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M.A.V. PRASAD RAO V/S UNION OF INDIA, decided on Thursday, March 29, 1973.
[ In the High Court of Andhra Pradesh, Writ Petition No. 5554 of 1971. ] 29/03/1973
Judge(s) : CHIEF GOPAL RAO EKBOTE, LAKSHMAIAH & MADHAVA RAO
Advocate(s) : B.P. Jeevan Ready . R2 to R5, The General, F.V. Suryanarayana Rao, T.H.B. chalapathi, R6 to R10, P.A. Choudhary.
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  "1973 (2) ALT 74"  ==   "1973 (2) SLR 872"  ==   "1973 LIC 1310"  ==   ""  







    Madhava Rao J.1. This application under Article 226 of the Constitution of India is filed by certain employees belonging to the category of Assistance in the Life Insurance Corporation of India Machilipatnam and Hyderabad Divisions for the issue of an appropriate writ restraining the respondents viz. The Life Insurance Corporation authorities from implementing or enforcing the new promotion policy contained in the memo of settlement of promotion procedure applicable to class 3 and 4 employees dated 15th October 1971 and to further direct the respondents to promote the petitioners in accordance with the Promotion Rule (Policy) obtaining in the years 1966 to 1971 before upgrading the section heads as Special Assistants and before considering and promoting others in accordance with the aforesaid new policy.2. Having regard to the reveal questions in the writ petition and for a final and speedy disposal of the case it was referred to a Division Bench by one of us (Krishna Rao J.) at the request of Counsel on both the sides. After the case was taken up for hearing before the Division Bench consisting of Kondaiah and Lakshmaiah JJ. the following order was passed:-It is represented by Mr. B.P. Jeevan Reddi for the petitioners and the learned Advocate General for the respondents that there are two conflicting Bench decisions on the point involved in this case and the matter has already been referred by our learned brother Vaidya J. in Writ Peition No. 1032 of 1969 to a Full Bench. In this view we direct the papers to be placed before the Hon'ble the Chief Justice to consider the constitution of a Full Bench and post this case along with the Writ Petition No. 1032 of 1969.Pursuant to this direction this case was posted before us (Krishna Rao Kondiah and Ramchandra Raju JJ. ) along with Writ Petition No. 1032 of 1969 which arose under the Andhra Pradesh State Road Transport Corporation Act. When the said case was taken up for hearing before us we held that the question whether the regulations have statutory force did not arise and hence we had to dispose of that case on its own merits.3. We therefore purpose to consider in this case whether the Regulations framed by the Life insurance Corporation in so far as they relate to the service conditions of its employees have statutory force.4. In M. Narasimha Rao v. Works Manager A.P. State Road Transport Corporation (1972) 1 An.WR 76 it was held by a Division Bench of this Court consisting of Kumaraya C.J. and Sambasiva Rao J. that the regulations framed by the Corporation governing the service conditions of its employees under section 45 of the Andhra Pradesh State Road Transport Corporation Act 1950 have statutory force. A contrary view was taken by another Division Bench consisting of Sharfuddin and Vaidya JJ. in Writ Petition No. 3152 of 1968 dated 9th September 1970 in a case which related to the service regulations framed under the Port Trust Act. The said decision in Writ Petition No. 3152 of 1968 was by some omission not cited before the Division Bench of Kumaraya C.J. and Sambasiva Rao J. It was also pointed out by the respondent's learned counsel that the decision of Kumaraya C.J. and Sambasiva Rao J. in M. Narasimha Rao v. Works Manager A.P. State Road Transport Corporation cannot be held to be good law in view of a subsequent decision of the Supreme Court in Indian Airlines v. Sukhdeo Rai 1971 (1) SLR 149 : AIR 1971 SC 1828.5. In U.P. State Warehousing Corporation Lucknow v. C.K. Tyogi 1969 SLR 799 : AIR 1970 SC 1244 the Supreme Court had occasion so consider the nature of regulations framed by the U.P. State Warehousing Corporation under the provisions of the Agricultural Produce (Development and Warehousing) Corporation Act 1956. The conditions of service including discipline of the employees of the Corporation were embodied in the regulations framed by the Corporation. A suit was filed by a Corporation employee challenging the order of dismissal on the ground that there was a violation of the procedure laid down in the said said regulations and that the said order of termination was therefore null and void. It was held by the Supreme Court that normally a contract of personnel service would not be enforced by a decree of nullity resulting in reinstatement of the employees except in three cases (1) Where the employee is a public servant governed by Article 311 of the Constitution of India (2) where the Industrial law provides reinstatement of a dismissed worker; and (3) where a statutory body acts in breach of mandatory obligation imposed by statute. The case before the Supreme Court did not fall within the first two cases. The case was therefore sought to be brought by the employee under the 3rd Category.Rejecting the said plea the Supreme Court held that though the regulations were framed by a corporation created under the statute the regulations merely embody the conditions of service between a master and servant and that the said regulations do not have statutory force. The case in Life Insurance Corporation of India v. Sunil Kumar Mukherjee AIR 1964 SC 847 was distinguished on the ground that in that case there was a breach of a statutory protection. The next case in which a similar question was considered by the Supreme Court is Indian Airlines v. Sukhdeo Rai. That case also arose out of a suit filed by a dismissed employee of the Corporation for a declaration that the order of dismissal was null and void and for reinstatement in service. Following the earlier decision in U.P. State Warehousing Corporation v. C.K. Tyagi the Supreme Court held that the regulations framed by the Corporation under the Air Corporation Act merely embody the terms and conditions of service between the Corporation and its employees and that the case does not fall within the 3rd of the three categories mentioned above in which the order of dismissal can be said to be void. The question posed in the judgement is as follows:-Are there then in the Act any provisions which impose upon the Corporation any statutory restriction or obligation which limits its power of terminating that relationship?After summarising the various regulations framed by the Corporation it was observed that they merely lay down the terms and conditions of service of the officers and employees that the employment did not confer on the employees a statutory status and that there was no statutory mandatory obligation imposing a restriction upon the power of the master to terminate the services. It was finally observed by the Supreme Court as follows:-The regulations contain the terms and conditions which govern the relationship between the Corporation and its employees. Though made under the power conferred by the statute they merely embody the terms and conditions of service in the Corporation but do not constitute a statutory (the emphasis is ours) restriction as to the kind of contracts which the Corporation can make with its servants or the grounds on which it can terminate them.It was accordingly held that the case did not fall within the three exceptions laid down by the Supreme Court which result in a reinstatement of a dismissed employee. In the above decision the Supreme Court referred to with approval two decisions of the Allahabad and Calcutta High Courts i.e. Ram Babu Ratheur v. Life Insurance Corporation AIR 1961 All 502 and Life Insurance Corporation of India v. Nilratan Banerje (1971) I LaB LJ 1 wherein the respective High Courts held that the regulations framed by the Life Insurance Corporation governing the conditions of service of its employees have no statutory force.6. It will be noticed from the foregoing decisions that though the Supreme Court was dealing with cases relating to regulations framed by the warehousing Corporations and Airlines Corporations they also held by necessary implication that the regulations framed by the Life Insurance Corporation governing the service conditions of its employees have also no statutory force.7. But Sri Jeevan Reddy the learned Counsel for the petitioners strenuously contended that there is no express decision by the Supreme Court that the regulations framed by the Corporation have no statutory force but that the Supreme Court merely observed that the regulations did not contain a statutory mandatory provisions restricting the employer's power to dismiss its servant and that there was no discussion about this aspect. He therefore attempted to argue that the power conferred by the statute on the Corporation under section 49 of the Life Insurance Corporation of India Act 1956 to frame regulations with respect to various matters including the conditions of service of the employees is a species of a delegated legislative function and that the regulations therefore have a statutory force. In support of his contention the learned Counsel cited several authorities on the point. On the other hand the learned Advocate General appearing for the Life Insurance Corporation contended that while section 49 merely empowers the Corporation with the approval of the Central Government to make regulations for its own guidance there is a separate provision in section 48 for rules to be framed by the Government. It is therefore submitted that the Legislature was making a distinction between the rule making power of the Government and mere regulations to be framed by the Corporation. In any event it is contended by the learned Advocate General that in view of the above pronouncement of the Supreme Court it is needless to examine the question on principle. Having regard to the clear and unambiguous observations of the Supreme Court in the case last cited viz. that the regulations do not constitute a statutory mandatory provision we do not see any justification in accepting the contention of the learned Counsel for the petitioners that the Supreme Court did not decide the question whether the power of the Corporation to make regulations is in the nature of a rule making power. Even if there is no discussion on the point in the two judgements of the Supreme Court cited above the Supreme Court in unmistakable terms regarding the Regulations as having no statutory force and it is not open to us to explain away the decisions on a different footing.8. In view of the foregoing decisions of the Supreme Court we have to hold that the decision of the Division Bench of this Court in M. Narasimha Rao v. Works Manager A.P. State Road Transport Corporation cannot be regarded as good law in sofar as it has held that the regulations framed by the A.P. State Road Transport Corporation have statutory force. The decision of the Supreme Court in Chief Inspector of Mines v. K.C. Thapar (1962) 2 SCJ 1 : AIR 1961 SC 838 relied upon in M. Narasimha Rao v. Works Manager A.P. State Road Transport Corporation stands on a totally different footing as there is a specific provision in that statute that the Regulations which are published under the Act shall have the force of statute. The decision in M. Narasimha Rao v. Works Manager A.P.S.R.T.C. in so far as it held that a statutory authority like the Road Transport Corporation is generally subject to the writ jurisdiction under Article 226 has not been questioned before us. Though the decision in U.P. State Warehousing Corporation v. C.K. Tyagi was cited before the Division Bench in M. Narasimha Rao v. Works Manager A.P.S.R.T.C. the learned Judges merely distinguished the same on the ground that the Supreme Court case arose in a suit. But we think that circumstance did not make any difference. The decision of the Division Bench in Writ Petition No. 3152 dated 1968 dated 9th September 1970 (Sharfuddin and Vaidya JJ) holding that the Regulations framed under the Port Trust Act have no statutory force is correctly decided. It should be made clear that we have considered only those Regulations framed by the Life Insurance Corporation of India which relate to the conditions of service and that we have not examined the nature of the Regulations relating to other matters.9. In conclusion we hold that the Regulations relating to the conditions of service framed by the Life Insurance Corporation of India have no statutory force. As there are several other questions raised in the writ petition we direct the same to be posted before the Division Bench for disposal.(Post the Writ Petition before a Bench next Wednesday at the request of the Counsel).This petition came up for hearing before the Division Bench consisting of their lordships the Obul Reddi and Madhava Reddy JJ.Obul Reddi J. -Mr. B.P. Jeevan Reddy the learned Counsel appearing for the petitioners contended that the answer given by the Full Bench to the reference made to it that the Regulations relating to the conditions of service framed by the Life Insurance Corporation of India have no statutory force does not dispose of the main questions involved in the writ petition as the action taken by the Life Insurance Corporation in repealing the existing rules regarding promotions constitutes an action of the State within the meaning of Article 12 of the Constitution and therefore any State action if it offends the fundamental rights would be justiciable. It is his case that the Life Insurance Corporation comes within the meaning of other authorities under the control of the Government of India and therefore satisfies the definition of the State in Article 12 of the Constitution.11. It is contended by Mr. J.V. Suryanarayana Rao appearing for the Life Insurance Corporation and Mr. P.A. Choudhary appearing for some of other respondents that the Life Insurance Corporation is not the State within the ambit and scope of Article 12 of the Constitution and even assuming that it could be brought within the meaning of other authorities under the control of the Government of India the rights of the petitioners if any under Part III of the Constitution are not affected so as to invoke the extraordinary writ jurisdiction of this Court when once it has been held by the Full Bench that the REgulations have no statutory force and the fact that the Full bench has not chosen to say that they are not enforceable makes no difference.12. To appreciate the points raised by both sides it may be relevant to notice the circumstances under which writ petition came to be filed. The petitioners are workfing as cashiers stenographers and typists in the category of Assistants in the Machilipatnam and hyderbad Divisions of the Life Insurance Corporation of India (hereinafter referred to as the 'Corporation'). The conditions of their service are governed by the Staff Regulations made by the Corporation with the previous approval of the Central Government as required under section 49 of the Life Insurance Corporation Act 1956 (hereinafter referred to as 'the Act'). These Regulations classified the employees into four classes and Class III is the relevant class which comprises again of four categories viz. Superintendents Higher Grade assistants Section heads and Assistants. promotions from one category to another and from Class III to Class I are regulated by the rules contained in the circulars dated 7th June 1960 21st July 1960 20th November 1963 15th January 1965 and 23rd February 1965 which are generally referred to as the promotion rules. As per these circulars an Assistant who obtains the Associateship of the Chartered Insurance Institute or the Associateship of the Federation of the Insurance Institutes or the Diploma of the Indian Life Insurance Officers Association or Intermediate of C.A. or three subjects of Institute of Actuaries will be entitled to be promoted as a Higher Grade Assistant from the 1st Day of the month in which the results of the said examinations are declared and their salary will be fixed at a particular level after giving benefit of certain increments. Similarly an Assistant by acquiring the prescribed qualifications could be promoted directly as a Superintendent without having to be promoted to the next higher post. An Assistant who did not pass the examinations referred to above would still become a section head or Superintendent in the normal course after passing the departmental tests. These promotions were made on the above basis till 1966 giving two jumps to those who qualified by passing the Higher Examinations referred to supra. It is alleged that the Corporation has not been making any promotions having regard to the circulars in the force on the ground that there are no vacancies though it was brought to the notice of the Corporation that several persons had acquired the requisite qualifications for promotion under the existing circulars. In the year 1971 the Corporation entered into an agreement with some of the unions of the Corporation where-under it agreed to revise the system of promotions giving weightage and preference to seniority without regard to the qualification acquired by the persons and the promotions rules contained in the various circulars.Under this agreement the Corporation agreed to abolish the four categories existing in Class III and bring into existence only two categories Assistants and Special Assistants. this reorganisation is questioned on the ground that it is made in breach of the circulars issued from time to time between the years 1960 and 1965 under the Regulations and that the reduction in the categories is made with a view to by pass the persons with qualifications and their legitimate right to be promoted automatically for higher posts when once they acquired the qualifications prescribed. In other words it is their case that the seniority which was not take into consideration all these years is now being taken into consideration without regard to merit and higher qualifications of Class III employees. They therefore filed the writ petition seeking an appropriate writ restraining the Corporation authorities from implementing or enforcing the new promotion policy pursuant to the agreement entered into with some unions of the Corporation. They also sought a further relief to direct the respondents to promote them in accordance with the promotion rules contained in the various circulars issued from time to time before upgrading the section heads as special assistants and before considering and promoting others in accordance with the new policy adopted by the Corporation pursuant to the agreement with some unions.13. The respondents resisted the petition contending inter alia that the circulars or rules regarding promotion do not part and parcel of the Staff Regulations and that even otherwise they have no statutory force and that the petitioners cannot raise an issue over promotions to higher posts as there was no such thing as automatic promotion and that the petitioners are not entitled to be promoted as a matter of right. It is also the case of the Corporation that there is no public or statutory duty imposed on it nor is there any legal right vested in the petitioners for enforcement of the circulars issued under the REgulations by seeking a writ of mandamus. The circulars relied upon by the petitioners are in the nature of administrative instructions and the Corporation is at liberty to change the rules of policy regarding promotions by laying down new procedure or policy. It is also the case of the respondents that the matter raised in the writ petition affects over 42 000 workmen of the Corporation involving conflict of interests among different categories of workmen and therefore it is a matter for adjudication by the Industrial Tribunal and not a matter for grievance under Article 226 of the Constitution.14. When the writ petition came up for hearing in the first instance before a single Judge (M. Krishna Rao J.) as several questions were raised the learned Judge referred the petition at the request of both sides to a Division Bench. When the petition came up for hearing before Kondaiah and Lakshmaiah JJ. the learned Judges as it was brought to their notice that there are two conflicting bench decisions on the point involved in this case directed the papers to be placed before the Hon'ble the Chief Justice to consider the constitution of a Full Bench. The Full Bench consisting of M. Krishna Rao Kondaiah and Ramachandra Raju JJ. considered only one question viz. whether the Regulations framed by the Corporation in so far as they relate to the service conditions of the employees have statutory force and gave their opinion that the Regulations relating to the conditions of service framed by the Corporation have no statutory force. They however directed the writ petition to be posted before a Division Bench for disposal as several other questions are raised in it.15. Mr. Jeevan Reddy sought to contend that the Full Bench has not said anywhere that the Regulations are not enforceable and therefore the fact that they have no statutory force will not make any difference if the action of the Corporation in by-passing the circulars regarding promotions constitutes a 'State action in which even the petitioners would be entitled to question that action as violative of their fundamental rights under Articles 14 and 16 of the Constitution.16. To show that the Corporation comes within the meaning of other authorities under the control of the Government of India and therefore satisfies the definition of the State' in Article 12 of the Constitution Mr. Jeevan Reddy referred us to the provisions of the Act. The Corporation is established by the Central Government by notification in the Official Gazette. it is a body corporate having perpetual succession and a common seal with power subject to the provisions of the Act to acquire hold and dispose of property and may be its name sue and be sued (Section 3). The Corporation consists of fifteen persons appointed by the Central Government and one of them is appointed as the Chairman of the Corporation (Section 4). The initial capital of five crores of rupees is provided by the Central Government (Section 5). The Corporation discharges its functions under the directions issued by the Central Government (Section 21). The Central Government has also to lay reports of the auditors giving an account of the activities of the Corporation before both Houses of Parliament as soon as such reports are received by the Central Government from the auditors (Section 298). The policies are guaranteed by the Central Government (Section 37). The Central Government has also the power to make rules to carry out the purposes of the Act (Section 48). The Corporation has Government (Section 49). The aforesaid provisions according to the leanred counsel for the petitioners bring the Corporation within the meaning of the State' as defined in Article 12 of the Constitution.17. Article 12 enacts:In this part unless the context otherwise requires the State' includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.In Ujjam Bai v. State of Uttar Pradesh AIR 1962 SC 1621 Ayyangar J. considered the ambit or range of the expression the State in Article 12. Construing the expression 'other authorities the learned Judge observed:-Again Article 12 winds up the list of authorities falling within the definition by referring to other authorities within the territory of India which cannot obviously be read as ejusdem generis with either the Government and the Legislatures or Local authorities. The words are of wide amplitude and capable of comprehending every authority created under a statute and function within the territory of India. There is no characterisation of the nature of the authority in this residuary clause and consequently it must include every type of authority set up under a statute for the purpose of administering laws enacted by the Parliament or by the State including those vested with the duty to make decisions in order to implement those laws.In K.S. Ramamurthy v. Chief Commissioner Pondicherry (1964) 1 SCR 656 : AIR 1953 SC 1464 Wanchoo J. (as he then was) explained the scheme of Article 12 in the following terms:-Article 12 gives an inclusive definition of the words the State and within these words of that Article are included (i) the Government and Parliament of India (ii) the Government and the Legislature of each of the States and (iii) all Local or other authorities. These are the only authorities which are included in the words the State in Article 12 for the purpose of part III. Then follow the words which qualify the words all local or other authorrities. These local or other authorities which are included within the words the State of Article 12 are of two kinds namely (i) those within the territory of India and (ii) those under the control of the Government of India. There are thus two qualifying clauses to all local or other authorities. These clauses are (i) within the territory of India and (ii) under the control of the Government of India. It would in our opinion be grammatically wrong to read the words under the control of the Government of India as qualifying the word territory. From the scheme of Article 12 it is clear thazt three classes of authorities are meant to be included in the words the State there; and the third class is of two kinds and the qualifying words which follows all local or other authorities define the two types of such local or other authorities as already indicated above........All local or other authorities would thus be of two kinds namely (i) those within the territory of India and (ii) those under the control of the Government of India. In the latter case there is no qualification that they should be within the territory of India. It is enough if they are under the control of the Government of India wherever they may be.18. In Rajasthan State Electricity Board v. Mohan Lal AIR 1967 SC 1857 again the expression other authorities in Article 12 came to be construed. Bhargava J. construed the expression as including all constitutional or statutory authorities on whom powers are conferred by law. It is considered not all material if some of the powers conferred upon the authority may be for the purpose of carrying on commercial activities for under the Constitution the State is itself envisaged as having the right to carry on trade or business as mentioned in Article 19(1) (g) of the Constitution.19. These decisions are relied upon by Mr.Jeevan Reddy to show that the expression the State as defined in Article 12 is comprehensive enough to include every authority created by statute and functioning under the control of the Government of India and the Life Insurance Corporation of India satisfies the requirements of the definition of the State in Article 12 of the Constitution.20. It is the contention of Mr. J.V. Suranarayana Rao and Mr. Choudary that it is not enough if the Life Insurance Corporation could be brought within the meaning of the expression other authorities for to render its action as an action of the State it must further be shown that it has been clothed by the Legislature with a legal right to command obedience to its orders.21. The learned Counsel for the respondents relied upon the decisions of the Supreme Court in U.P. State Warehousing Corporation Ltd. v. Tyagi and Indian Airlines Corporation v. Sukhdeo Rai to emphasise their contention that Article 226 cannot be invoked unless the Life Insurance Corporation is empowered by the statute to issue directions or orders the disobedience of which would entail punishment.22. Our attention has also been invited to contrary views expressed by the Allahabad and Bombay High Courts. The Bombay High Court in Pramodari Shamaldas Bhavasar v. Life Insurance Corporation of India AIR 1969 Bombay 337 expressed the view that under the provisions of the Act the activity of the Life Insurance Corporation is only business activity and it possesses no power which is any manner can be exercised to affect the activities of other citizens and it is not concerned with implementing any law which affects in any manner any member of the public and that it is a purely autonomous business body as any other private company except that the initial capital of five crores of rupees is supplied by the Central Government; and therefore it does not fall within the expression other authorities in Article 12 and is not a State within the meaning of Article 12 of the Constitution. In reaching that conclusion the learned Judges relied upon the Pondichery case (9) and the Rajasthan State Electricity Board case (10).23. The Allahabad High Court in Shyam Lal Sharma v. Life Insurance Corporation of India (1970) 2 LJ 398 is of the opinion that as the expression the State defined in Article 12 includes bodies created for the purpose of promoting the educational and economic interests of the people and the function of the Corporation is to develop Life Insurance business to the best of advantage of the community and as it consists of person nominated by the Central Government the original capital of the Corporation having been supplied by the Central Government and is empowered to make regulations the Corporation answers the description other authorities and therefore falls within the meaning of the expression other authorities mentioned in Article 12.24. The questions as to what kind of statutory bodies come within the expression other authorities mentioned in Article 12 and whether the action of such other authorities in matters relating to its employees and their service conditions is justiciable under Article 226 of the Constitution crop up too often for determination and these questions have not been answered by the Full Bench.25. We therefore consider that having regard to the importance of the matter and the divergence of opinion between two High Courts we refer the following question to be decided by a Full Bench:-(1) whether the Life Insurance Corporation is a State within the meaning of Article 12.(2) If so notwithstanding that the Regulations made by it have no statutory force whether such Regulations are in the nature of executive actions of the State so as to seek their enforcement under Article 226 of the Constitution;(3) Whether the Corporation is entitled to make the proposed changes in the matter of conditions of service of its workmen by repealing the existing circulars governing promotion of the staff after issuing notice as required under section 9-A of the Industrial disputes Act; and(4) Whether such action in proposing to change or alter the service conditions is amendable to the jurisdiction of this Court under Article 226 of the Constitution.26. We therefore direct the papers to be placed before the Hon'ble3 the Chief Justice for orders as to Constitution of a Full Bench. In pursuance of the above said order this case came up for hearing before the Full Bench (Gopal Rao Ekbote C.J. Lakshmaiah and Madhava Rao JJ.).27. Gopal Rao Ekbote C.J.- The short but important question which has to be answered in this enquiry is whether the Life Insurance Corporation is a State within the meaning of Article 12 of the Constitution of India. The question arises in the following circumstances.28. The 65 writ petitioners are Assistants (Cashiers Stenographers and Typists) in the Life Insurance Corporation. Their service conditions are governed by the Life Insurance Corporation Act 1956 (hereinafter called the Act) and the Staff Regulations 1960 (hereinafter called the Regulations).29. Section 23 of the Act empowers the Corporation to employ such number of persons as it thinks fit for the purpose of enabling it to discharge its functions under the Act.30. Section 48 empowers the Central Government to make rules to carry out the purposes of the Act in general and in particular to lay down the conditions subject to which the Corporation may appoint employees.31. Section 49 then empowers the Corporation with the previous approval of the Central Government 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 and in particular to provide for the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents.32. In pursuance of this power the Life Insurance Corporation has issued Staff Regulations in 1960. They were amended from time to time. chapter II deals with the appointments probation and termination of service. Regulation 5 classifies the staff into officers development officers supervisory and clerical staff. Regulation 6 then declares that appointments including promotions shall be made by the authorities specified in Schedule I.33. Regulation 7 then enjoins that all recruitment and promotions shall be made 'against the vacancies' in sanctioned posts. In making selections and promotions the appointing authority mentioned in Schedule I shall be assisted by committees prescribed in Regulation 7. Since we are concerned with the post belonging to class III i.e. supervisory and clerical staff we should mention that the post belonging to class III shall be dealt within matters of selections and promotions as follows: Superintendents' appointments shall be made by the appointing authority with the assistance of a committee consisting of an officer not below the rank of a Divisional Manager and two officers not below the rank of Assistant Divisional Managers. Similarly for appointing higher grade assistants and section heads the appointing authority will be assisted by a committee consisting of an officer not below the rank of Assistant Divisional Manager and two officers not below the rank of Administrative Officers. And in matters of appointments to the posts of Assistants Record Clerks and other similar posts the appointing authority shall be assisted by a committee consisting of three officers not below the rank of Assistant Administrative Officers.34. Sub-Regulation (3) of regulation 7 enacts that promotion shall be based on merit suitability of the candidate for a particular post and seniority. Merit and suitability may be judged by a confidential report and/or interviews and/or examinations.35. The Regulations in subsequent sections deal with probation and termination of services. Chapter III deals with conduct discipline and appeals.36. It is relevant to take note of regulation 4 which relates to the Chairman's power to implement Regulations. It reads:-The Chairman may from time to time issue such instructions or directions as may be necessary to give effect to and carry out the provisions of these regulations and in order to secure effective control over the staff employed in the Corporation.37. In pursuance of this power conferred on the Chairman he issued certain directions and instructions called Circulars.38. As directed by the Chairman the executive Director issued Circular No. N.S.r. 1/3285/ASP/60 dated 21st July 1960 regarding the procedure for promotions of Class III and Class IV staff. These administrative instructions are issued under Regulation 4. clause 1 of the Circular then lays down the promoting authorities. According to it promotions to the cadre of Superintendent and higher Grade Assistants will be decided by the Zonal Manager on a Zonal basis on the recommendations of the Zonal Promotion Committee which will be appointed by the Zonal Manager in consultation with Executive Director (P) and will consist of one officer not below the rank of Divisional Manager and two officers not below the rank of Assistant Divisional Managers at least one of whom will be from the central office.39. Similarly for promotions to the cadres of Section Heads and to the cadres of Assistant and Records Clerks etc. the promoting authority is laid down together with the committee which will assist the authority.40. The promoting authority is empowered to nominate on the committees additional members if necessary.41. We are concerned with para 6 of the Circular which relates to promotions from assistants or Section Heads to Higher Grader Assistants grade. Clause 1 and 2 lay down the qualifying test which an employee must pass for earning the promotion.42. Clause 3 exempts certain employees holding certain qualifications from fulfilling the test. They include graduates who have secured 50% marks at the degree examination and who have passed at least one section of the examination of the Institute of Actuaries. In other sub-clauses similar exemptions are given to those who have passed certain examinations.43. another Circular No. ZD/66/AS/61 dated 14th February 1961 was issued. This circular effects certain amendments to the previous circular dated 21st July 1960.Subsequent to these two circulars circulars dated 20th November 1963 15th January 1965 and 23rd February 1965 were issued.44. The result of all these circulars was that there were two avenues for promotion for assistants to section heads. One who completes five years service and satisfies the tests and (2) one who is exempted from test if he has completed 20 years service or has reached maximum of grade or 40 years age having 15 years service.45. There was yet another policy of promotion from Assistants to Higher Grade Assistants. In order to earn that double promotion an Assistant must have completed 7 years service (5 years for graduate) and test or on passing the prescribed examinations referred to above.46. Similar double promotional facilities wee available for other categories with which we are not concerned in this case.47. What is thus plain is that the category of Assistants were divided into two clauses for the purpose of promotions: (1) Assistants who are not qualified specially can earn promotion to section Head; and (2) Assistant specially qualified who concern double promotion to the post of Higher Grade Assistants. We are not concerned in this case whether this Grade Assistants. We are not concerned in this case whether this classification was reasonable within the meaning of Article 14 of the Constitution as no arguments were advanced in this behalf.48. While the matter stood thus disputes arose between the employees of the L.I.C. and the Corporation. A settlement was reached in regard to the promotion procedure applicable the Class III and class IV employees between the L.I.C. and its workers. The workers were represented by 3 different unions. This settlement was arrived at under section 18 of the Industrial Disputes Act. It was not filed before the Industrial Tribunal in the case pending before it and consequently no award was passed by the Tribunal which would bind all the workers whether parties to the settlement or not. The Chairman however has issued instructions under Regulation No.4 incorporating the settlement arrived at regarding the promotion rules applicable to Class III and class IV employees. These instructions were issued on 7th April 1972. Under these rules the Assistants specially qualified could not now get double promotions according to the incentives provided previously.49. The petitioners grievances has been that although they were specially qualified and were entitled to automatic promotion to the posts of Higher Grade Assistants the Corporation went on dodging on the ground that there were no vacancies. The contention was that in other Zones irrespective of the fact whether there were vacancies or not the specially qualified Assistants were given such promotions but it was denied only to the Assistants working in the South Zone. The contention therefore was that a right under the old procedure had accrued to them to get the promotion therefore in spite of the settlement to which they were not parties. They should now be given such promotions with retrospective effect to the posts of Higher Grade Assistants. it was argued that the L.I.C. is a State within the meaning of Article 12 and therefore its action in violating the rights of the petitioners to get double promotions can be interfered with by this Court. In any case it was submitted that the petitioners qualified themselves specially believing the representations made by the Corporation in the form of promotion procedure and therefore the Corporation is estopped from disputing the right of the petitioners to promotions to the posts of Higher Grade Assistants. The petitioners therefore prayed that a writ of mandamus be issued restraining the respondents from implementing or enforcing the new promotion policy contained in the settlement dated 15th October 1971 and further to direct the respondents to promote the petitioners in accordance with the promotion rules obtaining in the years 1966-71 before upgrading Section Heads as special assistants and before promoting the others in accordance with the new policy.50. The writ petition first came before M. Krishna Rao J. In view of several questions of importance involved he referred the case to a Bench. The petition then came before Kondaiah and Lakshmaiah JJ. The learned Judges in view of two conflicting Bench decisions on the point involved in the case directed the case to be referred to a Full Bench.51. The case then came before a Full Bench consisting of M. Krishna Rao Kondaiah and Ramchandra Raju JJ. The Full Bench considered only one question viz. whether the Regulations framed by the Corporation relating to the service conditions of the employees are statutory in character. The Full Bench held that these REgulations have no statutory force and remitted the case to the Division bench for disposal of the other points raised in the case.52. When the writ petition came up for consideration before the Division Bench consisting of Obul Reddi and Madhava Reddy JJ. the learned Judges thought that the question as to what kind of statutory bodies come within the expression 'other authorities' mentioned in Article 12 and other allied questions crop up too often for determination and these questions have not been answered by the Full Bench. The learned Judges therefore referred the following four questions for decision to a Full Bench.1. Whether the Life Insurance Corporation is a State within the meaning of Article 12?2. If so notwithstanding that the Regulations made by it have no statutory force whether such Regulations are in the nature of executive actions of the 'State' so as to seek their enforcement under Article 226 of the Constitution?3. Whether the Corporation is entitled to make the proposed changes in the matter of conditions of service of its workmen by repealing the existing circulars governing promotions of the staff after issuing notice as required under section 9-A of the Industrial Disputes Act; and4. Whether such action in proposing to change or alter the service conditions is amendable to the jurisdiction of this Court under Article 226 of the Constitution.53. After the arguments were commenced it was realised by all concerned that it would be more advisable to decide the writ petition on merits considering all the questions including those referred to us as it was difficult to separate the questions referred to form the merits of the case. It was therefore agreed that we should hear the petition in its totality and decide the same here finally. We accordingly heard the learned Advocates appearing for the parties on the whole case.54. It could not doubted that the four questions specifically referred overlap to a large extent and run into each other. We would therefore consider the arguments in accord with the order in which they were presented to us. The first question was whether the L.I.C. is a state within the meaning of Article 12 of the Constitution.55. Article 12 appears in the Chapter of Fundamental Rights as the first Article of that Chapter. it defines the words 'the State'. The definition however is confined in its operation to Part III only. Article 12 reads:-In this part unless the context otherwise requires the State' includes the Government and the Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the Territory of India or under the Control of the Government of India.56. An analytical reading of this Article would indicate that it is an inclusive definition. The term State includes : (a) the Government and Parliament of India; (b) the Government and the Legislature of each of the States; and (c) all local authorities and other authorities.57. The question therefore is whether the L.I.C. is included in the term the other authorities. We have to firstly consider whether the said term can be construed on the principles of ejusdem generis and secondly if the principle of ejusdem generis is not applicable then what is the meaning of the term the other authorities.58. Now it is a general though not inflaxible principle of construction that the statute should be so construed that every word should have effect. It is a settled law that where the particular things or authorities named have some common characteristics which constitute them a genus and the general words can be properly regarded as in the nature of a sweeping clause designed to guard against accidental omissions then the rule of ejusdem generis will apply and the general words will be restricted to things of the same nature as those which have been already mentioned. See Amar Singhji v. State of Rajasthan AIR 1955 SC 504 and Kochuni v. States of Madras and Kerala AIR 1960 SC 1080. This rule accomplishes the purpose of giving effect to both the particular words as indicating the class and the general words as extending the provisions of the statute to everything embraced in that class though not specifically named by the particular words.59. The doctrine is applicable where the members of the enumeration constitute a category class or genus and the class is not exhausted by the enumeration as it is followed by a general term. See Hamdard Dawakhana v. Union of India AIR 1965 SC 1167 : (1965) 2 SCR 192; Jagdish Chandra v. Kajaria Traders (India) Ltd. AIR 1964 SC 1882 and Indramani v. W.R. Natu AIR 1963 SC 274. The question that always arises is whether the members of the enumeration constitute a class. What is the test for finding out that?60. Now a 'class' is an artificial creation to provide case in dealing with numerous items with similar characteristics. Thus a 'Class' is a generalisation which accurately or inaccurately associates items for a particular purpose or treatment. Thus there ought to be some purpose or object to achieve; otherwise no classification is possible. The Legislature must intend to achieve such a purpose or object. It cannot however postulate all possible cases. The Legislature therefore expresses its intention by enumerating specific objects or conditions which have come to their attention but that enumeration is not intended to limit the operation of the statute to the specific objects set forth. They merely provide specific examples of the problem which the Legislature intended to meet. In cases where general words follow specific words the Legislature is supposed to intend to solve the problem as such an not merely to regulate the enumerated objects.61. It is well to bear in mind that when the Legislature enumerates objects in descending order objects of a higher order are ordinarily named at the beginning of the enumeration and if not so named are not intended to be included within the statute at all. In such a situation the general term is construed to embrace only those objects said by the Court to be of equal or inferior rank to those enumerated. It is plain that if the members of enumeration although specific are essentially diverse in character the inference that the Legislature attached to the general term a restricted meaning ejusdem generis with the specific term does not arise.62. The criterion to find out whether the specific members of enumeration constitute a class is to see whether they have a common object they have any characteristic features common to all from which to infer an intention to restrict the effect of the provision to any particular class. it is obvious that if the terms employed are so entirely unlike and antagonistic in meaning and kind that they cannot be brought by any sort of construction within the application of the rule of ejusdem generis in such a case the general term would remain unaffected by its association with the preceding words because the language of the statute would be deemed to have furnished no criterion by which to restrict the general words.63. Let us examine Article 12 in the light of what is stated above in order to find out whether the words other authorities have a restricted meaning because of the application of rule of ejusdem generis or the term has to be given a wide meaning.64. Even a casual reading of Article 12 would indicate that the authorities have been enumerated in a descending order. The Government and Parliament of India is the superior authority followed by the Government and Legislature of a State which is inferior authority. It is followed further yet by another inferior authority 'local authority' i.e. local bodies. These are the specifically enumerated objects. do they constitute a class? In our opinion they do. Not only because they are enumerated in a descending order but they have a common object to achieve. There are more than one characteristic feature common to all from which one can legitimately infer an intention to restrict the effect of the Article to that particular class. The language undoubtedly furnishes a common criterion by which to restrict the meaning of the general words 'other authorities' following the specific words. It would be unrealistic to call the specific enumerations so entirely unlike or diverse in character and antagonistic in meaning and kind that they cannot be brought by any sort of interpretation within the application of the rule of ejusdem generis. These particular words do not exhaust the genus so as to avoid the application of the rule. Nor do these words can be said to be heterogeneous.65. A little reflection would convince any one that the common features of all the three enumerated objects are the powers to administer and legislate. The Government and the Parliament of India unmistakably denote that the Sovereign Authority i.e. the Government which executes the laws passed by the Legislature and carries on the administration is common to the State Government as well as the local body although in a comparatively limited field. Can it not therefore be said that there are two common characteristics in the three enumerated objects and they are power to legislate and power to execute the laws and carry on the administration. Absence of judicial power would not alter the position. But when one speaks of Government now a days one realises that the Government in many cases has also the delegated quasi-judicial functions. The Government today combines in itself the legislative functions subordinate in character. In many cases the Government and its officers decide disputes of quasi judicial character. And it undoubtedly has executive powers. This feature is common not only with the Central Government and State Government but also with the local bodies. Thus a common thread can be seen running through the three enumerated objects. That can therefore form the class or genus on the basis of which the term 'other authorities' can be determined thus restricting its scope. In other words it is only those authorities which have the three features common to the enumerated subjects that is to say legislative executive and quasi judicial functions to perform can be said to be an authority within the meaning of Article 12. It is understood that the authority must be statutory authority performing these functions similar to that of the Government Central or State and the Legislature Central or State. It is immaterial that some of the powers conferred on the authority are for the purpose of carrying on trade or business. In the context of a welfare State the operation of the Government is not now restricted to the traditional functions but they have extended very largely which include promotion of a social and economic welfare of the people. These authorities need not be instrumentalities or agents of the Government. They may be autonomous in their field and govern the matters entrusted to them by the statute. It is only by the application of principle of ejusdem generis that we can give a restricted meaning to the general term. But if we come to the conclusion that the principle of ejusdem generis is not applicable then the general words would have to be given an ordinary meaning which attaches to that word. Such an interpretation would widen the meaning of the term 'authority' and would embrace every authority irrespective of the fact whether it is a sovereign body performing functions legislative and executive in character. It is difficult to postulate that the Legislature in using that term in Article 12 wanted to give it an unrestricted meaning. If the purpose and object of Chapter III is kept in view then it would be easy to understand that the Legislature intended to give protection to citizens in their fundamental rights even as against an authority which has similar function to perform. The controversy in this behalf which existed in America has been neatly avoided by enacting Article 12 and the intention in enacting that provision appears to us to apply the principle of ejusdem generis so as to give a limited meaning to the general term preceded by specific terms.66. In Electricity Board Rajasthan v. Mohan Lal the Supreme Court considered the meaning of the word 'authority' given in Webster's III New International Dictionary and observed:This dictionary meaning of the word 'authority' is clearly wide enough to include all bodies created be a statute on which power are conferred to carry out governmental or quasi governmental functions. The expression 'other authorities' is wide enough to include within it every authority created by a statute and functioning within the territory of India or under the Control of the Government of India and we do not see any reason to narrow down this meaning in the context in which the words 'other authorities' are used in Article 12 of the Constitution.67. Accordingly the Rajasthan Electricity Board was held to be an authority to which provisions of Part III of the Constitution were applicable.68. The judgement of the majority although says that the term 'other authority' is of wide amplitude nevertheless the test laid down narrows down the meaning and limit the range of other authorities. The test enunciated is firstly the authority must be a statutory authority. Secondly such authority must have powers to carry out governmental or quasi governmental functions.69. Now what do the governmental or quasi governmental functions mean and imply? Are they different than the legislative executive and quasi judicial functions? The language of Article 12 uses both Government and the Parliament. Therefore in any case two functions i.e. executive and legislative are clearly postulated. Thus the meaning of 'other authority' is confined only to those statutory authorities which have legislative and executive functions to perform. By necessary implication other authorities which are not statutory are excluded from the words 'other authorities'. The expression therefore will not include private persons and private bodies. Similarly statutory authorities which are not performing the governmental or quasi governmental functions are also excluded. These exclusions undoubtedly limit the width of the meaning of the words 'other authorities'. Therefore why not apply the principle of ejusdem generis which in effect was applied by the Supreme Court to the words 'other authorities' and thus declare that the preceding enumerated words have a common genus of executive and legislative functions and apply the same to the statutory authorities and thus restrict the scope of 'other authorities'.70. Shah J. who wrote a separate but concurring judgement did not consider the principle of ejusdem generis and whether it can be applied to Article 12. The learned Judge however expressly said:-The Board is an authority invested by statute with certain sovereign powers of the State.Apart from promoting coordinating developing generating supplying and distribution of electricity it is also invested with extensive powers of control over electricity undertakings.The power to make rules and regulations and to administer the Act is in substance the sovereign power of the State delegated to the Board. The Board is in my judgement 'other authority' within the meaning of Article 12 of the Constitution.71. The learned Judge expressly said that authorities constitutional or statutory invested with power by law not sharing the sovereign power do not fall within the expression 'State in Article 12. Those authorities which are invested with sovereign powers that is to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of 'State' in Article 12.72. The learned Judge earlier observed that the content of the expression 'other authority' in Article 12 must be determined in the light of a dual phase of fundamental rights that is to say the sweep of fundamental rights over the power of this authority as well as the restrictions which may be imposed upon the exercise of certain fundamental rights.73. What is plain is that the test laid down by Shah J. in effect is no way different than what is laid down by the majority. The power to make rules and regulations carries with it the power to impose reasonable restriction on fundamental rights. The sharing of the governmental powers would naturally mean the statutory body conferred with the power to carry on the executive and legislative functions.74. What is common in both the judgements therefore is that not every authority can be brought within the fold of Article 12. It is only a statutory authority conferred with the power to make rules and administer the same. In other words authorities which carry on the governmental or quasi governmental functions are the only authorities which come within Article 12. If that is so then we find no reason to keep out the application of the principles of ejusdem generis which if applied would bring out clearly the intention of the Legislature in confirming the words 'other authorities' to such authorities which belong to the said common class and have the said common characteristics and therefore a genus.75. We must however state that in the said Supreme Court case the majority expressly held that:-Since there is no distinct genus or category running through the bodies already named the principle of ejusdem generis would not apply in interpreting the words 'other authorities' used in Article 12.76. Although we were bound to say what we felt we respectfully follow the Supreme Court decision. What we said above would have made it plain that whether the principle of ejusdem generis is applied or the test laid down by the Supreme Court is followed the result would be the same. It is in the light of this that we have to consider whether the L.I.C. is a 'State' within the meaning of Article 12.77. The Life Insurance Corporation Act provides for the nationalisation of Life Insurance Business in India by transferring all such business to the Corporation. It also provides for regulation and control of the business of the Corporation.78. Section 3 of the Act empowers the Central Government to establish a corporation called Life Insurance Corporation of India. Section 6 lays down the functions of the Corporation. Chapter IV relates to the transfer of existing Life Insurance Business of the Corporation. Chapter V provides for Management and Chapter VI for finance accounts and audit. Section 49 empowers the Corporation to make regulations in respect of several matters.79. Even a brief survey such as this would reveal that the Corporation is a statutory body. Its function is to administer the business of life insurance and to give effect to the Act. On its executive side it is bound to affect at least employees of the Corporation and sometimes the policy holders or their legal heirs. The Corporation can make regulations and the subject on which such regulations can be made not only touch the employees and the administration but they also touch the policy holders and their representatives. The main business of the Corporation is to manage the Life Insurance Business in India which is one of the principal economic activity of the Government. It thus discharges governmental function. In making regulations the Corporation can place reasonable restrictions on such regulations which might touch or abridge the fundamental rights guaranteed by the Constitution. All these factors fully satisfy the test laid down by the Supreme Court. Since the Corporation is discharging the functions similar to that of the Government and the Legislature the rule of ejusdem generis if applied to the general words it would bring the Corporation within the term State. In either case therefore the Life Insurance Corporation is a State within the meaning of Article 12 of the Constitution.80. It is our view unnecessary to consider several cases cited to us in regard to other statutory authorities. We must however consider a decision of the Bombay High Court holding that the Life Insurance Corporation is not a State within the meaning of Article 12 of the Constitution.81. In Pramodrai v. Life Insurnace Corporation Bombay it was held that prohibition of any particular agency doing the same business is not by reason of any order of the Life Insurance Corporation but by reason of the statute itself. it is not concerned with implementing any law which affects in any manner any member of the public. It is purely autonomous business body as any other private company except that the initial capital of Rs. 5 crores is supplied by the Central Government. One of the reasons given was that the activity of the Life Insurance Corporation is purely business activity and it possesses no power which in any manner can be exercised to affect the activities of other citizens.82. With due respect to the learned Judges who decided that case we find it difficult to share their views. To manage the business of life insurance in the present context can be said to be a Governmental function. We have already seen that while administering the Act and carrying on the business of Life Insurance the Corporation would affect the employees and the policy holders who are members of the public. Even otherwise we do not thing that that consideration forms decisive part of the test laid down by the Supreme Court. it will be enough if the functional aspect of the statutory body satisfies the requirements of the duties of executive and legislative nature. The fact that the Corporation is autonomous is a strong indication of its being included within the term 'State'. The Rajasthan Electricity Board's case (10) unmistakably points out that it was not material that some of the powers conferred on the authority were for the purpose of carrying on commercial activities for under the Constitution the State itself is envisaged as having right to carry on trade or business as mentioned in ARticle 19 (1) (g) of the Constitution.83. The other requirement of Article 12 is also fulfilled. it is noticed that the term 'other authorities' in Article 12 is qualified by the words 'within the territory of India or under the control of Government of India.' The expression 'State' therefore will include not only authorities within the Territory of India but also those situate outside the territory of India. In the latter case however the authority in question must be under the control of the Government of India which requirement is not necessary for the first i.e. if the authority is within the territory of India. The Life Insurance Corporation admittedly functions with the territory of India. The said requirement therefore is also satisfied. In this view of ours it is not necessary to consider whether the Corporation is under the control of Government of India.84. It must be remembered that the definition of 'State' in Article 12 is intended to be used in the context of the fundamental rights conferred by Part III of the Constitution. Fundamental rights are intended to be enforced only against the State and public authorities and not against private persons or private bodies. The opening words of the Article 'in this part unless the context otherwise requires the State includes........' would make it plain that this definition applies only to Part III of the Constitution. This leads us to consider as to what is the fundamental right which is said to have been affected by the settlement dated 15th October 1971 arrived at between the Corporation and the three workers' unions or by the new promotion policy enunciated by the Chairman in his circular dated 7th April 1972.85. The grievance only is that although the petitioners held special qualifications they were not given double or automatic promotion to the posts of Higher Grade Assistants. It was contended that while in other zones irrespective of the existence of the vacancies or not persons specially qualified were given such promotions the same was denied to the employers in the South Zone. It is because of this the Corporation is accused of discrimination incurring the wrath of Article 14 and denial of equal opportunities to the petitioners violating Article 16 of the Constitution. The contention was that under the old rules the petitioners were entitled to such promotions and this right of theirs cannot be taken away by the new promotion policy.86. We are afraid we cannot accept these contentions as correct. The petitioners have no right of whatever kind to insist that the old promotions policy under which they were entitled to get a double promotion must continue till they get such a promotion or that such a promotion policy cannot be replaced by a new promotion policy. The Corporation can always frame regulations and this power includes the power to amend or even replace the regulations. Similarly the power to issue directions or instructions under Regulation 4 vested in Chairman would include a power to amend modify or even replace the directions and instructions validly given. In any case no question of any fundamental rights in that behalf arises.87. Does the old promotion policy confer any right upon the petitioners to automatically earn the promotion? We do not think the petitioners were conferred with any such rights. At best the only right they had was to be considered at the time of promotion. More than that they cannot have any right. The right to be considered for promotion arises only when there are vacancies in the higher posts and the authorities decide to fill them. No provision of law or any circular could be brought to our notice showing that even if there are no vacancies and or even if the authorities do not desire to fill the posts for the present the petitioners can enforce their right of promotion. On the other hand regulation 7 expressly states that all recruitment and promotions shall be made against the vacancies in sanctioned posts. No material was placed before us to show that in other zones promotions were given even when there were no vacancies in sanctioned posts. Even if so given it would be contrary to regulation 7 and any such promotion cannot be made a ground for claiming promotion by accusing the Corporation of discrimination.88. In the counter of Life Insurance Corporation dated 10th January 1972 it is specifically denied that the Corporation had allowed automatic promotion irrespective of vacancies to any cadre. Even the petitioners admitted that after 1966 the Corporation had not allowed automatic promotion even under the old policy.89. In Rajamani v. L.I.C. W.P. No. 4116 of 1968 where the same issue was raised Ismail J. of the Madras High Court said:-I am unable to accept the argument of the learned Counsel for the petitioners that under the circular dated 14th February 1961 the petitioner is automatically entitled to be promoted on becoming eligible for promotion and there had been a discrimination practised against him. It will be fantastic and extravagant to contend that irrespective of the requirement of the Corporation and irrespective of the availability of vacancies any person who became qualified or eligible for promotion should be automatically promoted to a higher post. Such an argument will not stand the test any principle based on administration or establishment of policy.We respectfully echo the same.90. It is also pertinent to refer to another affidavit of the Life Insurance Corporation filed on 28th March 1972. In paragraph 4 it is expressly denied that automatic promotions were given without any reference to vacancies. It was also denied that the cadre strength for the Higher Grade Assistants has not been fixed. The cadre strength of Higher Grade Assistants was fixed in 1966 and was communicated to all the zonal managers in April 1966 for implementation. It was asserted that all promotions to the cadre of Higher Grade Assistants were allowed strictly in terms of the vacancies determined on the basis of the cadre strength so fixed. The affidavit further states that in the South Zone on 31st March 1966 the position was that the Zone could have 431 Higher Grade Assistants. As against this the Zone had 842 Higher Grade Assistants. Thus there were 190 surplus Higher Grade Assistants in the south Zone. No question of any vacancy therefore could arise.91. The petitioners have not produced satisfactory material to rebut these emphatic assertions. Our attention was drawn to some letters dated 12th June 1965 18th may 1965 24th July 1964 indicating that the person named therein became eligible for promotion. We do not think that these and other similar letters make out any case as pleaded by the petitioners. We are therefore satisfied that irrespective of vacancies in Higher Grade Assistants posts nowhere automatic promotions were effected and since there were no vacancies existing the petitioners' cases could not have been considered for promotions. There was no occasion for that. We are therefore satisfied that there was no violation of either Article 14 or 16 of the Constitution.92. What follows is that although the Life Insurance Corporation is a State within the meaning of Article 12 of the Constitution since no fundamental right of the petitioner can be said to have been violated no question of the enforcement of any fundamental right of the petitioners against the Life Insurance Corporation can be said to have arisen.93. It was then contended that in any case relief should be granted under Article 226 of the Constitution against the Life Insurance Corporation which is an authority within the meaning of that Article.94. It is not possible to accept this contention also for the reasons which we have already given while considering the fundamental right of the petitioners. We have noticed that in the circumstances the petitioners have no right to promotion under the old promotion policy which can be enforced against the Life Insurance Corporation. There are some more reasons which would not entitle the petitioners to any relief.95. We have seen that section 48 of the Act empowers the Government to make rules and section 49 empowers the Corporation to make regulations. We have also seen that such regulations can be made regarding the terms and conditions of the employees as well as their method of recruitment. What is thus plain is that regulations relating to the employees can be made only by the Corporation. Section 49 enjoins that before such regulations are made approval of the Central Government must be obtained. Such regulations more over should not be inconsistent with the Act or the rules made by the Government.96. Regulation 4 made by the Corporation is intended to confer power on the Chairman for the purpose of implementing regulations. Section 49 does not empower the Corporation to sub-delegate its power to make regulation to the Chairman. Regulation 4 does not admittedly sub-delegate any power to make regulations to the Chairman. What if authorises is to issue such instructions or directions as may be necessary to give effect to and carry out the provisions of the regulations. The other purpose of such instructions is to secure effective control over the staff of the Corporation. The Chairman is thus authorised to give administrative instructions if necessary for implementing the regulations and nothing more. he has no power to make regulations determining the promotion policy or the method of recruitment or promotion a power which expressly vests with the Corporation. Under the garb of directions and instructions the Chairman cannot lay down regulations regarding promotion policies or the method of recruitment. It could not be disputed before us that the various circulars issued by the Chairman or under his instructions relate to the promotion policy method of recruitment terms and conditions of service and constitution of committees to assist appointing authorities. All such circulars cannot be and in fairness was not stated to be the administrative instructions coming strictly within the purview of Regulation 4. They indisputably far exceed the power of issuing instruction or direction and made serious encroachments upon the power of the Corporation to make regulations and upon the Central Government to approve such regulations. Such administrative instructions are not published any where. The question whether these circulars are inconsistent with the rules and regulations made under the Act was rightly not discussed before us. Because any such question is irrelevant. When the Chairman has no power whatsoever to legislate then he cannot issue circulars which practically amount to regulations. All these circulars therefore being inconsistent even with Regulation 4 and are issued by an authority which has no power are bad in law and cannot be given any affect to. Such circulars do not create or abolish any right fundamental or otherwise. Nor these circulars in these circumstances are enforceable in a Court of law.97. The new promotion policy of 7th April 1972 is also issued by an incompetent authority i.e. Chairman. It cannot be placed in a higher position than what was occupied by the previous circulars. All of them so long they travel beyond the scope of Regulation 4 are bad in law and therefore ineffective.98. What remains then is the settlement arrived at between the Corporation and the workers' unions on 15th October 1971. The validity of this settlement was questioned by the petitioners on some grounds into which we are afraid we cannot go. The workers' unions which were parties to the settlement have not been impleaded as parties to this writ petition. It was not disputed that any decision given in regard to settlement is bound to affect the workers' unions and the workers who are members of such unions. It may be that the petitioners are not members of any one of the unions. But that would not make any change. It was however disputed before us that the petitioners are not members of one or the other unions.99. Reliance was placed on B. Gopalaiah v. Government of Andhra Pradesh AIR 1969 AP 204 for contending that where a scheme formulated by the Government or any other authority is attacked on the ground of its being discriminatory persons likely to be benefited by a discriminatory statute or a scheme need not be made parties before it is struck down.100. We do not think it is possible to agree with that view. The parties likely to be affected are necessary parties and without hearing them it would not be proper to pass any orders. Merely because in some cases the number of persons effected is large would not alter the requirement. There is provision in the Civil Procedure Code in Order I rule 8 to meet such a situation. In this case there were only three workers' unions who were parties to the settlement. We are clear that without hearing them or at least providing an opportunity to them it would not be proper to give any decision regarding the validity of the settlement. We therefore decline to consider that question.101. What must necessarily follow is that no case is made out by the petitioners to give them any relief even under Article 226 of the Constitution.102. What remains to be considered is the argument that the old promotion policy was in vogue. The petitioners on the belief of the representation made through that policy that if they acquire special qualifications they would be automatically promoted to the posts of Higher Grade Assistants acquired qualifications by spending money and energy the Life Insurance Corporation which owned the policy circulars of the Chairman is now estopped from contending that the petitioners cannot be promoted. We do not find any substance in this contention. From what we have so far held it will be clear that the promotion policy did not give any assurance nor made any representation that the petitioners would be promoted automatically the moment the acquire special qualifications irrespective of whether there are vacancies or not. There were no vacancies and no promotion could be made unless there were vacancies under Regulation 7. Even if there was any representation it would be contrary to such regulation. The petitioners ought to have known the legal position.103. Moreover it is seen that the circulars were issued by the Chairman who was not authorised to issue such circulars. Such circulars therefore cannot amount to a valid representation made by a competent officer which would be binding upon the Corporation even if the petitioners have acted thereon. There circulars do not constitute mere irregularities in procedures which can be cured but they go to the root of the competence of the authority. They are illegal in as much as the Chairman has no authority to issue them affecting service conditions. The illegality of such an act would be the same whether or not the action has been misled by an assumption of an authority on the part of the Chairman. However high may be his position in the Corporation he cannot by wrong representation assume jurisdiction and no act of his which is ultra vires can be validated on the principle of equitable estopped.104. A Bench of this Court had an occasion to consider in detail the law relating to equitable estoppel in W.A. No. 105 of 1972 and batch dated 20th February 1973. We so entirely agree with the view expressed therein that we find it quite unnecessary to repeat what all has been said in the Judgement. In view of that judgement no plea of estoppel can be said to be available to the petitioners.105. If permitted the doctrine of estoppel would be used to give de facto validity to the circulars which are ultra vires administrative acts. If such officers of the Life Insurance Corporation are allowed to bind the Corporation by their acts even though such acts are not clearly within the scope of their authority there is danger that they will assume powers not actually belonged to them knowing that their principal i.e. Life Insurance Corporation will not be able to disavow even such ultra vires acts.106. Thus quite apart from the authority it is surely quite clear in principle that the question whether or not a public authority has exceeded its powers cannot be determined by a decision of the authority itself to ignore the legal limitations placed upon it. The whole basis of our administrative law would be undermined if it were possible for public bodies to validate at will acts which would otherwise be ultra vires. We do not therefore think that the principle of equitable estoppel can be pressed into service by the petitioners.107. For the reasons which we have given we can find no merit in the petition. It is accordingly dismissed with costs. Advocate's fee Rs. 250/-Petition dismissed.