Judgment

A. N. RAY, C. J.: (For himself and on behalf of Y. V. Chandrachud and A.C. Gupta, JJ.):- There are two questions for consideration in these appeals. First, whether an order for removal from service contrary to regulations, framed under the Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956 would enable the employees to a declaration against the statutory corporation of continuance in service or would only give rise to a claim for damages. Second, whether an employee of a statutory corporation is entitled to claim protection of Articles 14 and 16 against the Corporation. In short the question is whether these statutory corporations are authorities within the meaning of Article 12.

2. The statutes for consideration are the Oil and Natural Gas Commission Act, 1959; the Industrial Finance Corporation Act, 1948; and the Life Insurance Corporation Act, 1956. The question which really falls for decision is whether regulations framed under these statutes have the force of law.

3. The Oil and Natural Gas Commission Act, 1959 hereinafter referred to as the 1959 Act established the Commission as a body corporate having perpetual succession and a common seal. The composition of the Commission is the Chairman, and not less than two, and not more than eight, other members appointed by the Central Government. One of the members shall be a whole-time Finance Member in charge of the financial matters relating to the Commission. The Central Government may, if it thinks fit, appoint one of the members as Vice-Chairman of the Commission. Under Section 12 of the 1959 Act the Commission may, for the purpose of performing its functions or exercising. its powers, appoint such number of employees as it may consider necessary. The functions and the terms and conditions of service of such employees shall be such as may be provided by regulations made under the 1959 Act. There was an existing organisation set up in pursuance of a resolution of the Government of India No. 22/29/55-C & G dated 14 August 1956. Every person employed by the said existing organisation before the establishment of the Commission became an employee of the Corporation in accordance with the provisions contained in Section13 of the 1959 Act.

4. Sections 31 and 32 of the 1959 Act are important. Section 31 states that the Central Government may, by notification in the Official Gazette, make rules to give effect to the provisions of the Act. The rules provide inter alia for the term of office of, and the manner of filling casual vacancies among the members, and their conditions of service; the disqualifications for membership of the Commission and the procedure to be followed in removing a member who is or becomes subject to any disqualification; the procedure to be followed in the discharge of functions by members; the conditions subject to which and the mode in which contracts may be entered into by or on behalf of the Commission and some other matters. Every rule made under Section 31 of the 1959 Act shall be laid as soon as may be before each House of Parliament as mentioned in the Section. Both Houses may agree to or annul the rule or modify it.

5. Under Section 32 of the 1959 Act the Commission may, with the previous approval of the Central Government, by notification in the Official Gazette, make regulations not inconsistent with the Act and the rules made thereunder, for enabling it to discharge its functions under the Act. The regulations provide inter alia for the terms and conditions of appointment and service and the scales of pay of employees of the Commission; the time and place of meetings of the Commission, the procedure to be followed in regard to the transaction of business at such meetings; the maintenance of minutes of meetings of the Commission and the transmission of copies thereof to the Central Government; the persons by whom, and the manner in which payments, deposits and in