tions C Nos
331 47 of 1984
Under Article 32 of the Constitution of India  Rajinder Sachar and KT Anantharaman for the Petitioners
Narayan B Shetty GB Pai SS Shroff Mrs PS Shroff Miss Girja Krishan SA Shroff Mrs Pallavi Shroff OC Mathur and AM Dittia for the Respondents
The Judgment of the Court was delivered by 365 DUTT J
In these writ petitions the petitioners are former officers and employees of the Caltex Oil Refining India Ltd which has since been amalgamated with the Hindustan Petroleum Corporation Limited
The complaint of the petitioners is with regard to the inter se fitment of the officers and employees of the Caltex Oil Refining India Ltd and the other two Companies which have also been amalgamated with Hindustan Petroleum Corporation Ltd namely ESSO Standard Refining Company of India Ltd and Lube India Ltd In 1974 the Undertakings in India of ESSO Eastern Inc that is ESSO Standard Refining Company of India Ltd for short ESSO  and Lube India Ltd for short LIL  were acquired by the ESSO Acquisition of Undertakings in India Act 1974 and vested in Hindustan Petroleum Corporation Ltd for short HPCL  a Government Company
In 1977 the shares of Caltex Oil Refining India Ltd and Undertakings in India of Caltex India Ltd were acquired by the Caltex Acquisition of Shares of Caltex Oil Refining India Ltd and the Undertakings in India of Caltex India Ltd Act 1977 and vested in Caltex Oil Refining India Ltd for short CORIL  a Government Company
On May 5 1978 by the order of the Company Law Board CORIL was amalgamated with HPCL
By an order dated June 17 1978 the Central Government appointed a one man Committee of Mr BB Tandon IAS Retd for the purpose of examining the problems arising out the the integration of the management staff of CORIL and HPCL
The said Committee was to make recommendation inter alia on the following i fitment in equivalent Groups ii criteria to be adopted for determination of seniori ty and fixation of inter se seniority and iii placement in appropriate positions
In September 1970 the Tandon Committee submitted a report to the Central Government recommending that for equating positions in the two companies and fitting them in equivalent groups the following two principles should be followed 1
The principle of functional similarity 2
The principle of co equal responsibility
366 We shall have occasion to refer to the report of the Tandon Committee later in this judgment for much reliance has been placed by the petitioners on the report
While the report of the Tandon Committee was under the consideration of the Central Government HPCL appointed two functional directors for the purpose of formulating a rationalisation scheme
In this connection we may refer to a letter dated July 28 1979 of the Central Government whereby it advised HPCL that the pay scales and perquisites of management and employees in the nationalised oil companies should be ratio nalised and fitted into the pay scales of the Indian Oil Corporation hereinafter referred to as IOC  a public sector Company
Further it was stated in the said letter that the guiding principle to be adopted for the purpose was to find out the equivalence that is to say the equality of duty and also the equality of responsibility
On July 7 1980 a circular letter was issued by HPCL annexing thereto a rationalisation scheme consisting of two pans
In the first part the past service benefits that would be admissible to each employee of CORIL on the basis of existing pay scales and in the second pan details were given of the rationalised conditions of service payscales perquisites and retirement benefits
In the circular it was stated as follows In relation to your fitment or fixation of salary in the proposed rationa lised scales should you have any grievance you will be at liberty to represent your case to a Grievance Committee which has been specially constituted for the purpose
I am directed to request you to signify your acceptance of this offer within 30 days from the date of receipt of this letter by returning the duplicate copy of this letter duly signed by you
On receipt of your acceptance consequent letters will be issued
 In the scheme the pay scales of ESSO LIL and CORIL sought to be equated with the pay scales of HPCL are as follows From ESSO To  HPCL HPCL Salary Group Salary Group Salary Scale RS
E 7 E 8 A 750 40 1150 50 1550 E 6 B 1050 50 1450 60 1750 367 E 5 E 5A C 1450 60 1690 65 1950 E 4 D 1600 65 2120 E 3 E 1850 100 2350 E 2 F 2000 100 2500 O  E 1  Unclassified G 2250 100 2750 General Manager H 2500 100 3000 From  LIL To  HPCL HPCL Salary Group Salary Group Salary Scale L 7 A 750 40 1150 50 1550 L 6 B 1050 50 1450 60 1750 L 5 C 1450 60 1690 65 1950 L 4 D 1600 65 2120 L 3 E 1850 100 2350 L 2 F 2000 100 2350 L 1 G 2250 100 2750 General Manager H 2500 100 3000 From CORIL To  HPCL HPCL Salary Group Salary Group Salary Scale R 6 A R 6 B A 759 40 1150 50 1550 R 7 A R 7 B B 1050 50 1450 60 1750 R 8 C 1450 60 1690 65 1950 R 9 D 1600 65 2 120 R 10 E 1850 100 2350 R R 12 G 2250 100 2750 General Manager H 2500 100 3000 So far as CORIL is concerned it appears that it has 10 grades while HPCL has 8 Grades
For the purpose of equa tion of these 10 grades of CORIL with 8 Grades of HPCL some compression has been made in the lower Grades namely R6 A and R6 B have been clubbed together and equated with Grade A of HPCL
Again Grades R7 A and R7 B of CORIL have been clubbed together and equated with Grade B of HPCL
In ESSO the
Grades E 7 and E 8 have been clubbed together and equated with Grade A of HPCL
In the Salary Group of ESSO the Grades E 5 and E SA have been shown to be two different Grades but it is not disputed before us that these two Grades are really one Grade
368 The complaint of the petitioners is that in the matter of fitment integration of the officers of CORIL that is the petitioners and the officers of ESSOLIL into HPCLIOC Grades gross disparities have been made to the prejudice of the officers of CORIL
It is the case of the petitioners that the officers of CORIL have been fitted by HPCL consist ently in one or two Grades lower in HPCL vis a vis their counterparts in ESSOLIL performing similar duties and having similar responsibilities and status
It is urged on behalf of CORIL that in integrating the officers CORIL with those of ESSO and LIL HPCL did not make any attempt to equate all the positions held by the officers of CORIL with those held by the officers of ESSOLIL
It is submitted that before any fitment can be made into any scale of pay it is incumbent to make an equation of posts and without such equation the officers of CORIL could not be fitted into the pay scales of HPCL along with the officers of ESSO and LIL
In support of the contention that HPCL has not made any equation of posts before fitment in HPCLIOC scales of pay Mr Sachar learned Counsel appearing on behalf of the petitioners has placed much reliance on the Tandon Commit tee s Report
In the said report the post of General Sales Representative of ESSO has been equated with the post of Retail Development Supervisor of CORIL
In the scheme pre pared by HPCL the post of General Sales Representative of ESSO E 6 and that of Depot Superintendent E 6 have been placed in the Salary Group B of HPCL while the post of Retail Development Supervisor R6 A and Depot Superintend entRelief Depot Superintendent R6 B of CORIL have been placed in the Salary Group A of HPCL
In Tandon Committee s Report it has been observed that the functional similari ties and the responsibility carried by both these function aries namely Retail Development Supervisor of CORIL and General Sales Representative of ESSO are alike
Further it has been observed that since these two posts are congruent they can be fitted in the same Group that is in Group B of the new HPCL Grade Structure representing IOC scales of pay
The post of Depot Super intendent A R7 B and that of Mar keting Representative R7 A of CORIL have been placed in the Salary Group B of HPCL but similar posts of ESSO being E 5E 5A have been placed in the Salary Group C of HPCL
It is thus complained that the scheme which has been prepared by HPCL is arbitrary and is not based on a proper equation of posts
On the other hand it is the case of HPCL that before the rationalisation scheme was finalised
HPCL Employees Management 369 Staff Association and CORIL Staff Association submitted their written submissions on December 6 1977 and July 17 1977 respectively
These representations were considered by the Government and after several meetings between the Chief Executives of HPCL and CORIL and the Secretary and other senior officers of the Ministry and Bureau of Public Enter prise Government formulated the guidelines for rationalisa tion and communicated its decision to both CORIL and HPCL by its letter dated July 28 1979
With a view to giving a further opportunity to the employees of erstwhile ESSO and CORIL group of officers the Chairman of HPCL appointed two Committees to submit their recommendations as to the equiva lence and fitment of existing officers on the basis of IOC s scales of pay in accordance with the Government guidelines
HPCL considered the reports submitted by the said two Com mittees and also different methods of fitment and equiva lence of different pay scales of ESSO LIL and CORIL with the pay scales of IOC and keeping in view all these factors including the submissions made by the Officers  Association through their representations HPCL approved the proposal of rationalisation of pay scales allowances and perquisites
Accordingly an offer letter dated July 7 1980 together with the terms and conditions of new appointment as per the rationalisation scheme was sent to each of the employees
The further case of HPCL is that without exception every one of the CORIL Management Employees accepted the fresh terms offered to them by the said letter dated July 7 1980
It is accordingly contended by Mr Pai learned Coun sel appearing on behalf of HPCL that the impugned rational isation scheme having been finalised after repeated consul tations with the officers of CORIL and their Association and all the officers of CORIL having accepted in writing the said scheme they are precluded from challenging the same
Another fact upon which reliance has been placed on behalf of HPCL is an order of this Court dated December 17 1979 passed in Civil Appeal No 3214 of 1979 whereby HPCL challenged the judgment of the Delhi High Court quashing a circular dated March 8 1978 issued by the Board of Direc tors of CORIL on the writ petition filed by the employees of CORIL being Writ Petition No 426 of 1978
Two other appeals being Civil Appeal No 3212 of 1979 and Civil Appeal No 35 186 of 1979 were also filed by the officers of CORIL and Bharat Petroleum Corporation Ltd respectively
The said order is as follows The petitioner Corporation will be at liberty to frame a 370 scheme if it wishes to do so in accordance with the judg ment of the High Court under appeal
If the scheme is framed it will not be implemented for a period of three weeks from the date of its framing and the respondents will be at liberty within the period of 3 weeks to apply to this Court for stay
This order will be without prejudice to the rights and contentions of the petitioner Corporation in the appeal
 Admittedly no application was made to this Court by the officers of CORIL praying for stay of the rationalisation scheme within a period of three weeks
Relying on the said order of this Court and also on the fact that no application for stay was made to this Court within the period allowed it is submitted on behalf of HPCL that the petitioners accepted the rationalisation scheme which is also evidenced by their written acceptance
If they had any objection to the scheme they would have surely made a representation to this Court in the said Civil Appeal No 3214 of 1979 which was then pending
In the writ petition the petitioners have emphatically denied the allegation of HPCL that discussions were made with individuals and groups of Management Staff of CORIL with regard to the rationalisation scheme
As to the accept ance of the rationalisation scheme the case of the peti tioners is that on July 12 1980 a news item appeared in the Bombay edition of the Times of India to the effect that under the scheme of rationalisation the services of nearly 950 officers of HPCL would be terminated and that such officers would simultaneously be reappointed on the basis of public sector salary
In view of the said news the peti tioners filed an application in this Court in the said Civil Appeals praying for stay or suspension of the operation of the said offer letter dated July 7 1980 and for restraining HPCL from terminating the services of the Management Staff of CORIL pending the disposal of the Civil Appeals
HPCL filed an affidavit in opposition to the said application of the petitioners to the effect that no decision had been taken by HPCL to terminate the services of the officers of CORIL
Accordingly this Court disposed of the said applica tion recording that in view of the said affidavit of HPCL no order was needed to be passed
Further the case of the petitioners is that in spite of the said order of this Court the petitioners still apprehended that HPCL would terminate the services of the petitioners in the event of their refusal to accept the said scheme and as such the petitioners under duress were forced to signify their con sent to the said scheme
371 We have considered the explanation of the petitioner justifying the acceptance of the said offer letter dated July 7 1988 and the rationalisation scheme sent therewith and also the contention of HPCL in that regard
In our opinion the apprehension of the petitioners that in the event of their refusal to accept the scheme their services will be terminated cannot be rejected on the face of it
It may be that there was no reasonable basis for such apprehen sion but the plea that because of such apprehension the petitioners had no other alternative than to accept the scheme cannot be disbelieved
At the same time we do not also put any blame on HPCL for implementing the said scheme which was accepted by the petitioners and other officers of CORIL
Instead of disposing of these writ petitions on this technical grounds we may proceed to consider the respective contentions of the parties on merits
The main grievance of the petitioners appears to be that in the rationalisation scheme a compression has been made at the lower level namely Grades R6 A and R6 B have been clubbed together and instead of placing them in the Salary Group B of HPCL as has been done for the equivalent Grade E 6 of ESSO they have been placed in the Salary Group A of HPCL
Similarly the Grades R7 A and R7 B have been clubbed together and placed in Salary Group B of HPCL while the equivalent Grade of ESSO has been placed in the Salary Group C of HPCL
The contention of the petitioners is that the compres sion should have been made at the higher grades namely Grades R11 and R12 and the Grade of General Manager
This is not for this Court to say whether the compression should have been made in the lower grades or in the higher grades
By such compression Grades R6 A and R7 A have been upgraded and the persons placed in those Grades have been benefited by such upgradation
There is much substance in the conten tion made on behalf of HPCL that if compression had been made in the upper grades there would be much complications and moreover such compression in the upper grades was not convenient to be made in view of functional differences
The Grade of General Manager cannot be clubbed together with a lower grade
In the circumstances we are unable to accept the contention of the petitioners that the compression should have been made in the higher grades of CORIL
The most important question that requires consideration is whether in framing the rationalisation scheme HPCL has really made the equation of posts of CORIL with those of ESSOLIL
It is the 372 positive case of the petitioners that no such equation has been made and the fitment of the officers of CORIL and those of ESSOLIL in the IOCHPCL scales of pay have been made without the equation of posts which is a sine qua non for integration of officers coming from different sources
The petitioners have mainly relied upon the recommendation of the Tandon Committee that General Sales Representative of ESSO has been equated with the post of Retail Development Supervisor of CORIL
In the scheme prepared by HPCL the post of General Sales Representative of ESSO and that of Depot Superintendent have been placed in the Salary Group B of HPCL while the post of Retail Development Supervisor and Depot SuperintendentRelief Depot Superintendent of CORIL have been placed in the Salary Group A of HPCL
As against this the contention of HPCL is that the two Committees that were appointed by the Chairman of HPCL considered the different methods of fitment and equivalence of different pay scales of ESSO LIL and CORIL with the pay scales of IOC
Except the bare allegation no material has been produced before us on behalf of HPCL to show that the said Committees had as a matter of fact considered the question of equation of posts on the basis of the principle as laid down by the Central Government while referring the matter to the Tandon Committee namely functional similari ty and co equal responsibility
In the affidavits filed on behalf of HPCL no particulars have been given with regard to the functional equivalence or otherwise of the different grades of these officers of CORIL ESSO and LIL
It is also not stated what happened to the consideration by the Govern ment of the Tandon Committee s report
There can be no doubt that the Government is not bound to accept the recommenda tion of the Tandon Committee but at the same time the equation of posts has to be made on the principle of func tional equivalence and co equal responsibility
As no mate rials have been produced in that regard on behalf of HPCL it is difficult for us to hold that the different grades of posts have been compared before placing the officers of these companies in the IOCHPCL scales of pay
While it is not within the domain of the Court to make the equation of posts for the purpose of integration it is surely the concern of the Court to see that before the integration is made and consequent fitment of officers in different gradesscales of pay is effected there must be an equation of different posts in accordance with the principle stated above
As there is no evidence or material in support of such equation of posts it is difficult to accept the ra tionalisation scheme with regard to the placing of the officers of CORIL in different IOCHPCL grades of pay
373 The petitioners approached the Grievance Committee but the Grievance Committee did not consider the objections of the petitioners to the said scheme
In our opinion there is much substance in the contention made on behalf of HPCL that it was not the business of the Grievance Committee to con sider the propriety or otherwise of the rationalisation scheme but if any officer has not been placed in the proper grade the Grievance Committee may place such officer in the proper grade in accordance with the rationalisation scheme
Be that as it may in the view which we take namely that there has been no equation of posts the rationalisa tion scheme cannot be accepted in full
The prayer of the petitioners in the writ petition is for a declaration that the said scheme is violative of Articles 14 and 16 of the Constitution of India and for a writ order or direction in the nature of mandamus directing HPCL to remove the discrim ination against the petitioners in regard to the impugned rationalisation scheme
The question is whether we should set aside the scheme after the lapse of about eight years
During these eight years by virtue of implementation of the scheme many changes have taken place with regard to the positions and ranks of the officers of HPCL including the petitioners and to set aside the whole scheme at this stage would surely affect the service structure of HPCL
We are also not obliv ious of the order of this Court dated July 20 1984 record ing the statement made in the affidavit of HPCL that if this Court would ultimately decide the matter in favour of the petitioners HPCL would accord to them all the benefits which they would be entitled to
That is an undertaking given by HPCL but we should also look to the interest of several officers of HPCL who would be affected if the scheme is set aside
In the circumstances without setting aside the scheme we direct HPCL to appoint a Committee consisting of high officials of HPCL and Central Government other than those who were in the previous Committees within one month from date for the purpose of considering the question of equation of posts on the basis of functional similarity equivalence and co equal responsibility that is to say whether on that basis Grades R6 A and R6 B of CORIL either jointly or separately can be equated with the Grade E 6 of ESSO and similarly Grades R7 A and R7 B of CORIL either jointly or separately can be equated with Grade E 5E 5A of ESSO
In considering the question of equation of posts the respond ents shall also take into its consideration the report of the Tandon Committee
Such consideration shall be 374 made within six months from today
If such equation is found to be in favour of the petitioners HPCL shall give effect to the same
But in view of the lapse of about eight years for which the petitioners are also to some extent responsi ble the date or dates from which the consequential benefit will be given effect to and also the quantum of such benefit will be such as may be deemed fit and proper by the respond ents having regard to the financial involvement and the changes that have taken place
We make it clear that in no event promotions and the existing positions of the officers of HPCL by virtue of the implementation of the impugned scheme will be interfered with
The writ petitions are disposed of as above
There will be no order as to costs
PSS Petitions allowed


Summary:
The appellants were engaged in manufacture and sale of liquor under licence granted to them under the UP Excise Act
They installed vats in their Breweries  premises for the storage of liquor
The liquor stored in vats was bottled and sold under the supervision of officers of the Excise Department
The Inspector of Weights and Measures issued notices to them for getting their vats verified calibrated and stamped in accordance with the provisions of the UP Weights and Measures Enforcement Act 1959
The appellants filed appeals against the notices issued by the Inspector on the ground that the provisions of the Act were not applica ble to the appellants  undertaking manufacturing alcohol
The appeals were dismissed by the Respondent Controller of Weights and measures
The appellants filed writ petitions before the High Court challenging the orders of the respond ents
The High Court dismissed the petitions holding that the provisions of the Act and the Notifications issued thereun der were applicable to the manufacturers of liquor in the distillery and the notices issued by the respondents for the calibration of the storage vats were legal and valid
Aggrieved the appellants filed appeals by special leave in this Court contending that the High Court committed error in holding that the storage vats were required to be cali brated under the provisions of the Act that the provisions of the Act would apply if measures were used for transaction in trade and commerce but keeping alcohol in storage vats did not amount to transactions in trade or commerce and that unless the storage vats were used in transaction for trade and 376 commerce the provisions of the Act were not attracted
Dismissing the appeals HELD 11 Under the definition clause in section 2jj of the UP Weights and Measures Enforcement Act 1959 the legislature has given an artificial extended meaning to the expression use in transaction for trade or commerce
Ac cording to the definition it means use for the purposes of determining or declaring the quantity of anything in terms of measurement of length or capacity or weight in or in connection with the cls
a and b mentioned therein
Clause b refers to any assessment of royalty toll duty or other dues
Thus according to the extended meaning the provisions of the Act would be attracted if the assessment of royalty toll duty or dues is to be determined on the basis of the quantity of anything in terms of measurement of length area volume or weight
379C E 12 There is no dispute that for the purposes of deter mining excise duty on the liquor produced by a manufacturer the assessment is made on the basis of the volume of the liquor produced and sold
Since volume of the liquor pro duced and stored in vats is connected with the assessment of excise duty it is covered by the expression use in trans action for trade or commerce
379E F 13 Ordinarily the storage of alcohol in vats by itself may not amount to transaction for trade or commerce but under the extended meaning of the expression under section 2jj even the storage of liquor in vats would be covered by the expression use in transaction for trade or commerce as volume of the liquor is necessary to be determined in con nection with the assessment of excise duty
379F G 14 The alcohol stored in the storage vats is essential ly for the purpose of sale and there is no dispute that the appellants manufacture and store alcohol in storage vats for the purpose of sale and the officers of the Excise Depart ment measure storage vats as prescribed by Rule 751 of the Excise Manual Volume 1
Since the volume of the storage vats is measured by the officers of the Excise Department the provisions of the Act for the purpose of sale would be applicable to the storage vats also
380F G By Notification dated 1981961 the provisions of the Act were made applicable to an undertaking engaged in the manufacture and sale of alcohol with effect from October 1 1961
Any doubts about the 377 applicability of the provisions of the Act stood removed by the subsequent Notifications dated May 17 1962 and July 18 1967 making the provisions of the Act applicable to all the undertakings in so far as they relate to units of capacity in respect of those classes of undertakings to which the Act has been made applicable
380E H 381A Therefore having regard to the above facts the High Court was right in holding that the storage vats were cov ered by the provisions of the Act
381B