Case: Life Insurance Corporation Of India &Another Etc Vs. S.S. Srivastava & Others


Decision reasoning: 0[ds]21. Having regard to the different conditions of service that were prevailing in the various establishments whose business was taken over by the Corporation it can hardly be disputed that the fixation of age of superannuation is one of the essential parts of the process of transfer and integration to which sub-section (2) of S.11 of the Act is applicable, The fixation of 60 years as the age of superannuation in the case of transferred employees cannot be considered to be unreasonable in view of the history of this case. The observation made by Pathak, J. in the course of his judgment that "there is no danger of an order made by the Central Government under the second limb of sub-section (2) in respect of transferred employees being struck down on the ground that it violates the equality provisions of Part III of the Constitution because similar action has not been taken in respect of newly recruited employees" is significant.It has to be observed in the case before us also that the transferred employees belong to a diminishing cadre. When the Corporation was established they were about 27,000 in number and we are informed today that there are only about 22% of those employees in service. Already 30 years have elapsed from the date of the establishment of the Corporation. All the transferred employees who have already retired have retired only after completing 60 years. The remaining transferred employees are likely to go out of office within a short period. Thereafter only the employees who are directly recruited by the Corporation who are about 54,000 in number would continue to remain in its service.At this stage we should refer to another aspect of the case presented before us which relates to 16 persons who were appointed as the employees of the Corporation by virtue of an Order dated March 15, 1966. There was a department in existence in the year 1963 called Department of Insurance. The Government and the Corporation felt that the services of 16 persons who were working in the Department of Insurance were required by the Corporation. Accordingly, the president of India agreed to release 16 persons from the service of the Government of India to enable the Corporation to appoint them in its service by the Order of the Central Government dated 25th February, 1964. The resignation of those 16 persons from the service of the Government of India was accepted on 15th March, 1966 and from that date those persons became the employees of the Corporation. Out of those 16, 13 have already retired from service on attaining the age of 60 years. Only three of them are now in the service of the Corporation. One of them is no longer an employee of the Corporation since he is holding the post of the Chairman of the Corporation. The second of them is due to retire within 2/3 months and only one of them would continue in the service of the Corporation for about a period of two years more. In the case of those 16 people the Corporation passed a separate order fixing their age of retirement as 60 years having regard to the negotiations which had taken place between the Corporation and the Government before the taking over of their services by the Corporation. They again belong to a different category altogether and the fixation of the age of retirement in their case at 60 years cannot be challenged by those who were directly recruited by the Corporation after September 1, 1956 as there is no similarity between them and the, said 16almost all the public sector Corporations, Central services and State services 58 years age is considered to be a reasonable age at which officers can be directed to retire from their service. So, the determination of 58 years as the age of superannuation by itself cannot be considered to be arbitrary.25. We do not also find much substance in the contention of the 1st respondent that there cannot be any discrimination as regards the age of retirement between the employees belonging to Class I and Class II on the one hand and Class III and Class IV on the other. It is true that originally employees belonging to Class III and Class IV categories amongst the transferred employees were given the benefit of retirement at the age of 60 years but the employees belonging to Class III and Class IV categories recruited after 1st September, 1956 were required to retire on the completion of 58 years of age. In the Settlement which was arrived at between the management and the Class III and Class IV employees recruited after 1st September, 1956 it was agreed that there should be no discrimination as regards the age of retirement between the employees belonging to Class III and Class IV categories amongst the transferred employees and the class III and class IV employees recruited after 1st September, 1956. It was pursuant to the said settlement that regulation 19 was amended with effect from 19-6-1965. Having regard to the lower emoluments and other benefits which the employees belonging to Class III and Class IV are entitled to get from the Corporation and the higher emoluments and other benefits to which officers belonging to Class I and Class II are entitled and also the nature of their work and the powers enjoyed by them we are of the view that fixation of different ages of retirement to the different classes of employees would not by itself be violative of Arts. 14 and 16 of the Constitution.It was, however, contended on behalf of the 1st respondent that since he had been recruited originally into the Class III post and he would have had the benefit of retirement at the age of 60 years if he had remained in that Class, the said benefit cannot be denied to him on his promotion to the Class I category. We do not find any merit in this contention too. When the 1st respondent was promoted to the Class I post in 1963 the age of retirement of Officers in the Class I post had been fixed at 58 years and was not different from the age of retirement of Class III employees. It was only in 1965 under the settlement the age of retirement of employees in Class III and Class IV Who joined service after September 1, 1956 was raised to 60 years. If he felt that the conditions of service of Class I Officers were likely to be prejudicial to him he could have refused the promotion offered to him. Having accepted the promotion along with the higher benefits flowing from it he cannot contend after several years that he had been prejudicially affected by the condition relating to the age of retirement applicable to Class I Officers appointed after September 1, 1956. That apart the higher emoluments and other perquisites to which Class I employees may be entitled to and the better conditions of work which are enjoyed by them substantially compensate the effect of the lowering of the age of retirement from 60 years to 58 years.While we agree with the first part of the observations made in the above extract from the judgment of the High Court, namely, that it was not discriminatory to extend the benefit of the age of 60 years to the transferred employees, we do not agree with the latter part of the observations made therein which suggests that on promotion from Class III to Class I the transferred employees and the directly recruited employees would lose their birth marks. Pathak, J., as he then was, has observed in D. J. Bahadurs case (AIR 1980 SC 2181 ) (supra) that it is open to the Government to make an order under S.11(21 of the Act from time to time in respect of the transferred employees and that power is not exhausted when it is exercised once. It suggests that the transferred employees are always amenable for separate treatment and they do not lose their identity. It appears to be the intention of Parliament that even as late as in 1981 that the two categories of employees, namely, the transferred employees and employees recruited after 1st September. 1956 in the Corporation should be keptHigh Court of Kerala was right in not following the decision of the High Court of Allahabad which is now under appeal. It, however, distinguished it on the ground that the employees in question had not been promoted from Class III to Class I as it was the case here but the petitioners before it had continued in Class I or Class II right from the commencement. We, however, approve of the reasons given by the High Court of Kerala in holding that the employees of the Corporation belonging to Class I and Class II who had entered service of the Corporation after 1st September, 1956 were not entitled to continue in service beyond the age of 58 years. In our view the fact that an employee had entered the service of the Corporation after September 1, 1956 in a Class III post and is later on promoted to a Class I post does not make any difference in so far as the question which arises for decision before us.The decision taken by the Corporation and the Central Government as regards the ages of retirement of the different classes of the employees of the Corporation in the instant case is a bona fide one and cannot be characterised as unreasonable. It is not, therefore, liable to be upset by a decision of the Court. On a careful consideration of all the aspects of the case We feel that the High Court erred in striking down regulation 19(2) of the (Staff) Regulations, 1960 as amended in the year 1917, and in directing the Corporation to continue the 1st respondent in its service till he completed the age of 60 years.