The main legal point established in the judgment is that the Railway Board's policy for union recognition, allowing an unlimited number of unions to obtain recognition based on membership figures reported in annual returns, was arbitrary, irrational, and against public interest. The Court emphasized the need for a rational and non-arbitrary method for ascertaining union strength for recognition.

R. Jayasimha Babu, J.

The Indian Railways said to be the largest single employer in the country with about sixteen lakh employees, presently incurs a staggering annual expenditure of Rs.24.03 crores on about 22,283 office bearers of the labour unions recognised by it at various levels in it's nine Railway zones. There are two recognised unions at each level, with numerous office bearers all of whom are given free facilities of various kinds. The money value of facilities provided to them in the form of free passes (for many by first class) is Rs.6.04 crores; the money value of special casual leave - Rs.12.23 crores; money value of free telephones - Rs.1.64 crores; money value of free accommodation - Rs.3.87 crores; and the money value of TA/DA Rs.21.70 lakh. With effect from 01.04.2003 the number of Railway Zones have been increased to 16.

2. Recognition given to these unions is by reason of their having thirty per cent or more of the non gazetted employes as their members, that norm having been prescribed on 28.10.1985 pursuant to the recommendation made by the Railway Reforms Committee. Prior to 1985, the norm was 15 per cent as prescribed on 19.09.1961. Exclusivity of membership of that minimum percentage is embedded in the norm so prescribed.

3. Rules for recognition of associations of non-gazetted railway servants are set out in paragraphs 2510 to 2518 in Part B of Chapter XXV of the Indian Railway Establishment Manual.ÿ Conditions precedent to the recognition of a Union by a Railway administration are set out in Part C of that Chapter.

ÿÿÿÿÿÿÿÿÿÿÿ (b)ÿ Paragraph 2510 sets out, inter alia, that "Government is prepared to accord official recognition to associations of it's industrial employees.ÿ The grant and continuance of recognition rests in the discretion of Government, but recognition when granted will not be withdrawn without due cause and without giving an opportunity to the association to show cause against such withdrawal."

ÿÿÿÿÿÿÿÿ(c) Paragraph 2512 provides that "Recognition will not ordinarily be granted or continued to any association unless it complies with the following conditions: -(i) it must consist of a distinct class of railway servants and must not be formed on the basis of any caste, tribe, or religious denomination or of any group within or section of such caste, tribe or religious denomination; (ii) all railway servants of the same class must be eligible for membership; (iii) it must be registered under the Trade Unions Act."

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ÿÿÿÿÿÿÿÿÿÿ (d) "Government may" as provided in Paragraph 2513 "require the regular submission of copies of the Rules of any recognized association, of it's annual accounts, and of it's list of members."

ÿÿÿÿÿÿÿÿÿÿÿ (e) The Rules in parts 'B' and 'C' of Chapter XXV of the Railway Manual also provide for grant of leave, provision of passes and privileged ticket orders to railway servants, "for attending meetings or conducting the affairs of the union".ÿÿ The rules of the union are required to conform to those set out in Part C.

4. Of the two recognised unions at each level, one is affiliated to the All India Railwaymen Federation formed in 1924 and recognised from the year 1930, and the other, the National Federation of Indian Railwaymen formed in 1949. Though the two Federations had merged in 1952, they broke apart in 1957. These two federations in turn are affiliated to the Hind Mazdoor Sabha, and Indian National Trade Union Congress respectively. The recognized unions are entitled to participate in the permanent negotiating machinery set up by the Railways for dealing with service matters. This bilateral forum functions in three tiers.ÿ While Railway Board holds discussions separately with the two federations, the General Manager of the respective zones discuss matters again separately with the two recognized unions.ÿ The Divisional Branches of these Unions hold discussions separately with the Divisional authorities.

5. The Bharatiya Railway Mazdoor Sangh formed in 1966 ha