# PROCESS TECHNICIANS AND ANALYSTS' UNION v. UNION OF INDIA AND ORS

- **Citation:** [1997] 2 S.C.R. 798
- **Court:** Supreme Court of India
- **Decided:** 1997-03-10
- **Bench:** Am. Ahmadi, Sujata V. Manohar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/process-technicians-and-analysts-union-v-union-of-india-and-ors-15411
- **Pages:** 27

## Headnote

Labour Law:
Bharat Petroleum Corporation Ltd. (Determination of Conditions of
C Service of Employees) Act, 1988: Section 3.
Powel'-Confe"ed on Central Government-To frame Scheme-Held:
Not unguided-Constitution of India, Article 14--Administrative Law.
Section 3(1) & (2)-Provision enabled Central Government to protect
D wages of pie-nationalisation employees of Corporation while framing Sr;heme
under S.3( 1)-Constitutionality of-Held: Not violative of Art. 14--Historical
background of creation of Corporation and the fact that the group of pre·
nationalisation emp~oyees was a dwindling group taken into consideration-Burmah Shell (Acquisition of Undertaking in India) Act, 1976, S. 9.
E
Statement of Objects and Reasons-Paragraphs 3 and 4--Public Sector
F
wage policy-Held : Contention that there was no such policy and, therefore,
basis of Act unfounded, rejected.
·
Section 3(4)--f'owel'-Confmed 011 Central Government-To frame
Scheme-Retrospectively-Validity of-Held : Such power valid:
Section 3(1)-Validity of-Held: Such legislation was within the legislative competence of Parliament-Contention that retrospective operation of
Act aimed at setting aside earlier judgment of Industrial Court rejected.
Bharat Petroleum Corporation Ltd. (Determination of Condition of
G Service of Post-Nationalisation Refinery Employees) Scheme, 1989.
Pre-nationalisation . and post-nationalisation employees--Distinction
between-In matter of wages-Held : Not discriminatory.
Retrospective operation of-From a date prior to coming into force of
H
par~nt Act-Validity of-Held : Such Scheme was valid.
798
' ,,
..
PROCESS TECHNICIANS AND ANALYSTS' UNION v. U.O.I.
799
Retrospective operation of-<:ontention that Scheme aimed at setting A
aside earlier judgment of Industrial Court, rejected.
Wages-Difference between wages of refinery employees of Bharat
Petroleum Corporation under Scheme of 1989 and wages of employees of
Marketing Division of the same Corporatio1t-Validity of-Held : Not discriminatory as the latter were receiving their wages under a settlement with the B
Corporation, while the f onner could not reach any such settlement and were,
consequently, governed by the Scheme-Hence each of them constituted a
distinct clasr-Bharat Petroleum Corporation Ltd. (Detennination of Conditions of Service of Employees) Act, 1989.
Bharat Petroleum Corporation Ltd. (Detennination of Conditions of
Service of Post-Nationalisation Refinery Employees) Amendment Scheme,
1996.
c
Clause 3-Employees who entered into settlement with Corporation--£xclusion of-From ambit of-Union refu,sed to enter into such settle.- D
ment-Such exclusion not discriminatory-Such union was governed by
Scheme and, therefore, could not complain of discrimination-Further, considerations which go into finalising settlements on part of employer were very
different from considerations governing framing of statutory Scheme by
Central Government.
E
Clause 3-Most of the employees of Corporation stood excluded
from the Scheme because they entered into settlement with Corporatio1t-A
single Union which did not enter into such settlement, covered by
Scheme-<:omplaint of such Union being singled out-Validity of-Held : In
such circumstances, members of such Union could not complain of being F
singled out-<:onstitution of India, 1950, Arts. 14 and 16.
, The entire share capital of Burmah Shell Refineries Ltd. was purchased by the Government of India and Burmah Sell Refineries Ltd.
became a Government Company, and later a Public Sector Undertaking.
The Burmah Shell Oil Storage and Distributing Company which was a G
I
I
foreign company was acquired by the Central Government by enacting the
Burmah Shell (Acquisition of Undertakings in India) Act, 1976. After the
acquisition of the Burmah Sfie~I Oil Storage and Distributing C9mpa'9';
both these compllnies was merged and a notification was issued under
Section 7 of the Said Act, vesting the undertakings of the Burmah Shell H
800
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A O

## Text

_Characters 0–39,744 of 67,907. This is a partial read: ask again with offset=39744 for what follows._

A
PROCESS TECHNICIANS AND ANALYSTS' UNION
v.
UNION OF INDIA AND ORS.
'i
MARCH 10, 1997
B
[AM. AHMADI, 0. AND SUJATA V. MANOHAR, J.]
Labour Law:
Bharat Petroleum Corporation Ltd. (Determination of Conditions of
C Service of Employees) Act, 1988: Section 3.
Powel'-Confe"ed on Central Government-To frame Scheme-Held:
Not unguided-Constitution of India, Article 14--Administrative Law.
Section 3(1) & (2)-Provision enabled Central Government to protect
D wages of pie-nationalisation employees of Corporation while framing Sr;heme
under S.3( 1)-Constitutionality of-Held: Not violative of Art. 14--Historical
background of creation of Corporation and the fact that the group of pre·
nationalisation emp~oyees was a dwindling group taken into consideration-Burmah Shell (Acquisition of Undertaking in India) Act, 1976, S. 9.
E
Statement of Objects and Reasons-Paragraphs 3 and 4--Public Sector
F
wage policy-Held : Contention that there was no such policy and, therefore,
basis of Act unfounded, rejected.
·
Section 3(4)--f'owel'-Confmed 011 Central Government-To frame
Scheme-Retrospectively-Validity of-Held : Such power valid:
Section 3(1)-Validity of-Held: Such legislation was within the legislative competence of Parliament-Contention that retrospective operation of
Act aimed at setting aside earlier judgment of Industrial Court rejected.
Bharat Petroleum Corporation Ltd. (Determination of Condition of
G Service of Post-Nationalisation Refinery Employees) Scheme, 1989.
Pre-nationalisation . and post-nationalisation employees--Distinction
between-In matter of wages-Held : Not discriminatory.
Retrospective operation of-From a date prior to coming into force of
H
par~nt Act-Validity of-Held : Such Scheme was valid.
798
' ,,
..
PROCESS TECHNICIANS AND ANALYSTS' UNION v. U.O.I.
799
Retrospective operation of-<:ontention that Scheme aimed at setting A
aside earlier judgment of Industrial Court, rejected.
Wages-Difference between wages of refinery employees of Bharat
Petroleum Corporation under Scheme of 1989 and wages of employees of
Marketing Division of the same Corporatio1t-Validity of-Held : Not discriminatory as the latter were receiving their wages under a settlement with the B
Corporation, while the f onner could not reach any such settlement and were,
consequently, governed by the Scheme-Hence each of them constituted a
distinct clasr-Bharat Petroleum Corporation Ltd. (Detennination of Conditions of Service of Employees) Act, 1989.
Bharat Petroleum Corporation Ltd. (Detennination of Conditions of
Service of Post-Nationalisation Refinery Employees) Amendment Scheme,
1996.
c
Clause 3-Employees who entered into settlement with Corporation--£xclusion of-From ambit of-Union refu,sed to enter into such settle.- D
ment-Such exclusion not discriminatory-Such union was governed by
Scheme and, therefore, could not complain of discrimination-Further, considerations which go into finalising settlements on part of employer were very
different from considerations governing framing of statutory Scheme by
Central Government.
E
Clause 3-Most of the employees of Corporation stood excluded
from the Scheme because they entered into settlement with Corporatio1t-A
single Union which did not enter into such settlement, covered by
Scheme-<:omplaint of such Union being singled out-Validity of-Held : In
such circumstances, members of such Union could not complain of being F
singled out-<:onstitution of India, 1950, Arts. 14 and 16.
, The entire share capital of Burmah Shell Refineries Ltd. was purchased by the Government of India and Burmah Sell Refineries Ltd.
became a Government Company, and later a Public Sector Undertaking.
The Burmah Shell Oil Storage and Distributing Company which was a G
I
I
foreign company was acquired by the Central Government by enacting the
Burmah Shell (Acquisition of Undertakings in India) Act, 1976. After the
acquisition of the Burmah Sfie~I Oil Storage and Distributing C9mpa'9';
both these compllnies was merged and a notification was issued under
Section 7 of the Said Act, vesting the undertakings of the Burmah Shell H
800
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A Oil Storage and Distributing Company in Burmah Shell Refineries Ltd.
B
The name of the said company was changed to Bharat Petroleum Corporation Ltd. Upto the date of acquisition there were approximately 220 Burmah Shell workmen who were working in the Refinery Company.
Subsequently, some of these employees continued with the Government
Company. Fresh workmen were employed thereafter by the Government/Public Sector Company on a temporary basis on consolidated
salaries.
The Petroleum Employees' Union filed a petition under the
Maharashtra Recognition of Trade Unions and Prevention of Unfair
C Labour Practices Act, 1971, claiming on behalf of post- nationalisation
workmen in the refinery of Bharat Petroleum Corporation Ltd. benefits of
pre-nationalisation wage settlements signed by the then unions with Burmah Sell Refineries Ltd. The Industrial Court allowed the petition. The
Industrial Court held that the settlement continued to apply to employees
recruited after nationalisation (post-nationalisation employees). The InD dustrial Court further held that legislation was required if it was intended
that the same service conditions would not apply to post-nationalisation
employees. However, the High Court set aside the judgment of the Industrial Court.
E
F
Thereafter, the Bharat Petroleum Corporation Ltd. (Determination
of Conditions of Service of Employees) Act, 1988 was. enacted. Under
Section 3 of the Act, the Central Government framed by a notification, the
Bharat Petroleum Corporation Ltd. (Determination of Conditidns ·of Service of Post-Nationalisation Refinery Employees) Scheme, 1989. The said
Scheme was amended by the Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Post-Nationalisation Refinery
Employees) Amendment Scheme, 1996. It was deemed to have come into
force on and from 1.1.1992.
The appellant, a union of employees in the refinery division of the
G Corporation, filed a writ petition before the High Court challenging the
Constitutional validity of the Act, which was dismissed. Hence this Appeal,
On behalf of the appellant it wiis' contended that Section 3 of the Act
conferred unguided and arbitrary powers on the Central Government to
frame Schemes; that Section 3(2) of the Act and the Scheme of 1989, which
H permitted the Central Government to provide for continuance of the
. .
---
PROCESS TECHNICIANS AND ANALYSTS' UNION v. U.O.I.
801
pre-Nationalisation emoluments of the employees of the former companies A
who had become employees of the Corporation as a result of nationalisation, was discriminatory; that the entire basis of the Act was unfounded
because there was no such thing as public sector wage policy, as the wage
structure in different public sector undertakings was different as was
evident from Paragraph 3 anil <t of the Statement of Objects and Reasons B
of the Act, that the power given· under Section 3 of the Act to fraine a
Scheme retrospectively from 24.1.1976 was invalid; that the Act and the
Scheme of 1989 were designed to overcome the judgment of the Industrial
Court and such legislation was invalid; that the wages given to the refinery
employees under the 1989 Scheme were different from the wages received
by the employees of the Marketing Division of the Corporation constituted C
discrimination; that the distinction made by the Scheme of 1996 between
the employees who had entered into a settlement with the employer and
the employees who have not entered into a settlement was discriminatory;
.
.
and that since the Scheme of 1996 covered only the employees of the Union,
the appellants had been singled out.
D
Dismissing the appeal, this Court
HELD : 1. The power conferred by Section 3 of the Bharat Petroleum
Corporation Limited (Determination of Conditions of Sevice of
Employees) Act, 1988 on the Central Government to frame a Scheme can E
be exercised for the purpose of making the service , conditions of the
employees of Bharat Petroleum· Corporation comparable with those of
other public sector companies. This is not unguided power. The guidelines
are contained within Section 3 itself. (810-D-F]
F
Z.l':·The appellant's contention that Section 3(2) of the Act which
permitted the Central Government to provide for continuance of the
pre-nationalisation emoluments of the employers of the former companies
who had become the employees of the Corporation as a result of
nationalisation ignores the entire historical background of creatio~ of the
Corporation. Prior to 1976 the employees of Burmah Shell Refineries as G
well as Burmah Shell Oil Storage and Distributing Company of India
Limited enjoyed salaries and emoluments and had the benefit of a wage
structure which was very different from that of other public sector undertakings. When Burmah Shell Refineries became a Government Company,
and when the' Burmah Shell Oil Storage and Distributing Company of H
802
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A India Limited was taken over under the Burmah Shell (Acquisition of
Undertakings in India) Act, 1976, the employees of these two companies
who became the employees of the Corporation, were given protection of
their wages. Moreover, by its very nature this group of pre-natio_nalisation
employees was a dwindling group. Originally, there were abut 200
B employees who were entitled to their pre-nationalisation service benefits.
By the time the instant appeals came to be filed their numbers had
dwindled to 10. At present there is only one employee now left who is
entitled to pre-nationalisation emoluments. In this context, it cannot be
said that the provision of Section 3(2) violate Article 14 of the Constitution. [811-A-H]
c
LIC & Ors. v. S.S. Srivastava & Ors., [1988) Supp. SCC 1; B.S. Yadav
& Ors. v. Chief Manager, Central Bank of India & Ors., [1987) 3 SCC 120
and Imperial Bank of India Pensioners' Association & Ors., [1989) Supp. 1
sec 236, relied on.
D
Maninder Chandra Sen v. Union of India & Ors., AIR (1973) Cal. 385,
approved.
2.2. The distinction made by the Bharat Petroleum Corporation Ltd.
\
.,_.
(Determination of Conditions of Service of Post- Nationalisation Refinery
Hl.-
E Employees) Scheme, 1989 between pre- nationalisation and postnationalisation employees of the refinery does not violate Article 14 for the
same reasons as stated above in connection with the provisions of the 1988
Act. [813-A-B]
3.1. · The contention of the appellant that the figures in different
F
public sector unions do not tally is correct. But what one has to see is not
the actual figure but the pattern on the structure of the wage, or what
respondents describe as the public sector wage p:ittern. [814-H, 815-A]
3.2. The Scheme of1989, which has been framed under the Act of
1988, is for the purpose of introducing the public sector wage pattern in
G the Corporation for post-nationalisation employees. It would not, therefore, be correct to say that there is no such thing as a public sector wage
pattern. The variations pointed out by the appellant are a result of
revisions being made in different public sector enterprises at differe_nt
times and under different settlements. Such differences cannot nullify the
•
H basic intention of the Corporation to bring about parity in the wage
-
--
PROCESS TECHNICIANS AND ANALYSTS' UNION v. U.O.I.
803
pattern of their employees with the wages pattern in other public sector A
undertakings especially in the oil sector, which is the relevant sector.
[816-B, E]
4. Under Section 3( 4) of the 1988 Act an express power is given to the
Central Government to give retrospective effect to any Scheme framed
under Section 3(1) or (3). The retrospective operation, which is given to the B
Scheme of 1989, · is, therefore, under a statutory power so given to the
Central Government. Since the Scheme regulates the conditions of service
of post-nationalisation refinery employees, it must necessarily ~over the
post- nationalisation period, which began from 24.1.1976. It is open to the
legislature to make retrospective laws. Therefore, the statutory Scheme,
which has been made retrospective in exercise of statutory power expressly C
granted to the Central Government, cannot be faulted on that ground.
[8'16-G-H, 817-A]
. 5. The Judgment of the Industrial Court has been set aside by the
High Court. The retrospective operation given to the Scheme provides for
the conditions of service of all employees who joined the Corporation after D
24.1.1976, it necessarily lays down these terins and conditions operative
from 24.1.1976. The Scheme also provides emoluments, which are higher
than the emoluments, which the post-nationalisation employees were
receiving to the coming into effect of the Scheme. The Scheme also brings
into effect the avowed pattern in the Corporation conform to the wage E
pattern of public sector undertakings. A legislation which imposes
retrospectively a wage pattern may thereby discontinue the application of
any earlier settlement by an express legislative provision to that effect. Such
legislation is within the legislative competence of Parliament. [820-E-G]
Shri Prithvi Cotton Mills Ltd. & Anr. v. Broach Borough Municipality F
& Ors., [1970] 1 SCR 388; Comorin Match Industries (P) Ltd. v. State of
T.N., [1996] 4 SCC 281 and P. Kannadasan & Ors. v. State of T.N. & Ors.,
[1996] 5 sec 670, relied on.
A. V. Nachane & Anr. v. Union of India & Anr., [1982] 2 SCR 246 and G
Madan Mohan Pathak v. Union of India & Ors., [1978] 3 SCR 335, held
inapplicable.
LIC v. D.J. Bahadur & Ors., [1981] 1 SCR 1083, referred to.
6.1. The difference between the wages given to the refinery employees H
804
SUPREME COURT REPORTS
[1997) 2 S.C.R.
A
under the 1989 Scheme and the wages received by the employees of the
Marketing Division of the Corporation is not discriminatory as the latter
were their wages under a settlement and were, consequently, governed by
the Scheme. Hence, each of them constituted a distinct class.
B
6.2. The distinction made by the Bharat Petroleum Corporation Ltd.
(Determination of Conditions of Service of Post· Nationalisation Refinery
Employees) Amendment Scheme, 1996 between those employees who have
entered into a settlement and those employees who have not entered into a
settlement cannot be considered as discriminatory. The Corporation offered to sign a similar settlement with the appellant-Union but the appelC lant- Union declined to do so. Therefore, the appellant cannot complain of
discrimination. There are various considerations which go into finalising
such settlements on the part of the employer. These include (1) industrial
peace so that the workers can concentrate on their work with out agitations
(2) putting an end to expensive litigation between the employer and the
employees and establishment of goodwill and harmony between the
D employer and the employees leading to better functioning of the establishment. These considerations are very different from considerations,
which govern the framing of a statutory Scheme by the Central Government. Such a Scheme must necessarily bear in mind the wage pattern in
other public sector undertakings and provide for revisions of wages based
E on certain accepted principles for all public sector 'undertakings. The con·
siderations for framing the amended Scheme are different. Those who are
governed by a statutory Scheme cannot compare themselves with employees
who have entered into a negotiated settlement with their employer. The
charge of discrimination under Article 14, therefore, cannot be sustained
in this regard. [823-C-H]
F
7. The employees who are members of the appellant-Union being the
only set of employees, who have not entered into a settlement with their
employer, have necessarily to be provided for under statutory Scheme.
Such a Scheme, therefore, has been framed and the employees cannot
complain that they have been singled out. They cannot expect a statutory
G Scheme to give them the benefits of the settlements, which the other
employees have entered into with the employer. It is framed by the Central
Government under the statutory provisions of the 1988 Act. The amended
Scheme of 1996 gives substantial additional benefits to the employees. It
is in valid exercise of statutory powers, and is brought into effect from
H 1.1.1992 since the earlier Scheme covered period upto 1.1.1992. [824-B-D]
-
-
-
PROCESS TECHNICIANS AND ANALYSTS' UNION'· U.0.1. [MRS. SUJATA V. MANO HAR, J.)
805
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3878 of A
1992.
From the Judgment and Order dated 22.6.92 of the Bombay High
Court in W.P. No. 3549 of 1988.
Madan G. Phadnis, Jitendra Sharma, Ms. Gunwant Dara, Ms. B
Minakshi Vij for P. Ga~r for the Appellant.
T.R. Andhyarujina, Solicitor General, K.N. Shukla, K.C. Kaushik,
A.K. Sharma for B.K. Prasad for the Respondent for (Union of India).
Soli J. Sorabjee, Harish N. Salve, P.H. Parekh and Sameer Parekh C
for the Respondents.
The Judgment of the Court was delivered by
MRS. SUJATA V. MANOHAR, J. Bharat Petroleum Corporation
Ltd., the second respondent in this appeal has about 12,000 employees. Out D
of these about 1850 employees are working in the refinery division of the
second respondent. Process Technicians and Analysts' Union which is the
appellant-Union has a membership of about 411 employees in the refinery
division of the second respondent-corporation.
Prior to 1976 there were two companies; one was Burmah Shell E
Refineries Ltd. which was an Indian company and the other was Burmah
Shell Oil Storage and Distributing Company which was a foreign company
registered in the United Kingdom and was a marketing company. On or
about 24th of January, 1976, the entire share capi~al of Burmah Shell
Refineries Ltd. was purchased by the Government of India and Burmah p
Shell Refineries Ltd. became a Government Company, and later a public
Sector Undertaking. The Burmah Shell Oil Storage and Distributing Company which was a foreign company was acquired by the Central Government by enacting the Burmah Shell (Acquisition of Undertakings in India)
Act, 1976. After the acquisition of the Burmah Shell Oil Storage and
Distributing Company, both these companies were merged and a notifica- G
tion was issued under Section 7 of the said Act vesting the undertakings of
the Burmah Shell Oil Storage and Distributing Company in Burmah Shell
Refineries Ltd. The name of the said company was changed on or about
1st of August, 1977, to Bharat Petroleum Corporation Ltd. Upto 24th of
January, 1976, there were approximately 220 Burmah Shell workmen who H
806
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A were working in the Refinery Company. After 24th of January, 1976, some
of these employees continued with the Government Company. Fresh
workmen were employed thereafter by the Government/Public Sector
Company on a temporary basis on consolidated salaries.
In February 1978 Petroleum Employee's Union filed U.L.P.38/1978
B under the Maharashtra Recognition of Trade Unions and Prevention of
Unfair Labour Practices Act, 1971, claiming on behalf of post- nationalisation workmen in the refinery of Bharat Petroleum Corporation Ltd.
benefits of Pre-Nationalisation Wage Settlements signed by them unions
with Burmah Shell Refineries Ltd. Those settlements were dated 21.2.1973,
C 31.10.1973 .and 16.8.1974.
By a latter dated 27th of February, 1981 addressed by the Government of India to the second respondent-corporation, the attention of the
second respondent was invited to existing directions to the effect that the
D Wage Scales/Service Conditions which were prevalent before the take-over
of the company cannot be granted to the employees recruited subsequently
and that the second respondent-corporation should recruit all new entrants
after take-over of the company on consolidated wages. It was in compliance
with this directive that the second respondent-corporation had engaged
employees after nationalisation on a temporary basis and on consolidated
E salaries.
During the pendency of U.L.P .38/1978;-there were other litigations
between the employees and/or unions of these employees and the
second respondent~corporation pertaining to service conditions of the
F employees. These are, however, not relevant .for the present purposes.
On 29th of April, 1987 U.L.P.38/1978 was allowed in favour of the
employees. The Industrial court held that the second respondent-corporation was a successor-in-interest of Burmah Shell Refineries Ltd. and
that the settlement of 16th of August, 1974 continued to apply to employees
-
recruited after nationalisation (hereinafter referred to as post-nationalisaG tion employees'). It was also held that the letter from the Government of
India to the second respondent- corporation dated 27.2.1981 was of no
legal effect and legislation was required if it was intended that the same
-
service conditions would not apply to post-nationalisation employees. This
decision was challenged by the second respondent by filing a writ petition
H being Writ Petition No. 1835 of 1987 in the Bombay High Court on or"'
··~
PROCESS TECHNICIANS AND ANAL YSl'S' UNION'· U.0.1. [MRS. SUJATA V. MANOHAR, l.J
807
about 1st of July, 1987. The writ petition prayed for a writ of certiorari to A
quash the judgment dated 29th of April 1987 in U.L.P.38 of 1978. By an
interim order of the same date the application of the settlement of 16th of
August, 1974 was stayed for the past period but for prospective period from
1.7.1987 the said settlement of 1974 was made applicable to all workmen
of the refinery who were complainants in UL.P.38 of 1978.
B
On 2nd of July, 1988, Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Employees) Ordinance, 1988, was
promulgated. Under Section 3 of the Ordinance power was vested in the
Ministry of Petroleum, Government of India to determine service conditions under a scheme comparable with the employees of other public sector C
companies. The Ordinance was replaced by The Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Employees) Act,
1988, being Act 44 of 1988 (hereinafter referred to as 'the Act of 1988').
The relevant provisions of Section 3 of the said Act are as follows :
"3(1) : Where the Central Government is satisfied that for the D
purpose of making the conditions of service of the officers and
employees of the Corporation comparable with the conditions of
service of the officers and employees of other public sector companies, it is necessary so to do, it may, notwithstanding anything
contained in the Industrial Disputes Act, 1947 or any other law or E
any agreement, settlement, award or other instrument for the time
being in force, and notwithstanding any judgment, decree or order
of any court, tribunal or other authority, frame one or more
schemes for the purpose of determination of the conditions of
service of the officers and employees of the Corpora~ion.
(2) x
x
x
x
x
x
(3) The Central Government may make a scheme to amend or vary
scheme made under sub-section (1).
F
(4) The power to make any scheme under sub-section (1) or G
sub-section (3) shall include -
(a) the power to give retrospective affect to any such scheme
or any provision thereof; and
(b) the power to amend, by way of addition, variation or H
A
B
c
D
808
SUPREME COURT REPORTS
(1997] 2 S.C.R.
repeal, any existing provisions determining the conditions of
service of the officers and employees of the Corporation in
force immediately before the commencement of this Act.
(5) Every scheme made under sub-section (1) or sub- section (3)
shall be laid, as soon as may be after it is made, before each House
of Parliament, while it is in session for a total period of thirty days
which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the scheme, or both
Houses agree that the scheme should not be made, the scheme
shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such modification
or annulment shall be without prejudice to the validity of anything
previously done under that scheme."
Pursuant to the power given under Section 3, the Central, Government, or about 29th of April, 1989, framed a scheme by a notification of
that date, being that Bharat petroleum Corporation Ltd. (Determination
of Conditions of Service of Post-Nationalisation Refinery Employees)
Scheme, 1989 (hereinafter referred to as 'the Scheme of 1989'). The
E Scheme was made retrospective and clause 1(2) of the Scheme provided
that the Scheme shall be deemed to have come into force on and from the
24th day of January, 1976. The Scheme laid down conditions of service for
the employees covered by the Scheme for five different periods; (1) the
period from 24th of January, 1976 to 31st December, 1979; (2) 1st of
F January, 1980 to 31st December, 1983; (3) 1st January, 1984 to 31st
December, 1987;( 4) 1st January, 1988 to 31st December, 1991; and (5) after
31st of December, 1991, unless the conditions are altered, varied or
repealed by any other scheme.
Two unions of the employees of the second respondent-corporation,
G namely, the appellant union and Petroleum Workmen's Union filed Writ
Petition No. 3549 of 1988 in the Bombay High Court challenging the
constitutional validity of the Bharat Petroleum Corporation (Determination of Conditions of Service of Employees) Act, 1988. Another writ
petition being Writ Petition No. 3619 of 1988 was filed by another union,
H namely, Bharat Petroleum Corporation (Refinery) Employees' Union cha!-
--{
PROCESS TECHNICIANS AND ANALYSTS' UNION'· U.0.1. [MRS. SUJATA V. MANO HAR, J.)
809
lenging the constitutional validity of the said Act of 1988. After the coming A
into force of the said Scheme of 1989, these writ petitions were amended
to challenge the validity of the said Scheme which· was framed on 29th of
April, 1989. These writ petitions were heard together. By a common
judgment and order, a Division Bench of th_e Bombay High Court has
dismissed these writ petitions and has upheld the constitutional validity of B
the said Act of 1988 and the Scheme of 1989.
The present appeal is filed by the appellant-union from the judgment and order of the Division Bench of the Bombay High Court in Writ
Petition No. 3549 of 1988. Similarly, an appeal was also filed from the said
judgment and order by the Petroleum Workmen's Union who was a joint C
petitioner in the said Writ Petition No. 3549 of 1988. An appeal was also
filed by the Bharat Petroleum Corporation (Refineries) Employees's
Union before this Court from the said judgment and order in Writ Petition
No 3619 of 1988. The other two appeals, however, have been disposed of
before us by earlier orders in view of the settlements arrived at by the said D
!WO unions with the second respondent-corporation on or about 17th May,
1996. The appellant-union, however, has not reached a settlement with the
corporation.
After the dismissal of the said writ petitions by the Bombay High
Court by the impugned judgment and order, Writ Petition No. 1835 of 1987 E
which had been filed by the second respondent-corporation challeng:ng the
judgment and order of the Industrial court in U.L.P.38of1978 was allowed
by the Bombay High Court by its judgment and order of 27th June 1992,
and the judgment and order of the Industrial court dated 29th of April,
1987 in U .L.P .38 of 1978 was set aside.
During the pendency of this appeal before us, the Central Government, Ministry of Petroleum and Natural Gas by a notification dated 24th
F
of September, 1996 has notified a scheme further to amend the Bharat
Petroleum Corporation Ltd. (Determination of Conditions of Service of
Post-Nationalisation Refinery Employees) Scheme, 1989. The amended G
Scheme is known as the Bharat Petroleum Corporation Ltd. (Determination of Conditions of Service of Post-Nationalisation Refinery Employees)
Amendment Scheme, 1996 (hereinafter referred to as 'the Scheme of
1996'). It is deemed to have to come into force on and from the 1st day of
January, 1992. Under Clause 3 of the Amended Scheme, it applies to all H
810
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A clerical and labour employees who have joined the refinery of the Corporation on or after the 24th day of January, 1976, whose jobs are set out in
Part-B of the Fourth Schedule, provided that the Scheme shall cease to
have effect in respect of the employees who shall opt or consent to be
governed by the terms and conditions as may be mutually agreed with the
B Corporation. As a result, the employees who are governed by the settlement which have now been entered into on ·or about 17th of May, 1996,
will not be governed by the Amended Scheme of 1996. While the
employees who are members of the appellant-union, who have not signed
such settlements, will now be goxerned by the Amended Scheme of 1996.
The validity of this Amended Scheme of 1996 is also challenged before us.
c
The appellant-union contends that Section 3 of the Bharat Petroleum
Corporation Limited (Determination of Conditions of Service of
Employees) Act, 1988 confers unguided and arbitrary powers on the
Central Government to frame schemes. Hence Section 3 of the Act of 1988
D must be struck down. Section 3, however, clearly provides within itself the
guidelines for framing the scheme under that section. Thus Section 3(1)
stipulates that the Central Government should be satisfied, that for the
purpose of making the conditions of service of the officers and employees
of the Corporation comparable with the conditions of service of the officers
and employees of other public sector companies, it may frame one or more
E schemes for the purpose of determination of the conditions of service of
the officers and employees of the Corporation. It can do this notwithstanding anything contained in the Industrial Disputes Act, 1947 or any other
law, agreement, settlement, award or other instrument for the time being
in force, and notwithstanding and judgment, decree or order of any court,
p
tribunal or other authority. The power to frame the scheme, therefore, can
be exercised for the purpose of making the service conditions of the second
respondent's employees comparable with those of other public sector
companies. This is not unguided power. The guidelines are contained
G
within Section 3 itself.
·
It is next submitted that under Section 3(2) while framing any scheme
under sub-section (1) of Section 3, it shall be competent for the Central
Government to provide for the continuance, after the commencement of
any such scheme, of such of the emoluments and other benefits as were
payable to the officers and employees of the Corporation immediately
H before Burmah Shall Refineries became a Government Company or before
PROCESS TECHNICIANS AND ANALYSTS' UNION v. U.0.1. (MRS. SUJATA V. MANO HAR, J.]
811
the appointed day under the Burmah S~ell (Acquisition of Undertaking in A
India) Act 1976. It is submitted that by reason of Section 3(2) different
service conditions can be permitted for the pre-nationalisation employees
of Burmah Shell Refineries or Burmah Shell Oil Storage and Distributing
Company who have become employees of the second respondent-corporation as a result of the nationalisation. This, according to the appellant, B
violates Article 14 of the Constitution as it discriminates between two sets
of employees of the second respondent-corporation.
This submission, however; ignores the entire historical background
of creation of the second respondent-corporation. Prior to 1976 the
employees of Burmah Shell Refineries as well as Burmah Shell Oil Storage C
and Distributing Company of India Limited enjoyed salaries and emolu·
ments and had the benefit of a wage structure which was very different
from that of other public sector undertakings. When Burmah Shell
Refineries became a Government Company, and when the Burmah Shell
Oil Storage and Distributing Company of India Limited was taken over D
under the Burmah Shell (Acquisition of Undertakings in India) Act, 1976,
the. employees of these two companies who became the employees of the
second respondent-corporation, were given protection of their wages. Section 9 of the Burmah Shell (Acquisition of Undertakings in India) Act,
1976, in this connection, provides that these employees shall hold office or E
service under the Central Government or the Government Company, as
the case may be, on the same terms and conditions and with the same rights
to pension, gratuity and other matters as would have been admissible to
them, had there been no such vesting. It is to protect the conditions of
service of these pre-nationalisation employees that Section 3(2) of the 1988 F
Act provides that a scheme framed under Section 3(1) may provide for the
continuance of the salary and other benefits received by the prenationalisation employees. This was done to tr~at the pre-nationalisation
employees in a fair and just manner. it is also necessary to note that by its
very nature this group of pre-nationalisation employees was a dwindling
group. Originally, there were about 200 such employees who were entitled G
to their pre-nationalisation service benefits. By the time these appeals came
to be filed their numbers had dwindled to 10. We are now informed that
there is only one employee now left who is entitled to pre-nationalisation
emoluments. In this context, it cannot be said that the provisions of Section
3(2) violate Article 14 of the Constitution.
H
A
B
812
SUPREME COURT REPORTS
[1997)2S.C.R.
In the case of Life Insura'!ce Corporation of India & Ors. v. S.S.
Srivastava & Ors., [1988] Supp SCC 1, a distinction had been made in the
age of retirement between employees transferred to a Government Corporation from its predecessor private company and employees directly
recruited by the Corporation. The age of retirement for transferred
employees was fixed at 60 years and the age of retirement for those directly
recruited to the Government Corporation was fixed at 58 years. It was held
that the transferees and direct recruits formed two distinct classes and
providing different ages of retirement was not discriminatory. This Court
noted that the transferred employees belonged to a diminishing cadre.
Ultimately, the cadre would consist only of directly recruited employees.
C Secondly, a separate classification for transferred employees had become
necessary of historical facts and the need for treating these employees in
a fair and just way. This Court referred with approval to the decision of
the Calcutta High Court in Maninder Chandra Sen v. Union of India & Ors.,
AIR (1973) Cal. 385, in which the classification of railway employees into
D two categories, namely, those who joined on or before March 31, 1938 and
those who joined after March 31, 1938 for purposes of fixing the age of
superannuation was upheld. The classification was upheld as it was based
on historical facts, and as necessary for treating the employees in a just and
fair way.
E
In the case of B.S. Yadav & Anr. v. Chief Manager, Central Bank of
India & Ors., [1987] 3 SCC 120, this Court upheld rules fixing 60 years as
the ages of Superannuation for those inducted prior to bank nationalisation, but 58 years for those inducted after that date. These rules were held
as not violative of Articles 14 and 16 of the Constitution. The Court said
F
that the classification of the employees into these two categories was a valid
classification involving justice and fairness. These was good reason to make
a distinction between the employees who had entered service prior to
nationalisation and those who joined thereafter. At the time of nationalisation the corresponding new banks did not have their own employees to run
the wide business taken over under the Act. There was, therefore, necessity
G to secure the services of the employees of the former banking companies
without causing much dissatisfaction to them. There was also need for
standardising the conditions of service of all such employees belonging to
the 14 banks. Hence the age of retirement of the new entrants was fixed
consistent with the conditions prevailing in almost all the sectors of public
fl employment.
~
I
, --
PROCESS TECHNICIANS AND ANAL YSI'S' UNION'· U.O.L[MRS. SUJATA V. MANOHAR, J.]
813
The considerations which have impelled the provisions of Section A
3(1) and 3(2) in the 1988 Act are very similar to those cited in B.S. Yadav's
case (supra). In the case of Imperial Bank of India Pensioners Association
& Ors. v. State Bank of India & Ors., [1989] Supp. 1 SCC 236, this Court
upheld a distinction made between the India-based and London-based
pensioners of Imperial Bank of India which was later taken over by the
State Bank of India. The Court said that such a distinction did not violate B
Articles 14 and 16 of the Constitution. It said that London-based
employees constitute a class by themselves and there was no discrimination
within the same class. The contention of the appellant, therefor, in this
regard, cannot be sustained.
c
The appellant has drawn our attention to the Statement of Objects
arid Reasons of the 1988 Act. Paragraph 3 of the Statement of Objects and
Reasons accompanying the said points out that the Bharat Petroleum now
consists of three categories of employees. They are the employees of the
Burmah Shell Refineries who continued to serve in that company even after D
it became a Government Company; the employees of Burmah Shell whose
services were transferred to Burmah Shell Refineries under the provisions
of the 1976 Take-over Act,· and the employees recruited by Bharat
Petroleum after it became a Government Company. In paragraph 4 it is
pointed out that out of the first two categories of employees mentioned
above, a few have not agreed to abide by the public sector wage policy and, E
therefore, continue to enjoy the emoluments and other conditions of service to which they were entitled under the aforesaid companies even after
the Burmah Shell Refineries became a Government Company or, as the
case may be, after the nationalisation of Burmah Shell. The emoluments
and other conditions of service of the third category of employees menF
tioned above and who were recruited by Bharat Petroleum were, however,
-sought to be regulated after taking into consideration the conditions of
service applicable to employees in other public sector companies in accordance with the Wage Policy ·of the Government for Public Sector. This was
with a view that there should be, a far as possible, parity in the conditions
of service of Public Sector Companies.
G
The Statement of Objects and Reasons goes on to point out that
since the service conditions of this large category of employees were less
favourable then the employees of Burmah Shell Refineries and Burmah
Shell, a dispute was raised by them which was taken to the Industrial Court. H
814
SUPREME COURT REPORTS
[1997] 2 S.C.R.
A The Industrial Court has held that in view of the provisions Section 18(3)
of the Industrial Disputes Act, 1947, these employees are also entitled to
the same conditions of service as are applicable to other two categories of
employees. The Statement goes on to say, "The award of the Industrial
Tribunal if given effect to in Bharat Petroleum will amount to giving a
B higher wage structure in this Corporation alone and other employees in
similar undertakings may demand that they should also get the benefit of
the higher scales of pay on the principle of equal pay for equal work.