Holding

The Court held that Commercial Clerks and Assistant Station Masters/Station Masters are distinct categories, so the differential pay arising from the New Deal does not constitute discrimination under Article 14, and the Andhra Pradesh High Court’s legal principle is set aside, though the awarded emoluments remain unaffected.

Summary

The case concerned railway employees classified as Commercial Clerks and Assistant Station Masters/Station Masters (ASM/SM) whose pay scales were revised under a "New Deal" in 1956, resulting in some ASM/SM receiving lower pay than Commercial Clerks. The employees claimed this constituted discrimination violating Article 14 and sought equalisation of pay. The Andhra Pradesh High Court had held that the two groups were substantially alike and ordered the pay to be adjusted, a view later affirmed by the Madras High Court. The Supreme Court examined whether the two categories formed a single class for equality purposes and whether the differential treatment was permissible. It held that Commercial Clerks and ASM/SM are distinct categories, so the pay differentials do not amount to unconstitutional discrimination, and set aside the legal principle of the Andhra Pradesh High Court while leaving the actual emoluments already awarded untouched. Consequently, the Union of India's appeal succeeded and the special leave petitions were dismissed.

Issues considered

Whether the revision of pay scales that resulted in higher remuneration for Commercial Clerks than for Assistant Station Masters/Station Masters violates Article 14 of the Constitution.
Whether Commercial Clerks and Assistant Station Masters/Station Masters constitute a single class for the purpose of equality jurisprudence.
Whether employees promoted from Commercial Clerks to ASM/SM can claim increments under the New Deal that they would have received had they remained Commercial Clerks.
Whether the legal principle laid down by the Andhra Pradesh High Court should be set aside while preserving the actual emoluments awarded.

Subjects

Article 14EqualityDiscriminationRailway ServicePay scalesCivil serviceJudicial reviewClassificationEmployment law

Judgment

(
1200

A UNION OF INDIA & ORS. ETC.
v.
E. S. SOUNDARAJAN ETC.
. April 4, 1979

B [V. R. KRISHNA IYER AND V. D. TULZAPURKAR, JJ.]
Sen'ices-Railway Service-Two categories Cornmercial Clerks and Assistant
Station Masters/Station Masters-Pay scales substantially siniilar but higher
limit fur ASM/SM-Commercial Clerks becoming ASMJSM-Revision of set~
uµ by Governnient to provide Opportunity j.ar increment for Commercial Clerks
-Comrnercial Clerks who became ASM/SM Sustaining loss in pay-Validity
and per1nissibility of revision.
The MSM Railway, one of several British Indian Companies, V.'as merge.J in
rhc Indian Railways. Th'e employees under the MS~1 Railway, who con~citLI~,;d
the respondents, fell in two categories namely Commercial Clerks and ~Ai..ssistant
Slation Masters/Station Masters. The pay-scales at the va.rious grades were subs.
tantially similar, although at the high'er levels the Assist.ant Station Masters/
Station Ma.sters had higher scales of pay. In 1930 and thereafter several Cvm-
D mercial Clerks went over and became Assist,ant Station !v1asters/Station ~fa&t.:r5
and to some exfent they enjoyed certain advantages on this score, an4 contina~d
to work out their respective fortunes in the administrative service on the basis
of the then rules and scales- of pay. As 90 per cent of these posts \Vere occupied
by the lowest category, ·and there was long stagnation the appellant, Union of
India around 1956 felt that there was need for revision of the set-up and with
a view to give more relief and opportunities for increments to the Commercial
E Clerks, revised the pay scales, which was called the New Deal. When the New
Deal was brought in some Assistant Station Masters/Station Masters found that
nltliough they were senior to certain Commercial Clerks at the early stages, their
pay became less than that of Commercial Clerks.
Being aggrieved, they agitated their grievances before the Andhra Pradesh
High Court. That High Court took the view that Commerci>i Clerks and ASM/ .f-<
F SM were substantially treafed alike and when certain disparities and emoluments
arose on account of the New Deal discrimination ensued. The special leave
petitions to this Court a.gainst this judgment were dismissed.
Certain employees also assailed the New Deal in the Madras High Court and
the High. Court observed that though it was not possible to agree with the view
of the Andhra Pradesh High Court it had to be followed as the said decision hoJ
became final.
G
In the appeals to this Court, it was argu'ed on behalf of the appellant that the
Madra.s High Court bad expressly dissented from this reasoning of the Andhra
Pradesh High Court and contended that Commercial Clerk and ASMs/SMs fall
into two different categories and on. the basis of the rulings of this Court there
could not be any case of discrimination when distinct categories in Government
service had different treatment in th'e course of the service, and olily such of the
H employees as had a chance of going up in emoluments or drawing increments
attributable to the New Deal could claim the b'enefits or advantages under the
decision of the Andhra Pradesh Hi~h Court. On behalf of the respondents, it
UNION V. E. S. SOUNDARAJAN I201

was argued that the second decision of the Andhra Pradesh High Court was A
correct and that th'e illustration given by the High Court graphically to cla.rify
its conclusion was realistic and correct.

HELD· : 1. It is not possible to -agree with the conclusion reached by the
Andhra Pradesh High Court so long as Commercial Clerks and ASMs/SMs fall
into two different categories. The well~'established proposition is that there can-
not be ai case of discrimination merely because fortuitous circumstances arising B
out of some peculiar developments or situations create advantages or disadvan-
tages for one group or the other although in the earlier stages they were, more
or less alike. If one class has not been singl'ed out for special treatment, the
\. mere circumstances of advantages accruing to one or the other cannot result in
breach of Article 14 of the Constitution. [1204E-Gl

ReserFe Bank of India v. N. C. Paliwal & Others [1977] I S.C.R. 377, C
referred to.

2. The employees (ASM/S1.fs) \Vho, had they continued as Commercial
Clerks would not have had any increments on account of Lhe New Deal, could
not claim such increments on the basis of the Andhra Pradesh High Court deci-
sion. All that the said decision sought to do was to see that ASMs /SMs were
not prejudiced m'erely by leaving their earlier position as Commercial Clerks. It D
did not put then1 in a better position than they would have, if they had continued
as Commercial Clerks. [1205H, 1206A] ·

3. The emoluments that the respondents in the appeals as well as the special
leave petitions will draw will not be affected. Those not before the Couft will
not be entitled to amelioratory relief. [1204G-H, 1205A]

4. The Andhra Pradesh decision will prevail while the law laid down by the K
said decision will stand set aside. [1205C].

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 481482
of 1975.

Appeals by special leave from the Judgment and Order datec: F
9-1-1974 of the Madras High Court iil Writ Petitions Nos. 84 and
1454 of 1971.

AND
Civil Appeal No. 2165 of 1977
Appeals by special leave from the Judgment and Order dated G
27-8-1975 of the Andhra Pradesh High Court in W.P. Nos. 946174,
1484174, 3563/74, 5084174 and 6739174.

AND
Civil Appeal No. 2165 of 1977
H
Appeal by special leave from the Judgment and Order dated
2-9-1974 of the Andhra Pradesh High Court in W.A. No. 127174.
1202 SUPREME COURT REPORTS (1980] 2 S·C.R. •

A WITH
Special Leave Petition (Civil) No. 4029 of 1977

From the Judgment and Order dated 14-12-1976 of the Andhra
Pradesh High Court in Writ Appeal No. 108176.
B
Soli J. Sorabjee Addi. Sol. Genl. for the Appellants in CA Nos.
481-482 of 1975.

R. B. Datar, E. C. Agarwala and Girish Chandra for the Petitioners
in SLP 4029 /77.
C M. K. Ramamurthy and Ambrish Kumar for the Respondents.

B. Kanta Rao for the Respondent in CA Nos. 416-420177.

K. R. Choudhary for Respondents in SLP 4029/1977.
The Judgment of the Court was delivered by

KRISHNA IYER, J. The main appeal with which we are concerned
in this batch of civil appeals (and special leave petitions whose fate
will depend on the decision in the civil appeals) is one where a Railway
employee successfully challenged the refusal to pay certain emoluments
by the Union of India in the Madras High Court. His writ petition
E in the Madras High Court was in the wake of similar one in the Andhra
Pradesh High Court a few years prior thereto. The decision of the
Andhra Pradesh High Court had become final, especially because the
·special leave petition filed by the Union of India challenging it had
been dismissed by this Court. The Madras High Court considered the
reasoning given in the Andhra Pradesh decision and was inclined to
F 'lissent from it, but felt that the CO'nsequences of divergent decisions in
the two High Courts might lead to anomalise and should, therefore, be
avoided. The High Court expressed itself thus :

"With respect to the view of the Andhra Pradesh High
Court, we are unable to agree with it. ............... .
G But the decision of the Andhra Pradesh High Court has creat-
ed a peculiar situation. The result of giving effect to it, as the
Department is bound to give effect to that judgment which
has become final is that employees like the petitioners in the
Railway service in the Andhra Pradesh Area will be treated
differently from the petitioners, who are in every way similar
H
to them except for the region in which they happen to work,
in the matter of pay-scales and other matters."
tJNION v. E. s. SOUNbERAJAN (Krishna Iyer, !.) 1203

Having regard to this odd potential consequence, the High Court of A
Madras fell in line with the Andhra Pradesh High Court and upheld
the writ petitioners' claim.
A fe ,,; facts, minimally necessary to bring out the two questions of
law urged before us by the aggrieved Union of India, may now be
narrated. We are concerned with the MSM Railway, one of those
British It1dian companies, since merged in the Indian Railways. The 11
employees under the MSM with whom we are concerned fell in two
categories, namely, Commercial Clerks and Assistant Station Masters/
Station Masters. Their pay scales, at the various grades, were substan-
tially similar although at the higher levels the Assistant Station Masters/
Station Masters had higher scales of pay. It was found at the lowest
levels in the two categeries of posts, there was long stagnation since
c
around 90 per cent of these posts were occupied by the lowest catego-
ries. The Union of India, around 1956, felt that there was need for
revision of this set-up and with a view to give more relief and opportu-

r nities for increments to the Commercial Clerks at the most conjesteJ
levels, produced what has been called the New Deal. We may make D
it clear that the New Deal covered not merely Commercial Clerks and
Asstt. Station Masters and Station Masters but also applied to other
- categories in the Railway service. The particular problem which con-
fronts the Court now alone need be mentioned. That is why we arc
focussing attention on Commercial Clerks and ASM/SMs.
Way back in 1930 and from then on, several Commercial Clerks E
went over and became Asstt. Station Masters/Station Masters and to
some extent they enjoyed certain advantages on this score. They con-
tinued to work out their respective fortunes in the administrative ser-
vice on the basis of the then rules and scales of pay. When in 1956,
the New Deal was brought in some Asstt. Station Masters/Station
Masters found that although they were senior to certain Commercial F
Clerks at the early stages, their pay became Jess than then of Commer-
'•
cial Clerks. This, according to them, was unequal treatment of equals.
It was on this grievance that with a constitntional veneer some of those
employees moved a writ petition in the Andhra Pradesh High Court.

r
That High Court took the view, right or wrong that Commercial Clerks
and ASMs/SMs were substantially treated alike and when certain dis- G
parities in emoluments arose on account of the New Deal, discrimina-
tion ensued. On the basis of this logic the High Court directed as
follows:
'Tn the result, the writ petitions are allowed and the
respondents are directed to fix the pay of the petitioners in H
their present cadre so as not be less than the pay they would
have drawn if they had been in the cadre of Commercial
1204 SUPREME COURT REPORTS (1980] 2 S.·t~R.

A Clerks from which they were promoted, to be effective from
the date of the implementation of the New Deal. The
petitioners will get their costs. Advocate's fee Rs. 250/-
(Rupees two hundred and fifty only). One set."

The learned Additional Solicitor General, appearing for the Union
B of India, pointed out that the Madras High <:;ourt expressly dissented
from this reasoning and fnrther contended before us. that Commercial
Clerks and ASMs/SMs fall into two different categories and on the basis
of th!" rulings of this Court there could not be any case. of discrimina-
tion when distinct categories in Government service had different treat-
ment in the course of the service. He cited before us a series of deci-
··~
c s10ns, the earliest of which was reported in [1963] 3 SCR. 809 (at
817, 823 and 824). Indeed a series of other decisions right down to
(1977] 1 SCR 377 at 389 have taken the view that even though two
categories may be close cousins they are quite distinct. There cannot
be any discrimination spelt out merely bec.ause they have been dealt
with in regard to their salary scales or other conditions of service diffe-
D rently. Equality postulates identity of the class and once that is absent,
discrimination cannot arise. This argument appeals to us and we are
not prepared to agree with the conclusion reached by Andhra Pradesh
High Court so long as Conunercial Clerks and ASMs/SMs fall into two
different categories-and this seems to be plain and is contained in the
narration of facts by the Andhra Pradesh High Court as weII as the
E
Madras High Court. It is equally important to remember the well-
established proposition that there cannot be a case of discrimination
merely because fortuitous circumstances acising out of some peculiar
developments or situations create advantages or disadvantages for one
group or the other although in the earlier stages they were, more or
F less, alike. If one class has not been singled out for special treatment,
the mere circumstance of advantages accruing to one or the other
cannot result in breach of Article 14 of the Constitution. On this basis
we should agree that the reasoning of the High Court of Madras and so
declare the Jaw correctly.

G Indeed the Madras High Court has also gone this for but has dec-
lined to reverse the result reached by the Andhra Pradesh High Court.
We have earlier extracted the reason which weighed with the Madras
High Court in doing so. We too feel likewise. The only persons who
claim benefits on the basis of the Andhra Pradesh decision are those
before this Court at the various civil appeals and special leave petitions
H and no more. They are some-where around 547 or so. The exact
figure is not necessary for us to mention except to make it plain that
no one who is not before this Court now wiII be entitled to the arneliora·
UNION v. E. s. SOUNDARAJAN (Krishna Iyer, !.) 12 0 5

tive relief that we propose to give largely induced by the realism when A
appealed to the Madras High Court.
Having heard counsel on oth sides on this aspect, we direct that
while the Jaw has been declared by us and it in effect reverse the
,. position taken by the Andhra Pradesh High Court, the emoluments that
the respondents in the appeals as well as the special leave petitions B
will draw will no! be affected, subject of course to our observations
regarding the second point urged by the last Additional Solicitor
General.
We thus make it clear that the net result of the Andhra Pradesh
decision will prevail while the law laid down by the said decision will
stand set aside. c
Now we proceed to the second point nrged before us by Shri Soli
J. Sorabjee. This takes us to the second decision of the Andhra Pradesh
High Court. Certain events ensued after the first decision rendered by
the Andhra Pradesh High Court. The employees who were beneficiaries
under that decision sought a clarification of the decision with which D
the Union of India did not agree. Therefore, a second writ petition was
filed where the High Court again went into the construction of the
concluding or decretal portion of the first decision of the Andhra Pradesh
High Court.
Here again we do not agree with the conclusion reached by the
E
High Court because its reesoning appears to us to be fallacious. The
rive! contentions bearing on the interpretation o~ the first decision may
be briefly stated before we express our opinion. The whole grievance
of the employees concerned was that had the aggrieved Commercial
Clerks not become Assistant Station Master or Station Masters tl1ey
would have got the benefit of the New Deal and thereby got increased F
emolnments. This should not be denied to them merely because they
had gone over to the category of Assistant Station Masters/Sfation
Masters. The necessary consequence is that only such of them as had
a chance pf going up in emoluments or drawing increments attribu-
table to the New Deal could claim any benefits or advantages under
the decision of the Andhra Pradesh High Court. This was the conten- G
tion pressed before us by Mr. Soli J. Sorabjee. On the other hand, Mr.
M. K. Ramamurthy, appearing for the employees-counsel for the others
similarly situated have adopted his arguments-argued before us that the
2nd decision of the Andhra Pradesh High Court was correct and that
the illustration given by the High Court graphically to clarify its con-
clusion was realistic and correct. We do not go into it in greater detail B
because we are cl$r in our mind lhat the employees (ASMs/SMs)
who, had they continued as Commercial Clerks would not have had
1206 SUPREME COURT REPORTS [1980] 2 S.C.R.

A any increments on account of the New Deal, could not claim such
increments on the basis of the Andhra Pradesh High Court decision.
All that the Andhra Pradesh decision sought to do was to see that
ASMs/SMs were not prejudiced merely by leaving their earlier posi-
tion as Commercial Clerks. It did not put them in a better position
than they would have if they had continued as Commercial Clerks. On
B this footing, we disagree with the decision of the Andhra Pradesh High
Court in the second round which was rendered in a clarification of the
conclusion in the first decision.
Pragmatism here again dictates the ultimate relief we propose to
give. Assuming the clarification by the Andhra Pradesh High Court
c to be wrong-and it is in the light of what we have stated above-an
intricate calculation will have to be made about things of long ago and
a restructuring of the little benefits each one draw would have to be
worked out. We do not think that this is w,orth the candle especially
having regard to the fact that the employees belonging to the lower
category and their emoluments are far from enviable.
D
We, therefore, uphold the law as contended for by the Union of
India, but decline to interfere with the cash results and emoluments
that the employees/respondents have been held entitled to under the
decisions of the Andhra Pradesh High Court and the Madras High
Court. We dispose of the appeals and the special leave petitions as
Ii; above. No costs. The Union of India will implement the directions
given by the High Court concerned within six months from today.

N.K.A.