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Khagendra N. Sen Sharma and ors. Vs. Life Insurance Corporation and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKolkata High Court
Decided On
Case NumberMatter No. 38 of 1958
Judge
Reported inAIR1959Cal785
ActsConstitution of India - Article 226; ;Life Insurance Corporation Act, 1956 - Section 11 and 11(2)
AppellantKhagendra N. Sen Sharma and ors.
RespondentLife Insurance Corporation and ors.
DispositionApplication dismissed
Cases ReferredThangal Kunju Musaliar v. Venkatachalam Potti
Excerpt:
- .....he was receiving before. the petitioners coming under this category would be entitled to receive dearness allowance if they were receiving the same before that date. it is not the case of the petitioners that they were receiving dearness allowance previously. therefore the entire claim of the petitioners is based on sub-section (2) of section 11, and they can only claim dearness allowance if the same is made payable by orders of the central government made under this provision of the act. it is stated that the central government by order no. 53(1)-ins. (1)/57 made in its ministry of finance, department of economic affairs, dated 30th september 1957 has made an order in terms of sub-section (2) of section 11 of the act. that such an order has been made is not denied. the relevant.....
Judgment:
ORDER

D.N. Sinha, J.

1. The petitioners were employed in various life insurance companies and became workers employed by Life Insurance Corporation of India after its incorporation. It is stated that the petitioners are now receiving basic monthly pay at various rates ranging from Rs. 50/- to Rs. 150/- per month. The complaint made in this application is that they are not being paid dear-ness allowance, although according to the orders made under the Life Insurance Corporation Act, 1956 (hereinafter referred to as the Act) they are entitled to receive the same. Reference has been made to Section 11 of the Act. Under Sub-section (1) of Section 11, every whole-time employee of an insurer, whose controlled business has been transferred to and vested in the Corporation, becomes an employee of the Corporation and would be entitled to the same remuneration and the same terms and conditions upon which he was being employed until his employment in the Corporation is terminated or until his remuneration, terms and conditions of service are altered by the Corporation according to the provisions of the Act. Sub-section (2) lays down how that alteration is to be made. I set out the provisions of Sub-section (2) below:

'Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms andconditions of service applicable to employees of insurers whose controlled business has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy-holders, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in Sub-section (1), or in the Industrial Disputes Act, 1947, or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions of service to such extent and in such manner as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination.'

It will appear therefore that so far as a worker is concerned who was employed by an insurer before he became employed by the Life Insurance Corporation, he was to receive and continue to receive remuneration at the rate that he was receiving before. The petitioners coming under this category would be entitled to receive dearness allowance if they were receiving the same before that date. It is not the case of the petitioners that they were receiving dearness allowance previously. Therefore the entire claim of the petitioners is based on Sub-section (2) of Section 11, and they can only claim dearness allowance if the same is made payable by orders of the Central Government made under this provision of the Act. It is stated that the Central Government by order No. 53(1)-Ins. (1)/57 made in its Ministry of Finance, Department of Economic Affairs, dated 30th September 1957 has made an order in terms of Sub-section (2) of Section 11 of the Act. That such an order has been made is not denied. The relevant provisions in the order are Clauses 5 and 11. These clauses are set out below:

'5. Scales of Pay and Allowances.

(a) All Field Officers shall be placed in the scale of Rs. 125-10-175-15-250-20-350-25-500.

Provided that such of the Field Officers whose total remuneration inclusive of dearness allowance, conveyances and other allowances, if any, did not exceed Rs. 150/- per mensem on 31-8-1956, shall be placed in the scale of Rs. 75-10-125 until such time as they qualify themselves for the scale of Rs. 125-10-175-15-250-20-350-25-500 in accordance with the criteria laid down by the Corporation in this behalf.

(b) In addition, all Field Officers shall be en-tided to dearness allowance according to the following scale:

Basic salaryDearness Allowance

Rs. 51 or more but less than Rs. 101Rs. 50Rs. 101 or more but less than Rs. 151Rs. 55Rs. 151 or more but less than Rs. 201Rs. 60Rs. 201 or more but less than Rs. 251Rs. 65Rs. 251 or more but less than Rs. 301Rs. 70Rs. 301 or more but less than Rs. 401Rs. 75Rs. 401 or more but less than Rs. 501Rs. 80,'

'11. Fixation of actual pay and allowances of a Field Officer in the scales prescribed.

The actual pay and allowances admissible to any Field Officer under the scale of pay specified in paragraph 5 shall be determined in accordance with such principles as may be laid down by the Corporation by regulations made in this behalf under Section 49 of the Act.'

2. That being the position, the question is as to whether under this order the respondents are liable to pay dearness allowance to the petitioners which they have not been paying. The case made on behalf of the respondents is not that they are not going to pay dearness allowance to the petitioners or the field workers generally. Mr. Chowdhury appearing on behalf of the? respondents has formulated his case thus: He says that under Clause 5(a), the scale of remuneration that is to be paid has been fixed, but the criteria by which existing field workers are to be fitted into that scale has not yet been determined. Further, under Clause (b) it has been distinctly laid down that the actual pay and allowances admissible to any Field Officer under the scale of pay specified in paragraph 5 shall be determined in accordance with such principles as may be laid down by the Corporation, by regulations made in this behalf under Section 49 of the Act. No such regulation has yet been made. It is therefore argued that until the criteria have been determined, and the regulations made, whereby the actual pay and allowances admissible to any field worker nave been determined, there is no liability on the part of the respondents to make payment of dearness allowance to the workers. Apart from this, a point has been taken about jurisdiction. It is said that this Court has no jurisdiction, because the head office of the Life Insurance Corporation of India is at Bombay and that is where the Respondent No. 3, the Chairman has his office. It is said that so far as the Zonal Manager and the Divisional Manager at Calcutta are concerned, they have nothing to do with the fixation of the scales and allowances and they are quite unable to make payments until the scales and allowances are fixed at the head office by the Board or such body as may be authorised to carry out those functions under the Act or the rules made thereunder. The point of jurisdiction, to my mind, is somewhat doubtful. On the one hand, the Supreme Court has laid down in Thangal Kunju Musaliar v. Venkatachalam Potti, : [1956]29ITR349(SC) that in such cases, location might give jurisdiction. The Life Insurance Corporation of India is not an itinerant body like the Election Commission but there is a permanent location within the State. It might therefore be argued that orders can be effectively made against it and this Court has jurisdiction. On the other hand, it may well be argued that under the Act it is the Board which can deal with fixation of scales and allowances and the Board as well as the Chairman of the Board have offices not within this State but outside. However, in view of my decision, it is not necessary to deal with this question of jurisdiction finally.

3. The point to be determined is whether regard being had to the order passed under Sub-Section (2) of Section 11 of the Act, the respondents are bound immediately to make the payments of dearness allowance to the petitioners. In my opinion, the contention of Mr. Chowdhury must be accepted. So far as Clause 5 of the order is concerned, it lays down the scales, but the criteria for fitting the existing Field Officers into that scale have still to be determined and are not laid down in Clause 5. Further, the existing pay has to be fitted into the scale of pay and allowances that will be determined under the Order. Take an example. Let us suppose that a Field Officer is now drawing Rs. 150/-. It does not mean that under the new scales of pay or allowances he is to get Rs. 150/- plus dearness allowance. First he willhave to be fitted into the scale and then his pay and allowances will have to be determined according to the scale and allowances laid down under the Order. The total amount may not come to Rs. 150/- at all, or if it does come to Rs. 150/-, it is not known what portion of it will represent his pay and how much his deamess allowance. Consequently, to order that he should be paid dear-ness allowance at any particular rate forthwith is impractical, and would be contrary to law. Mr. Dutt Majumdar on behalf of the petitioner has argued that an order may be made at least for payment of the minimum dearness allowance. A little thought will disclose that even that is not a practical proposition, because the question is not of determining merely the deamess allowance but also the pay. It is true that at least Rs. 50/- will be payable as dearness allowance, but surely, payment to thousands of workers cannot be made in that fashion without a proper determination of what the pay and dearness allowance will be under the new scale of pay and allowances. At least, it is impossible for this Court to compel the respondents to make payments in that haphazard fashion. '

4. It is clear to me therefore that the petitioners have not made out grounds for immediate intervention by the Court. On the other hand, it is to be expected that the Life Insurance Corporation will make up its mind at an early date, and the criteria required under Clause 5, or the regulations required under Clause 11, ought not to be deferred indefinitely, as this will cause and is causing great distress to field workers. As a matter of Fact, Mr. Chowdhury has stated that so far as the Calcutta office is concerned, it has drawn up its own schemes and forwarded them to the authorities and it is expected that the necessary rules and regulations will be published at an early date.

5. Lastly, Mr. Dutt Majumdar has pointed out that the authorities have been sending letters to some of the field workers stating they were entitled to payment of dearness allowance at certain rates and he states that this is a sordid discrimination between workers. Unfortunately, these letters were all disclosed in the affidavit-in-reply and consequently Mr. Chowdhury is not in a position to give. proper explanations to Court. Such matters ought to have been agitated in the petition and not in the affidavit-in-reply. It is therefore impossible to say what these letters mean and to deal with them.

6. The result is that at the moment it is not possible for the Court to interfere in the matter and this application must be dismissed. No orderas to costs.


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