Prakash Narain, C.J:— This judgment will dispose of five petitions under Article 226 of the Constitution of India raising identical questions in similar circumstances.

2. The petitioners are Class ??? officers in the employment of Life Insurance Corporation of India (hereinafter referred to as L.I.C). They are designated as Development Officers the petitioners in C.W No. 1610 of 1979 and C.W No. 1611 of 1979 were, prior to September 1, 1956, employed by various insurance companies, namely, New India Assurance Company, Lakshmi Insurance Company Ltd. Universal Insurance Company Ltd. and New Asiatic Assurance Co. They were in those companies doing almost similar work to the work that is being done by Development Officers in L.I.C On nationalisation the services of these petitioners stood transferred to L.I.C

3. The petitioners in the other writ petitions were, admittedly, all appointed in L.I.C subsequent to September 1, 1956 as Development Officers.

4. The Life Insurance Corporation Act, 1956 (hereinafter referred to as the Act) came into force with effect from July 1, 1956. The L.I.C was established with effect from September 1, 1956. From the same date by virtue of the provisions of Section 7 of the Act all the assets and liabilities appertaining to the controlled business of all insurers in India stood transferred to and vested in the L.I.C The controlled business that thus stood transferred was the business as defined by sub-section (3) of Section 2 of the Act. The services of whole-time employees of an insurer, whose controlled business thus stood transferred to and vested in the L.I.C and who were employed by the insurer wholly or mainly in connection with his controlled business immediately before September 1, ???956, also stood transferred to L.I.C upon the same terms and c???nditions and with the same rights and privileges as to pension and gratuity and other matters as were applicable to them in their earlier appointme???t and it was declared that the terms and conditions would continue to be the same under L.I.C, unless and until the employment in the L.I.C was terminated or until the remuneration, terms and conditions were duly altered by the L.I.C by virtue of the provisions of Section 1???(I) of the Act. Inasmuch as by operation of Section 11(1) of the Act a number of employe???s in diverse categories having diverse conditions of service would become employees under the L.I.C with their original terms and con???itions being guaranteed, the Parliament conscious of the anomalies that may arises gave power to the Central Government by section 11(2) of the Act that if the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business had be???n trans???rred to, and vested in, the L.I.C, it was ne???essary so to do, or that, in the interests of the L.I.C and its policy-holders a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them was called for, the Central Government may, notwithstanding anything contained in subsection (1) of Section 11, or in the Industrial Disputes Act, 1947, or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter, whether by way of reduction or otherwise, the remuneration and bring about change in other terms and conditions of service to such extent and in such manner as it thinks fit. It is common case that an order under section 11(2) of the Act was duly issued by the Central Government on December 30, 1957, known as the Life Insurance Corporation Filed Officers' (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1957. Popularly, this order was known as “Blue Order”. It is also common case of parties that this order rationalised the scales of pay of Development O???cers, provided for termination of service for poor performance etc. Except for the petitioners whose services stood transferred to L.I.C with effect from September 1, 1956, the other petitioners who were appointed snbsequent to September 1, 1956 joined service of the L.I.C after the issue of the Blue Order.

5. Before we notice further facts and the contentions raised by the petitioners we may read certain other provisions of the Act and other law and rules which are relevant to the points ar???ing for determination.

6. Section 48 of the Act gives power to the Central Government, by notification in the Official Gazette, to make rules to carry out the purposes of the Act. One of the aspects on which rules have to be made by the Central Government is the conditions subject to which the L.I.C may appoint employees. The rules made by virtue of the provisions of this section were required to be placed before both Houses of Parliament, as soon as possible, after the same were made, being subject to such modification as the Parliament may make therein.

7. Section 49 of the Act authorises the L.I.C, with the previous approval of the Central Government, by notification in the Gazette of India, to make regulations so long as the same are not inconsistent with the provisions of the Act and the rules made thereunder to provide for various matters, including the method of recruitment of employees and agents of the L.I.C and the terms and conditions of such employees and a???ents as well as the terms and conditions of service of persons who had become employee of the LIC. by virtue of the operation of sub-section (1) of Section 11 of the Act.

8. Section 40(1) of the Insurance Act, 1938 is applicable to L.I.C This provision prohibits payment of or any contract to pay any remuneration or reward whether by way of commission or otherwise for soliciting or procuring insurance business in India to any person except an insurance agent or a principal, chief or special agent. (See Section 42(2) of the Act read with Notification No. GSR 734 dated April 24, 1958).

9. By virtue of the power conferred by Section 49 of the Act L.I.C promulgated the Life Insurance Corporation of India (Staff) Regulations, 1960, hereinafter referred to as the Regulations the same came into force from July 1, 1960. It is alleged that on account of certain negotiations and agreements; some of these regulations were amended, including Regulation 56, which laid down what kind of service shall be counted for increments and when the increments were to be considered as due. clause 3 of regulation 56 reads as under:—

“Increments shall ordinari???y be drawn as a matter of course unless the employee has reached the maximum of the grade or it is withheld as a disciplinary measure under Regulation 39.”

10. Chapter III of the Regulations deals with Conduct, Discipline and Appeals. Regulation 36 in Chapter III deals with suspension of employees pending disciplinary proceedings or when the same are contemplated or where a case against an employee in respect of any criminal offence is under investigation or trial. Regulation 39 spells out the penalities that may be imposed on an employee for mi???conduct or for any act prejudicial to good conduct. It also provides for procedure for imposition of such penalties. Regulations 40 provides for a right of appeal where penalties are imposed' Regulation 47 provides for appeals against an order which denies or varies to the disadvantage of an employee his salary or other conditions of service. Regulation 48 gives an overriding power to L.I.C, on its own motion or otherwise, to call for the records of any case, review any order made or which is appealable under the regulations. Regulation 49 permits memorial to be presented to the Chairman of L.I.C against any order passed by an authority subordinate to the Chairman.

11. Chapter IV deals with pay and allowances. Regulation 56, noticed earlier, forms part of it Regulation 57 gives power for refixation of salary above the basic pay on promotion Regulation 58 deals with bonus and Regulation 59 with ad hoc grant??? and bonus commission to Development Officers depending upon the business.

12. As noticed earlier, an order under Section 1 i(2) of the Act was issued by the Central Government on December 30, 1957. It is the petitioners' case that work norms for Development Officers were fixed by L.I.C in July 1969. In August, 1969 a Committee was set up by the Central Government under the Chairmanship of Shri R.R Morarka, M.P to enquire into the cause of high level of expenditure of L.I.C and to recommend measures to control and bring down the expenses to a level consistent with the cannons of sound management and the maxim???m interests of the policyholders. The work norms which had been fixed by L.I.C in July, 1969 were recommended by the Morarka Committee for Development Officers to be fixed at a cost ratio of 15 per cent. This Committee also recommended that those Development Officer whose cost ratio was above 15 per cent should be given the option of having their emoluments reduced to conform to the limit of 15 per cent or their services being terminated the petitioners say that on November 19, ???971 norms for performance for Development Officers were prescribed for (a) scheduled first year's premimium income of Rs. 25,000, (b) 100 lives to be insured. These norms were increased to Rs. 30,000 and 125 lives to be insured with eff???ct from April 1, 1974. On April 8, 1976 the Central Government issued an order under section 11(2) of the Act, known as the Life Insurance Corporation Development Officers' (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1976. The L.I.C, with the previous approval of the Central Government, amended on April 21, 1976 the regulations providing therein that the Development Officers were require??? to ensure within three years, that the operation cost ratio does not exceed 20 per cent and if the co???t ratio exceeded 20 per cent it will result in refixation of the pay of the Development Officers automatically. It also provided that grade increments were to be allowed to only those whose cost ratio did not exceed 20 per cent. The Development Officers who failed to conform to the stipulated norms would have their remuneration adjusted from three consecutive years. Those Development Officers whose cost ratio was so high that on revision of their emoluments they could not be fixed even at the min???mum of the basic pay scales were to face termination of service. The 1976 norms also introduced revised and improved pay scales with effect from April 1, 1973 and the rate of city compensatory allowance as well as the rate of contribution of provident fund. These norms were challenged in the High Courts of Madras, Gujarat, Calcutta and Delhi hut the petitions were dismissed upholding the validity of the 1976 norms. There was some discontent despite judicial pronouncements resulting in negotiations these terminated in fresh work norms being notified on December 19, 1978 entitled Life Insurance Corporation Development Officers' (Alteration of Remuneration and other Terms and Conditions of Service) Order, 1978, purported to be issued under section 11(2) of the Act. On the same date Regulation 49 was again amended. The revised 1978 norms provided for differential cost ratios for different regions from 22% to 25%. These also provided for termination of the service of a Development Officer is the cost ratio exceeded 50% in the preceding year and also 50% in the last three years taken together. Those who faced such termination of service were to be given an option for alternative employment subject to guidelines prescribed by L.I.C and a system of appeals, representations etc. vis-a-vis termination of service. On January 31, 1981 the President of India promulgated an ordinance entitled Life Insurance Corporation (Amendment) Ord???nance, 3 of 1981. The provisions of this ordinance empowered the Central Government to make rules for the terms and conditions of service of employees of L.I.C and its agents, including those who became employees of L.I.C by virtue of the operation of Section 11(1) of the Act. The said Ordinance also provided that the power to make rules shall include the power to give retrospective effect to such rules from a date not earlier than 20th July, 1979. Such retrospective rule was given an overriding effect notwithstanding any judgment, decree or order of any court, Tribunal or other authority and notwithstanding anything cont???ine??? in the Industrial Disputes Act, 1947 or any other law or any agreement, settlement, award or other instruments for the time being in force. By virtue of the power so conferred, the Central Government on February 2, 1981 promulgated rules, called the Life Insurance Corporation of India Class III and IV Employees (Bonus and Dearness Allowance) Rules, 1981. These rules modified the terms and conditions for the payment of bonus and dearness allowance to Class III and IV employees of the L.I.C The aforesaid Ordinance was replaced by the Life Insurance Corporation (Amendment) Act, 1981. It came on the statute book on ???arch 17, 1981 but was operative from the date on which the Ordinance had been issued. On July 27, 1981 the Central Government issued another rule in exercise of the power conferred by the amending Act imposing a ceiling on total emoluments at Rs. 2,750 P.M for Class III and Class IV employees of L.I.C These rules were called the Life Insurance Corporation of India (Class III and IV Employees) Pay Rules, 1981. The Supreme Court dismissed the writ petitions challenging the aforesaid Ordinaances and the amending Act and the Rules issued by the Central Government by its judgment in A.V Nachane v. Union of India, (1982) 1 SCC 205 : A.I.R 1982 S.C 1126. A challenge to the Life Insurance Corporation of India (Class III and IV Employees) Pay Rules, 1981 was dismissed by the Supreme Court in Ap???il, 1982.

13. The challenge before us by the present petitioners is with regard to amendment to Regulation 8 of December 19, 1978 and the notified orders issued under Section ???I (2) of the Act by the Central Government in 1976 and 1978, allegedly altering to their det???iment the terms and conditions of service of Development Officers, as were contained in the Blue Order of 1957. Since the order under section 11(2), issued by the Central Government on December 19, 1978, is the latest operative order in consequence of which ???ertain actions have been taken by the L.I.C vis-a-vis the petitioners, what was pressed at the hearing was that this order be struck down as being ul???ra vires the provisions of Section 11 of the Act. It may be mentioned here that the impugned order under section 11(2) of the Act as well as the impugned regulations are in effect pari materia.

14. It is the petitioners' case that the terms and conditions of service of Development Officers, whether they were direct recruits or transferred employees, meaning thereby whether those were pre-1956 employees, covered by Section II (???) of the Act or were employed by L.I.C directly after 1956, have to be the same and the norms have to be similar as they fall under one class of employees. Reliance for this contention is placed on Roshan Lal Tandon v. Union of India, A.I.R 1967 S.C 1889 and The General Manager South Central Railway, Secunderabad v. A.V.R Siddkanti, (1974) 3 SCC 510 : A.I.R 1974 Supreme Court 17. If the above proposition be correct, it is submitted, there was no power in the Central Government to issue an order under Sect???on 11(2) of the Act, 1978, having earlier issued an order way back in 1957. The amended regulations are claimed to ???e invalid as they are inconsistent with the Blue Order of 1957. The Blue Order had the status of a rule and, therefo???e, no regulation inconsistent W???th a ru???e could be issued, as is provided by Section 49 of the Act according to the petitioners by virtue of the impugned order and regulatio???s their status as permanent employe???s of L.I.C has become illuso???y and they lave ???eased to be permanent employees, their rights and other privileges including their pay and allowances, have become speculative in nature and exposed to arbitrary methods of assessment and their vested rights have ???een completely jeopardised; they have been placed in a position similar to a commission agent inasmuch as pay and increments have been made variable, being dependent upon business secured ar premium earned; the time scale of pay guaranteed along with the annual increments provided for, the benefits of provident fund, including the terminal pay, bonus etc. no longer remain certain affecting security of employment till superannuation. In short, the terms and conditions have been altered to their disadvantage in violation of statutory provisions.

15. Mr. Kumaramang???am and Mr. Kailash Vasdev, learned counsel for the petitioners, urged the following propositions in support of the challenge put forth by the petitioners:—

1. The impugned order of the Central Government, pur???orted to have been made under section 11(2) of the Act, is ultra vires the power contemplated by that section since the order has not been passed for purposes of transfer and integration.

2. The impugned Regulations, purported to have been made by virtue of the power conferred by Section 49(2)(bb), are invalid to the extent that the san???e are inconsistent with the provisions found in the Blue Order of 1957 since the Blue Order is deemed to be a rule framed under the Act and has predominance over the Regulations.

3. Section 40(1) of the Insurance Act gets attracted by virtue of the provisions of Section 42(2) of the Act due to the issuance of Notification No. GSR 734 dated August 24, 1958. In consequence, the prohibition postulated by Section 40(1) of the Insurance Act with regard to payment of re???uneration to any person excepting an insurance agent for procuring/soliciting-business, makes the impugned conditions now imposed on the Development Officers illegal.

4. By virtue of Regulation 2 of the Staff Regulations it is laid down that the regulation shall apply unless otherwise provided for by the terms of any contract or agreement or letter of appointment. In the present case there is an agreement dated November 19, 1981 which lays down in clause 3 as to what is the procedure to be followed for action in cases of below norm performance. Consequently, Schedule III of the Regulations cannot be applied to the petitioners.

5. The impugned order of Central Government is violative of Articles 14 and 16 of the Constitution inasmu??? as:—

(a) Class II Officers have been singled out for discriminatory treatment since they have been converted from whole time employees to those whose remuneration is linked with productivity, like the insurance agents working under the Development Officers, and thereby placing them in the same situation as piecerated employees, specially when the avowed object is to cut cost and expenses.

(b) There are other o???cers who also do development activity, like Assistant Branch Managers, to whom these nor???s have not been made applicable.

(c) The area-wise classific???tion into ‘A’, ‘B’ ‘C’ and ‘D’ areas is irrational and unreasonable since it does not have any scientific basis.

(d) The viability of the L.I.C not being the issue and when L.I.C is one of the numerous public sector undertakings whose employees draw equal pay if not more than those in other services, making these impugned norms applicable to L.I.C employees and that to only to one class, amounts to discrimination.

(e) The impugned action is violative of Article 19(1)(f), read with Article 31 of the Constitution (Article 19(1)(f) being in force on December 19, 1978 when the impugned orders were notified), inasmuch as reduction of wages and pay and rights vis-a-vis gratuity amounts to affecting property rights.

(f) The impugned actions of the Central Government and L.I.C are in violation of Article 43 of the Constitution of India.

(g) The petitioners are workmen within the meaning of Section 2(S) of the Industrial Disputes Act, 1947. Thus, their terms and conditions could not be unilaterally altered except after compliance with Section 9(A) of the Industrial Disputes Act.

16. The case of the respondents is that the challenges, as put forth, are untenable. It is contended that the conditions of service have not been altered to the detriment of the petitioners. Indeed, the conditions of service have been improved. The impugned order and Regulations of 1978 are only exercises in the nature of rationalisation and making the terms and conditions, assessments and actions to be more objective. In consequence, there is neither any violation of any provision of the Act nor of the Insurance Act. It is further submitted that none of the provisions of the Constitution is violated.

17. Learned counsel for the respondents have also invited our attention to similar challenges made by Development Officers with regard to the impugned order of the Central Government and the impugned regulations in the Andhra Pradesh High Court, Madras High Court and the Patna High Court by petitions under Article 226 of the Constitution. All those petitions have been dismissed. Strong reliance is placed by the respondents on these judgments it is further urged that in the appeal filed in the Supreme Court, the Development Officers have not been able to secure any modification of the orders even by way of interim relief.

18. As the main plank o??? the arguments, addressed on behalf of the petitioners, is the decision of the Supreme Court in The Life In???urance Corpora???ion of India v. D.J Bahadur, (1981) 1 SCC 315 : A.I.R 1980 S.C 2181, we may first consider that case. A writ petition under Article 226 of the Constitution had been filed in tile Allahabad High Court challenging a notice dated May 6, 1978, issued by LI.C under Section 9A of the Industrial Disputes Act and a notification dated May 26, 1978, issued under section 11(2) of the Act by the Central Government. The writ petition was allowed by the High Court resulting in an appeal being filed by L.I.C in the Supreme Court. Another similar petition was pending in the Calcutta High Court which was transferred to the Supreme Court. Both these matters were disposed of together. The challenge before the Allahabad High Court and the Calcutta High Court was preferred by Class III and Class IV employees who had contended that the impugned order and notification amounted to changing their conditions of service to their detriment vis-a-vis payment to them of bonus to which they had earlier become entitled through a settlement with L.I.C made under Section 18 of the Industrial Disputes Act-The appeal was dismissed by majority of 2:1 and the transferred petition was allowed directing issue of a writ to L.I.C to give effect to the terms of the settlement of 1974 relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation. Pathak, J. was one of the Hon'ble Judges constituting the majority. Dealing with the provisions of section 11(2) of the Act the learned Judge observed that there were two limbs of that provision of law. The first limb conferred power on the Central Government to alter the scales of remuneration and other terms and conditions of service applicable to transferred employees. The learned Judge commented, “Predictably, when the transferred employees of different insurers were brought together in common employment under the Corporation they would have been enjoying different scales of remuneration and other terms and conditions of service. The power under this part of sub-section (2) is intended for the purpose of securing uniformity among them.” With regard to the second limb the learned Judge held that it empowered the Central Government to reduce the remuneration payable or revise the other terms and conditions of service, but the power had to be exercised when the Central Government was satisfied that the interests of the Corporation and its policy-holders required such reduction or revision. Answering the question whether the provision was confined to transferred employees or extends to all employees generally, it was held that the provision was confined to transferred employees, “being a part of the scheme enacted in Chapter IV providing for the transfer of existing life insurance business from the insurers to the L.I.C and the attendant concomitants of that process.” With regard to the exercise of the power under section 11(2), the learned Judge observed as under in para 69 of the report:—

“Another point is whether the power under the second limb of sub-section (2) of Section II can be exercised more than once. Clearly, the answer, must be in the affirmative. To effectuate the transfer appropriately and completely it may be necessary to pass through different stages, and at each stage to make a definite order. So long as the complex of orders so made is necessarily linked with the process of transfer and integration, it is Immaterial ???hat a succession of orders is made. I am not impressed by the circumstance that the original Bill moved in Parliament for amending sub-section (2) of Section 11 contained the words ‘from time to time’ and that t???ose words were subs???quently deleted when enactment too??? place. The intent of the legislative provision must be discovered primarily from the legislation itself.”

19. It may be worth noticing that Pathak, J. in terms has laid down, “While the first limb of the sub-section (Sec. 11(2)) provides for securing uniformity among the transferred employees in regard to their scales of remuneration and other terms and conditions of service, the second limb provides that if after such uniformity has been secured, or even in the process of securing such uniformity, the Central Government finds that the interests of the Corporation and its policy holders require a reduction in the remuneration payable or revision of the other terms and conditions of service applicable to those employees, it may make an order accordingly.” Dealing with the notification dated May 26, 1978, Pathak, J. has observed, “it is evident from the recital with which it opens that it is intended to apply to transferred employees only. It declares explicitly that the Central Government is satisfied that a revision of the terms and conditions of service of the transferred employees is considered necessary. However, there is nothing to show that the amendment is related to the process of transfer and integration.” Krishna Iyer, J., the other learned Judge constituting the majority, observed in the context of nationalisation and taking over of the employees of the erstwhile insurers having different terms and conditions of service and divergent emoluments that, “broad uniformity became a necessity. Thus the statutory transfer of service from former employers and standarization of Scales of remuneration and other conditions of employment had to be and were taken care of by S. 11 of the Life Insurance Corporation Act, 1956. The obvious purpose of this provision was to enable the Corporation initially to absorb the motley multitudes from many companies who carried with them varying incidents of service so as to fit them into a fair pattern, regardless of their antecedent contracts of employment or industrial settlements or awards.” The learned Judge did not further dilate at any great length on section 11(2) of the Act but went on to decide the matters in the context of, to put it in his own words, “the competing claims for dominance as between the id act and the l.i.c act in areas of conflict.” Therefore, on the issue, as raised before us, it is the observations of Pathak, J. which will have to be relied on, being observations of one of the Hon'ble Judges constituting the majority. We cannot accept the contention, on behalf of the respondents that on the issue of section 11(2) of the Act we can accept eit???er the view expressed by Pathak, J. or by Koshal, J. (the learned Judge who was in majority).

20. Now what has Pathak, J held? First, that section 11(2) of the Act has two limbs. Secondly, the provisi???n is meant for transferred employees. Thirdly, orders under section 11(2) can be passed from time to time (emphasis ours) to bring about either uniformity or to sub-serve the interests of the L.I.C and its policy-holders.

section 11(2) of the Act reads as under:—

“(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to, and vested in, the Corporation, it is necessary so to do, or that in the interests of the Corporation and its policy-holders, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub-section (1), or in the Industrial Disputes Act, 1947, or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the ???emuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate the employment by giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination.

Explanation —The compensation payable to an employee under this sub-section shall be in addition to, and shall not affect, any pension, gratuity provident fund money or other benefit to which the employee may be entitled under his contract of service.”

21. The contention of learned counsel for the petitioners that the Central Govern???ent cannot issue orders under section 11(2) of the Act from time to time cannot be accepted. It has been held in D.J Bahadur's case that the Government can issue orders under section 11(2) from time to time. It may be that the Blue Order, relied upon by the petitioners, was issued under what Pathak, J. has held to be the first limb of Section???1(2). The impugned order under section 11(2) can well be regarded as having been issued under the seco???d limb of section 11(2) of the Act. This by itself completely disposes of the argument of the petitioners. No doubt, Pathak, J in Para 70 on page 2205 of the report does make observations which tend to suggest that the order under section 11(2) of the Act can only be made for the process of transfer and integration, nonetheless this observation has to be read in the light of what the learned Judge has observed about there being two separate limbs of section 11(2) In terms it has been held that the Government has the right to issue orders under section 11(2) from time to time.

22. Apart from this finding, which we give, we are in respectful agreement with the observations in a judgment of the Andhra Pradesh High Court given in Writ Petition No. 4555 of 1979 etc. that “Having regard to the amendment of the Act under the Life Insurance Corporation (Amendment) Act, 1981, this aspect has become wholly academic, for under the Amendment Act what was issued as an order under section 11(2) and as schedule to the said order, has now been decla???ed to be Rules framed by the Central Government under section 48 of the Act and the said Rules ???ave been made operative with effect from 20-6-1979.” That the rules can be retrospective cannot be disputed. (See Roshan Lal v. Union of Indio, A.I.R 1967 S.C 1889).

23. Apart from the above legal proposition we arc of the view that the impugned order under section 11(2) of the Act or the impugned regulations, which are pari materia, are consistent with the Blue Order and indeed one may say they make the conditions less stringent and assessments etc. more objective. The impugned order and the impugned regulations may, therefore, be regarded as not only amplificatory but as rationalising the earlier conditions of service without, in any way being in conflict with the earlier terms and conditions as also making the working of the Blue Order more intelligible and objective. We may compare the various terms in the two orders to show why we take the view that we have taken. We will first read the terms of the Blue Order of 1957, as amended in 1962. Clause 3 lays down the duties of Development Officers. Clause 5 gives the pay scales and allowances. Clause 7 reads as under:—

“7. Increments.

(1) Increments in the scale of pay shall be granted to a Development Officer only after an overall appraisal of his work during the twelve months preceding the date on which the increment falls due.

(2) In appraising the work of a Development Officer, the following factors shall be taken into consideration, namely:—

(i) the volume of new business procured by or through the efforts of the Development Officer: (Under this item will be taken into account not only the total sums assured, but also the number of lives assured and the increase in the volume of new business procedure by or through the efforts of the Development Officer);

(ii) the ratio of expenses incurred to the first year's scheduled premium income;

(iii) the efforts made in recruit???ng, training and motivating new agents and in activising existing agents;

(iv) the routine services rendered to policy-holders.

(3) A Development Officer may be granted one or more increments in the scale depending upon his Success under all the heads mentioned in ???ub-paragraph (2) taken together collectively, but no increment shall be granted if the work is not upto an adequate standard.

(4) The decision of the Corporation as to whether the work of a Development Officer is upto an adequate standard or not shall be final.”

24. Clause 8 provided that new business bonus may be paid to Development Officers in accordance with such scheme as may be framed by L.I.C from time to time. Clause 9 dealt with promotion of Development Officers and, inter alia, provided that any Development Officer may, with his consent, be appointed to do administrative work as an Assistant or Section-Head on such terms as may be agr???d upon between him and the L.I.C Clause 10 read as under:—

“10. Penalties and termination of service.

(a) In case of unsatisfactory performance of duties by a Development Officer or if a Development Officer shows negligence in his work or is guilty of misconduct or is other-???ise incapable of discharging his duties satisfactorily, his remuneration may be reduced or his services may be terminated, after giving him an opportunity of showing cause against the action proposed to be taken in regard to him and after conducting such enquiry as the Corporation thinks fit.

(b) The services of any Development Officer may, with the prior approval of the Chairman of the Corporation, be] terminated without assigning any reason after giving the Development Officer three months' notice thereof in writing.”

25. It will be noticed that Clause 7 postulates appraisal of work when it says that performance of ???ast year would have to be taken into account there was no automatic increment contemplated. The appraisal was to be done in respect of all the aspects laid down in Clause 7(2). Sub-clause spoke of adequate standard without defining what was adequate standard. The same is the position regarding sub-clause (4). I??? Clause 10(a) no objective standards are set out. Clause 10(b) permitted termination without assigning any reason whatsoever

26. We now turn to the impugned order under Section ??? (2) of the Act. In terms clause (2) says that it shall apply to the class of employees of the L.I.C known as transferred employees, holding the post of Development Officers. The terms and conditions are mentioned in the annexure to this order, as mentioned in cluse (4). Turning to the annexure, we find that para ??? (a) defines “annual remuneration”. P???ra 1(???) fixes the appraisal d???te What was vague in the earlier order is now made specific. Para 2 deals with increments. The term now laid down is more beneficial inasmuch as previously increments could not be claimed as of right. They have now been more or less made automatic as the rule says that ordinarily the same shall be granted as a matter of course unless it is a case of exceeding the expense limit which has to be read in the context of app???aisal postulated in the impugned order as well as Clause 7(1) of the Blue Order. Previously, there was no right to seek review or file an appeal if increment was not granted. Now even that right has been granted. We now come to Para 3 of the impugned order. Comparing it with Clause 5(c) of the Blue Order, which spoke of conveyance allowance, we find whereas previously the conveyance allowance was fixed and was related to the basic pay, now it has been delinked and is made more rational, i.e on the basis of actual expense incurred. Development Officers are not only entitled to conveyance allowance but even additional conveyance allowance which was not there before. It may be interesting to note the conveyance allowance that is being paid now from some figures supplied to us by learned counsel for the respondents. That will be evident from a chart that we reproduce below:—

Name Division Remuneration Incentive Bon???s Addl. C.A Total Emoluments %age of cost Rs. Rs. Rs. Rs. M.L Kasat Calcutta 29511 1,66,769 56981 2,53,261 2 J.D Dholakia Rajkot 29854 1,10,208 33344 1,73,406 3 M.S Malbotra Delhi 29303 1,07,008 36744 1,73,055 3 R.S Nanda Kanpur 22606 96,755 32624 1,51,985 3 A.S Singbal Delhi 29979 96,754 33541 1,60,274 3 B.N Vohra Bombay 27322 89,709 31989 1,49,020 4 S.R Deb Jamshedpur 27746 81,218 28248 1,37,212 4 Mohinder Singh Delhi 23204 76,371 25105 1,24,680 3 B.M Taori Nagpur 28127 70,062 25287 1,23,476 4 M.L Jain Patna 28681 68,681 24774 1,22,136 4

27. Surely, the new terms an??? conditions cannot be regarded as detrimental to the interests of the petitioners or disadvantageous compared to the terms and conditions regarding conveyance allowance they enjoyed under the Blue Order

28. Under Clause 10 of the Blue Order if a Development Officer's performance was not found satisfactory, apart from the fact that his remuneration could be reduced, his services could be ter???inated though after giving him a show cause notice. No reason was required to be assigned if clause 10(b) was invoked for termination of service provided three months' notice thereof had been given. Under clause 5 of the impugned order this aspect has been made much less stringent. Termination is now only in very special contingencies. Indeed, only the remuneration could be reduced for by and large unsatisfactory performance and that also by giving an opportunity to conform to standards of satisfactory or good performance. Objective tests previously not there have been laid down to judge performance. Appraisal is not left to the whim but to scientific method laid down in the impugned order. The petitioners cannot complain that t???e terms are now disadvantageous to them when the very mode of assessment, previously without any objective standards, is now crystalised within the frame work of how it is to be done. We may advert to Para 8 of the impugned order. The incentives now postulated were not there earlier. Clause 8 of the Blue Order on??? talks of new business bonus to be given in accordance with the scheme that may be framed by the L.I.C Para 8 of the impugned order is definitely more advantageous and removes the vagueness of the earlier order. Para 9 of the impugned order cannot be regarded as taking away any of the rights conferred by clause 9 of the Blue Order. Indeed, Para 9(2) is definitely more advantageous where penalty of termination of service can be awarded.

29. The above comparison shows that the apprehensions of the petitioners are not only misplaced but the whole controversy is misconceived. L.I.C is a national institution. It is to work as an instrumentality to bring about a welfare State. Its employees cannot and should not be doled out largesse at the expense of the nation. It must work on strict business norms. The impugned order cannot be regarded as adver???ely affecting employees. The incompete???t and inefficient employees will, of course, always have a grievance.

30. The contention, therefore, of the impugned order being violative of Section II(2) of the Act has to be negatived. Wehold accordingly.

31. The impugned regulations, made under Section 49(2)(bb), are pari materia to ???he impugned order under section 11(2) of the Act. For the reasons upholding the impugned Order, the Regulations have also to be uph???ld.

32. We now proceed to examine the contention regarding the impugned order and Regulations being violative of Section 40(1) of the Insurance Act. Reliance has been placed on K.S Ramaswamy v. Union of India, 1977 (1) L.L.J 211. The contention of the petitioners is that if wages are linked with performance, it would be violative of Section 40 of the Act. They support this contention by showing that grant of increments or reduction in salary is linked to the cost ratio, i.e expense incurred in relation to first year premiums or business secured. To understand the ratio of the above case, we have to keep in mind that the Development Officers are not r???quired to procure business but organise the procuring of business. The incentive bonus, increment on the basis of pefo???mance or reduction in wages on assessment keeping in view the cost ratio that is postulated is for good organisation resulting in good business rather than in just procuring new business in the case relied upon, a learned Judge of the Madras High Court was examining a particular clause of the Regulations of 1976 in the context of Sections 11 and 49 of the Act. It was urged that the amendment of Staff Regulations which permitted reduction in pay or refusal to grant an increment with reference to volume of business secured was violative of Article 16 of the Constitution. This argument was negatived on a reading of the impugned Regulations. It was further held that when the accent is more on volume of business it is only with a view to get better performance from the Development Officers who form a class by th???mselves. Therefore, the contention that the Regulations which have now been framed or the provision in the impugned order would be violative of Section 40 of the Insurance Act cannot be accepted as the norms laid down are conducive to better performance and are related to economic working of the system rather than that emoluments of the petitioners are dependent on quantum of business procured. Indeed, as we have said earlier, the reward or otherwise is for good organisation rather than procurement of actual business directly.

33. Turning now to the fourth contention of the petitioners it will be apparent on a reading of the agreement dated November 19, 1971, relied upon by the petitioners, that there is no clause which says that the Regulations will not apply. With regard to the function of the Development Officers, Clause 2 of the agreement spoke of only “fresh scheme of minimum norms for the Development Officers”. Clause 3, no doubt, laid down the procedure for dealing with below the minimum nor???s performance but a comparison of the two would show that the present norms are more objective. We need not examine this agreement clause by clause and rest the issue by holding that even in D. ???. Bahadur's case it has been held that the agreement will apply till it is superseded by another agreement or settlement or by a valid law. The impugned order, having the force of rule specially after the amendment Act, is the law contemplated and that is binding.

34. With regard to all that has been said about the impugned order and the impugned regulations being violative of Articles 14 and 16 of the Constitution, we are of the view that the impugned orders and regulations cannot be called arbitrary. The same are not discriminatory because the Development Officers are a class by themselves. Being a class by them ???elves no question of discrimination with another ???ype or category of employees or employees of other nationalised institution arises. They carry on Specialised type of work that some others, like Assistant Branch ???anagers, may also partly do similar work is neither here nor there. The entire commercial structure of L.I.C is dependant upon the organisation that Development Officers may set up to procure business they cannot, therefore, be considered to be similarly placed as others. Further, it is a complete misconception to say that they have ceased to be wholetime employees and have become piece-rated employees. The petitioners have failed to put in any cogent material with regard to the duties of Assistant Branch Managers to show that the Assistant Branch Manage???s do precisel??? the same work as the petitioners and nothing else. The area-wise classification can also not be called irrational. The Blue Order itself contemplates zone. ‘A’, ‘B’, ‘C’ and ‘D’ Zones which have now been contemplated on population basis is one of the modes or basis of providing the zones. L.I.C could adopt any rational basis. Perhaps, per capita income basis could have been adopted but then it is not for ???s to say which criterion should have been adopted. Unless the population basis is wholly irrational, which we are unable to hold, the impugned order cannot be regarded as irrational or arbitrary. The viability of L.I.C may not be in issue but the fantastic payments that the Development Officers get by way of total remuneration, as evidenced by the schedule reproduced earlier would show that the Development Officers should be the last persons to have any cause for complaint. If at all, the policyholders may have a cause for complaint against the L.I.C in this regard. That Article 43 of the Constitution can be invoked by the petitioners is incomprehensible. Indeed, a policy-holder may well ???aise a que???tion that they are paid to much.

35. We need not comment upon the contention that the impugned order or Regulations are violative of Article 19(1)(???) of the Constitution, as was in force on December 19, 1978. No such right is enforceable today. Further, an examination of the data placed before us shows that there is no reduction of wages. Indeed, there is substantial increase in the total wages.

36. Relying on H.S Chauhan v. Life Insurance Corporation of India, 1982 Lab. I.C 1864 and The Life Insurance Corporation of India v. D.J Bahadur, (1981) 1 SCC 315 : A.I.R 1980 S.C 2181, it is urged that Development Officers are workmen within the meaning of Section 2(S) of the Industrial Disputes Act and, therefore, no action could be taken qua them without first complying with the requirements of Sect???on 9-A of the Industrial Disputes Act.

37. The argument has merely to be noted and rejected. By no stretch of imagination, looking at the duties and functions of Development Officers, can they be regarded as workmen. Their wages also be lie this. The cases relied upon have no relevance to the facts in the present case. In any case, we have held that the terms and conditions have not been varied to the disadvantage of the Development Officers but variation, if any, is to their advantage.

38. The result is that we find no force in the petitions and dismiss the same. The rules are discharged. The respondents will be entitled to costs. Counsel's fee Rs. ???00 in each case.

39. Petition dismissed.

(18-5-83)

Prakash Narain, C.J and B.N Kirpal, J.:— We have pronounced judgment in five connected writ petitio???s and have dismissed the same. An oral prayer is made by learned counsel for the petitioner for grant of a certificate of fitness to appeal to the Supreme Court by invoking the provisions of Article 134A of the Constitntion. In our opinion, there is no case made out for grant of certificate. We are in good company inasmuch as the view taken by us is the same which has been taken by three other High Courts in respect of identical issues raised in similar matters. Further even the earlier order under section 11(2) of the Act which was challenged has been considered by other High Courts and its validity upheld. We, therefore, decline the prayer for the grant of a certificate.

40. It has been pointed out to us that the Madras High Court has granted the certificate and the matter is pending in the Supreme Court. Nevertheless, that does not persuade us to take a different view.

41. Leave refused.