Bombay High Court
B.J. Shetty & Others vs Air India Limited & Another on 14 September, 1999
Equivalent citations: 2000(1)BOMCR743, 2000(4)MHLJ274
Author: B.N. Srikrishna
Bench: B.N. Srikrishna
ORDER B.N. Srikrishna, J.
1. Rules issued returnable forthwith. Respondents waive service through their respective Counsel. By consent, rules called out and heard finally.
2. These three writ petitions, though marginally variant on facts, arise out of the same circumstances and impugn the action of the first respondents, Air-India Limited, of reducing the age of superannuation form 60 years to 58 years. Hence, it would be convenient to dispose of all the three writ petitions by a common judgment. For the sake of convenience, we would recite in detail the facts in Writ Petition No. 1473 of 1999 and indicate the variation in facts in the other two writ petitions.
3. The petitioners is Writ Petition No. 1473 of 1999 are employees employed in various capacities with the first respondent. The petitioner in Writ Petition No. 1557 of 1999 is employed as a Pilot in the employment of the first respondent, while the petitioner in Writ Petition No. 1988 of 1999 is employed as Joint General Manager in the Operations Department of the first respondent. Thus, amongst the three writ petitions are covered employees at various levels i.e. employees covered by the provisions of the Industrial Disputes Act, 1947 and Middle Management and Senior Manager/Officers.
4. The first respondent is a Public Limited Company incorporated under the Companies Act, 1956 and is, inter alia, engaged in the business of transportation of cargo and passengers on International routes to and from India. By an Act of Parliament known as "Air Corporations Act, 1953", two statutory Corporations, Air India Corporation and Indian Airlines Corporation were established and set up to do the business of transportation of cargo and passengers on International routes and domestic routes respectively. Each statutory Corporation was empowered under the incorporating statute to frame service regulations for determining the conditions of service of employees employed by it. Both Corporations had framed such service regulations. The service regulations applicable to the employees of Air India Corporation were styled as "Air India Employees Service Regulations". Apart from these service regulations, the employees who fell within the definition of "workman" under section 2(s) of the Industrial Disputes Act, 1947 were also covered by the provisions of the Industrial Employment (Standing Orders) Act, 1946. Their service conditions were governed by a set of Standing Orders settled and certified in accordance with the provisions of the said statute. Under the Regulation 46(1) of the Air India Employees Service Regulations and the Certified Standing Orders, the age of retirement was prescribed as 58 years.
5. Parliament enacted and brought into force an Act known as "The Air Corporations (Transfer of Undertakings and Repeal) Act, 1994 (Act No. 13 of 1994) with effect from 29th January 1994. Under the Act, the Air Corporations Act, 1953 was repealed and the erstwhile Air India and Indian Airlines Corporations were transferred to and vested in two Government Companies known as "Air India Limited" and "Indian Airlines Limited". Section 4 of Act 13 of 1994 provides for general effect of vesting of undertakings in the companies. Section 8 of Act 13 of 1994 which provides that every officer or other employee of a Corporation, who was in employment immediately prior to the appointed day, shall continue to become an officer or other employee of the company in which the undertaking has vested and "shall hold his office or service therein by the same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave, passage, insurance, superannuation scheme, provident fund, other funds, retirement, pension, gratuity and other benefits as he would have held under the Corporation if its undertaking had not vested in the company and shall continue to do so as an officer or other employee, as the case may be, of the company or until the expiry of a period of six months from the appointed day if such officer or other employee opts not to be the officer or other employee of the company with in such period". The section, however, allowed an option to such officer or employee to opt out of service. Sub-section (3) of section 8 provides that nothing in the provisions of the Industrial Disputes Act, 1947 would enable such transferred officer/employee to claim compensation upon his services being transferred to the company. Thus, all officers and other employees whose services were transferred to the first respondent by virtue of Act 13 of 1994 would continue to have the same terms and conditions, with the same obligations and with the same rights and privileges with regard to their service. In other words, the erstwhile service regulations and the Standing Orders would continue to determine the service conditions of the two different classes of employees. We may notice Here that under Regulation 47 of the Service Regulations, an employee was required to retire on attaining the age of 58 years, though the service of a retiring employee could, at the option of the Managing Director, and upon the employee being found medically fit, be extended by one year at a time for aggregate period not exceeding two years. With regard to the "workman" category of employees, Certified Standing Order No. 30 also provides that the age of retirement of employees would be 58 years of age.
6. Taking notice of the global trends as to age of superannuation, the Fifth Pay Commission recommended, inter alia, that the age of retirement of all Central Government employees should be raised to 60 years. This, the Pay Commission did by taking note the increase in longevity , the extension of better health care facilities, improved health standards, need for utilization of experience of senior employees and resultant reduction in the expenditure on pensions and several other relevant factors.
7. On 13th May 1998, the Government of India issued an Office Memorandum accepting the recommendations made by the Fifth Central Pay Commission in paragraphs 128.16 and 128.17 relating to the age of retirement. Consequently, the President of India was pleased to direct that the age of retirement of all Central Government servants would stand increased to 60 years. It was also directed that there would be complete ban on extension of service beyond the age of 60 years except in the case of medical and scientific specialists who could be granted extension in service on a case to case basis upto the age of 62 years. This Office Memorandum provided that "These orders would come into force with effect from the date of Notification of amendment to the relevant rules and regulations, etc." and did not apply to Central Government employees who had already retired in accordance with the earlier rules or regulations. This Officer Memorandum also provides for other incidental matters which are not material for our purpose. The Fundamental Rules were also amended consequent upon the aforesaid directives and a Notification was issued on 13th May 1998 bringing into force the amendments in the Fundamental Rules pertaining to the age of retirement.
8. On 19th May 1998 the Department of Public Enterprises (DPE) issued an Office Memorandum conveying that the Central Government had decided to enhance the age of retirement for below board level employees of Central Public Sector Enterprises from 58 to 60 years and also that there shall be complete ban on extension of service beyond the age of superannuation of 60 years. The Office Memorandum says, "These decisions will come into force with effect from the date the relevant rules and regulations of PSEs concerned are amended by the concerned PSE."
9. The Ministry of Civil Aviation by a letter dated 21st May 1997 forwarded a copy of the Office Memorandum dated 19th May 1998 issued by the DPE on the subject of raising the age of retirement from 58 to 60 years to all Public Enterprises under its control including the first respondent "for information and compliance".
10. On 27th May 1998, the Board of Air India Limited resolved that as a consequence of the decision of the Government of India conveyed through the Department of Public Enterprises vide its Office Memorandum dated 19th May 1998 for compliance, the management of the Air India Limited was required to raise the age of retirement from 58 to 60 years. Accordingly, the Board passed a resolution approving that the age of retirement of below board level employees of the company be raised from the present 58 years to 60 years and advised the management of the first respondent to amend the Service Regulations/Standing Orders accordingly to give effect to the said decision of the Government. The Board also resolved that there would be complete ban on extension beyond the age of 60 years.
11. On 27th May 1998, the first respondent issued Staff Notice bearing No. 4/98-99 in which, after making reference to the Ministry of Civil Aviation's letter and the approval of the Board, it was stated, "the Management has decided to raise the age of retirement of below board level employees of Air India from 58 to 60 years with immediate effect. This will cover all employees who are on the payroll of the Company on this date". It was also stated therein that the other related issues consequent to issue of the Staff Notice would be clarified by way of separate administrative circular.
12. On 11th June 1998, the first petitioner in Writ Petition No. 1473 of 1999 received a letter by which he was informed that "In continuation of our letter No. EMP-1/SUP/28172 dated 16th March 1998, we would like to inform you that the Management has decided to raise the age of retirement from 58 to 60 years. A copy of Staff Notice No. 4/98-99 dated May 27, 1998 is enclosed". Similar letters were issued to other petitioners individually in this writ petition as well the petitioners in the other two writ petitions.
13. On 21st August 1998, the Government of India in the Ministry of Industry, Department of Public Enterprises, issued an Office Memorandum indicating rethinking on the part of the Central Government. Referring to the earlier Office Memorandum dated 19th May 1998 on the subject of raising the age of retirement of below board level employees of Central Public Enterprises from 58 to 60 years, this Office Memorandum, says, "..the decision of the Government in this regard is binding on all undertakings. In case any administrative Ministry of Public Sector Undertaking does not want to increase the age of retirement of its employees, specific exemption from operation of the aforesaid decision would be necessary".
14. The issue of seeking an exemption from the operation of the decision of the Central Government to raise the age of retirement was put up for consideration of the Board of the first respondent on the Agenda of the 51st meeting to be held on 18th January 1999. The Board considered the fact that the Ministry of Civil Aviation had issued a directive on 21st April 1998 to implement a 10% reductions in the staff strength; that the Management had already introduced various staff reduction and cost saving measures which had received good response; that the Air India Employees Service Regulations and the Certified Standing Orders pertaining to the age of retirement had not yet been amended so far; that about 268 employees were due to retire in 1998-99 (143 in operational and 125 in non-operational areas) and the financial outgo to the payments of the total emoluments to these 268 employees was Rs. 27.14 crores; the number of employees retiring during 1999-2000 was 310 (185 in operational and 125 in non-operational areas) towards whom the financial outgo was approximately Rs. 31.85 crores; that the Staff Notices had been issued in view of the specific instructions received from the Ministry even though the Service Regulations and the Certified Standing Orders had not been amended; the employee/aircraft ratio in Air India is significantly higher than most Asian Airlines; the issue of restoring the retirement age to 58 had been considered at joint meetings held with various Unions, Association and Guilds; most of the Unions, Associations and Guilds representing about 95% of the employees had favoured retention of the age of retirement at 58 years; that reversion of age of retirement at 58 would hence not have adverse repercussions on the operations or the overall functioning of the company; that in respect of employees who had already been informed that the age of retirement had been increased to 60 years on the basis of Staff Notice No. 4/98-99 dated 27th May 1998, they would be allowed to continue in service till 31st March 1999 on which date they would be superannuated from service; alternatively, they could be retired from the company by giving three months notice or three months salary/wages in lieu thereof; Staff Notice No. 4/98-99 dated 27th May 1998 stood cancelled and licenced categories like Pilots, Flight and Aircraft Engineers could be re-employed on contract basis for a maximum period of two years after attaining the age of superannuation at 58 years; the total savings in the financial year 1999/2000 would be approximately Rs. 58.99 crores. The Board in the meeting of 18th January 1999, approved the course of action suggested by the Management of Air India Limited and resolved in favour thereof.
15. On 25th January 1999, the first respondent addressed a letter to the Secretary, Civil Aviation, Ministry of Civil Aviation, requesting that the proposal of Air India Limited of reverting the retirement age of all below board level employees from 60 to 58 years be taken up with the Department of Public Enterprises and the first respondent be granted an exemption in terms of Office Memorandum dated 21st August 1998 which would be in the overall interest of the Air India Limited in the present difficult position.
16. By a letter dated 18th June 1999 addressed by the Deputy Secretary to the Government of India in the Ministry of Civil Aviation, the first respondent was informed that the proposal for exemption was accepted by the Government of India and that the Government had decided to exempt the first respondent from the Government's decision to raise the retirement age from 58 to 60 years embodied in the Department of Public Enterprises Office Memorandum dated 19th May 1998 "...subject to the condition that the complete ban on recruitment already in force shall continue".
17. On 18th June 1999, the first respondent issued Staff Notice No. 3/1999-2000 conveying the decision of the Government of India to exempt the first respondent from the directives of the Central Government conveyed through the Department of Public Enterprises to increase the age of retirement from 58 to 60 years. The Staff Notice said that in supersession of the earlier Staff Notice dated May 27, 1998, "the Management has decided to retain the retirement age of all below board level employees of Air India at 58 years as provided in the subsisting Service Regulations and Standing Orders. However, as a gesture of goodwill to employees who attained the age of 58 years on May 27, 1998, and whose employment has been extended pursuant to the Staff Notice dated May 27, 1998, the Management has decided, without prejudice to the Company's rights and contentions, to give them three months salary in lieu of notice. A communication in that behalf will be separately addressed to each such employee". With regard to employees who would attain the age of 58 years from 18th January 1999 to 1st July 1999, as a gesture of goodwill, but without prejudice to the first respondent's rights and contentions, it was stated that they would be granted three months salary in lieu of service and would retire with effect from 30th June 1999. Finally, it was clarified that all employees who attain the age of 58 years on or after 2nd July 1999, "would retire in the normal course in accordance with the existing Rules and Regulations of the company". Individual letters conveying the aforesaid decision were issued to all the petitioners on different dates. As far as the petitioner in Writ Petition No. 1557 of 1999 is concerned, he being a Pilot, by the letter dated 19th June 1999 he was informed that he would retire from the service of the company on 30th June 1999, but that it had been decided to employ him on contract basis from 2nd July 1999 on terms and conditions which would be intimated to him separately. The other unlicenced categories of employees were informed by individual letters that they would retire from the services of the company on 30th June 1999.
18. The petitioners have challenged the action of the first respondent in reverting to 58 years as the age of superannuation of its employees, broadly on the following grounds;
(I) that by increasing the age to retirement from 58 years to 60 years by Staff Notice No. 4/98-99 dated 27th May 1998, the first respondent has entered into an implied contract with the employees that henceforth their age of superannuation would be 60 years and, therefore, by unilateral arbitrary action, the first respondent could not reduce the age of superannuation to 58 years;
(II) that with respect to the category of employees covered by the provisions of the Industrial Disputes Act, 1947, the unilateral reduction of age from 60 to 58 years, amounts to a contravention of the provisions of section 9-A of the Industrial Disputes Act, 1947;
(III) that with respect to the "workman" category of employees, the action on the part of the first respondent also amounts to contravention of section 33(1) of the Industrial Disputes Act, 1947 since the workmen are concerned workmen in an industrial dispute which is pending adjudication before the National Industrial Tribunal presided over by Justice S.N. Khatri;
(IV) that the extension of age from 58 to 60 years gave both categories of employees a vested right to continue till the age of 60 years and the first respondent, being "State" within the meaning of Article 12 of Constitution, could not arbitrarily take away this vested right;
(V) that by reason of declaration made by Staff Notice No. 4/98-99 dated 27th May 1998 increasing the age from 58 to 60 years, the employees had rearranged their lives and entered into or refused to enter into long term commitments, and altered their position to their prejudice. The first respondent should, therefore, be estopped from reducing the age of retirement from 60 to 58 years;
(VI) that the unilateral increase of retirement age of 58 to 60 years, gave rise to a 'legitimate expectation' amongst the employees that the age of superannuation would be 60 years henceforth and this legitimate expectation could not be defeated by unilateral action of the first respondent;
(VII) that, in any event, the Management of the first respondent failed to consider larger issues of public interest in taking the decision to reduce the age of superannuation to 58 years. The decision has a prejudicial effect on aspects of passenger safety and financial viability of the first respondent both of which are vital public interest considerations. The first respondent did not place all relevant material affecting public interest before the Government of India and the decision of the Government of India to approve and sanction the application of the first respondent for exemption was made without application of mind to vital and germane factors;
(VIII) that the representation of the petitioners to the first respondent indicating the grounds on which the decision was being opposed was not even put before the Government for its consideration, nor were the employees who are likely to be affected by the decision to revert to 58 years as age of superannuation given a hearing. Hence, there is contravention of basic principle of natural justice.
(IX) that historically, and by judicial decision, it has been held that the employees of the Indian Airlines and Air India carrying out similar operations form one class. The age of superannuation has been retained at 60 years as far as Indian Airlines is concerned and hence there is invidious discrimination made between the employees belonging to the same class which would be violative of the fundamental right under Article 14 of the Constitution;
(X) that the Office Memorandum of the Department of Public Enterprises, Government of India, dated 21st August 1998 permits exemption for Public Sector Corporations which had not increased and do not want to increase the age of retirement to be exempted, but does not permit decreasing the age of retirement to 58 years after having increased it;
(XI) that out of all the Public Sector Enterprises, only the first respondent has been granted exemption from raising the age of retirement from 58 years to 60 years and permitted to revert to the age of retirement as 58 years. This is unreasonable and discriminatory.
GROUND (I)
19. The respondents contend that the service of the employees in the first respondent, a Public Sector Undertaking, is akin to service under the Government and more a matter of status than of contract. In fact, Mr. Andhyarujina, learned Counsel for the first respondent, relied strongly on the judgments of the Supreme Court in (i) S.L. Agarwal v. Hindustan Steel Ltd., , (ii) N. Lakshmana Rao v. State of Karnataka, and (iii) K. Nagaraj v. State of A. P., , and contended that there is no vested contractual right in regard to terms of service of a public sector employee and that the legal position of a public sector employee or that of a Government servant is one of a status and not of contract- The duties of status are fixed by law and the terms of service are governed by statute or statutory rules which can be unilaterally altered by the Government without the consent of the employee. Mr. Andhyarujina, therefore, contended that it was perfectly open to the first respondent to unilaterally change the term of service and that no objection could be taken thereto.
20. The Counsel for the petitioners have, however, relied on the judgment of the learned Single Judge of the Calcutta High Court in Ranjit Kumar v. Union of India, , and the judgment of the Supreme Court in Tewari v. District Board, Agra, 1964(1) L.L.J. 1. Relying on these two judgments, it is contended by the learned Counsel for the petitioners that the first respondent is an autonomous body constituted as a Government Company and not a Department of the State. The relations between the first respondent and its employees were originally governed by the Air India Employees Service Regulations, but consequent upon the coming into force of the Air Corporations (Transfer of Undertakings and Repeal) Act, 1994, the Service Regulations ceased to have effect as Regulations and, though they have been continued by virtue of section 8, their force is that of contractual terms and no more in view of the fact that there is no statutory obligation which is enforceable on the employees, nor is the power under the statute available to the first respondent to unilaterally change the conditions of service of the petitioners which have carried over by virtue of section 8 of Act 13 of 1994. It is urged that merely because the first respondent is a Government Company within the meaning of section 617 of the Companies Act, 1956, its juristic character has not changed and it does become identified with the State, nor do its employees become Government servants or holders of Civil posts under the Union or the State Government. Once it is held that a company registered under the Companies Act is not State or Department or agent thereof, the fact that its employees are appointed or removed by the President or that the President of India holds all the shares of the Government Company, is irrelevant and the employees do not become Government servants or holders of civil posts amenable to Article 311(2) of the Constitution. Their relations continue to be one of contract and any alteration therein can only be by way of a novatio of the contract of employment and not by unilateral action. The learned Counsel for the petitioners also relied on the judgment of the Supreme Court in Gujarat State Financial Corporation v. M/s. Lotus Hotels Put. Ltd., , and contended that merely because the dispute raised between the parties is in the realm of the contract, it cannot be contended that the remedy would only be by way of damages in a Civil Court for breach of contract and not by way of a writ petition under Article 226. It is contended that where the Company is an instrumentality of the State falling within the sweep of Article 12 of the Constitution, it cannot be allowed to commit breach of a solemn undertaking on which the other side has acted and then contend that the party suffering by the breach of the contract may sue for damages but cannot compel specific performance by resorting to the writ jurisdiction of the High Court.
21. In our view, the contentions canvassed on either side take the extreme view. We are unable to subscribe to the contention of the respondents that the conditions of service of a Public Sector Undertaking, one which is no longer governed by the provisions of the statute and in which the power of prescribing conditions of service of employees is not available under any statute, would be the same as in the case of a Government servant or that it would be a matter of status which could be altered at will by the Government. In our view, the petitioners are justified in contending that the conditions of service under the first respondent, though originally prescribed in exercise of statutory power delegated to the first respondent resulting in the staff regulations, are no longer so by virtue of the repeal of the Air Corporations Act. Once the Air Corporations Act came to an end, so did the power of prescribing the conditions of service by exercise of statutory powers. When the first respondent possessed the said power, it perhaps was possible to contend that the employment under the first respondent was a matter of status and not contract. At any rate, after the repeal of the Air Corporations Act by Act 13 of 1994, this position has drastically changed. The staff regulations which determined the conditions of service of the employees have spilled over by virtue of section 8 of Act 13 of 1994, but they do not operate as regulations propria vigore any longer, but would merely be statutorily imposed contractual terms of employment. We have no hesitation in accepting the contention of the petitioners thus far. We are, however, unable to accept the contention of the petitioners that the display of Staff Notice No. 4/98-99 dated 27th May 1998 itself amounted to a consensual variation of the contractual terms of employment of the employees, nor are we able to subscribe to the theory of the petitioners that there was a novatio of the contract of employment with regard to the age of retirement. We cannot be unmindful of the fact that the first respondent displayed the Staff Notice No. 4/98-99 dated 27th May 1999 under a directive given by the Department of Public Enterprises. Though the directive of the DPE contained in Officer Memorandum dated 19th May 1998 clearly stated that the increase in the age of retirement from 58 to 60 years would come into force from the date on which the relevant Rules and Regulations were amended by the concerned Public Sector Enterprises, the first respondent was probably over-enthusiastic. By its Staff Notice No. 4/98-99 dated 27th May 1998, the first respondent notified that the Management had decided to raise the age of retirement of below board level employees from 58 to 60 years "with immediate effect" and that it would cover all the employees on the payroll of the company as on that date. Indubitably, this was unilateral action on the part of the first respondent's Management, which gave an advantage to the employees. Similarly, by the Staff Notice No. 3/1999-2000 dated 18th June 1999, the first respondent reverted the retirement age to 58 years. Merely because during the interregnum between 27th May 1998 to 18th June 1999 a certain facility had been made available to the employees, it cannot be postulated that the terms of employment pertaining to age of retirement were changed and substituted by a new contractual term of employment which gave a vested right to the employees to continue in service upto the age of 60 years. It is difficult to agree with the contention of the petitioners that the Staff Notice No. 4/98-99 dated 27th May 1998 can be said to have introduced any change in the contract of employment. Any change in the contract of employment could only have been consensual and brought into force by both parties being ad idem thereupon, and for valuable consideration. None of the indicia of a valid contract are to be found in the present situation. Even assuming that, after the coming into force of Act 13 of 1994, the Staff Regulations continued as contractual terms of employment, we are unable to agree that by virtue of the Staff Notice No. 4/98-99 dated 27th May 1998 there was any variation in the contract of employment. At the highest, it amounted to a concession granted unilaterally by the employer, which was again unilaterally withdrawn on 18th January 1999. The contention of the petitioners that it amounts to breach of contract by the first respondent State within the meaning of Article 12 and, therefore, needs to be interfered with in writ jurisdiction is without substance and needs to be rejected.
GROUND (II)
22. With regard to the category of employees covered by the provisions of the Industrial Disputes Act, 1947, learned Counsel for the petitioners contended that the unilateral action of the first respondent in withdrawing the concession of extending the age of retirement to 60 years, would amount to a contravention of the provisions of section 9-A of the Industrial Disputes Act, 1947, inasmuch as, no notice prescribed thereunder had been given. This argument must fail for two reasons. In the first place, by a Notification bearing No. IDA-3160-Lab. II dated 29th August 1960 issued in exercise of the powers conferred by Clause (b) of the proviso to section 9-A of the Industrial Disputes Act, 1947, the Government of Maharashtra, which was the then "appropriate Government", had notified the Air India International Employees' Service Regulations. Consequently, the provisions of section 9-A of the Industrial Disputes Act, 1947, would not apply for the purpose of a variation in the Air India Staff Regulations which now spilled over under section 8 by the Act 13 of 1994. (See in the connection the judgment of this Court in Air India Cabin Crew Association v. Air India, 1981 Bom.C.R. 646 : 1981(11) L.L.J. 306. Even otherwise, we are not satisfied that the extension of the age of retirement from 58 to 60 years and its subsequent reversion to 58 years by the second Staff Notice, would amount to a change with regard to or affecting any industrial matter enumerated in Schedule IV to the Industrial Disputes Act, 1947. In any event, we are satisfied that this change has been brought out as a result of the agreement between the first respondent and its workmen, since large number of Unions representing about 95% of the employees have not only agreed to it, but have actively canvassed for reversion of the age of retirement to 58 years. For all these reasons, we are unable to accept the contention based on section 9-A of the Industrial Disputes Act, 1947.
GROUND (III)
23. The learned Counsel for the petitioners then contended that the reversion of the age of retirement by the second Staff Notice No. 3/1999-2000 dated 18th January 1999 amounts to contravention of the provisions of section 33(1) of the Industrial Disputes Act, 1947. It is contended that there is an industrial dispute with regard to conditions of service of the workmen of the first respondent which has been referred to the National Industrial Tribunal for adjudication and is pending before the National Industrial Tribunal The contention is that all the "workmen" of the first respondent are concerned workmen in the said reference and a unilateral change with regard to the condition of service is prohibited by section 33(l)(a) of the Industrial Disputes Act, 1947. This contention too cannot be accepted. In the first place, there is no industrial dispute with regard to the age of retirement referred to the National Industrial Tribunal. We called upon the petitioners' Counsel to show us that the industrial dispute pending before the National Tribunal pertains to age of retirement. This, they are unable to do. In any event, it cannot be forgotten that the Certified Standing Order, which prescribes the age of retirement of workmen at 58 years, has not been amended at all and both on the date of the first Staff Notice and the Second Staff Notice it continued to remain at 58 years. We are, therefore, unable to accept the contention that there is any contravention of the provisions of section 33(1) of the Industrial Disputes Act, 1947 by the second Staff Notice.
GROUND (IV)
24. The learned Counsel for the petitioners contend that the extension of age from 58 to 60 years by the first Staff Notice No. 4/98-99 dated 27th May 1998 gave the employees of the first respondent a vested right to continue till the age of 60 years and that such vested right could not be abridged by the first respondent "State" within the meaning of Article 12 - arbitrarily. The action of the first respondent is, therefore, a breach of the petitioners' fundamental right under Article 14, so goes the contention. The basic premises for this argument is that the first Staff Notice No. 4/98-99 vested a right in the employees. We are unable to accept this. In fact, the decision of the Government of India, as conveyed by the DPE, clearly says that the increase in the age of retirement would come into force only upon the concerned Staff Regulations/Standing Orders being amended. The first Staff Notice was obviously in anticipation of such amendment, which actually never came about. On 21st August 1998, the DPE issued another Office Memorandum giving the option to the Public Sector Undertakings to seek exemption from increase in the age of retirement. The first respondent by its application dated 25th January 1999 applied for such exemption which was granted after careful consideration by the DPE and the Union Cabinet. In these circumstances, it is not possible to accept the contention of the petitioners that the first Staff Notice No. 4/98-99 dated 27th May 1998 created a vested right in the employees of the first respondent. Hence, this contention fails.
GROUND (V)
25. The petitioners urge the doctrine of estoppel. It is contended that as a consequence of Staff Notice No. 4/98-99 dated 27th May 1998 increasing the age of retirement from 58 to 60 years, the employees had rearranged their life-styles and entered into, or refused to enter into, long term commitments and had thereby irrevocably altered their positions to their prejudice. The action of the first respondent in reverting to 58 years as the age of retirement would cause immense harm and prejudice to the employees and the first respondent must be estopped from implementing its decision in this regard, is the contention of the petitioners. This contention has no basis whatsoever. Estoppel can only be based on specific pleadings and evidence. Apart from vaguely saying that the employees had entered into long term commitments, none of the petitioners has pleaded in the writ petitions any particulars so as to found in argument of estoppel. No particulars whatsoever as to the change in their life styles, or the long term commitments entered into, or refused to be entered into, have been given in the writ petitions. For want of sufficient particulars, we decline to accept this argument based on the doctrine of estoppel.
GROUND (VI)
26. It is contended by the petitioners that the increase of retirement age from 58 to 60 years by the first Staff Notice No. 4/98-99 dated 27th May 1998 gave rise to a 'legitimate expectation' amongst the employees that the age of superannuation would henceforth be 60 years and that this legitimate expectation could not be frustrated by the unilateral action of the first respondent by way of the second Staff Notice dated 18th January 1999. The petitioners relied on the judgment of the Supreme Court in Union of India v. Hindustan Development Corpn., , National Buildings Construction Corpn v. S, Raghunathan, and Punjab Communications Ltd. v. Union of India, .
27. The law as to doctrine of legitimate expectations has been fairly crystallized by the judgment of the Supreme Court in Punjab Communications (supra) which has taken a survey of all other judgments. Punjab Communications (supra) summarized the law in paragraphs 37 and 38 as under :
"37. The above survey of cases shows that the doctrine of legitimate expectation in the substantive sense has been accepted as part of our law and that the decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way. The judgment in Raghunathan case, requires that reliance must have been placed on the said representation and the representee must have thereby suffered detriment.
38. The more important aspect, in our opinion, is whether the decision maker can sustain the change in policy by resort to Wednesbury Principles of rationality or whether the Court can go into the question whether the decision maker has properly balanced the legitimate expectation as against the need for a change. In the latter case the Court would obviously be able to go into the proportionality of the change in the policy."
The Court pointed out that whether the action of the public authority could be said to be reasonably necessary in order to meet an overriding public interest, has to be Judged by application of the "Wednesbury" principle of reasonableness. The Supreme Court approvingly referred to the observations of Laws, J. in R. v. Secy, of State for Transport, exp Richmond upon Thames London", 1994(1) All.E.R. 577, as under:
"The Court is not the Judge of the merits of the decision-maker's policy ... the public authority in question is the Judge of the issue whether 'overriding public interest' justifies such a change in policy.... But that is no more than saying that a change in policy, like any discretionary decision by a public authority, must not transgress Wednesbury principles."
However, the Supreme Court pointed out in Punjab Communications (supra) that a change in policy can defeat a substantive legitimate expectation if it can be justified on Wednesbury reasonableness. Referring to its earlier decision in Hindustan Development Corpn. case (supra), it was pointed out that the decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy and that the choice of the policy is for the decision-maker and not for the Court. The legitimate expectation merely permits the Court to find out if the change in the policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made.
28. Even assuming the argument of legitimate expectation to be correct and that there arose a legitimate expectation as a consequence of the Staff Notice No. 4/98-99 dated 27th May 1998 issued by the first respondent, we are of the view that the change in policy as indicated in the option given by D.P.E. by its Office Memorandum dated 25th August 1998 and its exercise by the first respondent by its application for exemption followed by the second Staff Notice No. 3/1999-2000 dated 18th January 1999, cannot be said to be or based on grounds which are irrational, perverse or on one which no reasonable person could have acted. The expression "reasonable" used in this context has a different connotation than the one attached to it in the Law of Torts as pointed out by the Supreme Court in G.B. Mahajan v. Jalgaon Municipal Council, . In Jalgaon Municipal Council case (supra), the Supreme Court observed:
"39. Different contexts in which the operation of "reasonableness" as test of validity operates must be kept distinguished. For instance as the arguments in the present case invoke, the administrative law test of 'reasonableness' as the touchstone of validity of the impugned resolutions is different from the test of the 'reasonable man' familiar to the law of torts, whom English Jaw figuratively identifies as the "man on the Clapham omnibus". In the latter case the standards of the 'reasonable man' to the extent such a 'reasonable man' is Court's creation, is in a manner of saying, a mere transferred epithet. Lord Radcliffe observed 1956(2) All.E.R. 145, 160:
"By this time, it might seem that the parties themselves have become so far disembodied spirits that their actual persons should be allowed to rest in peace. In their place there rises the figure of the fair and reasonable man. And the spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice, is, and must be, the Court itself...." . See Davis Contractors Ltd. v. Fareham U.D.C, 1956(2) All.E.R. 145, 160."
40. Yet another area of reasonableness which must be distinguished is the constitutional standards of 'reasonableness' of the restrictions on the fundamental right of which the Court of judicial review is the arbiter.
41. The administrative law test of reasonableness is not by the standards of the "reasonable man" of the torts law. Prof. Wade says;
"....This is not therefore the standard of 'the man on the Clapham omnibus'. It is the standard indicated by a true construction of the Act which distinguishes between what the statutory authority may or may not be authorised to do. It distinguishes between proper use and improper abuse of power. It is often expressed by saying that the decision is unlawful if it is one to which no reasonable authority could have come. This is the essence of what is now commonly called 'Wednesbury unreasonableness', after the now famous case in which Lord Greene, M.R. expounded it."
42. To the same effect are the observations in "Legal Control of Government" (Bernard Schwartz and H.W.R, Wade) at page 253:
"... Confusion has perhaps arisen because the test of reasonableness in this context is the law of tort and elsewhere. In applying the latter standard the Judge merely enforces what he thinks is reasonable. But in condemning unreasonable administrative action he asks himself whether the decision is one which a reasonable body could have reached. In other words he allows some latitude for the range of deferring opinions which may fall within the bounds of reasonableness...."
43. The 'reasonableness' in administrative law must, therefore, distinguish between proper use and improper abuse of power. Nor is the test the Court's own standard of 'reasonableness' as it might conceive it in a given situation. This is the essence of Lord Greene's dictum now familiar as the 'Wednesbury unreasonableness' in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, 1947(2) All.E.R. 680. It was observed:
"It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington, L.J., in Short v. Poole Corporation, 1926 Ch. 66 gave the example of the red-haired teacher, dismissed because she had red hair. This is unreasonable in one sense. In another it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and, in fact, all these things run into one another."
44. Referring to the doctrine, Prof. Wade says:
"This has become the most frequently cited passage (though most commonly cited only by its nickname) in administrative law. It explains how 'unreasonableness, in its classic formulation, covers a multitude of sins. These various errors commonly result from paying too much attention to the mere words of the Act and too little to its general scheme and purpose, and from the fallacy that unrestricted language naturally confers unfettered discretion. Unreasonableness has thus become a generalised rubric covering not only sheer absurdity or caprice, but merging into illegitimate motives and purposes, a wide category of errors commonly described as 'irrelevant considerations', and mistakes and misunderstandings which can be classed as self-misdirection, or addressing oneself to the wrong question..."
The point to note is that a thing is not unreasonable in the legal sense merely because the Court thinks it is unwise. Some observations of Lord Scarman in Nottinghamshire County Council v. Secretary of State for Environment, 1986 A.C. 240, 247 might usefully be recalled:
"....But I cannot accept that it is constitutionally appropriate, save in very exceptional circumstances, for the courts to intervene on the ground of "unreasonableness" to quash guidance framed by the Secretary of State and by necessary implication approved by the House of Commons, the guidance being concerned with the limits of public expenditure by local authorities and the incidence of the tax burden as between taxpayers and ratepayers. Unless and until a statute provides otherwise, or it is established that the Secretary of State has abused his power, these are matters of political judgment for him and for the House of Commons. They are not for the Judges or your Lordships' House in its judicial capacity".
"For myself, 1 refuse in this case to examine the detail of the guidance or its consequences. My reasons are these. Such an examination by a Court would be justified only if a prima facie case were to be shown for holding that the Secretary of State had acted in bad faith, or for an improper motive, or that the consequences of his guidance were so absurd that he must have taken leave of his sense..."
29. Thus, the test is not one of "the man on the Clapham omnibus", but a more stringent one of testing the constitutional validity of the State's act as elaborately pointed out in Jalgaon Municipal Council case (supra). In the same judgment, the Supreme Court also observed:
"..With the expansion of the State's presence in the filed of trade and commerce and of the range of economic and commercial enterprises of government and its instrumentalities there is an increasing dimension to governmental concern for stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of costs against time scales, quality control, cost-benefit ratios etc. In search of these values it might become necessary to adopt appropriate techniques of management of projects with concomitant economic expediencies. These are essentially matters of economic policy which lack adjudicative disposition, unless they violate constitutional or legal limits on power or have demonstrable pejorative environmental implications or amount to clear abuse of power. This gain is the judicial recognition of administrator's right to trial and error, as long as both trial and error are bona fide and within the limits of authority".
The Supreme Court recalled the memorable words of Justice Brandies in New State Ice Company v. Ernest A. Liebmann, 285 U.S. 262, 310-11:
"The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due to experimentation..."
"...There must be power in the States and the Nation to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs.."
"To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the Nation. It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country. This Court has the power to prevent an experiment... But in the exercise of this high power, we must be ever on our guard, lest we erect our prejudices into legal principles."
30. These are the parameters by which the constitutional Court has to Judge the reasonableness of the action of the State in changing its policy which is alleged to defeat the legitimate expectation.
31. What were the policy considerations which led to a reversion of the age of retirement from 60 to 58 years in the case of the first respondent? The first respondent was beset with continuous financial losses. The Department of Public Enterprises and the Ministry of Civil Aviation, to which the first respondent is subject, had issued directives that within a stipulated period the first respondent should reduce its work force in as painless a manner as possible. The matter was debated at great length in meetings held with the Ministry of Civil Aviation in which the representatives of D.P.E. were present. Several decisions were taken which included introduction of voluntary retirement schemes, compulsory retirement of employees, total freeze on recruitment, optimisation of manpower and restructuring the organisations, fresh look at the mission/objectives of each organisation, introduction of privatisation and appointment of a committee to go into the issues. The first respondent by resorting to some of these measures was able to abolish 789 posts which were identified as superfluous. The Management of the first respondent already introduced staff reduction and cost saving measures which included, inter alia:
(i) a voluntary option for employees to go on two years' leave without pay/allowance etc.;
(ii) a three days half working week with a 60% compensation as against payment of full salary for full working week.
These were in addition to the measures recommended by D.P.E. which had already been implemented. The first respondent's Management was bona fide of the view that the employee/aircraft ratio in Air India was the highest amongst all Asian Airlines and that was one of the contributory factors for its continued loss making. The first respondent had to compete against airlines operating International routes which were more efficiently run by private enterprises without the drag of bureaucratic interference. In order to trim flab and regain its lost edge of competition, the Management of the first respondent decided that reverting to 58 years of age of retirement would mean that during the year 1998-99, 268 employees (143 in operational and 125 in non-operational areas), the financial outgo towards payment of whom was approximately 27.14 crores, and 310 employees during the year 1999 2000 (185 in operational and 125 in non-operational areas) towards whom the projected financial outgoing was about 31.85 crores would be retired. Thus, in effect, the total savings in the two financial years 1999 and 2000 were projected to be approximately Rs. 58.99 crores. It was in these circumstances that, after careful application of mind to the problems with which the Management of the first respondent was beset, the Management recommended to the Board of the first respondent that the exemption offered by the Office Memorandum of the D.P.E. dated 25th August 1998 be sought and the age of retirement be reverted to 58 years. This issue was again considered at the level of Ministry of Civil Aviation and, in view of the disagreement between different Ministries concerned, by the Union Cabinet itself. The Union Cabinet finally gave its approval to the proposal made by the Management of the first respondent which led to the second Staff Notice No. 3/1999-2000 dated 18th January 1999 being issued. Tested by the principle of Wednesbury reasonableness, we are unable to hold that the action of the first respondent was unreasonable or that it was perverse. The Court is not best Judge of a business decision, for the wearer knows where the shoe pinches. We cannot sit in judgment over what is purely a commercial and Management decision taken by the first respondent, for good causes, by exercising the option of invoking the exemption offered by the D.P.E. We are unable to accept the contention of the petitioners that the action of the first respondent is liable to be faulted.
GROUND (VII)
32. The petitioners in the Writ Petition No. 1473 of 1999 moved this Court by Chamber Summons No. 63 of 1999 to direct the Union of India (second respondent in Writ Petition No. 1473 of 1999) to produce before the Court the following documents listed in Schedule "I" to the Chamber Summons:
1) Office Memorandum dated May 19. 1998.
2) Letter dated May 21, 1998.
3) Office Memorandum dated August 21, 1998.
4) Letter dated September 8, 1998.
5) Letter dated January 25, 1999 along with annexures (Exhibit "I").
6) Note for Cabinet dated May 31, 1999.
7) Letter dated June 18, 1999 (Exhibit "2").
8) Minutes of the Cabinet meeting dated 8-6-99.
Second respondent produced document at Sr. Nos. 1 to 5 and 7 out of the above documents, but declined to produce the documents at Sr. No. 6 (Note for Cabinet dated May 31, 1999) and Sr. No. 8 (Minutes of the Cabinet meeting dated 8th June 1999) by claiming privilege against production. Mr. Rana, learned Counsel appearing for second respondent contended that these documents belongs to the class of documents which are entitled to privilege by the very nature of the documents. Though the petitioners joined issue on the ground of privilege, finally the learned Counsel for the petitioners, Mr. Grover, did not insist on the issue of privilege being decided and submitted that he would be satisfied if the said two documents were perused by the Court so as to satisfy its judicial conscience. Mr. Grover urged that it may not be necessary to decide the Chamber Summons No. 63 of 1999 with regard to privilege issue, but that the decision on the Chamber Summons may be postponed to the decision of the writ petition. We have perused the documents in respect of which privilege was claimed and apprised ourselves of the contents. It appears to us that the main purpose with which the documents were called for by the petitioners was to demonstrate that there was a disagreement between different Ministries of the Union of India with regard to the proposal of the first respondent to revert to 58 years as the age of retirement of its employees. Mr. Rana, learned Counsel for the second respondent, said that notwithstanding the issue of privilege, the said fact is admitted by the second respondent. It was precisely because there was disagreement between different Ministries that the issue was referred under Rule 10 of the Rules of Business for decision by the Union Cabinet. Consequently, the entire issue was placed before the Union Cabinet with an appropriate note and the Union Cabinet after discussion decided to approve of the course of action suggested by the Management of the first respondent. These facts are not in dispute and may be stated even without deciding the claim for privilege raised by the second respondent. In our view, the fact that there was disagreement between different Ministries is by itself no ground to show that the ultimate decision taken by the Union Cabinet was erroneous or unreasonable (as understood in the light of the Wednesbury principle).
33. The learned Counsel for the petitioners contended that the documents placed on record by the second respondent indicate that larger issues of public interest had not been considered by the first respondent, nor was the Union Cabinet properly apprised of such issues. It is contended that the Union Cabinet has been apprised only of a partial picture and hence the decision taken by it is vulnerable. Two issues of public interest were highlighted. One pertains to the financial viability of the first respondent and the second pertains to passenger safety. On both counts it was contended that the note prepared by the first respondent for the information of the Civil Aviation Ministry was incomplete and inadequate. Consequently, the decision of the Union Cabinet also was liable to be faulted, is the contention of the petitioners.
34. We may mention here that the impact of roll back of retirement age from 58 to 60 years was carefully considered by the Engineering Department of the first respondent which forwarded a note on 16th June 1990 to the Director of Engineering. It was highlighted in this note that the first respondent had not been recruiting manpower for a long time; though shortage was met to a large extent by engaging personnel on overtime, however, due to aging of aircrafts, it had been found extremely difficult to meet the production target even with overtime. It was pointed out in this note that there was a proposal to dispose of three of the oldest B747-2000 aircraft and, if the sale were to materialize, with the retirement age of 60 years, it was estimated that the existing manpower strength (barring categories such as Technicians Assistants) would meet the current production requirement. The note highlights that a large number of vacancies had remained unfilled in the categories of Service Engineers, Aircraft Engineers, Technical Officers and Technicians Assistants to the extent of 515. With The retirement age being brought down from 60 to 58 years, the Department pointed out that the available manpower would further reduce drastically. The note then states that if the aging aircrafts are not phased out as proposed and the ban on recruitment continues, the work would be seriously hampered. Finally, the note cautioned that a situation could arise wherein some of the aircrafts would have to be sent to external parties for major checks, and, based on past experience, it would cost 3.5 million U.S. Dollars per aircraft to have the major checks done from outside parties, besides which a number of components would also be required to be sent to external facilities for repair/overhaul due to such reduction in manpower. In view of this detailed consideration in the note, the Director of Engineering proposed that:
(a) Approval be obtained for placing all retiring Aircraft Engineers on contract basis so that they will be available for some time.
(b) Process of recruitment be commenced for Aircraft Engineers, Service Engineers and Technicians Assistants.
35. The detailed note prepared by the Director of Engineering was considered by the Deputy Managing Director of the first respondent, who prepared a note for the Managing Director on 16th June 1999. In his note, the Deputy Managing Director agreed broadly with the contents of the notes and the observations and suggestions made by the Engineering Department. He pointed out that the salient features of the note were as follows:
"i) The roll back of the retirement age will result in the retirement of a large number of Aircraft Maintenance Engineers (AME), Service Engineers and Technician's Assistants at one point of time instead of phased retirements spanning over the next 1/2 years.
ii) This will cause immediate shortage of AMEs, Service Engineers and Technician's Assistants. As far as AME's are concerned, the shortage can be met by extending their retirement age for a year on till the age of 60 years on contract as had been done earlier, for which approval of the Government already exists. This will give us enough time to initiate recruitment process to take care of the shortages.
iii) As far as the Service Engineers and Technician's Assistants are concerned, the immediate shortage will have more far reaching effect. Unlike the AME's there is no Government approval to appoint Service Engineers and Technician's Assistants on contract basis after the age of superannuation. As such no immediate solution can be found in this regard. Even if we initiate the recruitment process immediately, it will take at least a year or so before recruitment of Service Engineers and Technician's Assistants are completed and in the intervening period the shortage of these two categories will continue.
iv) Even presently there are vacancies in the Standard Force on AMEs, Service Engineers and Technicians Assistants and Engineering Department had earlier indicated the requirement of additional manpower although no decision had yet been given. As the existing shortage is going to be compounded with the roll-back of the retirement age Engineering Department will have no option but to make arrangements for sending few aircraft to outside parties for major work till the recruitment of Services Engineers and Technician's Assistants are completed.
v) I agree with the suggestion of the Engineering Department that it will at least need to send some aircraft to outside parties during the next one year at a cost of USD 3.5 million per aircraft. The 3 aircraft that are proposed to be sold will in any case have to be sent outside if the sale does not take place immediately as planned and the aircraft mentioned above will be in addition to the aircraft proposed to be sold."
Finally, the Deputy Managing Director ended up by saying that he fully agreed with the Engineering Department that there was need to start the recruitment process to make up the required number and also to initiate the process of sending two aircraft for outside repairs during the next year so that services could be maintained without any disruption. It was also stated that appointment of the retiring Aircraft Maintenance Engineers on contract for another one to two years could at best be a temporary measure and the recruitment process of Aircraft Maintenance Engineers also needed to be initiated both within the company and from outside sources in order to meet the present and future strategies.
36. When the writ petitions came up for admission, it was urged that three was no material to indicate that the Management of the first respondent had carefully applied its mind to the negative factors of the roll-back of the retirement age from 60 to 58 years highlighted in this note of the Deputy Managing Director. We, therefore, directed the first respondent to state on oath whether these factors were ever considered before the decision to roll-back was taken. M.P. Mascarenhas, Managing Director of the first respondent, has filed an affidavit on 4th August 1999 in which he asserts that all the factors highlighted in the note of the Deputy Managing Director were very much within his cognizance and were taken note of at the time of submitting the proposal for rolling back the age of retirement from 60 to 58 years. He also points out in his affidavit that, out of nine B-747-200 aircraft earlier owned by the first respondent, two had been sold in 1998 and seven others have been publicly advertised for sale as decided by the Board. Consequently, according to him, the action to send the said aircrafts aboard for necessary checks an maintenance and consequent expenditure is not likely to occur. The other four B-747-200 aircraft have been fitted with 7-Q engines which do not require their having to be sent abroad for checks and maintenance. He further contends that a discussion with the Deputy Managing Director of the Engineering Department indicated that the number of Aircraft Maintenance Engineers and Technicians currently on the roll would be sufficient to maintain the remaining B-747-200 aircraft for the time being, although, at a later stage, it may be necessary to induct technical personnel as and when the situation warrants. Finally, he highlighted the fact that, in the note of the Deputy Managing Director there was no objection to the roll-back of the age of retirement from 60 to 58 years and that all that had been suggested was that there should be employment of licenced categories of employees on contract basis after they had retired at 58.
37. In these circumstances, it is difficult for us to agree with the contention of the learned Counsel for the petitioners that the issue as to safety of aircraft was not sufficiently considered by the management or the Board of the first respondent or Civil Aviation Ministry and even by the Union Cabinet. As we have already pointed out, the Court is not the best Judge of an Administrative decision taken by a public authority. We are more than satisfied that all necessary inputs, which would affect the decision of the public authority, were placed before the authorities at all levels, including the Union Cabinet and that the decision of the Union Cabinet cannot be faulted on this ground. In any event, on behalf of the second respondent, Union of India, learned Counsel Mr. Rana, made a statement, which we have recorded, that notwithstanding the ban on recruitment presently operating, the Central Government would grant such exemption from the ban on recruitment as may be necessary in the interest of operational requirements and safety of passengers, as and when sought by the first respondent. In other words, on behalf of the Union of India, an assurance has been given to the Court that the ban on recruitment shall not compromise or prejudice its operational or maintenance requirements. For this reason also, we are not inclined to accept the contention.
38. A subsidiary contention raised by the learned Counsel for the petitioners is that the issue of losses and the steps to be taken to counter them was not considered in proper perspective by the Management of the first respondent, that because of inherent defects in the note prepared for the benefit of the Ministry of Civil Aviation, the decision of the said Ministry and the Union Cabinet must have been affected. Here again, we are unable to agree. We may recapitulate the observations of the Supreme Court in Jalgaon Municipal Council case (supra) that it is not the function of this Court to sit in judgment over administrative decisions as long as they have been taken bona fide and after reasonably collecting all available material. As the Supreme Court pointed out in Jalgaon Municipal Council (supra), the Administrator must be left free to carry out trial and error. We, therefore, reject this argument.
GROUND (VIII)
39. It is contended that the employees likely to be affected by the decision of the Government of India to grant exemption to the first respondent from raising the retirement age from 58 to 60 were not afforded a reasonable opportunity of being heard before the decision was taken. It is pointed out that the representations addressed to the Minister for Civil Aviation was not even replied by him, but only by the first respondent's officer. In our view, this contention has no merit. It is asserted by the first respondent, on the strength of documents placed on record, that most of the Unions/Associations/Guilds, representing about 95% of the employees of the first respondent had not only approved of the decision to revert to 58 years as the age of retirement, but, in fact, had demanded that the first respondent do so. In the face of these facts, it is difficult to appreciate what other hearing could have been given to the employees. Surely, the first respondent was not expected to give hearing to about 18000 employees individually. In our view, assuming that there was a requirement as to pre-hearing, this is more than substantially met by the course of conduct adopted by the first respondent in ascertaining the wishes of the different Unions/Guilds/Associations representing its employees. It has to be borne in mind that in service jurisprudence there cannot be any service rule which would satisfy each and every employee and its constitutionality has to be judged by considering whether it is fair, reasonable and does justice to the majority of the employees and fortunes of some individuals is not the touch-stone. Kamal Kanti Dutta v. Union of India, , and Reserve Bank of India v. C.N. Sahasranaman, .
GROUND (IX)
40. It is contended that historically, and as recognised by judicial decision, the employees of Indian Airlines and Air India carrying out similar operations have been considered to form one class. The age of superannuation has been retained at 60 years for the employees of Indian Airlines but has been reverted to 58 years in the case of the first respondent. This, contend the petitioners, amounts to invidious discrimination without rational basis between the employees belonging to the same class. Consequently, there is violation of the fundamental right under Article 14 of the Constitution. At first blush, the argument is undoubtedly attractive, but if fails upon critical appraisal.
41. The action of the first respondent in having a different age of retirement in respect of Air Hostess had been challenged and came to be faulted by the Supreme Court in Air India v. Nergesh Meerza, . One of the reasons given by the Supreme Court in its judgment is based on the finding that the two Corporations (erstwhile Indian Airlines Corporation and Air India Corporation) formed one single entity and whenever disputes arose they tried to get the disputes settled by a common agency. If fact, Mr. Singh, learned Counsel for the petitioners, highlighted the observations made in paragraph 4 of the judgment in Nergesh Meerza's case (supra). In this paragraph, the Supreme Court pointed out that, both Air India Corporation and Indian Airlines Corporation were established under the 1958 Act as a single entity which was divided into two units in view of the nature of the duties that each Corporation had to perform. The provisions of the said Act militated against the argument that each was a separate and distinct entity and could not be equated with the other. The provisions of the 1953 Act showed that the two Corporations formed one single unit to be controlled by the Central Government though they may have different functions to perform-Air India operating international flights and the Indian Airlines operating domestic flights within the country. It was also pointed out by the Supreme Court that the Khosla Award (Award of National Tribunal headed by Justice Khosla in reference (NIT) No. 1 of 1964) laid down the service conditions of Air India staff, while a similar dispute between Indian Airlines and its employees was referred to Justice Mahesh Chandra. In the proceedings before Justice Mahesh Chandra, Air India had filed an application for being impleaded as a party to the reference. This application was allowed and consequently the scope of the reference was widened to include the demands of the employees of Indian Airlines Corporation as well as Air India Corporation. This, according to the Supreme Court, clearly showed that the two Corporations formed one entity and whenever dispute arose they tried to settle it by a common agency. Apart from these observations by the Supreme Court, it is also pointed out to us by the learned Counsel for the petitioners, that one of the terms of reference in the Khosla Award was "what relationship, if any, should the wage structure of Air India bear to the wage-structure of Indian Airlines with reference to comparable categories of workmen performing similar functions?". Our attention has also been invited to the Terms of Reference made in the industrial dispute which is currently pending before the National Industrial Tribunal of Justice S.N. Khatri. We may mention here that the dispute which was referred on 7th December 1990 to the adjudication of the National Industrial Tribunal headed by Justice S.N. Khatri, was a dispute between Indian Airlines and their workmen with regard to the conditions of service of the workmen. A perusal of the Terms of Reference indicates that, with regard to service conditions, the demand was that there should be parity between the conditions of service of the employees of Indian Airlines and the employees of Air India Limited. A perusal of the different terms of reference would, therefore, suggest to us that, though historically there might have been parity between condition of service of the two entities, namely, the first respondent and the Indian Airlines, somewhere along the line this parity was disturbed and that is precisely why the present dispute has been raised by the employees of the Indian Airlines for bringing back the parity in condition of service.
42. True that both the Corporations were established as statutory Corporations by virtue of 1953 Act. If this situation had continued, perhaps the findings made by the Supreme Court in Nergesh Meerza case (supra) may have concluded the issue. Two developments which have taken place subsequently militate against the contention of the petitioners in this regard. First, the 1953 Act itself was repealed by 1964 Act which has given rise to two different Government Companies, each of which is left to fend for itself, though both are subject to directions of Central Government by virtue of section 9 of the 1964 Act. As from 29th January 1964, the Government Companies, namely, Indians Airlines Limited and Air India Limited, are separate entities and have no common thread running between them. Second, though historically and by the judicial decision of the Supreme Court in Nergesh Meerza case (supra), based on historical events, the conditions of service of comparable categories were held to be same and comparable categories of workmen were held to form one class, currently this situation no longer holds good. In any event, we do not have sufficient factual material on record to show that the conditions of service of comparable categories of workmen are presently identical in the Indian Airlines Limited as well as the first respondent. The Term of Reference of the industrial dispute referred for adjudication of National Industrial Tribunal of Justice Khatri militate against this hypothesis. For these reasons, we are unable to accept the contention that the action of the first respondent is violative of Article 14 of the Constitution by discrimination amongst equals without rational basis. As the situation stands now, unless the Tribunal takes the view that there should be parity of conditions of service between workmen of comparable categories, there is nothing to prevent the first respondent from having different conditions of service.
GROUND (X)
43. The next contention urged on behalf of the petitioners is that the Office Memorandum of DPE issued on 21st August 1998 permitted exemption to those Public Undertakings which had not actually increased the age of retirement to 60 years; conversely, it is contended that the Public Sector Enterprises which had increased the age of retirement to 60 years, was not entitled to get the benefit of the said Office Memorandum. In our view, this argument is too hypertechnical and cannot be accepted. We cannot interpret Office Memoranda in the manner of statutory enactments. In any event, the Office Memorandum dated 21st August 1998 itself states that the directive contained therein to increase the age of retirement to 60 would come into force from the date on which the applicable Service Regulations/Standing Orders were amended to bring this intention into effect. By the earlier Office Memorandum dated 19th May 1998 all the Public Sector Enterprises had been informed that the instruction to increase the age from 58 to 60 was to be implemented by all. The Management of the first respondent acted promptly thereupon and, despite the non-amendment of the Service Regulations/Standing Orders, the Management of the first respondent promptly issued the Staff Notice No. 4/98-99 on 27th May 1998- Accepting the argument of the petitioners in this regard would mean putting premium on tardiness in implementation. If the first respondent had not promptly displayed the Staff Notice No. 4/98-99 dated 27th May 1998, but had dragged its feet till August 1998, it would be entitled to the benefit of exemption from the liability to increase the age of superannuation to 60 years, but because it promptly acted and issued a Staff Notice on 27th May 1998, no such exemption would be available to it. We are unable to accept this contention as valid. In our view, the exemption granted by the Office Memorandum of Department of Public Enterprises dated 28th August 1998 was equally available irrespective of whether the Public Sector Enterprise had already implemented the earlier directive or had yet to implement the same.
GROUND (XI)
44. The last contention urged was that, of all the Public Sector Enterprises, no other Public Sector Enterprise has been permitted to revert to the age of 58 years and that the first respondent is the sole exception. In the first place, there is no material placed on record with regard to the factual circumstances of all the Public Sector Enterprises in the country. Mr. Rana, learned Counsel appearing for the Union of India, however, fairly conceded that the Ministry of Civil Aviation was concerned with six Public Sector Enterprises and, amongst them, it was only the first respondent, Air India Limited, which had sought and been granted exemption from raising the age of retirement to 60 years. We may mention here that, from the documents placed on record, it appears that the Ministry of Civil Aviation was incharge of:
i) Department of Civil Aviation (Main Sectt).
ii) Directorate General of Civil Aviation.
iii) Department of Civil Aviation Security.
iv) Commission of Railway Safety.
v) Air India Limited.
vi) Indian Airlines Limited.
vii) Airports Authority of India.
viii) Airports Authority of India.
ix) Pawan Hans Helicopter Limited.
x) Indira Gandhi Rashtriya Udan Academy.
Out of them, we notice that the only Limited Companies are Air India Limited, Indian Airlines Limited and Pawan Hans Helicopter Limited, the rest being Departments of the Government of India. In these circumstances, the fact that Air India Limited was granted the exemption does not militate against the reasonableness of the decision of the Government of India to grant such exemption.
45. For the aforesaid reasons, considering the matter from all angles, we are unable to hold that the action of the first respondent in reverting the age of retirement of its employees to 58 years from 60 years, is in any way liable to be interfered with. We find no substance in the writ petitions which are liable to be dismissed.
46. Writ petitions dismissed. Rules discharged. In the circumstances, there shall be no order as to costs.
47. In view of Writ Petition No. 1473 of 1999 having been dismissed, Chamber Summons No. 63 of 1999 does not survive and is hereby dismissed. No order as to costs.
48. Writ petition dismissed.