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Srinivasan (V.P.) Vs. Life Insurance Corporation of India (by Zonal Manager) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1966)IILLJ669Mad
AppellantSrinivasan (V.P.)
RespondentLife Insurance Corporation of India (by Zonal Manager)
Excerpt:
.....of application of the formula and that was really a matter which arose out of the categorization, in respect of which it is not denied by sri batan, learned counsel for the corporation, an appeal is available to the zonal manager.ordersrinivasan, j.1. the petitioner is a field officer in the life insurance corporation of india. he was formerly a branch manager in universal fire and general insurance company, ltd., drawing a salary of rs, 500 a month and conveyance allowance of rs. 150. prior to the enactment of the life insurance corporation act, which came into force on 1 september 1956, an emergency ordinance, followed by an act, had been passed, as a result of which the controlled business of an insurer was taken over by the government of india. a custodian had been appointed in respect of such controlled business, controlled business being that part of the business of the insurer which related to life insurance business only. as part of his powers, the custodian fixed the salary of the petitioner, the company.....
Judgment:
ORDER

Srinivasan, J.

1. The petitioner is a field officer in the Life insurance Corporation of India. He was formerly a branch manager in Universal Fire and General Insurance Company, Ltd., drawing a salary of Rs, 500 a month and conveyance allowance of Rs. 150. Prior to the enactment of the Life Insurance Corporation Act, which came into force on 1 September 1956, an emergency Ordinance, followed by an Act, had been passed, as a result of which the controlled business of an insurer was taken over by the Government of India. A Custodian had been appointed in respect of such controlled business, controlled business being that part of the business of the insurer which related to life insurance business only. As part of his powers, the Custodian fixed the salary of the petitioner, the company in which he had been employed being one which was doing composite business, that is to say, both life and general insurance. The Life Insurance Corporation Act called for a separation of the life business. Since it was the Intention of the relevant enactment to take over the services of the employees of the businesses affected by the legislation, it was necessary to fix the salary of such employees in respect of the life business. The Custodian accordingly fixed the salary of the petitioner at Rs. 350 and a conveyance allowance of Rb. 50 per month. This was done sometime in March 1966, After the Life Insurance Corporation came into existence, the petitioner was given an order of appointment stipulating those terms. He was informed by this letter that he had been provisionally appointed as inspector (field officer) in the Madras Division of the Corporation and that the appointment was subject to review and confirmation in due course. The petitioner protested, contending that he had been a branch manager of the company and that his status, emoluments and tenure had been altered to his prejudice by the order of appointment referred to. He could not however pursue his protests very effectively, for an implied threat of dire consequences was held over his head. In 1958, he preferred an appeal to the Executive Committee of the Corporation, his contention being that his rank, status and conditions of service had been altered in violation of Section 11(1) of the Life Insurance Corporation Act. To his knowledge, this appeal went unconsidered. He accordingly preferred another appeal in 1960, putting forward the same grounds. In addition, he pointed out that in the case of certain employees of another company which had also been taken over and who had been absorbed in the Corporation, their salaries and emoluments were maintained at the same level at which they stood when they were In the employ of the company, and contended that a like benefit should have been accorded to him. It may be mentioned, however, that in between these two dates, the petitioner had been informed by a letter dated 20 November 1959, that no appeal lay to the Executive Committee, for the reason that when he was absorbed in the Corporation on 1 September 1956 he was taken on as a field officer on the remuneration which he had been receiving from the company prior to the date of nationalization. He was also Informed that a special committee, which had been appointed to review the cases of ex-branch managers and other supervisory officers of the companies, had examined his case and that the recommendations in that regard confirming the earlier appointment of the petitioner as only a field officer had been approved by the Board of the Corporation. He was further informed that as against this approval of the Board, no appeal could lie to the Executive Committee which was only a subordinate body of the Board.

2. Subsequently again, as a result of a categorization scheme put into effect by the Corporation, the petitioner's salary and allowance were fixed out (sic) Court figures Briefly stated, this categorization scheme enabled the authorities to examine the work of the field officers for the period 1 September 1956 to 30 September 1957 or between 1 January 1957 and 31 December 1957 and Integrate them at a suitable level in the service of the Corporation. It is claimed by the petitioner that the application of this categorization scheme has been erroneously made. The order that fitted him in this categorization scheme further reduced his salary and emoluments and that order had been made by the Divisional Manager. Against the order of the Divisional Manager, an appeal lies to the Zonal Manager. The petitioner preferred such an appeal, but no decision has been given on that appeal till now. In these circumstances, the petitioner prays for the issue of a writ of mandamus to direct the executive authority and the Zonal Manager to dispose of the appeals.

3. In the counter-affidavit filed by the Life Insurance Corporation, the stand taken is that when the Corporation came into existence on 1 September 1956, it was competent to take over not (?) only the controlled business of the insurer and take over also the employees of the companies, who opted for such service. What Section 11 guaranteed was the right which the employee had in relation to his salary and tenure pertaining to the life business. The petitioner was the branch, manager of the company which was doing composite business. The Custodian, who derived his power under the emergency legislation, was competent to fix the salary of the petitioner in be far as the life business of the insurer was concerned, and the protection granted by Section 11 of the Act extended only to such salary as was fixed by the Custodian. The Life Insurance Corporation was not the authority which so fixed his salary. When the petitioner's services were transferred to the Corporation, ha could claim only such rights and privileges as he had immediately before the appointed date. The Corporation accordingly repudiated any liability in respect of such fixation of the salary of the petitioner at a time when the Corporation itself was not in existence.

4. After the petitioner became an employee of the Corporation, he was subject to the various rules and regulations. One of these is the Life Insurance Corporation (Field Officers' Alteration of Remuneration and other Terms and Conditions of Service Order, 1957. In accordance with the provisions of this order, the petitioner's salary and allowances were fixed. It is claimed that this order provides for no right of appeal. The Corporation, however, appointed a special committee to examine the cases of persons like the petitioner and the recommendations of the special committee were approved by the full Board. Against this decision, there can be no appeal, for no authority superior go the Board exists.

5. The counter-affidavit does not specifically deal with the appeal that was filed to the Zonal Manager in respect of the grievance which the petitioner felt on the application of the categorization order to him.

6. In a reply-affidavit, the petitioner points out that whether an appeal lies or not to the Executive Committee it is for the Executive Committee to say so and not for the officers of the Corporation to decide that question. He again insists that this has not been done; also, there has been no consideration of his last appeal to the Zonal Manager.

7. It is an unfortunate fact that though the matters in dispute arose in the year 1956, no quietus has been given to them till today. Though the Corporation has contended in its counter-affidavit that there has been an enormous delay on the part of the petitioner in approaching this Court and the discretionary relief should not be granted to him solely on the ground of delay, I am, by no means, convinced that this is a proper case in which the contentions of the petitioner can be dismissed on that basis. I shall therefore deal with the matter on the merits.

8. On one point at least there is no doubt that the Corporation's contention is well-founded. It is that the Corporation is not responsible for fixing the salary of the petitioner at a figure lower than what he was receiving from the company. As a statement of fact, its correctness cannot be, and is not, challenged by the learned Counsel for the petitioner. Prior to 1 September 1956, the controlled business of every insurer was taken over by the Government of India. A Custodian was appointed in respect of such controlled business and he was in charge of the controlled business on behalf of the Government of India. It was the Custodian purporting to exercise the powers on behalf of the Government of India who fixed the salary of the employees of the companies in so far as such employment related to the controlled business. If the petitioner was receiving a basic salary of Rs. 500 from the company, which was doing composite business, the Custodian, who took over only the controlled business, could fix the salary with regard to that part of the business at Rs. 350. Since the other part of the business was not taken over, presumably, the company would be liable to pay him the difference in salary. The validity of the action of the Custodian representing the Government of India tinder the emergency legislation in so fixing the salary of the petitioner in March 1956 cannot be questioned in these proceedings. The two appeals which the petitioner filed before the Executive Committee of the Corporation related only to the fixation of the salary of Rs. 350 by the Custodian. It was not an act of the Corporation which so fixed his salary. That being so, I am unable to see how the Corporation can be called upon to explain something which had happened prior to its own creation. It seems to me unnecessary to examine whether an appeal lies to the Executive Committee or not. Sri Kalyana-sundaram, learned Counsel for the petitioner, however, contends that it was the Life Insurance Corporation which issued him the order of appointment as a field officer in September 1956, fixing his salary at a particular figure. That being so, he contends that an appeal would lie to the Executive Committee, since the order of appointment proceeded from the Zonal Manager. I do not agree with this contention, for the Manager was only giving effect to the provisions of the Act. The provisions of the, Act declared that the services of the employees of the companies would be taken over on such terms and conditions as they enjoyed while in the service of the companies. It is manifest that on 1 September 1956 in so far as the controlled business is concerned, the petitioner was drawing a salary of Rs. 350 plus allowance as fixed by the Custodian. The Zonal Manager's order of appointment so called only recognized that position. The Zonal Manager representing the Corporation did not alter the salary or the terms and conditions of service of the petitioner in any way, and unless such an order had been made in the exercise of any powers vested in the Zonal Manager, the relevant staff regulations do not provide an appeal. Sri Kalyanasundaram has referred to these staff regulations. Regulation 42 states that an employee shall have a right to appeal against an order passed by a superior authority which injuriously affects his interests. Before he can found a claim on this regulation, ho must show that an order passed by a superior authority exists. As I have endeavored to point out, the order of appointment issued by the Zonal Manager in September 1956 only gave expression to what is contained in Section 11 of the Act. It was not an order passed by the superior authority against which a right of appeal can be said to exist.

9. Whether or not the petitioner can have any remedy with regard to the fixation of his salary by the Custodian is not a matter which I need consider here. It is abundantly clear from what I have said above that there being no order passed by an officer of the Corporation adversely affecting the salary or emoluments of the petitioner, the two appeals to the Executive Committee were wholly incompetent.

10. Sri Ratan rightly points out that when the controlled business of the insurers was taken over, there was a large number of persona holding offices bearing similar assignations, employed by the numerous companies. A company which was doing a very small business of a few lakhs per year might have a branch manager with a salary of, Bay, Rs, 200, A company whose volume of business runs into crores might have a branch manager with a much higher salary. In the case of the former, such a person would be virtually doing field work in canvassing business and the like, whereas, in the case of the larger concern, there would be other field officers while the branch managers would be entrusted exclusively with supervisory and organizational functions. When the businesses were taken over, It was impossible not to recognize these differences and the Corporation was, therefore, entitled to say in the case of one that he should be responsible for the field work and in the other, to entrust him with managerial functions. What Section 11 guaranteed were only the salary and the terms and conditions of service. When factually the petitioner must have been doing field officer's work, the Corporation, while taking over his services, gave him salary as it had been provisionally fixed by the Custodian, but called upon him to do the officer's work. That the Corporation was clearly entitled to do. Now, it appears that by reason of the large number of companies which were affected by the nationalization scheme, considerable difficulty was experienced in the case of fitting In the branch managers of the companies. There were apparently complaints that persons who occupied a superior status in the companies were not accorded a similar status in the Corporation. Accordingly, a special committee was appointed to review such cases. It may be mentioned that no provision of the Life Insurance Corporation Act calls for any such course to be adopted. It was purely as a measure of administrative expediency that the Corporation decided to examine the cases of all persons who claimed and have occupied supervisory or managerial posts in the companies, whether they should be placed in similar positions under the Corporation. It is not in dispute that the special committee which examined the case of the petitioner also came to the conclusion that he should be continued only as a field officer. A copy of the proceedings of the special committee has been placed before me. The recommendations of the special committee were accepted by the Board. But I must emphasize that neither these recommendations nor the approval by the Board of these recommendations gives any cause of action to the petitioner to move any appellate authority or this Court. His rights and liabilities became crystalized on 1 September 1956 and unless those rights had been affected adversely by any subsequent order, he cannot complain.

11. The prayer that a writ of mandamus should be issued to the Executive Committee accordingly fails and must be dismissed.

12. A similar question came to be examined by this Court In Writ Appeals Nos. 88, 92,101 and 140 of 1960. There the appellants had moved this Court for the issue of writs of mandamus to direct the Corporation to reinstate them to the same office with all the rights and privileges attached thereto respectively held by them In the various Insurance units before their integration into the Life Insurance Corporation of India. There also, those appellants had been occupying administrative or supervisory posts In the companies, but after the Corporation cams into existence, they were offered the position of field officers only. This Court dismissed their applications under Article 226 and their appeals were also rejected. A Bench of this Court held that no employee of an insurance company which has been taken over by the Corporation would have a vested right to any particular post and that It was competent for the Corporation which was entitled to organise its business to. fib In the various officers of the several Insurance companies taken over in such manner as it may consider proper, subject to safeguards provided in Section 11. The Bench also examined the Field Officers (Alteration of Remuneration and other Conditions of Service) Order and repelled the argument that the order was in any way unconstitutional. In particular, Rule 2 (c) of that order stated 'field officer' means

a person, whether designated as branch manager, branch secretary, assistant -branch manager, zonal agency manager or by any other name, who, before the first day of September 1956, was wholly or mainly engaged in the development of new life insurance business for the insurer, by supervising, either directly or through one or more intermediary, the work of persons procuring or soliciting new life insurance business and who were remunerated by a regular monthly salary and who became employees of the Corporation under Section 11 of the Act.

But the expression did not include

any person now in the employment of the Corporation as assistant branch manager, branch manager or in any higher capacity.

It would appear, therefore, that this order did not affect such of those persons who had been taken over by the Corporation as assistant branch managers or branch managers, but applied only to persons who on 1 September 1956 had been taken over as field officers, by whatever designation they might have been known when they were in the employ of the companies. This order was challenged as unconstitutional. The learned Judges did not agree. They, however, observed that since, in the case before them, there had been no investigation as to whether the appellants had occupied supervisory posts in the previous set-up, it would be open to agitate that question before the appropriate authorities. But they denied emphatically the claim of the appellants that they were entitled to be appointed as branch managers as of right.

13. In the present case, however, I am unable to agree that there is any scope for any re-examination of the position. Bo long as the absorption of the petitioner in the Corporation was not on terms different from what the petitioner was entitled to when he was in the service of the company, in so far as the controlled part of the business was concerned, he cannot ask by a writ for an examination of that position at the present time.

14. The other appeal to the Zonal Manager arises from the application of the Life Insurance Corporation of India (Fixation of Pay and Allowances of Field Officers) Regulations, 1957. According to this regulation, the work of the field officer is reviewed before fitting him in the service of the Corporation. It provides that where the work of a field officer has been of adequate standard, his basic pay in the scale of pay prescribed for field officers shall be so fixed that the basic pay so fixed together with the dearness allowance and the conveyance allowance admissible to him in the categorization order and these regulations is not lees than the total monthly remuneration to which he was entitled immediately before 31 August 1956. Where the work of a field officer has been either below or above the adequate standard, the Corporation may fix his back-pay at such a stage in the scale of pay prescribed as it may think fit. The categorization order provides for rules for such fitting in. That was presumably for the purpose of fixing their remuneration at the commencement of their service under the Corporation. The further terms and conditions of service and salary of field workers provide for allocation of areas to the field of lacers for granting increment in the salary-scale only on the basis of the appraisal of the field officer's work during the twelve months preceding the date on which the increment falls due, and further provide that in the case of unsatisfactory performance of duties or negligence or misconduct, his remuneration may be reduced or his services may be dispensed with after due enquiry. It appears that in accordance with this order, the performance of the petitioner for the period ending 31 December 1957 was examined and he was categorized fixing his salary, dearness allowance and conveyance allowance as provided in that order. He was also furnished with a copy of the categorization working sheet disclosing the basis upon which his salary, etc, were fixed, and he was informed that there was a right of appeal to the Zonal Manager on any matter arising out of categorization. In the appeal which the petitioner preferred to the Zonal Manager, however, he did not confine himself to the categorization and the fixation of his salary on the basis of the order referred to, but covered the whole ground starting from 1956, The contention of the Corporation has been that apart from matters which were not germane to the question, the petitioner purported to attack the very categorization order, which it was not open to him to do, particularly in the light of the decision in the writ appeals referred to. It was shortly contended by the Corporation that the appeal did not relate to any matter arising out of the categorization but was against the categorization order itself in respect of which an appeal is not provided for. Ignoring those parts of his memorandum of appeal which relate to questions which I have already dealt with in the earlier paragraphs, it is seen that the petitioner did in fact object to the figures on the basis of which his performance had been evaluated in fixing his pay and allowances. In Para. 6 of this appeal petition, it is stated:

Apart from the question of the validity of the categorization formula evolved by the Life Insurance Corporation of India and the legal aspects involved and without prejudice to the appellant's rights to question the validity thereof, the appellant refutes the inference in the letter under reference and the categorization sheet attached thereto that his performance of work as a field worker has come down for the periods ending 30 September 1957 and 80 December 1957 to 77 per cent and 75 percent respectively. The figures given are wrong.

15. Clearly, therefore, the petitioner questions the correctness of the method of application of the formula and that was really a matter which arose out of the categorization, in respect of which it is not denied by Sri Batan, learned Counsel for the Corporation, an appeal is available to the Zonal Manager. That his appeal with reference to this particular aspect has not been disposed of is also not denied by the learned Counsel. It would follow, therefore, that the petitioner is entitled to a writ of mandamus directing the Zonal Manager to dispose of the appeal without further delay.

16. The petitions are allowed only to this extent. In view of the considerable confusion created by the petitioner himself in mixing up tenable and untenable pleas, I see no reason to award any costs.

17. It has been brought to my notice that the arrears of salary due to the petitioner (covered by Writ Petition No. 1560 of 1964) have not been paid to him for the reason that he refused to furnish the receipt In the form required. The salary has been fixed in terms of the integration order. Subject to the result of the appeal to the Zonal Manager, the respondent is directed to pay the arrears and the future salary against a quietus receipt without any conditions attached thereto.


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