JUDGMENT

GUPTA, J. (For himself and an behalf of R. S. Pathak, J.) :— The validity of the provisions of the Life Insurance Corporation (Amendment) Act, 1981 and the Life Insurance Corporation (Amendment) Ordinance, 1981 which preceded it is challenged in this batch of writ petitions. The writ petitions have a history behind them which can be conveniently divided into three chapters. However, it will be easier to follow this history if we refer to some of the provisions of the Life Insurance Corporation Act, 1956 first. The Life Insurance Corporation was constituted under the Life Insurance Corporation Act, 1956 to provide for the nationalisation of life insurance business in India by transferring all such business to the Life Insurance Corporation of India. Under S. 11 (1) of the Act the services of the employees of insurers whose business has vested in the Corporation are transferred to the Corporation. Sub-sec. (2) of S. 11 provides :

"Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions of service applicable to employees of insurers whose controlled business has been transferred to and vested in, the Corporation it is necessary so to do, or that, in the interests of the Corporation and its policyholders, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub-sec. (1), or in the Industrial Disputes Act, 1947, or in any other law for the time. being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months remuneration unless the contract of service with such employee provides for a shorter notice of termination."

There is an explanation to this sub-section which is not relevant for the present purpose, S. 48 of the Act empowers the Central Government to make rules to carry out the purposes of the Act. Sub-sec. (2) of S. 48 in Cls. (a) to (m) specifies some of the matters that the rules may provide for. Sub-sec. (3) of S. 48 states :

"Every rule-made by the Central Government under this Act 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 rule or both Houses agree that the rule should not be made, the rule 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 rule."

S. 49 (1) empowers the Life Insurance Corporation of India to make regulations to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of the Act. Cls. (a) to (m) of sub-sec. (2) of S. 49 specify some of the matters the regulations may provide for. The matter referred to in cl. (b) of sub-sec. (2) is "the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents." Cl. (bb) speaks of the terms and conditions of service of persons who have become employees of the Corporation under sub-sec. (1) of S. 11.

2. Turning now to the history of the litigation, the first chapter begins with two settlements reached on Jan. 24, 1974 and Feb. 6, 1974 be