The main legal principle established in the judgment is the obligation of the State to secure social and economic justice, job security, fair remuneration, and the right to work, as enshrined in the Constitution. The judgment emphasizes the need for fair treatment of employees and directs the Authority to regularize the services of employees based on their qualifications and length of service, in line with the constitutional philosophy.

1. In special leave petitions, leave granted.

2. An autonomous body called the Kerala Water and Waste Water Authority was constituted with effect from 1st April, 1984 under S.3(1) of the Kerala Water and Waste Water Ordinance, 1984 (No. 14 of 1984) which Ordinance was brought into force w.e.f. 1st March, 1984. This Ordinance was replaced by similar Ordinances issued from time to time, the last being Ordinance No.271986 which was in turn replaced by the Kerala Water Supply and Sewerage Act, 1986 (Act No.14of 1986), (hereinafter called 'the Act'); S.1 (3) whereof provides that it shall be deemed to have come into force on 1st March, 1984. This Act, besides providing for the establishment of an autonomous authority to be called the Kerala Water Authority, makes provision for the development and regulation of water supply and waste water collection and disposal and for matters connected therewith. There is no dispute that the functions which were carried on by the Public Health Engineering Department (PHED) were transferred to the autonomous body on the enactment of the Ordinance No. 14 of 1984. After the enactment of the Act, every person working in the PHED became the employee of the Kerala Water Authority (for short 'the Authority') by virtue of S.19(1) of the Act, which reads as under:

"Transfer of employees to the Authority -- Save as otherwise provided in this section, every person who was employed in the Public Health Engineering Department of the Government shall, on and from the appointed day become an employee of the Authority and shall hold his office or service therein by the same, tenure, at the same remuneration and upon the same terms and conditions, and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if this Act had not come into force and shall continue to do so until his employment in the Authority is terminated or until his remuneration or other terms and conditions of service are revised or altered by the Authority under or in pursuance of any law or in accordance with any provision which for the time being governs his service:

Provided that nothing contained in this sub-section shall apply to an employee in the cadres of the Administrative Officers, Financial Assistants, Divisional Accounts, Typists and Stenographers, who, by notice in writing given to the Government and the Authority within such time as the Government may, by general or special order, specify, intimates his intention of not becoming an employee of the Authority;

Provided further than an employee referred to in the preceding proviso shall continue to be an employee under the Government and shall be provided elsewhere in any post or other service under the Government."

Sub-sections (3) and (6) of S.19 makes it clear that such transfer of service shall not entitle the employee to claim any compensation under the Industrial Disputes Act, 1947 nor shall it amount to retrenchment or abolition of post under any extent rule, regulation or order applicable to Government servants. Thus, the erstwhile staff of the PHED was by the thrust of S.19(1) transferred on the establishment of the Authority. This would naturally concern those persons only who were in the employment of the PHED before the establishment of the Authority w.e.f. 1st April, 1984.

3. The staff members employed by the Authority after its constitution were naturally appointed under the provisions of the concerned statute. Since the Act has retrospective effect, reference may be made to S.8 (1) of the Act which reads thus:

"Appointment of officers and staff - Subject to the provisions of sub-section (2), the Authority may appoint for the purpose of enabling it to carry out its powers, duties and functions under this Act, a Secretary and such other officers and staff as may be required against posts duty sanctioned by it:

Provided that the Authority shall obtain the previous approval of the Government for