judgement:
Civil Appeal No. 806 of 1982.
From the Judgment and order dated 27 7 1981 of the Industrial Tribunal (III) U.P. in Adjudication Case No. 15 of 1977.
114 M. K. Ramamurthy, Jitendra Sharma and P. Gaur for the Appellants G.B. Pai, H. K. Puri and J. K. Mehra for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
In exercise of the power conferred by Sec. 4 (K) of the U.P (`Act ' for short) the Government of Uttar Pradesh by its order dated May 23, 1975 referred the following dispute to the Industrial Tribunal for adjudication.
The reference is in Hindi.
Agreed translation of the industrial dispute referred for adjudication reads as under: "Whether the variable dearness allowance payable by the employers to their workmen should be revised and it should be linked with the consumer price index for industrial workers at Kanpur computed by Labour Bureau Simla ? If yes, then from what rate (sic) and with what other details.
" There are two rival unions of the workmen employed by the Indian Oxygen Ltd. (`Company ' for short) in its Industrial under taking at Kanpur.
They are the Indian Oxygen Karamchari Union (Karamchari Union ' for short) and the Indian Oxygen Sharamik Sangh (`Sharamik Sangh ' for short).
There is a federation of trade unions formed at various centres where the Company has its industrial undertaking.
Sharamik Sangh is affiliated to the federation.
Karamachari Union claims to represent the workmen employed by the Company at Kanpur.
The demand and the consequent industrial dispute which led to the reference was espoused by Karamchari Union.
The Karamchari Union in its statement of claim stated that the Company is a unit of the multi national British Oxygen Company.
The Indian Unit of the multi national corporation operates under the name and style of M/s Indian Oxygen Ltd. The industrial activities of the Company comprises manufacture and sale of industrial and medical gases etc.
It was stated that while the wage structure is uniform in respect of workmen employed by the Company all over the country the dearness allowance formula varies from centre to centre.
Briefly it was stated that the workmen of the Company employed at Bombay, Madras, Hyderabad, Bangalore and 115 Delhi are in receipt of higher dearness allowance compared to the workmen employed in Kanpur Unit.
The immediate provocation for raising the demand was an award by the Industrial Tribunal Delhi by which the dearness allowance of the workmen employed in Delhi unit was linked to consumer price index for Delhi prepared by the Labour Bureau Simla which resulted in a substantial increase in the dearness allowance available to the workmen posted at Delhi.
Soon after the award was published, the Karamahcari Union submitted a demand on January 7, 1975 for revising the rate of dearness allowance for workmen employed in Kanpur unit and as there was no adequate response from the employer, the matter was taken into conciliation.
The Company in its attempt to thwart the demand being pursued entered into a settlement with the Sharamik Sangh in respect of the dearness allowance and then approached the Labour Commissioner Kanpur for registering the settlement.
Failing to obtain the registration, the Company unilaterally enforced the new scheme of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau Simla.
The Karamchari Union did not accept the revised formula, and pressed its demand that the dearness allowance should be linked to all India consumer price index number prepared by Labour Bureau, Simla for Kanpur centre, after adopting the linking factor as has been done in the award by the Industrial Tribunal at Delhi.
The conversion ratio was suggested at 4.83 linked to January 1970 index number.
The Company consistent with the employer culture put forth number of preliminary objections so as to delay the adjudication of the demand.
All the preliminary objections failed as per the decision of this Court in Indian Oxygen Ltd. vs The Workmen as represented by Indian Oxygen Karamachari Union.(1) After the matter went back for adjudication on merits it was contended on behalf of the Company that the settlement arrived at between the Sharamik Sangh and the Company would be binding on the members of the Karamachari Union and the Tribunal should not adjudicate the dispute on merits.
This settlement has been stigmatized by this Court to be a collusive one.
(See page 920).
It was further contended that the Company is desirous of linking dearness allowance to all India average consumer price index for working class with base 1960=100 and that the Tribunal should avoid accepting a demand of a few workmen where a majority of the workmen have accepted and are satisfied with the revised formula introduced by the Company.
116 The Company employs 5,400 workmen in all its establishments all over the country.
Out of total strength of 5,400 workmen, 3030 are employed in gas manufacturing unit.
The employment strength in Kanpur unit is roughly about 200.
It is not in dispute that the basic wages of all workmen employed all over the country by this Company are occupation wise uniform but the dearness allowance paid to workmen differs or varies from place to place.
This ought to be so as will be presently pointed out.
Prior to 1975 dearness allowance to the workmen employed in the units of the Company in North Eastern Zone i.e. in the States of West Bengal, Bihar, Orissa, U.P., Delhi and Punjab was linked to the consumer price index number (middle class) prepared by the Bengal Chamber of Commerce for Calcutta.
It may be mentioned that the Bengal index has been discontinued since 1975.
It is important to note that by the two awards of the Industrial Tribunal, the office staff and the workmen employed the Company at Delhi are being paid dearness allowance linked to consumer price index compiled by Labour Bureau Simla for Delhi.
Subsequently by a decision of this Court in Govardhan Prasad and others vs The Management of M/s Indian Oxygen Ltd.(1) 10 workmen employed by the Company stationed at Ghaziabad were required to be paid dearness allowance to the same extent and in the same manner as was being paid under the awards of the Industrial Tribunal to the workmen of the Company at Delhi.
Before we delve into the narrow contentions raised in this behalf we would remove the gloss over the submission that the attempt of the company, having all India operation, is to introduce uniformity in the matter of dearness allowance payable to its workmen all over the country.
Uniformity, to an uninformed mind, appears to be very attractive.
But let it not be forgotten that sometimes this uniformity amongst dissimilar persons becomes counter productive.
Uniformity and equality have to be amongst equals measured by a common denominator.
One can appreciate the implementation of the constitutional aspiration of `equal pay for equal work. ' In the matter of basic wages it is a consummation devotedly to be wished.
But when it comes to dearness allowance any attempt at uniformity between workmen in such metropolitan areas like Delhi, Bombay, Madras, Calcutta and in smaller centres 117 would be destructive of the concept of dearness allowance.
Dearness allowance is directly related to the erosion of real wages by constant upward spiraling of the prices of basic necessities and as a sequel to the inflationary input, the fall in purchasing power of the rupee.
It is a notorious phenomenon hitherto unquestioned that price rise varies from centre to centre.
Dearness allowance is inextricably intertwined with price rise, it being an attempt to compensate loss in real wages on account of price rise considered as a passing phenomenon by compensation.
That is why it is called variable dearness allowance.
Any uniformity in the matter of dearness allowance may confer a boon on persons employed in smaller centres and those in big metropolitan areas would be hard hit.
Dearness allowance by its very form and name has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is employed.
Therefore, the claim in the written statement on behalf of the company that imbued with the equitable principle of introducing uniformity in the matter of dearness allowance, the Company with the easy availability of consent of its protege union Sharamik Sangh introduced a new scheme of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau, Simla is misleading.
The Tribunal rightly observed that it is by now well settled that dearness allowance to workmen at a particular place should depend upon the place where the workman is working irrespective of the fact that the industrial undertaking in which the workman is employed is a unit of an industrial enterprise having an all India or inter State operations.
In Dunlop Rubber Co. (India) Ltd vs Workmen & Ors.,(1) a contention on behalf of the employer that in the case of an all India concern, it would be advisable to have uniform conditions of service throughout India was repelled observing that `however desirable uniformity may be in the case of all India concerns, the tribunal cannot abstain from seeing that fair conditions of service prevail in the industry with which it is concerned. ' This view to some extent was affirmed in the Remington Rand of India Ltd vs The Workmen(2).
Leaving aside basic wages in the matter of dearness allowance specially the Court should lean in favour of adjudication of dispute on the principle of industry cum region because dearness allowance is linked to cost of living index of a particular centre which has a local flavour.
If the concept of uniformity on an all India basis is introduced in the matter of dearness allowance, it would work havoc, because the price structure 118 in a market economy at places like Bombay, Madras, Calcutta, Delhi, Ahmedabad has little or no relation to smaller centres like Kanpur, Varanasi etc.
If workmen working in such disparate centres are put on par in the matter of dearness allowance in the name of proclaimed all India uniformity, not only unequals will be treated as equals but the former would suffer irreparable harm.
Such an approach would deal a fatal blow to the well recognised principle of industrial adjudication based on region cum industry developed by courts by a catena of decisions.
Realising this situation courts have learned in favour of determination of dearness allowance linked to cost of living index, if available for the centre where the workman employed and in the matter of neutralisation on the industry cum region principle.
The Tribunal having rejected this approach committed an error apparent on the record.
At this stage, it is necessary to have some idea of what is consumer price index number, how it is being complied and what is its relevance in the matter of dearness allowance ? Pursuant to the recommendations of the Planning Commission for the Second Five Year Plan the Labour Bureau, Simla and the Industrial Statistical Organisation of the Government of India took steps to conduct fresh family living surveys among working class and middle class population respectively with a view to constructing the new series of consumer price index numbers.
The working class surveys were conducted at 50 selected centres and the middle class surveys at 45 centres, 18 centres being common to both.
The work of this survey was commenced in the second half of 1958 and was concluded by September, 1959.
One of the centres selected for survey was Kanpur (See Ahmedabad Mill Owners ' Association etc.
vs The Textile Labour Association(1) What materials and statistical information enter into the compilation of consumer price index number may be briefly noticed.
The consumer price index number for industrial workers (base 1960=100) are being compiled and published by the Labour Bureau, Simla every month in respect of 50 industrial centres scattered all over the country.
Amongst them is Kanpur.
The material collected is through the family surveys of working class families.
There are six main groups for which indices for each centre are being compiled besides the general index.
They are: 119 (i) Food (ii) Pan, Supari, Tobacco and intoxicants (iii) Fuel and light (iv) Housing (v) Clothing, bedding and footwear, and (vi) Miscellaneous Consumer price index numbers are intended to measure relative temporal (overtime) changes in the price of a fixed basket of goods and services consumed by the index population in a current period in relation to the base period.
The index numbers are compiled by using Laspeyers ' Formula.
The Broadly stated this formula takes note of base and current prices for a particular item, quantity consumed of that item during the base period.
It would appear that for the compilation of an index, there are three essential requirements namely: (1) weighting diagram which is the relative percentage share of the total consumption expenditure as revealed by the basic family budget enquiry in respect of different items, (2) Base prices of the different items which go into the index basket and (3) current prices in respect of each one of the items featuring in the index basket.
The weighting diagram for a centre is derived on the basis of the data collected through family budget enquiries which were conducted in the 1958 59 at each one of the 50 centres.
The survey was conducted by taking all samples of working class families in each of the 50 centres and the data was collected by interviewing these families.
Based on the results of the family budget enquiries, the average expenditure of a family per month on different items of consumption was arrived at.
All India average consumer price index number is a weighted average of the 50 centres ' indices.
This is compiled and published alongwith the index number for each centre (Source: Consumer Price Index: An anatomy published by Labour Bureau, Simla).
It would appear at a glance that there would be a noticeable difference between the consumer price index number for a centre and its weighted average for 50 centres which would be the all India average consumer price index number, the latter would generally be lower than the former in some cases.
120 Reverting to the demand in this case, the Karamchari Union raised a demand that the variable dearness allowance payable to the workmen should not only be revised but it should be linked with the consumer price index for industrial workers at Kanpur.
The Tribunal by its award directed the employer to pay dearness allowance linked to the all India consumer price index (1960= 100) for the Kanpur Centre compiled by Labour Bureau, Simla.
On the question of neuturalisation, the Tribunal directed that the calculation in the rate of dearness allowance will remain the same as presently operative and no change is required therein.
In reaching this conclusion, the Tribunal committed two manifest errors apparent on the record.
The company introduced as stated in its written statement, a new scheme of dearness allowance linked to the all India consumer price index prepared by Labour Bureau, Simla.
That was a very recent innovation introduced by way of a counter blast to the demand raised by the Karamchari Union.
Prior thereto, it is an admitted position that the workmen at Kanpur were being paid dearness allowance linked to Bengal Chamber of Commerce Index Number.
That was unilaterally given up by the Company.
There appeared to be at least two valid reasons for scrapping that scheme: one is that since 1975 Bengal Chamber of Commerce Index which was compiled for middle class families and was being artificially applied to industrial workers has been scrapped.
In other words, the index is no more being compiled.
Secondly, the constituent members of the Bengal Chamber of Commerce had started their business in India long before the present century and most of them were incorporated in England or other Western countries while the Company in the present case has been started a few decades back and therefore, re induction of the Bengal Chamber Index Number would not be relevant.
On behalf of the Karamchari Union, it was contended that in devising a dearness allowance formula, the region cum industry principle should ordinarily be accepted.
As pointed out earlier, dearness allowance generally has a local flavour.
A man is exposed to the vagaries of the market where he resides and works, even though he may be an employee of a national, multinational or trans national industrial empire.
The workman is concerned with the vagaries of price fluctuation in the area in which he resides and works for gain and to which he is exposed.
Therefore, the region 121 cum industry principle must inform industrial adjudication in the matter of dearness allowance.
In Woolcombers of India Ltd. vs Woolcombers Workers Union & Anr.
(1) this Court following its earlier decision in Greaves Cotton & Co. and Ors vs Their Workmen (2) held that in devising basic wages and dearness allowance structure, industrial adjudication sometimes leans on the industry part of the industry cum region formula and at other times, on the region part of the formula as the situation demands.
This well recognised principle of industrial adjudication cannot be given a go by on the specious plea that the workmen are employed by an industrial undertaking which has an all India operation.
In this case, the Tribunal has overlooked this important principle of industrial adjudication.
Before we examine the second manifest error committed by the Tribunal in narrowly construing the terms of reference, it would be advantageous to briefly recapitulate what relevant considerations have to be kept in view in devising dearness allowance formula.
This aspect is no more res integra.
In Bengal Chemical and Pharmaceutical Works Ltd. vs Its workmen (3), after reviewing all the earlier decisions, the court restated the principles on which a fair and just dearness allowance formula must be devised.
They are: "1.
Full neutralisation is not normally given, except to the very lowest class of employees.
The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on the rise in the cost of living and a decrease on a fall in the cost of living.
The basis of fixation of wages and dearness allowance is industry cum region.
Employees getting the same wages should get the same dearness allowance, irrespective of whether they are working as clerks or members of subordinate staff or factory workmen.
122 5.
The additional financial burden which a revision of the wage structure or dearness allowance would impose upon an employer, and his ability to bear such burden, are very material and relevant factors to be taken into account.
" We need not examine whether the dearness allowance formula as at present existing is valid according to the principles herein extracted because we are not devising a dearness formula for the workmen working in the industrial undertaking of the company at Kanpur for the first time.
The demand is for upward revision of the dearness allowance formula and its linkage.
The terms of reference extracted hereinbefore unmistakable show that the workmen sought upward revision of the variable dearness allowance by linking it to the consumer price index number for industrial workers at Kanpur computed by Labour Bureau, Simla.
If the demand is to be granted, the Tribunal was requested to specify the rate and other details.
Interpreting this reference the Tribunal observed that the new dearness allowance formula which was in vogue at the time of the reference as being related to all India average consumer price index number for industrial workers in accordance with the settlement with the Shramik Sangh which settlement was found to be collusive by this Court yet the Tribunal must proceed on the basis that dearness allowance was being paid to the workmen at Kanpur as per the settlement and that cannot be wished away.
This approach overlooks a vital fact that the introduction of the new formula under a collusive settlement led to the demand for revision.
The Tribunal rejected the submission that it must examine and devise a new formula in relation to the Bengal Chamber of Commerce Index Scheme which was in vogue before the formula as per the collusive settlement was introduced.
If the settlement between the company which is found to be collusive by this Court is to be the starting point of revision of the dearness allowance formula as has been done by the Tribunal, the conclusion is inescapable that the Tribunal started from a wrong premise and landed itself into an utterly unsustainable conclusion.
This is the second apparent error in the face of the record which would impoll us to interfere.
Mere so because the genesis of the demand for a revision of the dearness allowance was the collusive settlement.
The Tribunal committed a grave error in accepting the settlement as the starting point of the revision.
123 The demand of the Karamchari Union was that the Tribunal should first take into account, relevant to a certain date, the all India consumer price index number for Kanpur centre (1960=100) and then the index figure should be multiplied by the conversion factor of 4.83 and then dearness allowance should be linked to the figure so worked out.
The Tribunal rejected this demand on the ground that in the statement of claim, the Karamchari Union demanded payment of dearness allowance according to Simla Index Number for Kanpur.
The Tribunal took note of the fact of the linking factor but observed that as the same has been discontinued by the Labour Commissioner, U.P., the demand has been essentially for dearness allowance according to the Simla Index for Kanpur.
This reasoning manifests an error in approaching, appreciating and evaluating the demand for revision of dearness allowance.
Before we examine the error, let it be made clear that where for a certain industrial centre, a dearness allowance formula is in vogue and it is linked to some consumer price index number, whenever the base year for consumer price index number is changed, a fresh linkage requires a conversion ratio.
In the absence of a conversion ratio, the whole scheme falls out of gear and becomes unworkable.
To illustrate, in the textile industry, the consumer price index number was compiled on the basis of base year 1939=100.
The year 1939 was chosen as the year in which the second world was engulfed the world which completely overhauled the consumer pattern and the prices of essential articles.
Over years the price spiral relentlessly moved upward and that too so rapidly that in most of the industries where even though 100% neutralisation was not given by devising a dearness allowance yet the dearness allowance for a given month was occasionally double or triable of the basis wage.
This was unjust, unfair and from an economist 's point of view, imprudent.
Therefore, as pointed out earlier, a fresh survey was undertaken in 1958 with the base year 1960=100.
A fresh index was compiled and continues to be compiled with 1960=100 as base year.
In fact the 1960=100 base year is being replaced.
We will however, confine ourselves in this appeal to the base year of 1960=100.
Now if those industrial undertakings in which dearness allowance formula was linked to the base year 1939=100 are to be delinked and relinked to the index number compiled on the base year 1960=100, before the fresh number is adopted, a linking or a conversion ratio between 1939 100 and 1960=100 will have to be computed.
Only then a fresh linkage 124 can be devised.
This very obvious fact has been wholly overlooked by the Tribunal when it merely awarded that the workmen of the company at Kanpur should be paid dearness allowance linked to the all India consumer price index number (1960=100) for Kanpur Centre compiled by Labour Bureau, Simla.
This approach overlooks the linking factor.
The rejection of the linking or conversion factor makes the scheme devised by the award unworkable, ineffective and in fact unjust.
In this connection, we may refer to the Ahmedabad Mill Owner 's Association case in which this Court after noting the fact that the base year having changed, pointed out that the question of linking factor loomed large and assumed importance.
The court had before it the admitted position that there was only one index existing in Ahmedabad which was based on the new series (1960=100) and the old series (1939=100) has rightly gone out of existence since it had become antiquated.
Two alternatives were submitted to the court for its consideration.
It was submitted that an entirely new scheme of basic wages based not on the pre war level of 1939, but based on the cost of living of 1960 as the base year be devised and then award dearness allowance in relation thereto.
In the alternative, it was submitted that an arithmetical method of linking the old and the new series be devised.
The Tribunal had accepted the conversion ratio at 3.17.
This was attacked on diverse grounds.
After examining the whole gamut of arguments, this Court held that the linking factor of 3.17 was valid and correct Approaching the matter from the same angle, and avoiding the arguments which have been rejected by this Court in the aforementioned judgment, we are of the opinion that the conversion ratio of 4.83 is valid and correct and the Tribunal ought to have accepted the same.
It is usual in the matter of dearness allowance to examine the paying capacity of the employer.
Rightly Mr. Pai did not at all contend that this employer can not bear the additional burden.
We therefore, need not stray into this aspect at all.
On behalf of the Karamchari Union, it was seriously contended that the award of the Industrial Tribunal at Delhi between this very Company and its Workmen at Delhi be accepted.
We need not examine the same as the comparison between Delhi and Kanpur is ill conceived and untenable.
Delhi is the capital of the sub continent and it is fast growing.
Kanpur is at best a district town though 125 undoubtedly an important industrial centre in U.P.
But the comparison would be invidious.
Accordingly, this appeal partly succeeds and is allowed.
The award of the Industrial Tribunal that the workmen of the Kanpur unit of the Indian Oxygen Ltd. should be paid dearness allowance linked to all India consumer price index (1960=100) for Kanpur centre compiled by the Labour Bureau, Simla is modified to read that 'the dearness allowance should be paid according to all India consumer price index number for Kanpur (1960=100) compiled by Labour Bureau, Simla after applying conversion factor also called linking factor of 4.83. ' In all other respects i.e. the date of enforceability etc.
the award remains unaltered except for the modification herein granted.
The appeal is allowed to this extent with costs quantified at Rs. 3,000.
A.P.J. Appeal partly allowed.

dataset_name: IN-Abs

summary/full:
In the respondent Company there were two rival Unions of workmen, namely, Karamchari Union and Sharmik Sangh.
The Karamchari Union espoused the demand of the workmen employed by the Company in its Kanpur unit for upward revision of dearness allowance following an award of the Industrial Tribunal Delhi by which the dearness allowance of the workmen employed in the Delhi unit was linked to the consumer price index for Delhi prepared by Labour Bureau, Simla, which substantially increased the dearness allowance of workmen posted at Delhi.
The Company in its attempt to thwart the demand being pursued by the Karamchari Union, entered into a settlement with the Shramik Sangh in respect of dearness allowance and then approached the Labour Commissioner for registering the settlement Failing to obtain the registration, the Company utilaterally enforced the new scheme of dearness allowance linked to all India average consumer price index prepared by Labour Bureau, Simla.
The Karamchari Union did not accept the revised formula and pressed its demand.
The dispute was referred for adjudication.
Before the Tribunal the Company contended: (1) that the settlement would be binding on the members of the Karamchari Union and the dispute does not require adjudication on merits, and (2) that the Company is desirous of linking dearness allowance to all India average consumer price index for 112 working class with base 1960 100 and the Tribunal should avoid accepting the demand of a few workmen.
The tribunal directed that the workmen of the Kanpur unit of the Company should be paid dearness allowance linked to the all India consumer price index (1960 100) for Kanpur Centre compiled by the Labour Bureau, Simla.
On the question of neutralisation, no change was allowed.
Partly allowing the appeal of the workmen, ^ HELD: 1.
The workmen of the Kanpur unit of the Company should be paid the dearness allowance according to all India consumer price index number for Kanpur (1960 100) compiled by Labour Bureau Simla after applying conversion factor also called the linking factor of 4.83.
Their dearness allowance cannot be linked to all India average consumer price index.
[125 B C] 2.
The Tribunal Committed a grave error in accepting collusive settlement as the starting point of the revision.
[122 H] 3, Uniformity, to an uninformed mind, appears to be attractive.
But, sometimes uniformity amongst dissimilar persons becomes counter productive.
Uniformity and equality have to be amongst equals measured by a common denominator.
The implementation of the Constitutional aspiration of `equal pay for equal work ' can be appreciated.
In the matter of basic wages it is a consummation devotedly to be wished.
But when it comes to dearness allowance any attempt at uniformity between workmen in metropolitan areas and in smaller centres would be destructive of the concept of dearness allowance.
[116 G H] Dearness allowance is directly related to the erosion of real wages by constant upward spiraling of the prices of basic necessities and as a sequal to the inflationary input, the fall in the purchasing power of the rupee.
It is a notorious phenomenon hitherto unquestioned that price rise variee from centre to centre, [117 A] Dearness allowance is inextricably intertwined with price rise, it being an attempt to compensate loss in real wages on account of price rise considered as a passing phenomenon by compensation.
That is why it is called variable dearness allowance.
Any uniformity in the matter of dearness allowance may confer a boon on persons employed in smaller centres and those in bigger metropolitan areas would be hard hit.
Dearness allowance by its very form and name has an intimate relation to the prevailing price structure of basic necessities at the centre in which the workman is employed.
[117 B C] Dearness allowance to workmen at a particular place should therefore depend upon the place where the workman is working irrespective of the fact that the industrial undertaking in which the workman is employed is a unit of an industrial enterprises having an all India or inter State operations.
[117 E] 113 4.
In the matter of dearness allowance the Court should lean in favour of adjudication of dispute on the principle of industry cum region because dearness allowance is linked to cost of living index of a particular centre which has a local flavour.
A workman is exposed to the vagaries of the market where he resides and works, even though he may be an employee of a national, multi national or transnational industrial empire.
Therefore.
the region cum industry principle must inform industrial adjudication in the matter of dearness allowance.
In the instant case the Tribunal has overlooked this important principle of industrial adjudication.
[117 G; 120 H; 121 A; 121 C] Dunlop Rubber Co. (India) Ltd. vs Workmen & Ors., ; , referred to.
Remington Rand of India Ltd. vs The Workmen , woolcombers of India Ltd. vs Woolcombers Workers Union & Anr. ; and Greaves Cotton & Co. and Ors.
vs Their Workmen ; and Bengal Chemical and Pharmaceutical Works Ltd. vs Its Workmen ; , followed.
Any attempt of a company introducing uniformity in the matter of dearness allowance linked to the all India average consumer price index prepared by Labour Bureau, Simla would be destructive of the concept of dearness allowance.
Not only unequals will be treated as equals but the former would suffer irreparable harm.
Such an approach would deal a fatal blow to the well recognised principle of industrial adjudication based on region cum industry because there cannot be any uniformity in the dearness allowance of the workmen working in metropolitan areas and the workmen working in smaller areas.
[118 A C] 6.
Where for a certain industrial centre a dearness allowance formula is in vogue and it is linked to some consumer price index number, whenever the base year for consumer price index number is changed, a fresh linkage requires a conversion ratio.
In the absence of a conversion ratio, the whole scheme falls out of gear and becomes unworkable, ineffective and in fact unjust.
In the instant case the conversion ratio of 4.83 in valid and correct and the Tribunal ought to have accepted the same.
[123 D; 124 F] Ahmedabad Mill Owners ' Association etc.
vs The Textile Labour Association, [1966) 1 S.C.R. 382, followed.
In the matter of dearness allowance usually the paying capacity of the employer is examined.
In the instant case, it has not at all been contended that the respondent company cannot bear the additional burden.
[124 G]


judgement:
etition No. 348 52 of 1985.
Under Article 32 of the Constitution of India.
Shanti Bhushan G.L. Sanghi, Prashant Bhushan, Madan Lokur, R. Satish, V.K. Pandita, and E.C. Agarwala for the Petitioners.
Kapil Sibbal, Mr. Awad Behari, Mrs. Shobha Dikshit, R.K Mehta, B.R. Agarwala.
Miss V. Menon, Ravindru Bana, A.K. Sanghi, A.K. Srivastava and J.R. Das for the Respondents.
G. Rath.
Advocate General for the State of Orissa.
Badri Das Sharma, for the State of Rajasthan, and A.V. Rangam, for the State of Tamil Nadu.
The Judgment of the Court was delivered by BHAGWATI, J.
This writ petition is an offshoot of the decision rendered by us in Dr. Pradip Jain & Ors.
vs Union of India and others.
The main judgment in that case was delivered by us on 22nd June, 1984 and we held in that judgement that "wholesale reservation made by some of the State Governments on the basis of 'domicile ' or residence requirement within the state or on the basis of institutional preference for students who have passed the qualifying examination held by the University or the State, excluding all students not satisfying this requirement, regardless of merit" was unconstitutional and void as offending the equality clause of the Constitution.
But after condemning such wholesale reservation, we proceeded to observe that the very mandate of the equality clause viewed in the perspective of social justice, would justify some extent of reservation based on residence requirement within the State or on institutional preference for students passing the qualifying examination held by the University or the State and addressing ourselves to the question as to what extent such reservation might be regarded as constitutionally permissible, we said: "It is not possible to provide a categorical answer to this question, for as pointed out by the policy statement of the Government of India, the extent of such reservation would depend on several factors including opportunities for professional education in that particular area, the extent of competition, level of education development of the area and other relevant factors.
It may be that 47 in a State where the level of educational development is woefully low, there are comparatively inadequate opportunities for training in the medical speciality and there is large scale social and economic backwardness there may be justification for reservation of a higher percentage of seats in the medical colleges in the State and such higher percentage of seats in the medical colleges in the State and such higher percentage may not militate against "the equality mandate viewed in the perspective of social justice".
So many variables depending on social and economic facts in the context of educational opportunities would enter into the determination of the question as to what in the case of any particular State, should be the limit of reservation based on residence requirement within the State or on institutional preference.
But, in our opinion, such reservation should in no event exceed the outer limit of 70 per cent of the total number of open seats after taking into account other kinds of reservations validly made.
The Medical Education Review Committee had suggested that the outer limit should not exceed 75 per cent but we are of the view that it would be fair and just to fix the outer limit at 70 per cent.
We are laying down this outer limit of reservation in an attempt to reconcile the apparently conflicting claims of equality and excellence".
We pointed out that in the result "at least 30 per cent of the open seats shall be available for admission of students on All India basis irrespective of the State or University from which they come" and directed that "such admissions shall be granted purely on merit on the basis of either All India Entrance Examination or entrance examination to be held by the State".
This was the decision given by us in regard to admissions to the MBBS and BDS courses.
We proceeded to discuss the question of admissions to post graduate courses such as MD, MS and the like.
We I earned heavily on the observations made by Krishna Iyer J. in Jagdish Saran vs Union of India(1) as also on the recommendation by the Indian Medical Council and the opinion expressed by the Medical Education Review Committee where an opinion was clearly expressed that admissions to post graduate courses in any institution should be guided strictly by merit and should be open to candidates on all India basis.
We also referred to the policy statement of the Government of India filed by the learned Attorney General where 48 the view was expressed categorically by the Government of India that so far as admissions to the institutions of post graduate colleges and such professional colleges are concerned, they should be entirely on the basis of all India merit, subject only to Constitutional reservations in favour of scheduled castes and scheduled tribes However, taking into account broader considerations of equality of opportunity and institutional continuity in education which has its own importance and value, we took the view that though residence requirement within the State should not be a ground for reservation in admissions to post graduate courses, a certain percentage of seats may in the present circumstances, be reserved on the basis of institutional preference "in the sense that a student who has passed M.B.B.S. course from a medical college may be given preference for admission to post graduate course in the same medical college or University but such reservation on the basis of institutional preference should not in any event exceed 50% of the total number of open seats available for admission to the post graduate course.
" This Judgment was delivered on 22nd June, 1984, but by that time, admissions had already been made in the medical colleges attached to some of the Universities in the country and moreover it was felt that sometime would be required for the purpose of achieving uniformity in the procedure relating to admissions in various Universities.
Some of the students seeking admission to the M.B.B.S. course in the academic year 1984 85, therefore, made an application to the Court in Civil Appeal No. 6392 of 1983, Rita Nirankari vs University of Delhi, that the Judgment delivered by us may be given effect only from the academic year 1985 86 We accordingly issued notice on the application to the learned advocates who had appeared on behalf of the various parties at the hearing of Dr Pradip Jain 's case as also to the Attorney General and after hearing them we came to the conclusion that "in view of the fact that all formalities for admission, including the holding of entrance examination. have been completed in some of the States prior to the Judgment dated 22nd June 1984 and also since sometime would be required for making the necessary preparations for implementing the Judgment "it was not practicable to give effect to the judgment from the academic year 1984 85.
We therefore directed that the judgment shall be implemented with effect from the academic year 1985 86.
This order was made by us on 26th July 1984 and it was directed to form part of the main judgment dated 22nd June 1984.
49 Since it was made clear as far back as 26th July, 1984, that our Judgment dated 22nd June, 1984, shall be given effect from the academic year 1985 86, we should have thought that the Government of India and Indian Medical Council would make the necessary arrangements for holding an All India Entrance Examination well in time for admissions to the M.B.B.S. course for the academic year 1985 86 so far as the minimum 30% open seats not reserved on the basis of residence requirement or institutional preference (hereinafter referred to as the minimum 30% non reserved seats) were concerned.
But it seems that so far nothing has been done either by the Government of India or the Indian Medical Council and the fate of the students seeking admissions to the M.B.B.S. course for the academic year 1985 86 is in a state of total uncertainty.
The State Governments have also been equally guilty of indifference and inaction in not taking any steps for the purpose of holding an entrance examination which would test the relative merits of the students seeking admission to the minimum 30% non reserved seats in the M.B.B.S. course in the medical colleges.
Some of the State Governments and Universities, we are informed, are proposing to fill up the minimum 30% non reserved seats for the M.B.B.S. course on the basis of the marks obtained by the students at the qualifying examinations held by different States and or Universities, total ignoring the fact that the standard of judging at these different qualifying examinations cannot, by its very nature be uniform.
Some Universities may be very liberal in their marking while some other may be strict.
These would be no comparable standards on the basis of which the relative merits of the students can be judged.
It would be wholly unjust to grant admissions to the students by assessing their relative merits with reference to the marks obtained by them, not at the same qualifying examination where standard of judging would be reasonably uniform but at different qualifying examinations held by different State Governments or Universities where the standard of judging would necessarily vary and not be the same.
That would indeed be blatantly violative of the concept of equality enshrined in Article 14 of the Constitution.
We must, therefore, make it clear that no State Government or University or Medical College shall grant admission to students to fill the minimum 30% non reserved seats for the M.B.B.S. course, on the basis of comparison of the marks obtained by them at different qualifying examinations.
The admissions must be based one valuation of relative merits through an entrance examination which would be open to all qualified candidates through out the country.
Such entrance examination should 50 in our opinion be held by the Government of India or the Indian Medical Council on an all India basis and admissions should be granted to the various medical colleges in the country on the basis of the marks obtained at such entrance examination and while granting admission any preference expressed by the students for any particular State or University or Medical College or Colleges shall be kept in mind, and as far as possible, effort shall be made to conform to such preferences so that the students who secure admissions are least inconvenienced and they are able to carry on their studies near their place of residence.
There can be no constitutional impediment in the way of the Government of India or the Indian Medical Council for holding such entrance examination, because the topic of education is in the Concurrent List.
We are of the view that such entrance examination must be held by the Government of India or the Indian Medical Council because then there will be only one examination in which the students seeking admission to the M.B.B.S course will have to appear, irrespective of the place where or the University or Medical College in which, they are seeking admission is located.
Today we are witnessing the highly distressing spectacle of students rushing from place to place to appear at entrance examinations which are being held in Delhi, Chandigarh, Bangalore and various other places.
So much time, money and energy of the students is wasted and in addition there is a gnawing anxiety at the almost chaotic uncertainty in regard to admission.
It is therefore absolutely essential that there should be only one entrance examination common to all the medical colleges in the country and such entrance examination can be held only by the Government of India or the Indian Medical Council.
That is why at the last hearing of the present writ petition, we directed the Indian Medical Council to come forward with a positive scheme for holding an all India entrance examination for regulating admissions to the minimum 30% non reserved seats for the M.B.B.S. course.
We hope and trust that at the next hearing of this writ petition, the Indian Medical Council will produce a will thought out scheme for holding an all India entrance examination so that the necessary directions can be given by the court in regard to the holding of such entrance examination well in time before the next academic year begins in June/July 1985.
Much time has already been lost and we are anxious that no further delay should occur, because any delay now will jeopardise the future of the students seeking admissions to the M.B.B.S. course for the academic year 1985 86.
51 We would also like to clear up one misunderstanding which seems to prevail with some State Governments and Universities in regard to the true import of our judgment dated 22nd June, 1984.
They have misinterpreted our judgment to mean that 30% of the total number of seats available for admission to M.B.B.S. course in a medical college should be kept free from reservation on the basis of residence requirement or institutional preference.
That is a total mis reading of our judgment.
What we have said in our judgment is that after providing for reservation validly made, whatever seats remain available for non reserved categories, 30% of such seats at the least, should be left free for open competition and admission to such 30% open seats should not be based on residence requirement or institutional preference but students from all over the country should be able to compete for admissions to such 30% open seats.
To take an example, suppose there are 100 seats in a medical college or University and 30% of the seats are validly reserved for candidates belonging to scheduled castes and scheduled tribes.
That would leave 70 seats available for others belonging to non reserved categories.
According to our judgment, 30% of 70 seats, that is, 21 seats out of 70 and not 30% of the total number of 100 seats, namely, 30 seats, must be filled up by open competition regardless of residence requirement or institutional preference.
So far admissions to 50% open seats not reserved on the basis of institutional preference (hereinafter referred to as 50% non reserved seats) for post graduate courses such as M.D., M.B. and the like are concerned, we may point out that these admissions also cannot be made on the basis of marks obtained by the students at different M.B.B.S. examinations held by different universities, since there would be no comparable standards by reference to which the relative merits of the students seeking admission to post graduate courses can be judged.
It would not only be unfair and unjust but also contrary to the equality clause of the Constitution to grant admissions to 50% non reserved seats in the post graduate courses by mechanically comparing the marks obtained by the students at the M.B.B.S. examinations held by different Universities where the standard of judging would necessarily vary from University to University and would not be uniform.
If admissions were to be made on this basis, a less meritorious student appearing in the M.B.B.S. examination held by a University where the standard of evaluation is liberal would secure a march over a more meritorious student who appears in the M.B.B.S. examination where the standard of marking 52 is strict.
We cannot therefore approve of admissions to 50% non reserved seats for the post graduate courses being made on the basis of marks obtained by the students at the different M.B.B.S. examinations held by different Universities.
Such admissions would be clearly invalid as constituting denial of equality of opportunity.
There can be no doubt that in order to meet the demands of the equality clause, the admissions to 50% non reserved seats for the post graduate courses must be made on the basis of comparative evaluation of merits of the students through an entrance examination.
Such entrance examination must be held by the Government of India or the Indian Medical Council sufficiently in advance before the term is due to commence for the post graduate courses.
Here again the students seeking admission to post graduate courses can express their preference for any particular University or medical college or colleges as also for any speciality or specialities which they wish to take up for the post graduate course and admissions should be granted to the post graduate courses in various medical colleges in the country on the basis of marks obtained at such entrance examination and while granting admissions, the preferences expressed by the students must be kept in mind and as far as possible, effort should be made to conform to such preferences.
We have directed the Government of India and the Indian Medical Council to put forward a positive scheme for holding an all India entrance examination for regulating admissions to the post graduate courses at the next hearing of the writ petition so that we can give necessary directions to the Government of India for holding such All India Entrance Examination which would be conducted in at least one centre in each State and which would be open to the students from all over the country.
We may point out that having regard to the size of the population the number of students seeking admission and the extent of the geographical area of a State, it might be desirable to have more than one centre in some State or States both in regard to admissions to the post graduate courses as also in regard to admissions to M.B.B.S. course.
If for any reason the Government of India and the Indian Medical Council are unable to organise such All India Entrance Examination for admissions to the post graduate courses on account of paucity of the time now available to them, a situation for which they are almost entirely to blame, we may have to direct as the only possible alternative for the coming academic year, an entrance examination to be held by each State Government or University for regulating admissions to 50% non reserved seats for the post graduate courses in the medical colleges situate within 53 that State or attached or affiliated to that University.
But unquestionably no admissions can be allowed to be made on the basis of marks obtained at different M.B.B.S. examinations held by different universities.
That takes to a consideration of the main question arising in the present writ petition.
The question relates to the admissions to 50% non reserved seats for the post graduate courses in the Motilal Nehru Medical College, Allahabad.
Now in all the Medical Colleges in the State of Uttar Pradesh a student who wishes to join a post graduate course namely M.D., M.S. or like has necessarily to do house job for a period of one year after completion of internship and the house job has to be in a speciality which the student wishes to take up for the post graduate course.
There are a few exceptions to this general rule, as for example, a student who has done house job in medicine is qualified for admission to the post graduate course in radiology.
That is how petitioner No. 5 who had done house job in medicine could secure admission in the post graduate course for radiology.
Then there are also cases where a student who has done house job in a particular speciality for six months and in another allied speciality for the remaining six months, may be qualified for admission to the post graduate course in the former speciality.
But, by and large, barring these few exceptional situations, a student cannot qualify for admission to the graduate course in a particular speciality unless he has done house job in that speciality.
A student therefore, according to the rules prevailing in all the medical colleges in the State of Uttar Pradesh, has to do house job for one year and then seek admission to the post graduate course which is of two years ' duration and he can take admission to the post graduate course only in the speciality in which he has done his house job.
We are informed that this situation prevails also in the medical colleges of one or two other States.
This system under which a student is first required to do house job in a speciality of his choice and then seek admission to the post graduate course which can be only in that speciality and in no other, is likely to cause considerable hardship to the students, because it is quite possible that a student who has done house job in a particular speciality may not come within the quota of 50% seats reserved on the basis of institutional preference and even so far as 50% non reserved seats are concerned, he may be left out, if he gets less marks at the entrance examination than another student who has chosen the same speciality for his house job.
He obviously cannot get admission to the post graduate course 54 in another speciality even if he does better in the entrance examination than a student who has done house job in that speciality.
His admission to the post graduate course would become dicey and one year spent by him in doing house job may turn out to be futile.
That is why we find that in most of the States, the post graduate course is of three years ' duration and during the first year, the student is expected to do house job in the speciality in which he has been admitted to the post graduate course.
This system is more advantageous to the students since it given an opportunity to the students to secure admission to the post graduate course in any speciality that is available, on the basis of the marks obtained at the M.B.B.S. examination in case of 50% seats reserved on the basis of institutional preference and on the basis of marks obtained at the entrance examination in case of 50% non reserved seats.
We would therefore recommend to the Indian Medical Council as also to the State of Uttar Pradesh and other States which follow the system of one year house job followed by two year post graduate course to uniformly adopt the system of three year post graduate course with house job in the first year.
It is desirable that so far as post graduate education in the Medical Faculty is concerned there should, as far as possible, be uniformity throughout the country.
The petitioners belong to a batch of students who did the M.B.B.S. course in Motilal Nehru Medical College, Allahabad and who passed the M.B.B.S. examination held by the University of Allahabad in July 1982.
The internship of one year which is obligatory in the case of every student passing the M.B.B.S. examination was completed by them in July 1983.
The petitioners thereafter took up house job in the Motilal Nehru Medical College, Allahabad.
The case of the petitioners is that at the time when they took up their house job in July 1983, the admissions to the post graduate courses were governed by the old rules which provided for reservation of 75% seats for students passing the M.B.B.S. examination from the same institution in which admission is sought that is, on the basis of institutional preference with the remaining 25% seats open for students who had passed the M.B.B.S. examination from any Medical College in the State of Uttar Pradesh and who satisfied the residence requirement in the State of Uttar Pradesh.
The petitioners said that so far as admissions to the post graduate courses for the academic year 1984 85 were concerned which academic year commenced in January 1984 the petitioners knew that having regard to the number of students who had completed their house 55 job in 1983 and who would therefore be eligible for admission to the post graduate course in the academic year 1984 85, some seats in the post graduate courses for the academic year 1984 85 would remain vacant and would be available to the petitioners on completion of their house job in July 1984.
These seats in the post graduate courses for the academic year 1984 85 would be available to the petitioners in addition to the seats in the post graduate courses for the academic year 1985 86 commencing from January 1985.
The petitioners contended that on the basis of 75% of the seats for the academic years 1984 85 and 1985 86 being available to students passing the M.B.B.S examination from Motilal Nehru Medical College, Allahabad an assumption which according to the petitioners they were entitled to make before the Judgment of this Court dated 22nd June 1984 the petitioners reasonably anticipated that if they took a particular speciality, they would able to secure admission to the post graduate course in that speciality on the basis of institutional preference and basing themselves upon this anticipation, they selected their speciality for the house job.
The petitioners claimed that if the old rule of 75% and 25% had continued to prevail for the academic year 1985 86 and had not been set at naught by the Judgment of this Court dated 22nd June 1984, they would have been able to secure admission to the post graduate course in the speciality chosen by them for the house job.
But by reason of the reduction of the percentage reserved for institutional candidates from 75 to 50 commencing from the academic year 1985 86, the petitioners could not secure admission to the post graduate course for the academic year 1985 86.
The petitioners therefore urged that in those cases where the system of post graduate education adopted is to have house job for one year followed by a two year post graduate course, it would be fair and just to give effect to our Judgment dated 22nd June 1984 so as to be applicable at the point of time when house job is taken up by the students with a view to securing admission to the post graduate course on completion of the house job.
It was not the contention of the petitioner that the applicability of our Judgment dated 22nd June 1984 should be postponed beyond the academic year 1985 86 and they conceded that the Judgment may be given effect to from the academic year 1985 86 but they submitted that for the applicability of the Judgment the post graduate course should be deemed to commence from the time when the students take up house job in any particular speciality so that no injustice is done to them.
56 There is considerable force in this contention urged on behalf of the petitioners.
We have directed by our order dated 26th July, 1984 that the Judgment delivered by us on 22nd June 1984 shall become effective from the academic year 1985 86 and we do not propose to postpone the operation of the Judgment beyond that academic year.
But the question is as to how the principle laid down by us in the Judgment for regulating admissions to the post graduate courses is to be applied.
So far as three year post graduate courses are concerned and in most of the Universities in the country we have three years post graduate courses there is no difficulty in giving effect to the Judgment from the academic year 1985 86.
Whatever admissions are made to the three year post graduate courses for the academic year 1985 86 will be governed by the principle laid down in the Judgment.
But difficulty of application arises in cases where, as in the State of Uttar Pradesh and one or two other States, the students do house job for one year and then seek admission to one or the other of the post graduate courses which are of two years ' duration.
The admissions to the post graduate courses in such cases take place after the completion of the house job.
Now if the principle laid down by us in the Judgment were to govern such admissions from the academic year 1985 86, it would cause considerable hardship to the students who have selected house job in a particular speciality prior to the delivery of the Judgment on 22nd June, 1984, on the basis of reasonable anticipation that, according to the old rules governing admissions which prevailed prior to the date of the Judgment, they would be able to secure admission to the post graduate course in the speciality chosen by them but who may now, as pointed out in the paragraphs, be unable to secure such admissions under the principle governing admissions laid down in the Judgment.
Some of these students may legitimately complain that if they know that admissions to the post graduate courses for the academic year 1985 86 were going to be made on the basis of the new principles laid down in the Judgment and that only 50% of the seats were going to be available for institutional students, they would have selected for their house job a speciality which would have brought them within the 50% quota of seats reserved on the basis of institutional preference.
Now having chosen a particular speciality for the house job, they cannot obtained admission to the post graduate course in any other speciality and consequently they can hope to get admission to the post graduate course only if an entrance examination is held and they secure better marks at the entrance examination then other students who have done house job in the same speciality.
It is quite possible that in 57 the circumstances some less meritorious students might get admission to the post graduate course because they have done house job in some other speciality, while more meritorious students may be left out on account of choice of the speciality.
It would not therefore be fair and just to hold that in case of students who have taken up house job in a particular speciality prior to the delivery of the Judgment dated 22nd June, 1984, their admissions to the two year post graduate course during the academic year 1985 86 should be governed by the new principle laid down in the Judgment.
We would accordingly direct, in order to meet the demand of equality and justice, that in case of Universities and Medical Colleges, where the system in vogue is to have one year house job in a particular speciality followed by admissions to a two year post graduate course in the same speciality, the admissions to the two year post graduate courses for the academic year 1985 86 should be governed, not by the new principle laid down in the judgment, but the old rules which prevailed prior to the delivery of the Judgment, provided the students seeking admissions had commenced their house job prior to the delivery of the Judgment on 22nd June 1984.
If, however, the house job was commenced subsequent to the delivery of the Judgment on 22nd June 1984, the admissions to the two year post graduate courses for the academic year 1985 86 would be governed by the new principle laid down in the Judgment.
Now let us once again turn to the facts of the present case.
The academic year 1984 85 commenced in January 1984 and on the basis of 75% seats being reserved for institutional candidates according to the rules of admission then prevailing in the State of Uttar Pradesh, the students who completed their house job before January 1984 were admitted to the post graduate courses for the academic year 1984 85, but since the number of students eligible for admission in that academic year were few, some seats for the post graduate courses for the academic year 1984 85 remained unfilled.
Some of the students belonging to the batch of the petitioners who completed their house job in July 1984 there upon filed writ petition No. 8362 of 1984 in the High Court of Allahabad contending that a large number of seats reserved for institutional students in the post graduate courses for the academic year 1984 85 were lying vacant and that they should be directed to be filled.
The High Court by an order dated 28th September, 1984 gave interim direction that applications should be invited for the vacant seats for the academic year 1984 85.
Pursuant to this interim direction, applications were invited in September, 1984.
Thereafter another direction was given 58 by the High Court on 13th November 1984 that the State Government shall "complete the admissions to the post graduate courses for the academic year 1985 86 on or before 2nd January 1985 in accordance with the rules" applicable to such admissions.
It seems that following upon the earlier direction given by the High Court on 28th September 1984, the State Government passed an order on 15th December 1984 directing that the admissions to the vacant seats in the post graduate courses for the academic year 1984 85 be made by 31st December 1984.
This direction was carried out by the Principal of the Motilal Nehru Medical College and on the basis of 75% of the seats being reserved for institutional candidates and 25% being open to students from all medical colleges in the State of Uttar Pradesh subject to residence requirement, the Principal granted admissions to the vacant seats in the post graduate courses for the academic year 1984 85.
Unfortunately, the petitioners could not secure admission in these vacant seats since there were more meritorious students who had done better in the M.B.B.S. examination than the petitioners.
The admissions to these vacant seats were completed by 31st December 1984 as directed by the State Government by its order dated 15th December 1984.
The petitioners do not complain against these admissions But their grievance is in regard to the admissions made to the post graduate courses for the academic year 1985 86.
These admissions were purported to be made on the basis of the new principle laid down in the Judgment dated 22nd June 1984 as understood by the Principal.
What the Principal did was to grant admissions to 50% of the seats reserved on the basis of institutional preference by selecting institutional students on the basis of merit and having regard to the speciality in which they had done their house job and so far as the remaining 50% open non reserved seats were concerned, the Principal admitted students coming from different parts of the country on the basis of the marks obtained by them at the different M.B.B.S. examinations in which they had appeared and passed.
The result was that the petitioners could not secure admission to the seats in the post graduate courses even for the academic year 1985 86.
It was under these circumstances that the petitioners filed the present writ petition challenging the admissions made for the academic year 1985 86.
Now there can be no doubt that the grievance made by the petitioners is justified.
The petitioners are right when they contend that having regard to the fact that the house job was started by them prior to the delivery of the Judgment on 22nd June 1984, their admissions to the post graduate courses for the academic year 59 1985 86, that being the academic year for which they became due to be considered, should have been governed by the old rules which prevailed prior to the date of the Judgment and not by the new principle laid down in the Judgment.
We have already started our reasons for taking this view and we need not reiterate those reasons.
Of course the Principal of the Motilal Medical College cannot be blamed for granting admissions for the academic year 1985 86 in accordance with the new principle laid down by us in the Judgment, since we had said in our order dated 26th July 1984 that the Judgment shall be effective from the academic year 1985 86 and on a literal interpretation of that order even, admissions to the two year post graduate courses for the academic year 1985 86 would have to be in accordance with the new principle laid down in the judgment.
But, as pointed out above, it would work considerable hardship and injustice if, in case of students who have started house job prior to the delivery of the Judgment on 22nd June 1984, admissions to the two year post graduate courses for the academic year 1985 86 were to be made on the basis of the rule enunciated in the Judgment.
We must therefore hold that in the State of Uttar Pradesh and other States where the system of post graduate medical education adopted, is to have one year house job followed by two year post graduate course, students who started their house job prior to the delivery of the Judgment on 22nd June 1984 should be governed by the old rules prevailing prior to the date of the Judgment when seeking admission to the post graduate courses for the academic year 1985 86 but in case of students who started their house job after the date of the Judgment, their admissions to the post graduate courses for the academic year 1985 86 should be governed by the new principle laid down in the Judgment.
On this view, 75% of the seats in the post graduate courses for the academic year 1985 86 should have been made available to the institutional students and the case of the petitioners was that, if that had been done, the petitioners would have been able to secure admission as falling within the 75% quota.
It was not seriously disputed on behalf of the respondents that if the old rules governing admissions had been applied, the petitioners would, save perhaps in a solitary case, have been able to get admission to the post graduate courses.
The petitioners were thus unjustly and improperly left out of the quota for institutional students on what was turned out to be erroneous view of the legal position.
The petitioners also complained that even in regard to the 50% non reserved seats, the petitioners were denied an opportunity of competing for them, because no entrance examination was held either by the Government of India or by the State Government or 60 even by the concerned University for testing the relative merits of the students seeking admission to the post graduate courses.
This complaint was made in the alternative on the premise that the admissions were governed by the new principle laid down in the Judgment.
We have already pointed out that this premise was unjustified and the admissions were governed not by the new principle laid down in the Judgment but by the old rules which prevailed prior to the delivery of the Judgment.
But even if the admissions were governed by the new principle laid down in the Judgment, the Principal could not grant admissions to 50% non reserved seats in the post graduate courses without judging the relative merits of the candidates through a common entrance examination.
The Principal was clearly wrong in granting admissions to 50% non reserved seats on the basis of the marks obtained by the candidates at the different M.B.B.S. examination held by different Universities.
No admissions could be granted to 50% non reserved seats except through a common entrance examination where the relative merits of the candidates could be tested and a comparative evaluation could be made on the basis of a common standard.
It is quite possible that if a common entrance examination had been held, the petitioners or at least some of them might have been able to establish their superior merit as against those who happen to have been admitted on the basis of the marks obtained at the different M.B.B.S. examinations.
We are therefore of the view that the admissions purported to have been made to 50% non reserved seats in the post graduate courses were invalid and the admissions should have been made in accordance with the old rules prevailing prior to the delivery of the Judgment on 22nd June 1984.
But we are not inclined to strike down the admissions which have already been made.
There are two reasons why we do not wish to disturb these admissions.
In the first place, the students who have already been admitted are not parties to the present writ petition and it would not be right to make any order striking down their admissions without giving them an opportunity of being heard.
Secondly, the admissions have been made as far back as January 1985 pursuant to an order of the High Court and the students who have been admitted have been prosecuting their studies since the last about three months and it would cause them immense hardship if their admissions were none to be disturbed.
We do not therefore propose to strike down the admissions already made to the post graduate courses for the academic year 1985 86.
But at the same time we must not allow any injustice to be perpetrated on the petitioners.
It would in 61 our opinion be fair and just that the petitioners should be able to get admission to the post graduate courses in the Motilal Nehru Medical College being the institution in which they did their M.B.B.S. course, the reason being that if the old rules had been applied they would have been able to secure such admission.
The State of Uttar Pradesh, however, contended that the number of students admitted to the post graduate courses in the various specialities was already in excess of that permitted by the Indian Medical Council and apart from any objection which may be raised by the Indian Medical Council, the interest of higher education would suffer if the petitioners were directed to be admitted to the post graduate courses in the specialities respectively chosen by them for their house job.
Now it is necessary to point out that the number of students admitted to the post graduate courses has turned out to be in excess of that authorised by the Indian Medical Council simply because the students admitted to the vacant seats in the post graduate courses for the academic year 1984 85 pursuant to the order of the High Court dated 28th September 1984 and the order of the State Government dated 15th December 1984 could commence their post graduate study only from January 1985 and the students admitted to the post graduate courses for the academic year 1985 86 also commenced their post graduate study at the same time with the result that both sets of students, one admitted for the academic year 1984 85 and the other admitted for the academic year 1985 86 started and continued their post graduate study simultaneously and together and this resulted in the total number of students being in excess of that authorised by the Indian Medical Council.
But if we take into account only the number of students admitted for the academic year 1985 86, we do not think that by admitting the petitioners, the teacher student ratio prescribed by the Indian Medical Council would be substantially breached.
We may point out that even if the teacher student ratio is violated by granting admissions to the petitioners, we would direct that this may be allowed to be done as an exceptional case, because otherwise injustice would result to the petitioners and neither the Court nor the Indian Medical Council can be so insensitive as to shut its eyes to injustice.
We would therefore direct that the petitioners shall be admitted to the post graduate courses in the specialities respectively chosen by them for their house job, for the academic year 1985 86 either in the Motilal Nehru Medical College or in any of the other five medical colleges in the State of Uttar Pradesh, at the option of the State Government.
We are not finally disposing of the writ petition with this Judgment since directions have yet to be given by us in regard to the 62 holding of entrance examination both for admission to the M.B.B.S. course as also for admissions to the post graduate courses.
We have already directed the Indian Medical Council to come forward with a positive scheme in regard to the holding of both these entrance examinations and we shall finally dispose of the writ petition after considering the scheme put forward by the Indian Medical Council and issuing the necessary directions to the Government of India and the State Governments and/or Universities for holding the necessary entrance examinations.
A.P.J, Petitions Partly allowed.

summary/full:
Prior to this judgment of the Supreme Court in Dr. Pradeep Jain 's case delivered on 22nd June, 1984, admissions to the post graduate medical courses in the State of Uttar Pradesh were governed by the old rules which provided for reservation of 75% seats for students passing the MBBS examination from the same institution in which admission is sought, that is on the basis of institutional preference with the remaining 25% seats open for students who had passed the MBBS examination from any medical college in the State of Uttar Pradesh and who satisfied the residential requirements in that State.
In Dr. Pradeep Jain 's case the Supreme Court held that admission to post graduate course, such as MD, MS and the like, should be entirely on the basis of all India merit, subject only to Constitutional reservations in favour of scheduled castes and scheduled tribes.
However, keeping in view equality of opportunity and institutional continuity in education a certain percentage of seats may be reserved on the basis of institutional preference "in the sense that a student who has passed MBBS course from a medical college may be given preference for admission to post graduate course in the same medical college or University but such reservation should not in any event exceed 50% of the total number of open seats available for admissions to the post graduate 42 course".
Subsequently, on 26th July, 1984 it was directed that the aforesaid judgment shall be implemented with effect from the academic year 1985 86.
According to the rules prevailing in all the medical colleges in the State of Uttar Pradesh, a student has to do house job for one year and then seek admission to the two year post graduate course, barring some exceptions, only in the speciality in which he has done his house job.
The petitioners passed their MBBS examination in July 1982 from Motilal Nehru Medical College and completed obligatory internship of one year in July 1983.
At that time admission to the post graduate medical courses were governed by the old rules.
The petitioners could not secure admission to the post graduate medical courses for the academic year 1984 85 on the basis of the old rules.
For the academic year 1985 86, the Principal of the College granted admissions to 50% of the seats reserved on the basis of institutional preference by selecting institutional students on the basis of merit and having regard to the speciality in which they had done their house job and so far as the remaining 50% open non reserved seats were concerned, he admitted students coming from different parts of the country on the basis of the marks obtained by them at the different MBBS examinations.
Thus the petitioners could not secure admissions in the post graduate courses even for the academic year 1985 86.
Therefore, they filed the present Writ Petitions challenging the admissions made for the academic year 1985 86.
The petitioners contended: (i) that when they completed their internship in July 1983 the admissions to post graduate courses were governed by the old rules and so far as admissions to academic year 1984 85 were concerned they knew that having regard to the number of students, who had completed their house job in 1983 and would be eligible for admission to the post graduate courses in the academic year 1984 85, some seats in the post graduate courses for the academic year 1984 85 would remain vacant and would be available to them on completion of their house job in July 1984 in addition to the seats in the post graduate courses for the academic year 1985 86.
On the basis of 75% seats for the academic years 1984 85 and 1985 86 being available to the students passing MBBS examination from Motilal Nehru Medical College they reasonably anticipated that if they took a particular speciality, they would be able to secure admission to the post graduate course in that speciality on the basis of institutional preference and basing themselves upon this anticipation, they selected their speciality for the house job.
If the old rule of 75% and 25% had continued to prevail for the academic year 1985 86 and had not been set at naught by the judgment dated 22nd June 1984, they would have been able to secure admission to the post graduate course in the speciality chosen by them for the house job.
But by reason of the reduction of the percentage reserved for institutional candidates from 75 to 50 commencing from the academic year 1985 86, they could not secure admission to the post graduate course for the academic year 1985 86.
Therefore, in those cases where the system of post graduate education adopted is to have house job for one year followed by a two year post graduate course, the applicability of the judgment to the post graduate course should be deemed to commence from the time when the students take up house job in any particularly speciality and (ii) that even in regard to the 50% non reserved seats they were denied an opportunity 43 of competing for them, because no entrance examination was held either by the Government of India or by the State Government or even by the concerned University for testing the relative merits of the students seeking admission to the post graduate courses.
Partly disposing of the petitions, ^ HELD: 1.
Admissions to 50% open seats not reserved on the basis of institutional preference for post graduate courses can not be made on the basis of marks obtained by the students at different MBBS examination held by different Universities, since there would be no comparable standards by reference to which relative merits of the students seeking admission to post graduate courses can be judged.
In order to meet the demands of the equality clause, the admissions to 50% non reserved seats for the post graduate courses must be made on the basis of comparative evaluation of merits of the students through an entrance examination, to be held by the Government of India or the Indian Medical Council sufficiently in advance.
The students seeking admission in MBBS course as well as in post graduate courses can express their preference for any particular University of Medical College or colleges as also for any speciality or specialities which they wish to take up for the post graduate course and admissions should be granted on the basis of marks obtained at such entrance examination and while granting admissions, the preferences expressed by the students must be kept in mind and as far as possible, effort should be made to conform to such preferences.
[51 E F; 52 B D] 2.
The Principal of the Motilal Nehru Medical College cannot be blamed for granting admissions for the academic year 1985 86 in accordance with the new principle since the order dated 26th July 1984 says that the judgment dated 22nd June 1984, shall be effective from the academic year 1985 86 and on a literal interpretation of that order even admissions to the two years post graduate courses for the academic year 1985 86 would have to be in accordance with the new principle.[59 B C] 3.
The grievance of the petitioners that even in regard to the 50% non reserved seats, they were denied an opportunity of competing for them because no entrance examination was held for testing the relative merits of the students seeking admission to the post graduate courses, is based on the premise that the admissions were governed by the new principle.
This premise was unjustified and the admissions were governed not by the new principle but by the old rules.
Even if the admissions were governed by the new principle, the Principal was clearly wrong in granting admissions to 50% non reserved seats on the basis of the marks obtained by the candidates at the different MBBS examination held by different universities, without testing the relative merits of the candidates on the basis of a common standard.
The admissions purported to have been made to 50% non reserved seats in the post graduate courses were invalid.[59 H; 60 A B] 4 The admissions already made cannot be struck down because the students who have already been admitted are not parties to the present writ petitions and without giving them an opportunity of being heard their 44 admissions cannot be struck down.
Secondly, such admissions were made in January 1985 and since then the students are prosecuting their studies.
Striking down their admissions at this stage would cause immense hardship to them.
It would be fair and just if the petitioners are also allowed admission to post graduate courses in the Motilal Nehru Medical College on the basis of institutional preference according to old rules.
The petitioners shall be admitted to the post graduate courses in the specialities respectively chosen by them for their house job, for the academic year 1985 86 either in the Motilal Nehru Medical College or in any other five medical colleges in the State of Uttar Pradesh at the option of the State Government.[60 G H; 61 A; G H] 5.
The judgment in the case of Dr. Pradeep Jain has been misinterpreted to mean that 30% of the total seats available for admission to MBBS course in a Medical College should be kept free from reservation on the basis of residence requirement or institutional preference.
That is a total mis reading of that judgment.
True import of that judgment is that after providing for reservation validly made, whatever seats remain available for non reserved categories, 30% of such seats at the least, should be left free for open competition and admission to such 30% open seats should not be based on residence requirement or institutional preference but students from all over the country should be able to compete for admissions to such 30% open seats.
[51 A C] 6.
Some of the State Governments and universities are proposing to fill up the minimum 30% non reserved seats for the MBBS course on the basis of marks obtained by the students at the qualifying examinations held by the different States and or Universities, totally ignoring the fact that the standard of judging at these different qualifying examinations cannot, by its very nature be uniform.
It would be wholly unjust to grant admissions to students by assessing their relative merits with reference to the marks obtained by them, not at the same qualifying examination where standard of judging would be reasonably uniform but at different qualifying examinations held by different State Governments or Universities where the standard of judging would necessarily vary and would not be the same.
That would indeed be blatantly violative of the concept of equality enshrined in Article 14 of the Constitution.
Therefore, no State Government or University or Medical College shall grant admission to students to fill the minimum 30% non reserved seats for the MBBS course, on the basis of comparison of the marks obtained by them at different qualifying examinations.
The admissions must be based on evaluation of relative merits through an entrance examination which would be open to all qualified candidates throughout the country.
Such entrance examination should be held by the Government of India or the Indian Medical Council on an all India basis and admissions should be granted to various Medical Colleges in the country on the basis of marks obtained at such entrance examination and while granting admission any preference expressed by the students for any particular State or University or Medical College or Colleges shall be kept in mind and; as far as possible, efforts should be made to conform to such preferences so that the students who secure admission are least inconvenienced and they are able to carry on their studies near their place of residence.
[49 D H; 50 A B] 45 7.
There is no difficulty in giving effect to the judgment from the academic year 1985 86 so far as three year post graduate courses are concerned and the admissions will be governed by the principle laid down in the judgment.
But in cases where students seek admissions to the post graduate courses of two years duration after the completion of the house job, if the principle laid down in that judgment were to govern such admissions from the academic year 1985 86, it would cause considerable hardship to the students who have selected house job in a particular speciality prior to the delivery of the judgment on 22nd June, 1984.
In order to meet the demand of equality and justice it is directed, that in case of Universities and Medical Colleges, where the system in vogue is to have one year house job in a particular speciality followed by admissions to a two year post graduate course in the same speciality, the admissions to the two year post graduate courses for the academic year 1985 86 should be governed, not by the new principle laid down in the judgment, but by the old rules which prevailed prior to the delivery of the judgment, provided the students seeking admissions had commenced their house job prior to the delivery of the judgment on 22nd June 1984.
If however, the house job was commenced subsequent to the delivery of the judgment on 22nd June 1984, the admissions to the two year post graduate courses for the academic year 1985 86 would be governed by the new principle laid down in the judgment.
[57 A D] 8.
In most of the States, the post graduate course is of three years ' duration and during the first year, the student is expected to do house job in the speciality in which i e has been admitted to the post graduate course.
This system is more advantageous to the students since it gives an opportunity to the students to secure admission to the post graduate course in any speciality that is available, on the basis of the marks obtained at the MBBS examination in case of 50% seats reserved on the basis of institutional preference and on the basis of marks obtained at the entrance examination in the case of 50% non reserved seats.
It is, therefore, recommended to the Indian Medical Council as also to the State of Uttar Pradesh and other "states which follow the system of one year house job followed by two years post graduate course to uniformly adopt the system of three years post graduate course with house job in the first year.
So far as post graduate education in the Medical Faculty is concerned there should, be uniformity throughout the country.
[54 B D] 9.
All India Entrance Examination should be conducted in at least one centre in each State.
Having regard to the size of population, the number of students seeking admission and the geographic area of a State, there may be more than one centre in some States both in regard to admissions to the post graduate courses and MBBS course.
As directed earlier the Indian Medical Council should submit a positive scheme for holding an all India entrance examination for regulating admissions to the minimum 30% non reserved seats for MBBS course on the next hearing so that necessary directions could be issued for holding such entrance examination well in time before the next academic year begins in June or July, 1985.
The writ petitions shall be finally disposed of after such directions are issued.
[52 F; 50 E. 62 B] Dr. Pradeep Jain and Ors vs Union of India & Ors. ; explained and Jagdish Saran vs Union of India ; referred to. 46