom a general principle in these words (at page 765) : "Gathering all together, I would suggest that through all these instances there runs a single thread. They rest on inequality of bargaining power. They rest on inequality of bargaining power. By virtue of it, the English law gives relief to one who, without independent advice, enters into a contract on terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influences or pressures brought to bear on him by or for the benefit of. the other. When I use the word undue I do not mean to suggest that the principle depends on proof of any wrongdoing. The one who stipulates for an unfair advantage may be moved solely by his own self-interest, unconscious of the distress he is bringing to the other. I have also avoided any reference to the will of the one being dominated or .overcome by the other. One who is in extreme need may knowingly consent to a most improvident bargain, solely to relieve the straits in which he finds himself. Again, I do not mean to suggest that every transaction is saved by independent advice: But the absence of it may be fatal. With these explanations, I hope this principle will be found to reconcile the cases." (Emphasis supplied) 84. Though the House of Lords does not yet appear to have unanimously accepted this theory, the observations of Lord Diplock in A. Schroeder Music Publishing Co. Ltd. v. Macaulay (Formerly Instone) (1974) 1 WLR 1308 are a clear pointer towards this direction. In that case a song writer had entered into an agreement with a music publisher in the standard form whereby the publishers engaged the song writers exclusive services during the term of the agreement, which was five years. Under the said agreement, the song writer assigned to the publisher the full copyright for the whole world in his musical compositions during the said term. By another term of the said agreement, if the total royalties during the term of the agreement exceeded £5,000 the agreement was to stand automatically extended by a further period of five years. Under the said agreement, the publisher could determine the agreement at any time by one months written notice but no corresponding right was given to the song writer. Under the said agreement, the publisher could determine the agreement at any time by one months written notice but no corresponding right was given to the song writer. Further, while the publisher had the right to assign the agreement, the song writer agreed not to assign ,his rights without the publishers prior written consent. The song writer brought an action claiming, inter alia, a declaration that the agreement was contrary to public policy and Void. Plowman, J., who heard the action granted the declaration which was sought and the Court of Appeal affirmed his judgment. An appeal filed by the publishers against the judgment of the Court of Appeal was dismissed by the House of Lords. The Law Lords held that the said agreement was void as it was in restraint of trade and thus contrary to public policy. In his speech Lord Diplock, however, outlined the theory of reasonableness or fairness of a bargain. The following observations of his on this part of the case require to be reproduced in extenso (at pages 1315-16) : "My Lords, the contract under consideration in this appeal is one whereby the respondent accepted restrictions upon the way in which he would exploit his earning power as a song writer for the next ten years. Because this can be classified as a contract in restraint of trade the restrictions that the respondent accepted fell within one of those limited categories of contractual promises in respect of which the courts still retain the power to relieve the promisor of his legal duty to fulfil them. In order to determine whether this case is one in which that power ought to be exercised, what your Lordships have in fact been doing has been to assess the relative bargaining power of the publisher and the song writer at the time the contract was made and to decide whether the publisher had used his superior bargaining power to exact from the song writer promises that were unfairly onerous to him. Your Lordships have not been concerned to inquire whether the public have in fact been deprived of the fruit of the song writers talents by reason of the restrictions, nor to assess the likelihood that they would be so deprived in the future if the contract were permitted to run its full course. Your Lordships have not been concerned to inquire whether the public have in fact been deprived of the fruit of the song writers talents by reason of the restrictions, nor to assess the likelihood that they would be so deprived in the future if the contract were permitted to run its full course. It is, in my view, salutary to acknowledge that in refusing to enforce provisions of a contract whereby one party agrees for the benefit of the other party to exploit or to refrain from exploiting his own earning power, the public policy which the Court is implementing is not some 19th century economic theory about the benefit to the general public of freedom of trade, but the protection of those whose bargaining power is weak against being forced by those whose bargaining power is stronger to enter into bargains that are unconscionable. Under the influence of Bentham and of laissez faire the Courts in the 19th century abandoned the practice of applying the public policy against unconscionable bargains to contracts generally, as they had formerly done to any contract considered to be usurious; but the policy survived in its application to penalty clauses and to relief against forfeiture and also to the special category of contracts in restraint of trade. If one looks at the reasoning of 19th century judges in cases about contracts in restraint of trade one finds lip service paid to current economic theories, but if one looks at what they said in the light of what they did, one finds that they struck down a bargain if they thought it was unconscionable as between the parties to it and upheld, it if they thought that it was not. So I would hold that the question to be answered as respects a contract in restraint of trade of the kind with which this appeal is concerned is : "Was the bargain fair?" The test of fairness is, no doubt, whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promisor under the contract. For the purpose of this test all the provisions of the contract must be taken into consideration." (Emphasis supplied) Lord Diplock then proceeded to point out that there are two kinds of standard forms of contracts. For the purpose of this test all the provisions of the contract must be taken into consideration." (Emphasis supplied) Lord Diplock then proceeded to point out that there are two kinds of standard forms of contracts. The first is of contracts which contain standard clauses which "have been settled over the years by negotiation by representatives of the commercial interests involved and have been widely adopted because experience has shown that they facilitate the conduct of trade". He then proceeded to state, " If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would raise a strong presumption that their terms are fair and reasonable". Referring to the other kind of standard form of contract Lord Diplock said (at page 1316) "The same presumption, however, does not apply to the other kind of standard form of contract. This is of comparatively modern origin. It is the result of the concentration of particular kinds of business in relatively few hands. The ticket cases in the 19th century provide what are probably the first examples. The terms of this kind of standard form of contract have not been the subject of negotiation between the parties to it, or approved by any organisation representing the interests of the weaker party. They have been dictated by that party whose bargaining power, either exercised alone or in conjunction with others providing similar goods or services, enables him to say : If you want these goods or services at all, these are the only terms on which they are obtainable. Take it or leave it. To be in a position to adopt this attitude towards a party desirous of entering into a contract to obtain goods or services provides a classic instance of superior bargaining power. (Emphasis supplied) 89. Should then our courts not advance with the times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of nineteenth-century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the courts sit back and watch supinely while the strong trample under foot the rights of the weak? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of nineteenth-century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? Should the courts sit back and watch supinely while the strong trample under foot the rights of the weak? We have a Constitution for our country. Our judges are bound by their oath to "uphold the Constitution and the laws". The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the laws. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Art. 14. This principle is that, the courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal in bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the. This principle, however, will not apply where the bargaining power of the. contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In todays complex world of giant corporations with their vast infra-structural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its, own facts and circumstances. 92. The Contract Act does not define the expression "public policy" or "opposed to public policy". From the very nature of things, the expressions "public policy", "opposed to public policy", or "contrary to public policy" are incapable of precise definition. Public policy, however, is not the policy of a particular government. It connotes some matter which concerns the public good and the public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time. As new concepts take the place of old, transactions which, were once considered against public policy are now being upheld by the courts and similarly where there has been a well-recognized head of public, policy, -the courts have not shirked from extending it to new transactions and changed circumstances and have at times not even flinched from Inventing a new head of public policy. There are two schools of thought -"the narrow view" school and "the broad view" school. According to the former, courts cannot create new heads of public policy whereas the latter countenances judicial law-making in this area. The adherents of "the narrow view" school would not invalidate a contract on the ground of public policy unless that particular ground had been well established by authorities. Hardly ever has the voice of the timorous spoken more clearly and loudly than in these words of Lord Davey in Janson v. Driefontein Consolidated Mines, Limited (1902) AC 484, 500, "Public policy is always an unsafe and treacherous ground for legal decision." That was in the year 1902. Hardly ever has the voice of the timorous spoken more clearly and loudly than in these words of Lord Davey in Janson v. Driefontein Consolidated Mines, Limited (1902) AC 484, 500, "Public policy is always an unsafe and treacherous ground for legal decision." That was in the year 1902. Seventy-eight years" earlier, Burrough, J., in Richardson v. Mellish (1824) 2 Bing 229, 252 SC 130 ER 294, 303, and (1824-34) All ER Reprint 258, 266. described public policy as "a very unruly horse, and when once you get astride it you never know where it will carry you." The Master of the Rolls, Lord Denning, however, was not a man to shy away from unmanageable horses and in words which conjure up before our eyes the picture of the young Alexander the Great Taming Bucephalus, he said in Enderby Town Football Club Ltd. v. Football Association Ltd. (1971) Ch 591, 606, "With a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles." Had the timorous always held "the field, not only the doctrine of public policy but even the Common Law or the principles of Equity would never have evolved. Sir William Holdsworth in his "History of English Law", Volume III, page 55, has said : "In fact, a body of law like the common law, which has grown up gradually with the growth of the nation, necessarily acquires some fixed principles, and if it is to maintain these principles it must be able, on the ground of public policy or some other like ground, to suppress practices which, under ever new disguises, seek to weaken or negative them." It is thus clear that the principles. governing public policy must be and are capable, on proper occasion, of expansion or modification. Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to public conscience. If there is no head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest declare such practice to be opposed to public policy. Above all, in deciding any case which may not be covered by authority our courts have before them the beacon light of the Preamble to the Constitution. Above all, in deciding any case which may not be covered by authority our courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution. 93. The normal rule of Common Law has been that a party who seeks to enforce an agreement which is opposed to public policy will be non-suited. The case of A. Schroeder Music Publishing Co. Ltd. v. Macaulay (1974 1 WLR 1308), however, establishes that where a contract is vitiated as being contrary to public policy, the party adversely affected by it can sue to have it declared void. The case may be different where the purpose of the contract is illegal or immoral. In Kedar Nath Motani v. Prahlad Rai (1960) 1 SCR 861 : (AIR 1960 SC 213) reversing the High Court and restoring the decree passed by the trial court declaring the appellants title to the lands in suit and directing the respondents who were the appellants benamidars to restore possession, this Court, after discussing the English and Indian law on the subject, said (at page 873) (of SCR) : (at Pp. 218-219 of AIR) : "The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by misstating the facts. It however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the. It however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the. plea of the defendant should not prevail." The types of contracts to which the principle formulated by us above applies are not contracts which are tainted with illegality but are contracts which contain terms which are so unfair and unreasonable that they shock the conscience of the court. They are opposed to public policy and require to be adjudged void. 101. It was, however, submitted on behalf of the Appellants that this was a contract entered into by the Corporation like any other contract entered into by it in the course of its trading activities and the Court, therefore, ought not to interfere with it. It is not possible for us to equate employees with goods which can be bought and sold. It is equally not possible for us to equate a contract of employment with a mercantile transaction between, two businessmen and much less to do so when the contract of employment is between a powerful employer and a weak employee. 104. As the Corporation is "the State" within the meaning of Article 12, it was amenable to the writ jurisdiction of the High Court under Article 226. It is now well established that an instrumentality or agency of the State being "the State" under Article 12 of the Constitution is subject to the Constitutional limitations, and its actions are State actions and must be judged in the fight of the Fundamental Rights guaranteed by Part III of the Constitution (see, for instance, Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (AIR 1975 SC 1331). The International Airport Authoritys case (AIR 1979 SC 1628) and Ajay Hasias case (AIR 1981 SC 487)). The actions of an instrumentality or agency of the State must, therefore, be in conformity with Art. 14 of the Constitution. The progression of the judicial concept of Art. 14 from a prohibition against discriminatory class legislation to an invalidating factor for any discriminatory or arbitrary State action has been traced in Tulsiram Patels case (1985) 3 SCC 398 (at pages 473-476): (AIR 1985 SC 1416 at pp. 1458-1460). The progression of the judicial concept of Art. 14 from a prohibition against discriminatory class legislation to an invalidating factor for any discriminatory or arbitrary State action has been traced in Tulsiram Patels case (1985) 3 SCC 398 (at pages 473-476): (AIR 1985 SC 1416 at pp. 1458-1460). The principles of natural justice have now come to be recognized as being a part of the Constitutional guarantee contained in Art. 14, In Tulsiram Patels case this Court said (at page 476 of SCC : (at P. 1460 of AIR) : "The principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 because of the new and dynamic interpretation given by this Court to the concept of equality which is the subject-matter of that Article. Shortly put, the syllogism runs thus : violation of a rule of natural justice results in arbitrariness which is the same as discrimination; where discrimination is the result of State action, it is violation of Article 14; therefore, a violation of a principle of natural justice by a State action is a violation of Article 14. Article 14, however, is not the sole repository of the principles of natural justice. What it does is to guarantee that any law or State action violating them will be struck down. The principles of natural justice, however, apply not only to legislation and State action but also where any tribunal, authority or body of men, not coming within the definition of State in Article 12, is charged with the duty of deciding a matter." 15. Accordingly, in view of the observations made hereinabove, the petition is allowed. The cut off date, i.e., 23.07.1990 is struck down being violative of Articles 14 and 16 of the Constitution of India. Respondents are directed to release the petitioners pay scale of Rs.1365-2410/- w.e.f. their initial date of appointment and pay scale of Rs.4400-7000/- w.e.f. 01.01.1996. The amount shall carry interest @ 9% per annum. Needful be done within a period of ten weeks from today. No costs.