Case ID: 5940

Judgment:
tions (C) Nos. 331 47 of 1984. (Under Article 32 of the Constitution of India. ) Rajinder Sachar and K.T. Anantharaman for the Petitioners. Narayan B. Shetty	 G.B. Pai	 S.S. Shroff	 Mrs. P.S. Shroff	 Miss Girja Krishan	 S.A. Shroff	 Mrs. Pallavi Shroff	 O.C. Mathur and A.M. 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. B.B. 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 ESSO/LIL into HPCL/IOC 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 ESSO/LIL	 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 ESSO/LIL. 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 HPCL/IOC 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 ent/Relief 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 5/E 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 ESSO/LIL. 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 ESSO/LIL in the IOC/HPCL 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 Superintendent/Relief 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 IOC/HPCL 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 grades/scales 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 IOC/HPCL 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 5/E 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. P.S.S Petitions allowed.

Summary:
ESSO Standard Refining Company of India Ltd. and Lube India Ltd. were acquired by the ESSO (Acquisition of Under takings in India) Act	 1974 and vested in the Hindustan Petroleum Corporation Ltd. In 1978 Caltex Oil Refining India Ltd.	 another Government company was amalgamated with HPCL. Consequent upon this integration of management staff of CORIL and HPCL	 dispute arose as to their fitment in equiva lent groups and fixation of inter se seniority. The Tandon Committee appointed to examine the issues recommended the application of the principles of (1) functional similarity	 and (2) co equal responsibility	 for equating positions in the two companies. The HPCL appointed two functional direc tors for framing a rationalisation scheme. In the said scheme for the purpose of equation of 10 grades of CORIL with 8 grades of HPCL some compression was made in the lower grades	 namely	 R6 A and R6 B of CORIL were clubbed together and equated with grade A of HPCL. Again	 grade R7 A and R7 B were clubbed together and equated with grade B of HPCL. The complaint of the petitioners	 former officers and employees of CORIL	 was that the rationalisation scheme was arbitrary	 in that the fitment of officers of CORIL and those of the ESSO/LIL in the HPCL scales of pay had been made without the equation of posts	 which was a sine qua non for integration of officers coming from different sources	 so much so that they had been consistantly fitted in one or two grades lower in HPCL vis a vis their counterparts in ESSO/LIL performing similar duties and having similar re sponsibilities and status; that in the Tandon Committee report	 the post of General Sales Representative of ESSO had been equated with the post of Retail Development Supervisor of CORIL on the principle of functional similarity and co equal responsibility; that since these two posts were con gruent	 they should have been fitted in the same group	 that is	 in Group B of the new HPCL 363 Grade structure	 whereas in the said scheme 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 Superintendent/ Relief Depot Superintendent (R6 B) of CORIL have been placed in Salary Group A of HPCL. It is further averred that the post of Depot Super intend ent A (R7 B) and that of Marketing Representative (RT A) of CORIL have been placed in the Salary Group B of HPCL	 but similar posts of ESSO being E 5/E5A have been placed in Salary Group C of HPCL; that the compression should have been made at the higher grades namely	 grades R 11 and 12 and the grade of General Manager	 and that the petitioners were forced to signify their consent to the said scheme under duress. They	 therefore	 prayed for a declaration that the said scheme was violative of Articles 14 and 16 of the Constitution of India. For the respondents	 it was contended 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	 that the reports submitted by these two committees were considered by the HPCL along with the sub missions made by the officers ' association through their representations before approval	 that the terms and condi tions of the new appointments as per the rationalisation scheme were circulated to each of the CORIL employees with its letter dated July 7	 1980 and they having accepted in writing the said scheme they were precluded from challenging the same. Allowing the writ petitions	 HELD: 1. While it is not within the domain of the Court to make the equation of posts for the purpose of integra tion	 it is surely the concern of the Court to see that before the integration is made and consequent fitment of officers in different grades/scales of pay is effected	 there must be an equation of different posts in accordance with the principle Of functional equivalence and co equal responsibility. [372G H] In the instant case	 no evidence or material has been placed before the Court on behalf of the HPCL in support of such equation of posts. The rationalisation scheme with regard to the placing of the officers of CORIL in different IOC/HPCL grades of pay	 therefore	 cannot be accepted in full. [372H] 364 2. This is not for the Court to say whether the compres sion 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 benefitted. If compression had been made in the upper grades there would have been much complications in view of the functional differences	 for the grade of General Manager cannot be clubbed together with a lower grade. The contention that the compression should have been made in the higher grades of CORIL cannot	 therefore	 be accepted. [371F G] 3. The apprehension of the petitioners that in the event of their refusal to accept the scheme	 their services will be terminated cannot be rejected. It may be that there was no reasonable basis for such apprehension	 but the plea that because of such apprehension the petitioners had no other alternative than to accept the scheme	 cannot be disbe lieved. [371B] 4. Having regard to the interest of several officers of HPCL who would be affected if the scheme is set aside	 and in view of the fact that during the eight years in which the scheme had been in operation many changes had taken place with regard to the positions and ranks of the officers of HPCL including petitioners	 HPCL is directed to appoint a committee consisting of high officials of HPCL and Central Government	 other than those who were in the previous com mittees	 within one month for the purpose of considering the question of equation of posts on the basis of functional similarity	 equivalence and co equal responsibility	 and to give effect to the same. Promotions and the existing posi tions of the officers of HPCL by virtue of the implementa tion of the impugned scheme	 not to be interfered with. [373D	 F G; 374B]