AJOY KUMAR BANERJEE & ORS. ETC. versus UNION OF INDLA & ORS. ETC.

Citation: [1984] 3 S.C.R. 252 · Decided: 21-03-1984 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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252 
AJOY KUMAR BANERJEE & ORS. ETC. 
v.· 
UNION OF INDIA & ORS. ETC. 
12fst March, 1984 
[Y.V. CHANDRACHUD C.J., R.S. PATI!AK Al'D SABYASACHI 
· 
MUKHARJI, JJ.) 
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Constitution t>[ India 1950, 
Artie/~.• 14, I9(1) (g), ' Artie/~ JIB & G•~~trar 
!murance Businrss (Natia~tolisQtion) Act 1972 Src. 16, Rixhr ~( Cemrol Gam~ 
mcnt to from~ Jcht-s under tilt Act-Whtthtr affects fundamrnta/ rifhUof 
- rmp/oyeu of companlu constituted unclrr the Act. 
1nc/Ju/on of on 1Act In rite Ninth Srltt<lttle dors not prottct ordu at •4 
cations luutd undtr the said Act. 
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Schrm~ natifitd undrr Su. 16(1) uhethtr protutrcl. 
Introduction of ,.fdrm through ft!litfalion-Law nud Ml ha>t unimsof 
oppficotion-Pit<Ymrof mttT.od of introducing r<forms-Whtthtr ptrntiSJib!<-
Srutulory provlsio11 M'htth'r could bt srruck 1/own. 011 viet u/ umltdncllls[on. 
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huiMifial Disputrs Act /947-Witetlttr oppficabf~ le> grMral insurQna tom-
.POnln 
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Crn<ral Insurance lJus/nru (Nationali•atiull) Act 1971, &c. 16(1)/.g). 
Grn<ra/ Insurance (Rotlottalisatlon anJ Revision of Pay•Scalu nn:Ji!lhtr 
Condt1lon. of'St,lrt of Supervisory, Clerlcul and Subordittot6 Stoff) S~ 
Amrmlment Schrmc of 19SO-Sclttmt <>f 1980 rrfttllif/1/0 r~vlsioll of pay sralts atJ4 
othtr lrrnu ond condillons of service-Whtt!ttr u/11o vlru Sec. /6{2) oud ;,.,JiJ-· 
· IVhttlttr suf!rrs from vi" oft.tcuslvc <lt/egatlun of /egis/uti!'<! p'uwtr. 
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lnttrputotlon of Stotut~s-Couf/t~t b~twet!lt lire statt~tts..:..Ont iptclal othrt' 
II • ltntrai-Whlrlr; to prtvnii-TtJI$fur dttamln<ttlon o[. 
. 
/t /"'rrpretat/on of slatttl<s-Not '"~'' exur/u Ill u~l~llllcs-Pro•is!otll ~ 
trr "''" dtl•flallt!f po~·er-Curmruclion. 
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A.K. B:\NERJCE V. UNION 
. 253 
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to !972 tl\cre were over l 00 lnsuranc~ Companies-Indian and 
rnor 
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The conditions of serv1cc o 
t1e emp oyees of these companies were 
(ore•gn. d by the rc.1pectivc contracts of service between th~ companies and the 
governc 
On t3th.May 1971, the Government oflndia a'Sumed manag~ment 
' (mploy~esc.ncral insurance companies under the General Insurance (Emergency 
of theseS 
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Provisions) Act, 1971. Th.e General In~uran;e Busmess~(Nat•onal 1sation) Act, 
1972 nationalised gcneralJnsur~nce busmes5..o 
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Fo;•r merger schemes ~ere framed in 1973 b>· the Central Gov~rnment in 
ercise of the powers contained in s. 16(1) of the Act and four co:np, nies; 
~riental Fire and General Insurance Company, Naliolkll Insurance Complny 
N•"' India Assurance Compan)' and United India Insurance Company Ltd., 
wm merged into and they . alone "ere allowed to carry OTl the busine.s of 
g<ocral insuran~e. The1c comp1nies started functioning from lst.January, 1973 
~nd the process of merg~r was completed by 1st January, 1974 when the 8forc-
$3id four schemes came into force. 
The Government of India_by a notification dat.:d 27th !>by, 1974, fronted a 
'.cheme' called the General Insurance (Rationalisation and Re,·ision of Pay 
Sal,. and Other Cond1tions of Service or Supervisory, Clerical and Subordhate 
StU!') S:h<me, 1974 in exercise of the powers conferred by s. 16(,)(g) of the Act. 
This achcme provided for tbe rationalisation and revisiC>n of pay scales and otbcr 
ltrms and condilions of service of employ«s working in sup:rvisory, clericJI and 
!llbordioate positions 'and governed the pay scales, dearness atlowanec, other 
a!Jowaoces and other t~rms and conditions of the general insurance emp!oyees. 
Plroyaph 23 or the Scheme prolrided that the new 'seal~ of pay' shall remain 
in force till Decnnber 31, 1976 and thereafter shall continue to be in force 
Wll<:!S modified by the Central Go,-emment. 
lo 1976, the Board of Directors approved a policy for promotion. On lit . 
June, 1976. another SCheme by Which amendment~ y,·erc made With reg:lrd tO 
P~vidtnt Fund, Was Introduced. On 30th July 1977, a Scheme amending pro-
Y~IOfls regarding skk leave was also introduced. 
IC I The employees submit!ed a memorandum obj~ti~g to. the revision of pay 
1 ~t and other cond•tions or service and w~ntcd a n:f~~nc.: to the Industrial 
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~n~l. The class IU nod IV emplo~ees .hoWe\·er did oot accept the revision of 
rv~ee Condllio 
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di1pufe. The 
. ns, Pay. ,"C~le-s l!earnes4 allowance, ~tc. ~~d r'IJ~e ~n ustrta 
lnll bl 
ro "'ere conctll~tJon procccdinLS and th~re was la1lurc to b~mg about 
ca e scttktnent or dhpute1• 
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In 1980 the G 
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and b 
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ove
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