JUDGMENT

DUTT, J. : — Of these three appeals by special leave. we may first of all deal with Civil Appeal No. 3214 of 1979 for, admittedly the disposal of that appeal will virtually mean the disposal of the other two appeals. The said Civil Appeal No. 3214 of 1979 is directed against the judgment of the Delhi High Court whereby the High Court has quashed a circular dated March 8, 1978 issued by the Board of Directors of Caltex Oil Refinery (India) Ltd. (for short CORIL), a Government Company, on the writ petition filed by the employees of CORIL being Writ Petition No. 426 of 1978.

2. The Caltex (Acquisition of Shares of Caltex Refining (India) Ltd, and of the Undertakings in India of Caltex (India) Ltd.) Act 17 of 1977. hereinafter referred to as the Act, was enacted by the Union Parliament and came into force with effect from April 23. 1977. The Act provides for the acquisition of shares of CORIL and for the acquisition and transfer of the right, title and interest of Caltex (India) Ltd. in relation to its Undertakings in India with a view to ensuring co-ordinated distribution and utilisation of petroleum products.

3. Under S. 3 of the Act, the shares in the capital of the CORIL stood transferred to and vested in the Central Government on the appointed day being December 30, 1976. Under S. 5, the right, title and interest of Caltex (India) Ltd. in relation to its Undertakings in India stood transferred to and vested in the Central Government on the appointed day. S. 9 of the Act provides that the Central Government may by a notification direct that the right, title and interest and the liabilities of Caltex (India) Ltd. in relation to any of its Undertakings in India shall, instead of continuing to vest in the Central Government, vest in the Government Company either on the date of the notification or on such earlier or later date not being a date earlier than the appointed day, as may be specified in the notification. S. 11(2) provides that subject to rules made in this behalf under S. 23, every whole-time officer or other employee of CORIL would on the appointed day continue to be an officer or other employee of CORIL on the same terms and conditions and with the same rights to pension, gratuity and other matters as are admissible to him immediately before that day and shall continue to hold such office unless and until his employment under CORIL is duly terminated or until his remuneration and conditions of service are duly altered by that company.

4. The Chairman of the Board of Directors of CORIL issued the impugned circular dated March 8, 1978, inter alia, stating therein that consequent upon the take over of the Caltex (India Ltd. by the Government, the question of rationalisation of the perquisites and allowances admissible to Management Staff had been under consideration of the Board for sometime, and that as an interim measure, the Board had decided that the perquisites admissible to the Management Staff should be rationalised in the manner stated in the said circular.

5. At this stage, it may be mentioned that by the Caltex Oil Refinery (India) Ltd. and Hindustan Petroleum Corporation Ltd. Amalgamation Order, 1978 which was published in the Gazette of India, Extraordinary, dated May 9, 1978, the Undertaking of CORIL was transferred to and vested in Hindustan Petroleum Corporation Ltd. which thus became a Government Company referred to in S. 9 of the Act.

6. After the issue of the said circular, the respondents Nos. 1 to 4, who were some of the employees of CORIL, filed a writ petition in the Delhi High Court being Civil Writ Petition No. 426 of 1978 challenging the legality and validity of the impugned order. It was submitted by the said respondents that under the said circular the terms and conditions of service of the employees of CORIL had been substantially and adversely altered to their prejudice.

7. At the hearing of the said writ petition before the High Court it was contended an behalf of the respondents Nos. 1