JUDGMENT
1. The question of law involved in all these petitions is common and, therefore, they are clubbed together and a common order is passed.
2. The point for consideration in these writ petitions is “Whether the petitioners who were the employees of the Karnataka Government Insurance Department (hereinafter referred to as “the KGID”) whose services were subsequently absorbed in one of the nationalised insurance companies which came into existence pursuant to the nationalisation of insurance business in the country are to be retired on attaining the age of sixty years of fifty-eight years ?”
3. In all these petitions the reliefs sought for are common, viz., (i) to quash the orders of retirement of the petitioners at the age of fifty eight years; and (ii) to declare that the petitioners are entitled to continue in service till they attain the age of sixty years and not to terminate them at he age of fifty-eight years as is now ordered.
4. A few facts which are necessary to dispose of these petitions are :
The petitioners were earlier the employees of the Karnataka Government Insurance Department. They were working as class III employees. One of the functions of the KGID was insurance business of private motor vehicles. In the year 1971, the Central Government nationalised all the insurance companies in the country. The Central Government passed the General Insurance (Emergency Provision) Act, 1971, which will be hereinafter referred to as “the 1971 Act.”Subsequently, the Central Government passed the General Insurance Business (Nationalisation) Act, 1972, which will be hereinafter referred to as “the 1972 Act,” whereby all the insurance companies, nearly 107 in the country, were taken over with effect from January 1, 1973. By virtue of the nationalisation, all the General Insurance Industries came under the General Insurance Corporation and the 107 General Insurance Companies merged with four subsidiary nationalised companies, viz., (i) New India Insurance Company Ltd., (ii) United India Insurance Company Ltd. (iii) Oriental Insurance Company Ltd., and (iv) National Insurance Company Ltd. pursuant to the nationalisation, the KGID which was carrying on insurance business in respect of private motor vehicles stopped carrying on such business. As a consequence of this, 42 employees of the KGID became surplus. At that stage, the State of Karnataka made a request to the Central Government that the services of the surplus staff of the KGID be absorbed in any one of four companies mentioned above. Accordingly, the services of the surplus staff of the KGID were absorbed. The service conditions of employees of various erstwhile insurance companies came to be protected by framing two Schemes, viz., (i) The General Insurance (Rationalisation, Revision of Pay Scale and Other Conditions of Supervisory, Clerical, and Subordinate Staff) Scheme, 1974 (hereinafter referred to as “the 1974 Scheme”), and (ii) The General Insurance (Termination, Superannuation and Retirement of officers and Development Staff) Scheme, 1976 (hereinafter referred to as “the 1976 Scheme”).
The case of the petitioners is that they along with other working in the KGID became surplus and were transferred to the abovesaid four insurance companies. They were designated as Senior Assistants. Subsequently, they were given increments and promotions and other benefits of their past service. They were working in the Officers cadre in different places. As per the 1974 Scheme, the age of retirement of officers was sixty years. The retirement age under the 1976 Scheme was also sixty years. The petitioners were made to believe by the companies that their retirement would be at the age of sixty years and would be given financial assistance like car advance, housing loan, L.I.C. premium, etc., calculating the period of retirement upto the age of sixty years. Even some officials were allowed to retire after attaining the age of sixty years. By virtue of transfer, the petitioners fell under a separate category. They became the officials of the Corporation by the arrangement of the Central Government and the State Government. As the petitioners have been transferred, they come under a separate category and now they cannot be equated to the category of those who were appointed subsequent to January 1, 1973. When the KGID was carrying on the general insurance business which was taken over by virtue of the nationalisation, the employees who were working in such positions shall be treated on par with other officials of the Indian Insurance Companies. According to them, Section 16(1)(f) and (g) of the 1972 Act has no application to their service conditions. Their further case is that they are “transferred officers” as defined under Clause 3(c) of the 1974 Scheme and Clause 4(1) of the 1976 Scheme. Clause 3(c) of the 1974 Scheme reads thus :
“’employee’ means an employee to whom the provisions of this Scheme apply.”
Clause 3(j) of the 1976 Scheme reads thus :
“‘transferred officer’ means an officer who was deemed to have become an officer of the Corporation or of an Indian Insurance Company before the 1st day of January, 1973, or any employee as defined in paragraph 3(c) of the General Insurance (Rationalisation and Revision of pay Scales and Other Conditions of Service of Supervisory, clerical and Subordinate Staff) Scheme, 1974, who joined the service of the Corporation or of any Indian Insurance Company before the 1st day of January, 1973, and is promoted subsequently as an officer.”
Clause 4(1) of the 1976 Scheme reads thus :
“A transferred officer or a person of the transferred Development Staff shall retire on attaining the age of sixty years.
When such was the position, to their surprise the petitioners were served with the notices informing them they should retire from the services of their respective employers on the dates mentioned in the said notices. One of such notices is produced as Annexure ‘D’ to Writ Petitions Nos. 13457 and 13458 of 1992.
Aggrieved by the said notices, the petitioners gave representations to the respondents to allow them to be in service till they attain the age of sixty years. Instead of considering their request, the petitioners were informed that they have to retire on attaining the age of fifty-eight years instead of sixty years. Hence, they filed the above writ petitions for the reliefs mentioned above.
5. The grounds of attack against the orders of retirement are :
The orders of retirement at fifty-eight years are quite arbitrary and discriminatory in nature. The orders of retirement are contrary to 1974 Scheme and 1976 Scheme. When the petitioners were originally absorbed in the respondent company they were working as class III Officials, viz., First Division Clerks, Superintendents, etc., and as such their retirement age should be sixty years and not fifty-eight years. The orders of retirement apart from being arbitrary and illegal are without any authority of law and violative of Articles 14 and 16 of the Constitution of India, as there is no rationale in fixing their retirement age at fifty-eight years even though persons similarly placed were allowed to retire at the age of sixty years. The policy prepared by the company that if a person is promoted to the post of Officer, he should retire at the age of fifty-eight years and not at the age of sixty years, is quite unfair. When the petitioners were transferred and absorbed, the impression that was given to them was that they would retire at the age of sixty years and not at the age of fifty-eight years and subsequently they were even given car advances, housing loan, etc., calculating the age of retirement upto sixty years. Some of their erstwhile colleagues similarly placed were allowed to retire at the age of sixty years. The present demand of the respondents that the petitioners should retire at the age of fifty-eight years was there neither in the 1974 Scheme nor in 1976 Scheme. After absorbing the petitioners and others similarly placed and when they were given increments and promotions, etc., the subsequent classification of those appointed prior to January 1, 1973, and subsequent to that is quite illegal. If Clause 3(i) or 4(1) of the 1976 scheme and Clause 12 of the 1974 Scheme are understood properly, the only inference that can be drawn is that the above provisions would apply only for the promotees and not for those who were appointed. Since the petitioners come under the definition of “transferred Officers” they are entitled to continue till they attain the age of sixty years and curtailment of any period for retirement is quiet illegal an penal in nature. It was also contended that, if there was no assurance that the petitioners would be entitled to continue upto the age of sixty years, they would not have opted for transfer to one of the companies by virtue of the nationalisation of the general insurance business in the country. It was further contended that Section 2(c) and (e) of the 1971 Act, if read properly, clearly establishes that the intention was to bring all types of general insurance business including the one that was carried on by the KGID under the control of the Central Government. If Section 3(e) of the 1972 Act is given a liberal interpretation, the meaning would be that the petitioners are the employees of the existing insurers because they were the employees of the nationalised undertaking or the undertaking under the State control. The approach of the respondents in not treating the petitioners on par with the employees of all the nationalised companies is contrary to the Methrani Committee Report. The Report suggested modality to bring about uniform conditions of service of the employees of various insures including the State Government employees working in the Insurance Department. If the petitioners are not the employees of the existing insurers, the respondents cannot contend that the petitioners have to retire on the basis of clause 4(2) of the 1976 Scheme. Therefore, no importance can be attached to the conditions imposed in the offer of absorption of the petitioners, as there is no power to lay down conditions of service generally. If there is any such condition, it is not valid as similar conditions introduced by the company were earlier struck down by the Supreme Court. Once such scheme made in the year 1980 which came up for consideration before the Supreme court was ultimately struck down by it in Ajay Kumar Banerjee v. Union of India 1984 – I – LLJ – 368 and another in United India Fire and General Insurance Co. Ltd. v. K. S. Vishwanathan, . Moreover, the stand taken by the respondents that the petitioners had given option regarding retirement, etc., is not tenable, as giving of such an undertaking was only a formality and it was general in nature and, therefore, no importance can be attached to it as held by the Supreme Court in Ajay Kumar’s case (supra). The employees of the KGID, who were subsequently transferred to various insurance companies, have become less in number and as such they can very well be brought under the category of diminishing cadre and be permitted to retire at the age of sixty years as was done in the case of other employees. Thus contending, the petitioners sought for the reliefs to quash the retirement orders under challenge.
6. Whereat the respondents have filed their Statement of Objections to all the writ petitions. The stand taken by them therein are almost identical. The reasons give by the respondents why the reliefs sought for cannot be granted are as follows :
Their case is that under Section 16(1)(g) of the 1972 Act, two schemes were framed, viz., 1974 Scheme for rationalisation and revision of pay scales and 1976 Scheme for termination, superannuation, etc. By virtue of nationalisation, the KGID and the Kerala State Insurance Department suffered a great loss in their business. This led to render some employees to be Supernumerary and surplus. At that stage, a request was made to the Central Government by the respective State Governments to absorb the services of the surplus staff in one of the four companies on humanitarian grounds Accordingly, 42 officials of the KGID came to be absorbed. As per the 1974 Scheme and the 1976 Scheme, a “transferred employee” will be one whose services were absorbed prior to January 1, 1973. KGID was not a merged unit. It did not vest in the Central Government. As such, the officials of the KGID including the petitioners are not transferred officers but their services came to be absorbed purely on humanitarian grounds. The terminal benefits of the employees of the KGID including the petitioners were paid by the KGID at the time of their absorption, whereas the terminal benefits of the employees of the other 107 insurance companies who were transferred were not settled by those companies. The absorption of the petitioners was sub-sequent to January 1, 1973. By virtue of the nationalisation the business of insurance of private motor vehicles was given up by the KGID. However, other insurance business of the KGID still exists. The petitioners were absorbed without any transfer of their provident fund amount, etc. On the other hand, they had to claim the same from the KGID. While the petitioners were working in the KGID, their retirement age was fifty-eight years. As they came to be absorbed subsequent to January 1, 1973, their retirement age came to be fixed at fifty-eight years by reason of general scheme fixing the age of retirement of insurance companies at fifty-eight years and not sixty years. So far as the 1974 Scheme is concerned, it was framed for rationalisation and revision of pay scales, etc., and not to protect the service conditions, viz., retirement age of the surplus employees. Since the absorption of the petitioners was made only on humanitarian grounds, it cannot be said that asking the petitioners to retire at the age of fifty-eight years is arbitrary or violative of Articles 14 and 16 of the Constitution of India. The petitioners came to be absorbed as fresh candidates. KGID was and is not a general insurance company. The employees for the KGID were not the employees of the acquiring company or the Corporation to attract Section 22 of the 1972 Act. These employees are also not the “deemed officers” of the Insurance Companies. The 1976 Scheme would apply only if the employees satisfy the definition of “transferred officers” and “transferred Development Staff” since the petitioners came to be absorbed subsequent to January 1, 1973, they became fresh employees from the date of absorption and are governed by the Schemes framed by such Insurance Companies. Apart from these, the termination notices were issued to the petitioners much earlier to filing of these writ petitions. However, they kept quiet for a considerable period and approached this Court at the fag end of the period mentioned in the notices of retirement with a view to invoke the sympathy of this Court. Similar requests were made by some of the employees of the erstwhile insurance companies and the same came up for consideration before this Court and also before the High Court of Kerala. The similar contentions raised were negatived by this Court and also the High Court of Kerala. For these reasons, Sri Shankar and Sri Ramadas, learned counsel for the respondents, submitted that the contentions raised by the petitioners in these petitions have no merit and the petitions deserve to be dismissed.
7. In support of their rival contentions, both the counsel also placed reliance on various authorities which will be referred to a little later.
8. In order to appreciate the correctness or otherwise of the contentions raised by both sides, it is proper to take into consideration the dates for appointment of the petitioners in KGID, the dates of absorption of the petitiones in the Insurance Companies, the dates of their promotion including the applicability of the provisions of some of the sections of the Acts and the clauses of the Schemes.
The petitioner in Writ Petitions Nos. 13457 and 13458 of 1992 (Chikka Thimegowda,) entered into service of the KGID on March 5, 1962. He was obserbed in the services of the General Insurance Corporation on May 15, 1973. The petitioner was promoted as Assistant Administrative Officer on November 28, 1983.
The petitioner in Writ Petition No. 13851 of 1991 (M. H. Chikkanna), entered into service of the KGID on July 21, 1966. He was absorbed in the services of the General Insurance Corporation on January 1, 1976. Subsequently, he was promoted as Assistant Administrative Officer in the year 1985 and thereafter as Administrative officer in the year 1989.
R. Shivappa, the petitioner in Writ petition No. 14173 of 1991, entered into service of the KGID on November 16, 1960. His services were absorbed in the General Insurance Corporation on November 1, 1975. He was promoted as Assistant Administrative Officer in the year 1978. Thereafter, he was promoted as Administrative Officer in the year 1983 and subsequently as Assistant Manager in the year 1989.
In Writ Petition No. 14854 of 1989, the petitioner, viz., K. N. Sreekantaiah, entered the service of the KGID on October 1, 1956. His services were absorbed on September 2, 1975.
Subsequently, he was promoted as Assistant Administrative Officer in the year 1978, and thereafter as the Administrative Officer in the year 1983.
9. Clause 2 of the 1974 Scheme deals with the application of the Scheme to the employees. Clause 3(c) defines who is an employee. Clause 12 of the said Scheme, speaks of the age of retirement which is extracted below :
“12. Retirement. – The normal age of retirement shall be sixty years :
Provided that an employee attaining the age of sixty years during any month shall retire only on the 1st of the immediately following month.”
Clause 3(j) of the 1976 Scheme defines who is a transferred officer and Clause 4(1) deals with the age of retirement of transferred officer, whereas Clause 4(2) of the 1976 Scheme prescribes that an officer or a person of the Development Staff appointed on or after January 1, 1973, shall retire on attaining the age of fifty-eight years. The relevant Section of the 1971 Act are extracted below :
“2. Definitions. – In this Act, unless the context otherwise requires, –
(a) ‘appointed day’ means May 13th, 1971; ….
(c) ‘general insurance business’ means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them, but does not include capital redemption business and annuity certain business; ….
(e) ‘Insurer’ means an insurer, as defined in the Insurance Act, who carried on general insurance business in India, and includes an insurer whose registration under that Act has not remained wholly cancelled for a period of six months immediately before the appointed day, but does not include the Life Insurance Corporation of India established under the Life Insurance Corporation Act, 1956 (31 of 1956), or any State Government which carries on general insurance business.”
Section 15(a), (b) and (g) of the 1971 Act is extracted below :
“15. Act where not to apply. – Nothing contained in this Act shall apply to –
(a) any insurer whose business is being voluntarily would up or is being wound up by a Court;
(b) any insurer to whom the Insurance Act does not apply by reason of the provisions contained in Section 2-E thereof; …
(g) general insurance business carried on by a State Government or by the Life Insurance Corporation of India.”
Likewise, Clauses (a), (e), (g) and (o) of Section 3 of the 1972 Act read as follows :
“3. Definitions. – In this Act, unless the context otherwise requires, –
(a) ‘acquiring company’ means any Indian insurance company and, where a scheme has been framed involving the merger of one Indian insurance company in another or the amalgamation of two or more such companies, means the Indian Insurance company in which any other company has been merged or the company which has been formed as a result of the amalgamation; …..
(e) ‘existing insurer’ means every insurer the management of whose undertaking has vested in the Central Government under Section 3 of the General Insurance (Emergency Provisions) Act, 1971 (17 of 1971), and includes the undertaking of the Life Insurance Corporation in so far as it relates to the general insurance business carried on by it; …
(g) ‘general insurance business’ means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them, but does not include capital redemption business and annuity certain business; …
(o) ‘scheme’ means the Scheme framed under Section 16 and also includes a Scheme framed under Section 17-A.”
Section 7 of the General Insurance Business (Nationalisation) Act, 1972, deals with transfer of service of existing employees in certain cases. It reads as under :
“7. Transfer of service of existing employees in certain cases, – (1) Every wholetime officer or other employee of an existing insurer other than an Indian insurance company who was employed by that insurer wholly or mainly in connection with his general insurance business immediately before the appointed day shall, on the appointed day, become an officer or other employee, as the case may be, of the Indian insurance company in which the undertaking of that insurer or that part of undertaking to which the service of the officer or other employee relates has vested, and shall hold his office or service under the Indian insurance company on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting, and shall continue to do so unless and until his employment in the Indian insurance company in which the undertaking or part has vested is terminated or until his remuneration, terms and conditions are duly altered by that Indian insurance company.
Provided that nothing in this sub-Section shall apply to any such officer or other employee who has given, in writing, notice to the Central Government or to any person nominated in this behalf by that Government before the appointed day intimating his intention of not becoming an officer or employee of the Indian insurance company in whom the undertaking or part thereof to which his service relates has vested.
(2) If any question arises as to whether any person was a wholetime officer or employee, or as to whether any officer or employee was employed wholly or mainly in connection with the general insurance business of the existing insurer referred to in sub-section (1) immediately before the appointed day, the question shall be referred within a period of two years from the appointed day and not thereafter to the Central Government which shall, after giving an opportunity of being heard to the person concerned in the matter, decide it in such manner as it thinks fit and such decision shall be final.
(3) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947), or in any other law for the time being in force, the transfer of the services of any officer or other employee under sub-section (1) shall not entitle any such officer or other employee to any compensation under that Act or such other law and no such claim shall be entertained by any Court, Tribunal or other authority.’
Section 16(1) of the 1972 Act reads as follows :
“16. Schemes for merger of companies, etc. –
(1) If the Central Government is of opinion that for the more efficient carrying on of general insurance business it is necessary so to do, it may by notification, frame one or more schemes providing for all or any of the following matters :
(a) the merger in one Indian insurance company of any other Indian insurance company, or the formation of a new company by the amalgamation of two or more Indian insurance companies; ….
(f) the continuance in the acquiring company of the services of all officers and other employees of the Indian insurance company which has ceased to exist by reason of the scheme, on the same terms and conditions which they were getting or, as the case may be, by which they were governed immediately before the commencement of the scheme;
(g) the rationalisation or revision of pay scales and other terms ad conditions of service of officers and other employees wherever necessary; …..”
Section 17-A of the 1972 Act, dealing with the terms and conditions of service of officers and other employees, reads thus :
“17-A, Power of Central Government to regulate the terms and conditions of service of officers and other employees. – (1) The Central Government may, by notification in the Official Gazette, frame one or more schemes for regulating the pay scales and other terms and conditions of service of officers and other employees of the Corporation or of any acquiring company.
(2) A scheme framed under sub-Section (1) may add to, amend or vary any scheme framed under Section 16 including any addition, amendment or variation made therein by notification under sub-section (6) of Section 16 with respect to rationalisation or revision of pay scales and other terms and conditions of service officer and other employees of the Corporation or of any acquiring company, to provide for further rationalisation or revision of such pay scales and other terms and conditions of service notwithstanding that such further rationalisation or revision in unrelated to, or unconnected with, the amalgamation of insurance companies or merger consequent on nationalisation of general insurance business.
(3) The Central Government may, by notification, add to, amend or vary any scheme framed under this section.
(4) the power to frame a scheme under sub-section (1), and the power conferred by sub-Section (3) to add to, amend or vary any scheme framed under this section, shall include the power to frame such scheme or, as the case may be, to make such addition, amendment or variation in any scheme framed under this section, with retrospective effect from a date not earlier than the appointed day.
(5) A copy of every scheme, an every amendment thereto, framed under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
(6) The provisions of this section and any scheme framed under it shall have effect notwithstanding anything to be contrary contained in any other law or agreement, award or other instrument for the time being in force.”
Section 36(1)(a) and (b) of the 1972 Act is extracted hereunder :
“36. Exemptions. – Nothing contained in this Act shall apply in relation to –
(a) any general insurance business carried on by a State Government, to the extent to which such insurance relates to properties belonging to it or undertakings owned wholly or mainly by the State Government or to properties belonging to semi-Government bodies, or any board or body corporate established by the State Government under any statute or any industrial or commercial undertaking in which the State Government has substantial financial interest, whether as shareholder, lender or guarantor;
(b) any general insurance business not falling within clause (a) which has been carried on by a State Government before the commencement of this Act, to the extent to which it is necessary to allow such business to run off :
Provided that nothing contained in this clause shall be deemed to authorise the State Government to issue any new policies or renew any existing policies.”
10. Reading of the Clauses of the 1974 Scheme and of the 1976 Scheme and the Sections of the 1971 Act and of the 1972 Act makes it clear that to seek the benefit of retirement at the age of sixty years, an officer or an official shall substantiate that he comes within the definition of either “transferred Officer” or of “transferred Development Staff” and was ap pointed before January 1, 1973, and also establish the KGID was an insurer.
11. Sri Narasimhan, learned counsel for the petitioners, in support of his contentions placed reliance on the following authorities :
(a) Ajay Kumar Banerjee’s case 1984 – I – LLJ – 368, wherein the Supreme Court while dealing with the Scheme of 1980 framed under Section 6(1) relating to revision of pay scales and other terms and conditions of service of officers and other employees and explaining the scope of Section 16(2) which deals with amalgamation and merger of the insurance companies held that the scheme not being connected with the purpose of Section 16(2) is beyond authority of delegated legislation. The relevant portion reads thus (at page 379) :
“As framing of the scheme is an exercise of the delegated authority by the Central Government, the memorandum regarding delegated legislation submitted to Parliament along with the General Insurance Business (Nationalisation) Bill, 1972, will provide some guidance also. Clause 16 of the said Bill which later on became Section 16 of the Act explained the need for delegated authority and stated the object as ‘to frame one or more schemes for the merger of one insurance company with another or for the amalgamation of the two or more insurance companies and for matters consequential to such merger or amalgamation as the case might be’. Bearing in mind that this is delegated legislation and keeping in mind that the authority to frame the scheme must be found within the object of the power given under Chapter V of the Act, and reading the entire connected provisions together, it appears to us that the only authority or power to frame scheme given was for the purpose of merger of one insurance company with another or amalgamation of two or more insurance companies and for matters consequential to such merger or amalgamation as the case might be …. Any scheme, though it might come within the wide expression used in sub-section (6) of Section 16 as well as Clause (g) or Clause (j) of sub-section (6) of Section 16, which is unrelated to or unconnected with the amalgamation of the insurance companies or merger consequent upon nationalisation would be beyond the authority of the Central Government.”
But the above said decision speaks of Clauses (1) and (2) of Section 16 of the 1972 Act and deals with only merger or amalgamation. Therefore, on facts, the said decision has no application to the present cases. In addition to this, it is not the case of the petitioners that they were given their increments subsequent to the 1976 Scheme. As such it has to be said that the said decision has no application.
(b) For the proposition that always literal meaning shall be given while interpreting a statute, Sri Narasimhan placed reliance on the decision of the Supreme Court in A. V. Fernandez v. State of Kerala, , wherein the Supreme Court interpreting a fiscal enactment held as follows (head note) :
“In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law.”
12. For the similar proposition, he placed reliance on the decision of the Supreme Court in Saraswati Sugar Mills v. Haryana State Board, (1991) 80 FJR 140, wherein the Supreme Court held as under (at page 148) :
“Construction of words and the meaning to be given for such words shall normally depend on the nature, scope and purpose of the statute in which it is occurring and to the fitness of the matter to the statute. The meaning given to the same word occurring in a social security measure or a regulating enactment may not be apposite or appropriate when the same word is interpreted with reference to a taxing statute.”
13. He further submitted that having allowed the petitioners to serve under the belief that they would retire only at the age of sixty years, all of a sudden issuing a retirement order is a clear case of arbitrariness and opposed to Article 14 of the Constitution of India, when other officials were allowed to work till the age of sixty years. For the said proposition he placed reliance on the decision of the Supreme Court in Sengara Singh v. State of Punjab 1984 – I – LLJ – 161. It was case where 1100 members of the Police Force were dismissed from service on the ground that they had participated in an agitation. Later many of them were reinstated by the Department and others were denied the same benefit. They approached the High Court by writ petitions. The writ petitions were dismissed by the High Court. In the appeal the Supreme Court held thus (p. 164) :
“the order of the High Court dismissing the petitions was liable to be quashed. Logically the petitioners must received the same benefit which those reinstated received in the absence of any distinguishing feature in their cases. Accordingly, the petitioners would be entitled to reinstatement in service.”
14. In view of the above decision, Sri Narasimhan submitted that the petitioners come within the definition of “transferred officers” and they shall be allowed to continue in service till they attain the age of sixty years and their services shall not be terminated at the age of fifty-eight years.
15. Whereas Sri. S. P. Shankar and Sri Ramadas, learned counsel for the respondents, submitted that there is no merit in any one of the contentions of Sri Narasimhan, learned counsel for the petitioners. The learned counsel for the respondents by explaining the scope of some of the provisions of 1971 Act and 1972 Act referred to earlier and 1974 Scheme and 1976 Scheme, pointed out who the “transferred Officer” or “transferred Development Staff” is and whether the KGID was an “insurer” or not. They placed reliance on the following decisions :
In K. R. Vishwanathan v. General Insurance Corporation of India (Writ Petition No. 9007 of 1976 decided on October 7, 1977, and confirmed in Writ Appeal No. 390 of 1978 by the Division Bench of this Court on August 23, 1978), this Court, while considering the scope of the Schemes of 1974 and 1976, the meaning of “transferred Officer” and the effect of Section 7 of the 1972 Act which provided that the service conditions of the employees of the insurance companies stood then with the Corporation and comparing the position of the employees of the KGID, held thus :
“…. The parent department of the petitioner did not vest in the Corporation. Therefore, the section has no application to the case of the petitioner. He was only a transferred employee. He could, therefore, claim a right to remain in service till he attains the age of sixty years provided he has been transferred and appointed in the service of second respondent or in the service of the first respondent before January 1, 1973.”
This Court also held that the definition of “transferred Officer” as provided under Clause 3(i) of the 1976 Scheme has no application to the case of the petitioner therein, Thus, to bring an officer within the definition of “transferred officer” the important thing that should be established is that the person claiming that he is a transferred Officer must be an employee of the Corporation before January 1, 1973. Similar questions, viz., who is a transferred Officer and whether the Government Insurance Department comes within the definition of “insurer” or not was the subject-matter in O.P. No. 4378 of 1986-U before the High Court of Kerala (V. Gopinathan Pillai v. United Indian Insurance Company Ltd.) and the Kerala High Court held that to be a “transferred Officer” one should have been an employee of the Corporation before January 1, 1973, and the Kerala State Insurance Department was not a General Insurance Company or an “insurer”. By so holding, the said original petition was dismissed. The same was confirmed in Writ Appeal No. 559 of 1986 by the Division Bench of the Kerala High Court on August 26, 1986. The relevant discussion and observations are at paragraph 11 . It reads thus :
“How did the officers or employees of the State Insurance Department become officers or employees of the Insurance Companies ? Clue to this question is found in Exhibit P-2, which is a copy of Government Order in G.O. No : 357/W3/Fin. dated August 23, 1973. It refers to the 1972 Act which came into effect on January 1, 1973, and recites that as a result of the introduction of the Act, a the State Insurance Department stopped transacting the liability insurance from January 1, 1973 and hence a major portion of the business formerly done by the Department is carried out by the General Insurance Corporation of India and it subsidiaries as provided in the Act, and consequently, 80 persons in the staff of the Department have been rendered surplus. The State Government requested the Government of India to absorb them in the General Insurance Corporation of India. The personnel also opted for service under the Corporation. The General Insurance Corporation of India had agreed to absorb the staff rendered surplus with effect from September 1, 1973. In these circumstances, the State Government directed that the surplus staff numbering 80 who have opted for service under the General Insurance Corporation of India would be relieved from the service of the Government of Kerala so that they may join in the service of the Corporation with effect from September 1, 1973. Petitioner is admittedly one among these 80 persons. It is, therefore, clear that the petitioner on January 1, 1973, did not cease to be an employee of the State Government and did not become an employee of the General Insurance Corporation of India or a subsidiary company. He continued to be a State Government employee till August 31, 1973, when he was relieved as having been rendered surplus. He opted for service under the Corporation and joined the service of the Corporation with effect from September 1, 1973. That is clear from Exhibit P-1. It is true, as pointed by learned counsel for the petitioner and conceded by learned counsel for the respondents, that no order of appointment was issued petitioner or any of the other persons referred to in Exhibit P – 2. But their absorption was in terms of the suggestion made by the State Government and accepted by the Corporation. They were absorbed only with effect from September 1, 1973. It is true that petitioner was given travelling allowance and joining time to present himself before the officer concerned on September 1, 1973. That was only a courtesy extended to him. It may be, as pointed out by the petitioner, that increment has been sanctioned to him taking into consideration his prior service. These circumstances are not sufficient to show that he must be deemed to be an officer or employee of the Corporation at any time prior to September 1, 1973. He must be deemed to have been absorbed for appointment in the Corporation with effect from September 1, 1973. That being so, it is sub-clause (3) of Clause 4 of Exhibit P-3, that will apply to him. He has to retire on completion of fifty-eight years of age.”
16. According to them, by mistake some officials were allowed to retire at sixty years, that does not mean the company shall continue the same mistake. For this proposition, they placed reliance on a decision of the Supreme Court rendered in Coromandel Fertilisers Ltd. v. Union of India, , wherein the Supreme Court held that an error committed by an authority shall not be made a ground for the party to request the authority to perpetuate the same. It reads (at page 1777) :
“Mr. Setalvad made a grievance that the authorities concerned had allowed the benefit of the notification under similar circumstances to a rival company. If the grievance of the appellant is true, the appellant may no doubt have reasons to feel sore about it. We have, however, to point out that the grievance of the appellant, even if it is well founded, does not entitle the appellant to claim the benefit of the notification. A wrong decision in favour of any particular party does not entitle any other party to claim the benefit on the bass of the wrong decision.”
17. They submitted that on facts there is no discrimination or disparity in allowing some to retire at the age of sixty years and in the petitioners retirement at the age of fifty-eight years. Even otherwise, if for valid reasons, two types of age groups are created, such a classification cannot be termed as arbitrary or discriminatory, thus violative of Article 14 of the Constitution of India. For this proposition, they placed reliance on a decision of the Supreme Court in Tejinder Singh v. Bharat Petroleum Corporation Ltd., 1987 – II – LLJ – 225 where the Supreme Court held that fixing of retirement age for different category, viz., in the case of officers sixty years and in the case of other staff fifty-eight years, is valid for the reasons given at paragraph 4 of its order (at page 226) :
“This Court in Workmen of Bharat Petroleum Corporation Ltd. (Refining Division), Bombay v. Bharat Petroleum Corporation Ltd., (1984 – I – LLJ – 35), directed the retirement age of the clerical staff of the Refinery Division of Respondent No. 1 to be fixed at sixty years. Petitioners have contended that the disparity in the age of retirement between two groups of employees gives rise to discriminatory treatment. This stand is not tenable for more than one reason. Clerical staff and officers of the management staff belong to separate classifications and no argument is necessary in support of it. Petitioners have not contended that and perhaps could not legitimately contend, that the two classes of officers stand at par. In the Workmen’s case (supra) itself, this Court did not extend the benefit of superannuation at the age of sixty to all clerical staff but limited the same to that category of employees working in the Refinery Division, Bombay. Classification on the basis of reasonable differential is a well-known basis and we are of the view that the petitioners are not entitled in the facts of the case to seek support from Article 14 for their claim.”
18. They argued that when officials accepted and acted upon the basis of fixation of different age of retirement for different classes, subsequently they cannot make a complaint against such classification. For this proposition, the learned counsel for the respondents placed reliance on the decision of the Supreme Court in Life Insurance Corporation of India v. S. S. Srivastava, 1987 – II – LLJ – 414. The Supreme Court held thus (pp. 431-434) :
“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 of officers belonging to Class I and Class II are entitled and also the nature of their work and the powers enjoyed by them, fixation of different ages of retirement for Class III and IV employees on one hand and Officers on the other would not by itself be violative of Articles 14 and 16 of the Constitution ….
Where at the time of promotion of Class III employee, who joined service after September 1, 1956, to post of Class I Officer, the age of retirement for such Class III employee and the officer was the same, i.e., fifty-eight years, he could not after having enjoyed benefits of promotion post for several years, complain of discrimination on the ground that he would have had the benefit of retiring at the age of sixty which was fixed as the age of retirement for Class III employees belonging to his category after his promotion. If the employee 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 could not complain after 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 entitled and the better conditions of work which are enjoyed by them substantially compensate the effect of lowering of the age of retirement from sixty years to fifty-eight years ….
Since the classification of the employees for the purpose of age of retirement into two categories, i.e., transferred employees and employees appointed after September 1, 1956, is reasonable and not arbitrary and that there is a reasonable nexus between the classification and the object to be attained thereby, it cannot be said the Regulation 19 (2) is violative of Articles 14 and 16 of the Constitution. The transferred employees who are treated favourably belong to a vanishing group and, perhaps, within a period of few years none of them would be in the service of the Corporation. Thereafter, only one class of employees would be in the service of the Corporation, namely, those appointed subsequent to September 1, 1956, by the Corporation in respect of whom the Corporation has fixed the age of retirement as fifty-eight years which corresponds to the age of retirement in almost all the public sector establishments, the Central Government services and the State Government services.
The Act itself made a distinction between the transferred employees and the employees recruited to the service of the Corporation after September 1, 1956, by making amendments in Section 11 and in clauses (b) and (bb) of sub-Section (2) of Section 49 of the Act. In the (Staff) Regulations, 1960, there was again a distinction made between the transferred employees and employees recruited after September 1, 1956. The distinction between the two classes is recognised by Parliament even as late as 1981 when it amended Section 49 by deleting clause (bb) of sub-section (2) thereof and by amending Section 48 by introducing clause (cc) in sub-section (2) and the new sub-section (2-A) in it. Clause (cc) of Section 48(2), however, has been given retrospective effect from June 20, 1979. Sub-section (2-A) of Section 48 has given statutory recognition to the (Staff) Regulations of 1960, and in particular to Regulation 19(2) as amended in 1977. It is thus seen that at no point of time the transferred employees were integrated into one cadre along with the employees appointed after September 1, 1956, as such and the transferred employees have retained their birth-marks throughout. The fact that the pay, allowances and other conditions of service have been made the same in respect of both the transferred employees and the employees of the Corporation recruited after September 1, 1956 has not brought about the integration of the two classes of employees into one single cadre. 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 September 1, 1956 in the Corporation should be kept separate.”
19. For the similar proposition, learned counsel for the respondents placed reliance on a decision of the Supreme Curt rendered in B. S. Yadav v. Central Bank of India (1988) 72 FJR 336, wherein the Supreme Court, while considering Rules 1, 2 and 3 of the Central Bank of India (Officers) Service Regulations, 1979, held that Rule 3 prescribing fifty-eight years of age for retirement of Officers recruited subsequent to July 19, 1981, i.e., after the nationalisation of banks, and Rules 1 and 2 prescribing sixty years of age for retirement of other officers are not unconstitutional and not violative of Articles 14 and 16 of the Constitution. Similar was the view of the Supreme Court in Municipal Corporation of Delhi v. Smt. Sheila Puri, .
20. For the above reasons, they sought for dismissal of all the writ petitions.
21. From the material placed and the discussion made on various issues, now the finding shall be that KGID was not an insurer and did not vest with the Central Government. The business of insurance of private motor vehicles carried on by the KGID was stopped by virtue of nationalisation of the insurance companies. The surplus staff which the KGID had was absorbed by the four subsidiaries of the General Insurance Corporation on the direction of the Central Government at the instance of the request of the State Government. The surplus employees were absorbed on fresh terms and, therefore, the absorption of the petitioners by the respective Insurance Companies cannot be equated to that of “transferred officers” or “transferred development staff” so as to attract either the 1974 Scheme or the 1976 Scheme for the benefit of retirement at the age of sixty years. No doubt, the petitioners might have been given some monetary benefits like housing loan, car advance, fixing of insurance premiums, etc., calculating the retirement age at 60 years. But, such a concession given to the petitioners had not created a right in the petitioners to assert that they are entitled to be in service till they attain the age of sixty years and are not to be made to retire at the age of fifty-eight years. Allowing a few persons by mistake to enjoy some benefits does not mean that the authorities shall extend such benefits to other employees. Further, the Court cannot direct the companies to continue the mistakes which were committed in the case of others ignoring the effect of 1974 Scheme and 1976 Scheme. Thus, this Court cannot issue a direction to authorities to do a particular act which is prohibited under law or the rules governing service conditions of the staff concerned. From the material made available, it is not established that the action of the respondents in issuing the retirement notice to the petitioners making them retire on attaining the age of fifty-eight years is arbitrary, discriminatory or illegal so as to attract Articles 14 and 16(4) of the Constitution of India. No doubt, an attempt was made to show that the company had committed a mistake in fixing he age of retirement differently creating two categories of officials, viz.,for one category the age of retirement is at fifty-eight years of age and for the other category at the age of sixty years. But one has to bear in mind that if categorisation or classification is based on valid reasons, such classification or categorisation is permissible as held by the Supreme Court in the cases referred to above. In fact, similar contentions raised by the petitioners in these petitions were in fact raised before this Court in Writ Petitions No. 9007 of 1976 (K. R. Viswanathan v. General Insurance Corporation of India) and they were negatived by this Court by the order dated October 7, 1977 which was confirmed by the Division Bench in Writ Appeal No. 390 of 1978. Similar was the view of the High Court of Kerala in O.P. No. 4378 of 1986-U which was also confirmed in Writ Appeal by the Kerala High Court. These decisions have already been referred to earlier. As far as the authorities relied upon by both sides are considered, it has to be said that on facts the authorities relied upon by the learned counsel for the respondents are apt and applicable and not the decisions relied upon by the learned counsel for the petitioners. On the facts narrated, tested with the principles laid down by this Court, the Supreme Court and the High Court of Kerala, the conclusion is :
(i) The petitioners are not “transferred officers” or “transferred development staff” and the KGID was not an insurer and is not vested with the Central Government.
(ii) The petitioners who were the employees of the KGID and whose services were subsequently absorbed in one of the nationalised insurance companies are to be retired insurer on attaining the age of fifty-eight years and not at the age of sixty years as contended by them.
22. Hence, these petitions are dismissed as of no merit. No costs.