All India Insurance Employees' Association and Others vs The Life Insurance Corporation, Higher Grade, Assistants' Association and Others

C.J. Raghavan, J.—These four writ appeals arise out of writ Petition Nos. 825 and 826 of 1972 filed by (i) The Life Insurance Corporation of Higher Grade Assistants'' Association and (ii) Thomas Mathew, a higher grade assistant in the Life Insurance Corporation, but who is not member of the aforesaid Association, seeking for the issue of a writ of mandamus directing the National Industrial Tribunal, New Delhi (sixth Respondent) to hear and determine the dispute relating to item No. 7 of the reference NIT 2 of 1969 relating to the rule of promotion and also for the issue of a writ of mandamus forbearing the Life Insurance Corporation of India and the Zonal Manager of the Life Insurance Corporation of India (Respondents 1 and 2) from enforcing the new rules of promotion embodied in the agreement, dated 15th October 1971. The facts are not in dispute and we shall briefly refer to the same. The Life Insurance Corporation of India is a Corporation established by the Life Insurance Corporation Act, (Act XXXI of 1956). Section 49 of the said Act empowers the Corporation to frame regulations governing the terms and conditions of service of the employees, subject to the condition that they are made with the previous approval of the Central Government. Clause 5 of the Staff Regulations sets out the various classes and categories of posts in the Life Insurance Corporation, hereinafter referred to as L.I.C. So far as the present writ petitions are concerned classes I and III consists of the following categories of posts:

Class I.--(a) Assistant Administrative Officer. Class III.--(a) Superintendents, (b) Higher Grade Assistants, (c) section Head. (d) Assistants.

Under the rules in force, a section Head is entitled to be promoted as a Higher Grade Assistant or Superintendent, and a Higher Grade Assistant is entitled to be promoted as Superintendent or an Assistant Administrative Officer (Class I). The promotions are popularly called two-tier promotions such promotions were made on a selection basis and after the eligibility of the candidates was decided in a departmental tests and further tests on merit and ability. There were a large number of disputes between the employees and the Management of the L.I.C. On 28th November 1968 six items of disputes were referred to the National Industrial Tribunal (NIT 1 of 1969) (sixth Respondent). On 22nd August 1969 seven more items of disputes were referred to the same Tribunal (NIT 2 of 1969). In the second reference the seventh item related to Rules regarding promotions. The Tribunal went into the disputes. Meanwhile the Management of the L.I.C. persuaded the various employees associations to come to an understanding on the various items of disputes, as they considered that a reasonable set of rules governing promotions which would be fair and equitable to all categories of employees, could be arrived at in that manner.

On this basis on 20th June 1970, joint application were filed to the sixth Respondent (NIT) requesting that an award may be passed in terms of the settlement. The said joint application, however, stated in respect of item No. 7, as follows:

The workmen withdraw the item from this reference. The Management agrees to hold discussion before 31st December 1970 with the referencetations of the four parties representing workmen in this reference for a review of the existing rules.

The application further stated that the period of settlement would be 1st April 1969 (sic) 31st March 1973 and added:

All the demands raised by the workmen before the Honourable Natinal Industrial Tribunal, which constituted the subject matter of this reference are hereby fully and completely settled and disposed of.

On 13th July 1970, the sixth Respondent (NIT) embodied the terms of the settlement contained in the joint application and passed on Award and the same was published in the Gazette on 22nd July 1970.

In regard to item No. 7, negotiations began between L.I.C. and the four Associations and an agreement was reached on 15th October 1971 between the Management and the three Associations excluding the L.I.C. Higher Grade Assistants'' Association and a notice u/s 9-A of the Industrial Disputes Act, seeking to enforce the rules of promotion contained in the agreement, dated 15th October 1971 was sought to be issued to all the employees stating that the new rules of promotion would come into effect from the 6th November 1971. The principal features of the new rules of promotion contained in the agreement of 15th October 1971 are shortly as follows:

All the existing Superintendents were to be placed in the cadre of Assistant Administrative Officers (Class I), subject to certain transitional arrangements. A new cadre called Special Assistants Cadre was to be formed and all the section Heads were to be upgraded as Special Assistants, subject to certain transitional arrangements. The Higher Grade Assistants were to be merely redesigned as Special Assistants, that is to say, with one stroke of the pen all the section Heads were promoted to the rank of Higher Grade Assistants, and they were to enjoy the same privileges and rights as Higher Grade Assistants. Similarly Superintendents who were hitherto on part with Higher Grade Assistants for the purposes of promotion, were to be forthwith upgraded as Assistant Administrative Officers.

The L.I.C. considered that the new rules of promotion, which is in pursuance of the award of the N.I.T. are valid and binding on all the employees and that it can be implemented forthwith. The Life Insurance Corporation Higher Grade Assistants'' Association filed Original Petition No. 463 of 1972 in the High Court of Kerala under Article 226 of the Constitution. Thereafter they filed Writ Petition No. 825 of 1972 in this Court and a non-member of the said Association filed Writ Petition No. 826 of 1972 under Article 226 of the Constitution attacking the award of the N.I.T., dated 13th July 1970 to the extent that it related to item No. 7 of the reference is N.I.T. 2/69 on the following main grounds:

(i) It is not open to the Tribunal to embody a term in the award, where the parties are not resolving their dispute referred for adjudication, an area of dispute unresolved.

(ii) The Tribunal had abdicated its functions ;,n not finally adjudicating upon all the matters referred to it and the award is, therefore, a nullity.

(iii) The settlement arrived at on 15th October 1971 is binding only upon Respondents 3, 4 and 5 and it is not enforceable on all the other employees.

(iv) The impugned settlement containing new rules of promotion is violative of the award itself and contrary to the provisions of the Act and further violates Articles 14 and 16 of the Constitution.

The L.I.C. by its Chairman and the Zonal Manager of the L.I.C. riled a common counter affidavit seeking to uphold the validity of the award of the Tribunal regarding the settlement between the parties and contending that such a settlement was a valid disposal of the reference. Dealing with the objection that the agreement runs contra to the terms of the award in N.I.T. 1 of 1969, it was contended that the said award did not guarantee or preserve the categories of the employees, but merely awarded different pay scales for the employees and that so long as the new pay scales are not lower than the scales of pay which the so-called affected persons were getting under the new promotion rules, they cannot be deemed to be aggrieved persons. The further contention was that the L.I.C. was within its rights in negotiating with the majority of the employees and having arrived at the rules of promotion, which is binding upon them (employees). The further contention raised is that the scheme of promotions drawn by negotiation are not rules and regulations, but administrative instructions and have been issued by the Chairman for the betterment of the prospects of the employees of the Corporation and that such instructions are valid and binding on all the employees and the new rules of promotion having been arrived at and embodied in the settlement u/s 18(1) of the Act, is binding upon all the employees and the issue of the notice u/s 9-A of the Industrial Disputes Act is valid. Dealing with the contention that the impugned settlement violates Articles 14 and 16 of the Constitution, the L.I.C. contended that the Corporation is not a State and that the conditions of service are purely contractual and that consequently Articles 14 and 16 have no application.

The writ Petitioners filed a reply affidavit contending that the notice issued u/s 9-A of the Act was inoperative and cannot bind the Higher Grade Assistants and that the rules of promotion themselves have been made in a manner not authorised by the Act and, therefore, cannot be implemented. Their further contention is that by the aforesaid settlement and their avenues of promotion have been affected and that consequently the new rates of promotion should not be implemented.

The above writ petitions were heard by Ramaprasada Rao J., who held that (i) the N.I.T. without determining the issues referred to it and without applying its mind as to the fairness or justness of the request of the parties to leave open item 7 unresolved, failed to discharge its public duty.

(ii) Even if such a settlement was possible, the resultant arrangement entered into between the Corporation and the three Associations other than the L.I.C. Higher Grade Assistants'' Association and non-members of the Association, not a party to the arrangement, is not only violativate of an enforceable award made in N.I.T. 1 of 1969, but is contrary to the provisions of the L.I.C. Act and the regulations made thereunder.

(iii) The private settlement between one section of the employees and the Corporation is prima facie likely to affect the services of the Higher Grade Assistants in the Corporation and is violative of the terms of the award.

(iv) The new rules, in effect abrogating or repealing the existing regulations which were made by the Corporation under the existing law, have been made by the Chairman of the Corporation and the contention that these rules are administrative rules cannot be accepted.

(v) The so-called rules or administration instructions are violative of Articles 1 and 16 of the Constitution, as the Life Insurance Corporation is a State within the meaning of Article 12. In the view that the learned Judge took, he felt it unnecessary to go into the question whether factually any prejudice had resulted to the Higher Grade Assistants even if the rules were implemented. In the result, the learned Judge issued a writ of mandamus directing the N.I.T. to hear and determine the dispute regarding item No. 7 of the reference in N.I.T. 2 of 1969 relating to the rules of promotion after notice to all the parties concerned and pass an award in accordance with law. In the result, both the writ petitions were allowed.

The L.I.C. has filed Writ Appeal Nos. 41 and 42 of 1973 against the judgment in Writ Petition Nos. 825 and 826 of 1972 and the third Respondent in the writ petition, viz. All India Insurance Employees ''Association'' by its General Secretary has filed Writ Appeal Nos. 11 and 12 of 1973 against the same judgment. All the four writ appeals were heard together.

7 We may at this stage observe that the High Court of Kerala held on a similar application filed therein that the transitional arrangements in the settlement on promotion procedure, dated 15th October 1971 upgrading Section Heads and Superintendents to the Higher Grades to be violative of Article 16 of the Constitution. The L.I.C. while filing appeals against the judgment of Ramaprasada Rao, J., entered into an agreement with (i) the All India Insurance Employees Association, (ii) All India National Life Insurance Employees'' Federation and (iii) All India Life Insurance Employees'' Association representing workmen in the Corporation purporting to represent an overwhelming majority of the workmen, entered into a fresh agreement on promotion procedure for being presented to the N.I.T. requesting for an award to be passed in terms of the agreement. That agreement is, dated 15th February 1973. In view of the judgment of Ramaprasada Rao, the Central Government constituted a National Industrial Tribunal with headquarters at Jabalpur and appointed Shri S.N. Katju as the Presiding Officer of that Tribunal with effect from the date of publication of this notification in the Official Gazette, to hear and determine the said dispute relating to the said item No. 7. The consideration for making an award in terms of the agreement is awaiting disposal before the said Tribunal.

When the appeals were taken by us for hearing, Mr. M.K. Nambiar, the learned Counsel for the Respondents contended that by reason of the subsequent events, which happened, viz., the entering into of the fresh agreement, dated 15th February 1973 between the L.I.C. and the other three Unions to enure until 31st December 1974, the appeals have become infructuous. On the other hand, Sri V.K.T. Chari, who appeared for the L.I.C. contended that in view of the stand taken by the Respondents on the fresh agreement, dated 15th February 1973, there is no substance in the preliminary objection and argued the appeals on merits. We shall revert to the preliminary objection later and we shall now take up the contentions put forward by Mr. V.K.T. Chari. The first contention raised by Mr. Chari was that the L.I.C. is not a ''State'' within the meaning of Article 12 of the Constitution and that the L.I.C. is just like any other commercial Corporation incorporated under the Companies Act or the State Bank of India and consequently Articles 14 and 16 of the Constitution have no application to the employees in the service of the L.I.C. and that a Writ under Article 226 of the Constitution cannot be issued against it.

The first decision referred to by the learned Counsel is the decision of the Supreme Court in the Executive Committee, U.P. Warehousing Corporation Vs. Chandra Kiran Tyagi, where the question which arose for consideration was whether an employee of the U.P. State Warehousing Corporation was entitled to the protection under Article 311 of the Constitution. After referring to the provisions of the U.P. State Warehousing Corporation Regulations, 1961 Vaidialingam J., held that the employees of the Corporation are not entitled to the protection under Article 311 of the Constitution, but that the relationship between the Corporation and its employee is that of a master and servant and that in case of a wrongful dismissal the remedy of the aggrieved party will only be a claim for damages for breach of contract. Similarly in Indian Airlines Corporation Vs. Sukhdeo Rai, the question arose whether an employee of the Indian Airlines who was dismissed from service, was entitled to obtain a declaration that the termination of his employment was null and void. Shelat, J., after referring to the earlier decisions of the Supreme Court and other Courts, held that the relationship between the employee and the Corporation was that of master and servant and that on dismissal employee was only entitled to damages and not for a declaration that his dismissal was null and void.

The next decision to which reference was made in the decision in S.R. Tewari Vs. District Board Agra and Another, where the question related to the dismissal of an Engineer in the District Board, Agra, Shah J., held that the relationship between the employee and the Board was that master and servant.

In the Life Insurance Corporation of India and Ors. v. Nilratan Banerjee (1971) I L.L.J. 1, a Division Bench of the Calcutta High Court held that the dismissal of an employee of the L.I.C. after enquiry cannot be challenged in a writ petition under Article 226 of the Constitution. Similarly in Pramodrai Shamaldas Bhavsar Vs. Life Insurance Corporation of India, , the Bombay High Court came to the conclusion that the Life Insurance Corporation does not fall within the expression of other authorities under Article 12 of the Constitution and is not a State within the meaning of Article 12 of the Constitution.

In Rajasthan State Electricity Board, Jaipur Vs. Mohan Lal and Others, , Bhargava J. in delivering the judgment on behalf of the majority, held the expression other authorities in Article 12 will include all constitutional or statutory authorities on whom powers are conferred by law. It is no doubt true that Rajagopalan J. in Vaidyanatha Iyer v. Life Insurance Corporation of India Writ Petition No. 1016 of 1958) held that the Life Insurance Corporation of India is a ''State'' within the meaning of 12 and that a Writ under Article 226 can be issued against it, which view was affirmed on appeal and Ismail, J., in Ranganathan v. Life Insurance Corporation of India (Writ Petition No. 1515 of 1968) took a similar view. In view of the constitution of the L.I.C. under the L.I.C. Act, 1956, and the various provisions relating to its functions and the several decisions of the Supreme Court, particularly that of Rajasthan State Electricity Board, Jaipur Vs. Mohan Lal and Others, , referred to above, we are of opinion that the L.I.C. falls under Article 12 of the Constitution.

We shall next take up the main question argued in the appeals, viz., whether a reference to a Tribunal for determination of a dispute can be compromised between the parties to the reference and whether the Tribunal should have passed an award in terms of the said compromise without addressing itself to the question that the compromise is fair, just and equitable between the parties. Section 10 provides for reference of disputes to Boards, Courts or Tribunals. Sub-clause (b) of Section 10(1) of the Act empowers the appropriate Government to refer any matter appearing to be connected with or relevant to the dispute to a Court for enquiry. Sub-Clause (c) of Section 10(1) of the Act deals with a reference to a Labour Court for adjudication. Sub-clause (d) of Section 10(1) of the Act empowers the appropriate Government to refer the dispute, whether it relates to any matter specified in the Second Schedule or the Third Schedule, to a Tribunal for adjudication. Section 2(b) of the Act defines an award as meaning an interim or final determination of any industrial dispute, etc., Reading the above provisions together we are of opinion that the Court or the Tribunal, to whom a reference is made u/s 10 of the Act has to adjudicate upon the dispute and the final determination of the industrial dispute would result in an award. When a dispute is referred u/s 10 of the Act the determination should be completed and no part of it should be unresolved.

The next question for consideration is whether the parties to the dispute could settle the matter between themselves after a reference u/s 10 of the Act has been made and claim that the matter having been adjusted Between them, the Court or the Tribunal should record HUB compromise and pass a decree or award in accordance therewith as per Order XXIII, Rule 3 of the Code of Civil Procedure, that is to say, mere mechanical adoption of a settlement reported by the parties to an industrial dispute as if the dispute has been settled out of Court without any further probe into its property, justness or reasonableness. We may draw particular attention to the words enquiry and adjudication referred to in Section 10(1)(b), (c) and (d). Section 15 of the Act enjoins on the Tribunal to whom a reference for adjudication has been made to submit its award to the appropriate Government. The form of the award, its publication, the date of commencement and the persons on whom the awards are binding and the period of operation of awards are all referred to in the other provisions of the Industrial Disputes Act. The Industrial Courts or Tribunals are enjoined to expeditiously dispose of the reference and submit its award and the communication of the same to the appropriate Government. The provisions contained in the Industrial Disputes Act make it abundantly clear that a Tribunal to whom a reference for adjudication is made cannot merely accept the settlement arrived at between the contesting parties without the Tribunal going into its justness. What is contemplated is a tripartite settlement where the Tribunal, the third party to the contestants, scrutinise the settlement reached between the contesting parties and sets its seal in token of the application of its mind to such settlement. In no case, in our opinion, can there be an award, which is incomplete. We have, therefore, to consider in the light of the aforesaid discussion, whether the award passed by the N.I.T. in the instant case in N.I.T. 2 of 1969 is complete, valid and enforceable under the provisions of the Act. As already stated, on item 7 referred to the Tribunal, the joint application for settlement stated as follows:

The workmen withdraw this item from this reference. The Management agrees to hold discussions before 31st December, 1970 with representatives of the four parties representing the workmen in this reference for a review of the existing rules.

Period of settlement.--1st April 1969 to 31st March 1973, both days inclusive.

All the demands raised by the workmen before the Hon''ble National Industrial Tribunal which constitute the subject matter of this reference are hereby fully and completely settled and disposed of.

On the aforesaid application the N.I.T. passed an award as follows:

The settlements filed be recorded. 1 further give composite consent-award in both the reference in terms of the two settlements which have already been reproduced above and which need not be repeated.

In regard to N.I.T. 1 of 1969 it would appear that the Tribunal applied its mind and passed its award. The question for consideration is whether, in the circumstances, the N.I.T. in passing the award in N.I.T. 2 of 1969 discharged its public duty. We may observe that the award referred to above in N.I.T. 2 of 1969 left open for future determination of the dispute between the Management and the representatives of the workmen and thus the adjudication is incomplete. Where all the issues referred to adjudication are settled and the terms of the settlement are approved by the Tribunal, no difficulty will arise. That is what happened in the The State of Bihar Vs. D.N. Ganguly and Others, where Gajendragadkar J. as he then was at page 640 observed as follows:

It is true that the Act does not contain any provision specifically authorizing the industrial tribunal to record a compromise and pass an award in its terms corresponding to the provisions of Order XXIII, Rule 3, of the Code of Civil Procedure. But would be very unreasonable to assume that the industrial tribunal would insist upon dealing with the dispute on the merits even after it is informed that the dispute has been amicably settled between the parties. We have already indicated that amicable settlements of industrial disputes which generally lead to industrial peace and harmony are the primary objects of this Act. Settlements reached before the conciliation officers or boards are specifically dealt with by Sections 12(2) and 13(3) and the same ate made binding u/s 12. There can, therefore, be no doubt that if an industrial dispute before a tribunal is amicably settled, the tribunal would immediately agree to make an award in terms of the settlement between the parties.

In Hindustan Housing Factory Employees'' Union v. Hindustan Housing Factory Limited (1971) II L.L.J. 222 a Division Bench of the Delhi High Court had to consider a similar question. Hardayal Hardy, J., after referring to prior decisions observed as follows at page 231:

We agree that while accepting the compromise and adopting it as its own award the Tribunal is bound to see that the compromise is by all the parties to the reference. It should also see that the terms of compromise are fair, just and equitable and the compromise is not vitiated by collusion, fraud, coercion or undue influence.

On facts the learned Judges considered that the award by the Tribunal in the instant case cannot be said to suffer from any such infirmity nor can it be said that it was not fair, just and equitable despite the fact that the Tribunal had not said so on the face of the award.

In The Sirsilk Ltd. and Others Vs. Government of Andhra Pradesh and Another, the question arose whether a settlement arrived at between the parties after the Tribunal had passed an award in the normal course, but before publication of the award, could be given effect to Wanchoo, J., as he then was at page 163 observed as follows:

The only way in our view to resolve the possible conflict which would arise between a settlement which is binding u/s 18(1) and in award which may become binding u/s 18(3) on publication is to withheld the publication of the award once the Government has been informed jointly by the parties that a settlement binding u/s 18(1) has been arrived at....

The matter may be locked at in another way. The reference to the tribunal is for the purpose of resolving the dispute that may have arisen between employees and their workmen. Where a settlement is arrived at between the parties to a dispute before the tribunal after the award has been submitted to Government but before its publication, there is in fact no dispute left to be resolved by the publication of the award. In such a case, the award sent to Government may very well be considered to have become infructuous and so the Government should refrain from publishing such an award because no dispute remains to be resolved by it

In Aluminium Factory Workers'' Union v. Indian ''Aluminium Company Limited (1962) I L.L.J. 210 the question related to (i) a claim for promotion of a Supervisor to the post of a Foreman and (ii) the transfer of two supervisors from one department to another which disputes were referred for adjudication between the company and its workmen represented by a particular union. In both the references awards were made in terms of a memo of compromise entered into between the parties. This was a case of a complete settlement in regard to matters referred to the Tribunal and therefore it is distinguishable from the facts of the present case.

In Birla Cotton, Spinning and Weaving Mills Limited Delhi v. Its Workmen (1962) L.L.J. 647. Wanchoo J. observed at page 647 as follows:

Coming to the last point raised on behalf of the Appellant, namely that the tribunal has left a part of the dispute to be resolved by the parties themselves, it does seem that the direction of the tribunal with respect to a joint committee going into and investigating anomalies in categories to be found in the Appellant company and not to be found in the Bombay award has left a part of the area of dispute referred to it unresolved.

The Supreme Court ultimately sent back to the Tribunal in working out the standardization scheme for the Appellant company for a complete adjudication of the issue which arose therein and which were left unresolved.

In Maharana Mill Kamdar Union v. N.L. Vyas (1959) II L.L.J. 172 a Division Bench of the Bombay High Court had an occasion to consider this question. Chainani, C.J., observed at page 175 as follows:

Where a Tribunal allows a matter to be withdrawn in order that it may be referred to a private arbitrator for adjudication, there remains no dispute before it, on which it can adjudicate. There is also no determination of the dispute itself, the dispute continues, but instead of being decided by the industrial tribunal, it is to be decided by private arbitration. There is therefore, no determination of the dispute in such cases, much less is it a determination by an Industrial Tribunal.

The learned Chief Justice referred to The State of Bihar Vs. D.N. Ganguly and Others, referred to above. The learned Chief Justice again observed as followed:

The orders passed by the Tribunal on the applications for withdrawal made to It were that it was giving awards as per the terms of the settlements. The terms of the settlements show that the disputes between the parties had not been resolved; all that had been agreed was that these disputes should be referred for decision to certain specified arbitrators. There was no decision by the tribunal on the matters in dispute. Consequently, there was no determination of the disputes within the meaning of the Act. Even though, therefore, the orders made by the tribunal are described as awards and were published as such in the official gazette, they were not awards within the meaning of the Act.

In Sital Sukhiram Vs. Central Government Industrial Tribunal Cum Labour Court, Jabalpur and Others, the decision of the Bombay High Court referred to above was approved.

We shall next refer to the judgment of Ramachandra Iyer, J., as he then was in Coimbatore District Mill Workers'' Union v. Dhanalakshmi Mills Limited Tiruppur (1960) II L.L.J. 556 the learned Judge observed as follows:

The question that has to be decided is whether the compromise entered into on 23rd March 1952 by the Indian National Trade Union Congress Unions, could be held to finally terminate the industrial dispute, and whether there has been a valid award in regard to it. The industrial tribunal merely adopted the compromise and passed an award in terms thereof. There was no finding arrived at by the industrial tribunal after hearing all the parties as to whether that agreement was a fair and just settlement of the dispute, so that it could be adopted as an award by the tribunal, itself. The dispute that was referred to for adjudication was one between the management and the workers in the 32 mills. Section 2(b) of the Act defines award as meaning an interim or a final determination of any industrial dispute. The order of the Industrial Tribunal, dated 25th March 1957, purports to be a final determination of the dispute and nothing is left outstanding to be decided. There has been no determination as such by the industrial tribunal of the question referred to it. The Tribunal had merely adopted the agreement between the parties. Section 15, which prescribes the duties of the tribunal, directs it to hold its proceedings expeditiously and submit its award to the appropriate tribunal. There is no power in the industrial tribunal similar to one conferred under Order 23, Rule 3, of the Civil Procedure Code, to record a compromise. What the industrial tribunal is empowered is to pass an award which is defined as interim or final determination. It is implicit in the word determination that it should be judicial, implying that the tribunal exercises its own judgment. This does not however, mean that the tribunal is precluded from taking note of a compromise entered into between the workers and the management. Where there is a compromise, it should consider whether, in its opinion, the compromise could be adopted as its own determination of the dispute that is, whether it is fair, just and equitable between the parties.

Thus in the present case we find that the Tribunal without any determination by itself of the issue referred to it and without applying its mind as to the fairness of justness of the withdrawal of item No. 7 which was referred to it by the Government, left that issue unresolved and consequently failed to discharge its public duty in mot exercising its mind on matters covered by the issue.

The next contention that the impugned settlement, dated 16th October 1971 entered into between the L.I.C. and the three Associations other than the Life Insurance Corporation of Higher Grade Assistants'' Association (Petitioner in Writ Petition No. 825 of 1972) is violative of the award in N.I.T. 1 of 1969 and further it is contrary to the provisions of the L.I.C. Act and the regulations made thereunder, besides contravening Articles 14 and 16 of the Constitution. The stand taken by the L.I.C. is that the award in N.I.T. 1 of 1969 did not guarantee or preserve the categories of employees, but merely awarded different pay scales for different employees and so long as the new pay scales are not prejudicial to the employees, there is no inconsistency between the settlement arrived at on 15th October 1971 and the earlier award in N.I.T. 1 of 1969. We find that in N.I.T. No. 1 of 1969 different pay scales are provided for different categories of employees of the L.I.C. Even though there is a merger of one class of employees with another class of employees, the contention of the L.I.C. is that so long as no prejudice results therefore, there cannot be a grievance. It is seen that N.I.T. No. 1 of 1969 is in force till March 31, 1973 and any attempt to alter the pay scales of different categories of employees would result in an inconsistency. In N.I.T. 1 of 1969 there exists different categories of employees, such as Superintendents, Higher Grade Assistants and section Heads and under the private settlement, dated October 15, 1971 the category of Superintendents, has been taken away and merged with the Administrative Officers. As observed earlier Higher Grade Assistants and Section Heads are classified into a new category and named as Special Assistants and all these have been done without consulting the Higher Grade Assistants, Association and ascertain their views. It is unnecessary to envisage the repercussions arising out of the merger. The fact that the views of the Association dealing with the Higher Grade Assistants where interest are sought to be affected thereunder not having been ascertained, we are of opinion that the settlement dated, October 15, 1971, is violative of the terms of the earlier award in N.I.T. No. 1 of 1969.

The further contention raised is that the impugned settlement are contrary to the provisions of the L.I.C. Act and the regulation made thereunder. The question for consideration will be whether the new rules of promotion and categorization would fall within Section 49 of the Act. While the Association''s contention is that it is covered by Section 49 and that it could be made only by the Corporation and not by its Chairman, the answer put forward by the L.I.C. is that it is a settlement arrived at u/s 18(1) of the Act and that it is binding on the employees. It is seen that the Higher Grade Assistants Association was not a party to the arrangement in question which according to the L.I.C, falls u/s 18(1) of the Act. The stand taken by the L.I.C. is that the terms of the settlement are in the nature of administrative instructions issued by the Chairman and, therefore, will bind all the employees. In our view, Section 49 of the Act empowers the Corporation to make regulations with the previous approval of the Central Government by notification in the Gazette of India not inconsistent with the provisions of the Act and the rules made thereunder. The terms and conditions of service, the methods of recruitment, etc., are all enumerated items falling under Sub-clause (2) of Section 49. It is conceded that the arrangement has not been notified in the official Gazette and the impugned settlement falls u/s 49(2)(b) and (bb) and the procedure prescribed u/s 49 not having been followed in our view the settlement would be hit at for non-compliance with the requirements of Section 49 of the Act. We are further unable to agree with the contention that the impugned settlements are hereby guidelines in the firm of instructions issued by the Chairman for the promotion of the employees of the Corporation. In this connection, reference was made to B.N. Nagarajan and Others Vs. State of Mysore and Others, . The above decision is inapplicable to the facts of the present case. We are, therefore, unable to accept the contention advanced on behalf of the Corporation.

The next contention put forward is that the settlement, dated 15th October 1971 must be treated as superseding the earlier agreement. In that connection our attention was drawn to the judgment in Union of India v Kishorilal Gupta and Bros (1970) 1 S.C.R. 493 where Subba Rao J. as he was then delivering the judgment on behalf of the Bench after referring to the English decisions and a passage from Chetty On Contracts observed as follows at page 504:

From the aforesaid authorities it is manifest that a contract may be discharged by the parties thereto by a substituted agreement and thereafter the original cause of action arising under the earlier contract is discharged and the parties are governed only by the terms of the substituted contract.

In the present case it cannot be said that the settlement, dated 15th October 1971 has replaced the prior agreement. There is thus no force in the contention put forward on behalf of the Corporation. We are, therefore, of opinion that the view of Ramaprasada Rao, J., on all the points decided by him is correct.

Mr. Ramachandran for Messrs. Row and Reddy, who appeared for the All-India Insurance Employees'' Association (third Respondent in Writ Petition Nos. 825 and 826 of 1972; and the Appellant in the Writ Appeals Nos. 11 and 12 of 1973 raised a further contention that the L.I.C. and the Life Insurance Corporation of Higher Grade Assistants'' Association having agreed to withdraw item No. 7 in N.I.T. 2 of 1969 and the writ Petitioner in Writ Petition No. 826 of 1972 not having objected to such withdrawal, even though fully aware of such proceedings, is estopped from attacking the settlement, dated October 15, 1971 and that the said settlement having been entered into by the L.I.C. with an overwhelming majority of workmen, the learned Judge erred in exercising his discretionary jurisdiction under Article 226 of the Constitution in favour of the Petitioners in the Writ Petitions. We find no substance in this contention. The learned Judge has gone into the question as to how the settlement, dated October 15, 1971, cannot be said to be a considered adjudication of the Tribunal. Mr. Ramachandran drew our attention to our recent judgment in Vallamalai Estate Vs. Workers of Vallamalai Estate and Another, . There we confirmed the remittal order of the single Judge under different circumstances.

We shall now deal with the preliminary objection raised by Mr. M.K. Nambiar as to the maintainability of the writ appeals by reason of the happening of the subsequent events. The present writ petition is seeking for the issue of writ of mandamus directing the N.I.T. to hear and determine the dispute relating to item No. 7 of the reference N.I.T. 2 of 1969 relating to the rules of promotion embodied in the settlement, dated 15th October 1971. We do not at this stage propose to say anything about the fresh agreement, dated 15th February 1971 said to have been arrived at between the L.I.C. and the three other Unions and as to how far it will supersede the agreement of October 15, 1971, or its validity or binding nature on all the employees.

We, therefore, confirm the remittal order made by Ramaprasada Rao, J. The writ appeals are dismissed with costs.