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Vatakkeveedu Chami Gopalkrishna Vs. the Life Insurance Corporation of India - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 707 of 1969 and Miscellaneous Petition No. 707 of 1968
Judge
Reported in(1969)71BOMLR577; 1969MhLJ921
AppellantVatakkeveedu Chami Gopalkrishna
RespondentThe Life Insurance Corporation of India
DispositionAppeal dismissed
Excerpt:
constitution of india - article 226 - life insurance corporation of india--whether writ can be issued against corporation-life insurance corporation act (xxxi of 1956).;a writ under article 226 of the constitution of india cannot be issued against the life insurance corporation of india constituted under the life insurance corporation act, 1956.;it is not possible to regard the corporation as an entity discharging any public authority or public duty. the work that it does is the business of life insurance, though it is constituted by a special act. it is entitled, in the doing of its business, to engage workers as and when necessary, but the relations between the workers and the corporation are the same as between the workers and any other incorporated limited company.; paresh chandra..........no. 1 in the present case is the life insurance corporation _of india constituted under the life insurance corporation act, 1956 (hereinafter referred to as the act of 1956) and has the monopoly of doing life insurance business in the country. appellant no. 1 is a class iii employee and appellant no. 2 is a class iv employee of respondent no. 1. on january 29, 1965, an agreement was entered into between the all india insurance employees association and respondent no. 1 for a temporary increase in the dear-ness allowance with effect from august 1, 1964. by this agreement an additional amount of temporary dearness allowance equal to eight per cent, of the basic salary in respect of class iv employees governed by the regulations, and equal to six per cent, of the basic salary in.....
Judgment:

Patel, J.

1. This is an, appeal under Clause 15 of the Letters Patent against the judgment of Mr. Justice K. K. Desai dismissing the petition of the appellants filed on the Original Side.

2. Respondent No. 1 in the present case is the Life Insurance Corporation _of India constituted under the Life Insurance Corporation Act, 1956 (hereinafter referred to as the Act of 1956) and has the monopoly of doing life insurance business in the country. Appellant No. 1 is a class III employee and appellant No. 2 is a class IV employee of respondent No. 1. On January 29, 1965, an agreement was entered into between the All India Insurance Employees Association and respondent No. 1 for a temporary increase in the dear-ness allowance with effect from August 1, 1964. By this agreement an additional amount of temporary dearness allowance equal to eight per cent, of the basic salary in respect of class IV employees governed by the Regulations, and equal to six per cent, of the basic salary in respect of class III employees governed by the said Regulations, based on eight points of the AH India Working Class Consumer Price Index was agreed to be paid. It was to be paid until the expiry of the said settlement or upto the time the 1960 base index figures were available whichever was earlier. Under Clause 9 of the agreement the period of settlement was to be from January 1, 1965, for two years. Thereafter, in exercise of its powers under Section 49 of the Act of 1956 the Corporation framed a regulation giving effect to the said settlement. The regulation was to be effective from August 1, 1964, for the same period as originally provided in the settlement. It appears that the base index figures were published in October 1968. Until this date the dearness allowance continued to be paid as per the settlement, though the period of settlement had ended. On November 18, 1968, the head office issued a circular directing that payment of the allowance should be stopped from November 1968 salary and thereafter. As to the amounts already paid for the months of September and October the recovery was to be held in abeyance until further directions.

3. By this petition the petitioners challenge the said circular and pray that this Court issue a writ of mandamus directing respondent No. 1 to continue to pay the dearness allowance which was being paid under the regulation. The argument is that even though the settlement was temporary, if after the expiry of the said period the same amount continued to be paid, it would become part of the service conditions and respondent No. 1, therefore, could not effect any change in the service conditions by stopping the payment except by giving a proper notice under Section 9A of the Industrial Disputes Act of an intended change. Inasmuch as no notice was given the action of the Corporation was illegal.

4. Mr. Justice K. K. Desai dismissed the application holding that a writ cannot be maintained against respondent No, 1 as decided by a Division Bench of this Court, of which I was a member, in Pramodrai Shamaldas v. L. I. Corporation (1968) 71 Bom. L.R. 288.

5. That case arose out of an order of dismissal of an employee by the Manager of the Corporation. The employee challenged the action by a petition to the Court. After referring to the decision in Electricity Board, Rajasthan v. Mohan Lal : (1968)ILLJ257SC and the cases there referred to, Ram Babu v. Divl. Manager, L.I.C. : AIR1961All502 , S.R. Tewari v. Dist. Board, Agra : (1964)ILLJ1SC , Life Insc. Corporation v. Simil Kumar A.I.R. S.C. 847, we held that the application could not be entertained. The reason is this. That though Articles 226 and 227 of the Constitution are widely worded and speak amongst others of 'any person', the High Court can issue writs and orders against such authorities against whom visually writs have been issued from time immemorial. In appropriate cases such writs could be issued against any authority to keep it within the bound of its jurisdiction or to prevent abuse of its powers. The writs can, however, be issued against a public authority only. Since the Corporation cannot be regarded as an authority, no writ ought to issue. In that case, the question raised was whether the petitioner had been wrongly dismissed by the Corporation. On the footing of the principle stated above, the writ was refused.

6. It is argued before us that even if the Corporation' is not an authority, it is still a public body in the sense of a public Corporation exercising powers for the benefit of the public and a writ ought to issue in appropriate cases in order to prevent its committing breaches of the rules and laws.

7. It is argued that the regulations framed under the said Act are law and a breach of a regulation is breach of law. In support, reliance is placed on Naryanaswamy v. Krishnamurthi [1958] Mad. 513: A.I.R. [1958] Mad. 343. This was an appeal against an order of the Election Tribunal and the question that came up for discussion before the learned Judge was, whether an employee of the Life Insurance Corporation of India held an office of profit under the Government of India within the meaning of Article 191(1)(a) of the Constitution. The Court held that he was not holding an office of profit under the Government of India. But, it further observed that the regulations framed by the Corporation by virtue of its powers vested in that behalf under the Act prohibiting the employees from standing for election constituted a law, which operated to disqualify its employees from standing for election within Article 191(1)(e) of the Constitution. The decision is not apt. Even private citizens are bound by law enacted by the Parliament. In this case, once the regulations are framed they bind both parties. On the other hand, the Court after analysing the provisions of the Act rejected the contention of the Advocate General that

As carrying on the business of insurance involved commercial operations, the department had to be conducted on business and commercial lines, making the concern subserve the economic needs of the people of the State and -with a policy co-ordinated to the economic purpose and the social objectives which the Government had in view. Parliament created a Corporation for carrying on this business, but notwithstanding that in form a new legal entity was created, still it was virtually a department of Government, with the result that the Corporation was the servant of the State and the employees of the Corporation were the employees of the State, (page 521).

The Court held that the Corporation was not a department of the State (page 536) nor a servant or agent of the Government (page 538).

8. Then we are referred to Christopher Pimento v. Life Ins. Corporation (1957) 60 Bom. L.R. 318. In that case the petitioners asked for a writ directing the Corporation to cancel or withdraw or forbear from implementing or giving effect to or in any way enforcing the alterations in the terms and conditions of service of the petitioners and further directing the Corporation to give effect to the awards, settlements and agreements there referred to between the various Companies and the employees. Before the learned Judge two contentions were raised by the counsel for the Corporation: (1) that a writ ought not to be issued and that an alternative remedy by way of a dispute under the Industrial Disputes Act and the Payment of Wages Act was available to the employees. In answer to this contention, the learned Judge observed, as regards the first contention, that the powers of the Corporation and of the Central Government were sought to be challenged by the petition and, therefore, the issue of a writ was the proper remedy for the purpose and that the raising of a dispute under the Industrial Disputes Act or the Payment of Wages Act was not an adequate remedy. As the action of the Central Government was challenged, the Court would have been justified in issuing the writ (page 322). It may be stated that in that case the writ was asked against the Central Government also.

9. We have been referred in this connection to Halsbury's Laws of England, Third edn., Vol. 11, p. 84, para. 159. The statement of the law reads thus:

The order of mandamus is an order of a most extensive remedial nature, and is, in form, a command issuing from the High Court of Justice, directed to any person, corporation, or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duly. Its purpose is to supply defects of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual.

(Italics are ours.)

In the present case the condition that what is sought to be enforced is in the nature of a public duty is wanting-. Particular reliance is placed on para. 166 where it is said, 'A mandamus will lie commanding the delivery up of public books and papers; for example to the clerk of a trade corporation to deliver up the corporation's books on his removal'. In the foot-note the following cases have been referred to: Rex v. Wildman (1730) 2 Stra. 879, R. v. Clapham (1751) 1 Wils. 805, s.c. 95 E.R. 632 and R v. Fox (1838) 1 Will. Woll. & H.4. In Rex v. Wildman a mandamus is stated to have been granted to a clerk to deliver books of the Blacksmith's company after his removal from office. Probably it was a chartered guild exercising some powers. Except the statement of this fact, we do not find anything else. There are no reasons and the cases referred to in the foot-note relate to a clerk of the turnpike and town clerks. Even the facts are not stated and it seems, the move for mandamus was made by the State. It is difficult to regard it as authority for the proposition that the writ can be issued to any one irrespective of whether he discharged a public duty. On the other hand, in R. v. Clapham mandamus was issued to an overseer of the poor. In the last case an overseer on expiry of his office was asked to deliver up the books of the Parish Corporation to his successor, and the argument that 'the obligation whether the law imposed upon an overseer to give up the books to his successor is a public duty and if it is not performed, this is the only appropriate remedy (Stat. 17 Geo. II. e. 38, Section 1)'' was accepted.

10. Reliance is then placed on Carlsbad M. W. Mfg. Co. v. II. M. Jagtiani : AIR1952Cal315 . The question there was whether a writ of mandamus should issue to the General Manager of the East Indian Railway. The Railway is owned by a department of the Government and the Railway Manager is a Government servant, It was held that writ could be issued to the Manager and the only point was whether it could be issued for the purpose asked. This case has no application.

11. Reference is then made to K. P. C. Menon v. Divisional Manager : (1960)IILLJ424Mad and an unreported judgment in Paresh Chandra Roy v. Zonal Manager, Life Insurance Corp. decided on January 27, 1'969, by a single Judge of the Calcutta High Court. In the first case, Mr. Justice Rajagopala Ayyangar decided on merits against the applicant, but while referring to the objection that no writ should issue to the Corporation under Article 226 of the Constitution, the learned Judge said (p. 335) :

I should not be taken to assent to the proposition in such wide terms. In the decision in Naryanaswamy v. Krishnamurthi this Court has held that a disqualification provided for by the Regulation of the Corporation was a disqualification under a law made by Parliament under Article 191(1)(e) of the Constitution. If a regulation were such a law, and there is no doubt either that the Life Insurance Corporation is a public authority and if there was a violation on the part of such public authority to observe a law, I would be inclined to hold that a violation of the law contained in such a regulation could be the subject matter of proceedings in this Court under Article 226 of the Constitution and that a suitable remedy could be afforded to the person who had been injuriously affected by a violation of such a statutory provision.

This seems to be a prima facie view of the learned Judge and is no authority in support of the proposition. In Paresh Chandra, Roy v. Zonal Manager a writ was asked for on the basis of the settlement under the Regulations 'with which we are concerned in the present case as here, and the contention of the respondents that no writ should issue under Article 227 of the Constitution was summarily rejected. The learned Judge observed:.I am not impressed by this contention on behalf of the respondents. The Life Insurance Corporation of India is a statutory authority, and if this authority acts in excess of the powers conferred upon it by statute, this Court undoubtedly has jurisdiction to interfere and grant relief to the aggrieved party.

With all respect, we cannot agree with this conclusion of the learned Judge. We may state here that on merits the Court dismissed the petition. We have already held that it is not possible to regard the Corporation as an entity discharging any public authority or public duty. The work that it does is the business of life insurance, though no doubt it is constituted by a special Act. It is entitled, in the doing of its business, to engage workers as and when necessary, but the relations between the workers and the Corporation are the same as between the workers and any other incorporated limited company.

12. In Pramodrai Shamaldas v. L. I. Corp. we have discussed the question as to what is the position of the Life Insurance Corporation and applied the relevant tests formulated by the Supreme Court in the cases referred to by us. Mr. Buch places reliance on para. 9 of the judgment in Pramodrai Shamaldas v. L. I, Corp. but it is also misplaced. These observations are made to state the general effect of the law about the jurisdiction of the Court under Article 226 of the Constitution. These observations must be read in the context of what we have stated earlier in the case. Apart from the question whether the Corporation can be regarded as a State, it is clear from the judgment of this Court, that the Corporation is a trading body albeit created by a special Act and does not discharge any public duty as such according to the tests formulated by the Supreme Court and, therefore, no writ would lie.

13. We may refer in this connection to the observations of Kajamannar C. J. in In re Nagabhushana [1931] A.I.R. Mad. 249 which read thus (p. 260) :.But, as the language of Article 226(1) is very wide and refers to the issue of directions to any person for any purpose, logically, the creditor instead of filing a suit can straightway approach this Court for a direction to the debtor to pay him the money. As the only limitation contained in Article 226 is that the power is confined to the territories in relation to which this Court exercises jurisdiction, presumably any person in the State of Madras can approach this Court under Article 226 for a direction against any other person in this State for any purpose. This construction of Article 226 would practically abrogate the entire judicial system and the machinery set-up for the administration of justice in the State. We do not think that Article 226 should be construed in this manner in spite of the wide language on which the counsel relied.

In almost every case against the State this short cut of a writ is being adopted to avoid the delays of suit and appeal.

14. The appellants moreover have alternative remedy. It has been brought to our notice that the employees have raised an industrial dispute regarding clearness allowance and other allowances and it has been referred to a national Tribunal by an order dated November 28, 1968. It is argued that the Tribunal would not consider the question involved in the present case. That is not so, for presumably the Tribunal will consider the question of the amount of dearness allowance to be paid to the employees and also the date from which it should be paid, the interval between non-payment and reference being November 1 to November 28. It may be mentioned that the Calcutta High Court in Paresh Chandra Roy's case has dismissed the petition on merits, which arose out of the same facts.

15. Accordingly, the appeal fails and is dismissed with costs. The respondents are at liberty to withdraw the sum deposited.


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