LIC OF INDIA AND ANR. versus CONSUMER EDUCATION AND RESEARCH CENTRE AND ORS. ETC.

Citation: [1995] SUPP. 1 S.C.R. 349 · Decided: 10-05-1995 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Dismissed
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Judgment (excerpt)

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·. 
r 
• 
LIC OF INDIA AND ANR. 
v. 
CONSUMER EDUCATION AND RESEARCH 
CENTRE AND ORS. ETC. 
MAY 10, 1995 
[K. RAMASWAMY AND N. VENKATACHALA, JJ.] · 
A 
B 
' Constitution of India Article 14-Clause in term insurance policy 
restricting it to persons employed in govemmen4 semi-government and reputed 
commercial fimis-Held, clause unconstitutional--/ndian Contract Act, 1872 · C 
S.23. 
Constitution of India Article 14-LIC floating term insurance policy 
with low premia but restricting availability to select class of persons-Held, 
unreasonable arbitrary and violative of Article 14. 
Constitution of India Article ii-Life Insurance policy-Held, ap-
propriate policy within the paying capadty of the insured is a social security 
measure to make right to life meaningful; .Held further, while insurer free to 
evolve policy based on brisiness principles, policy should be consistent with 
constitutional animation. 
Constitution on India Article 226-f'ublic law-Writ petition challeng-
ing clause in term insurance policy of LIC-Held, action of LIC bears public 
character with an imprint of public interest element; writ maintainabl..-l'rac~ 
lice and procedure. 
D 
E 
F 
Life Insurance Corporation of India (LIC) introduced a term iu-
surance policy under Table 58 for terms of 5, 6 and 7 years, with substan-
\ tially low rates of premium intended to cater to a larger section of the 
population in the urban and rural areas. At the end of the term, in the 
event of survival the assured would not get anything. In the event of death, G 
the nominee or the dependents would get the assured amount. However, 
LIC restricted this term policy only to "persons in government or quasi· .· · 
government or in the service of reputed commercial firms". When LIC 
turned down proposals for term insurance cover from the executive trustee 
of the first respondent and certain others, they challenged, by way of writ 
petitions in the Gujarat High Court the conditions imposed under Table H 
349 
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/ 
350 
SUPREME COURT REPORTS, (1995) SUPP.1 S.C.R .. 
A 58 as being arbitrary discriminatory and violative of Articles 14, 19 (1) (g) 
and 21 of the Constitution. While upholding the eligibility and other 
criteria laid down under Table 58, the High Court declared unconstitution· 
al and struck down that part of the conditions which restricted the term 
policy to a select class of persons. LIC as well as the writ petitioners 
B appealed to this Court. 
· 
LIC contended that its policies were framed on actuarial considera· 
lions and that the High Court was not justified in interfering "ith matters 
based ou economic criteria. The writ petitions seeking to enforce contrac· 
tual obligations were not maintainable. The respondents contended that 
C LIC had no power to impose any unconstitutional conditions in the con· 
tract; no classification much less a valid classification could be made of 
employees in government semi-government, organised sectors or reputed. 
commercial organisations on the one hand and those self· ·employed or in 
unorganised sectors on the other. 
D 
Dismissing the appeals, th~s Court 
. HELD : 1: The offending clause extending the benefit only to the 
salaried class in Government, semi-government and reputed firms is 
unconstitutional. The declaration given, therefore, is perfectly valid. The · 
E offending part is severable from the rest of the conditions. The rest of the 
conditions are valid and do not call interference. Subject to compliance 
with other terms and conditions, the appellant is free to enforce Table 58 
policy "ith all eligible lives. (382-C] 
" 
Gillespie Brother~ & Co. Ltd. v. Roy Bowles Transport Ltd., (1973] 
F ·Q.B •. 4oo; Central Inland Water Transport Corporation Ltd. v. Brojo Nath 
Ganguly, (1986] 2 SCR 278; D.T.C. v. D.T.C. Mazdoor Congress, (1990] 1 
Supp. SCR 142; V. Raghunadha Rao v. State of A.P. and Others, (1988) 1 
Andhra Law Times; National Textiles Workers' Union E.tc. v. P.R. Ramak· 
rishnan, (1983] 1 SCR 922; Workmen of Meenakshi Mills Ltd. v. Meenakashi 
Mills Ltd., (1992] 3 SCC 336; Consumer Education & Research Centre v; 
G Union of India, JT (1995); Dwarkanath v. Income Tax Officer, Kanpur, 
[1965] 3 SCR 536; Andi Mukta Trust v. V.R. Rudani, (1989] 2 SCC 691; 
Unni Krishnan v. State of A.P., (1993] 1 SCC 645; Hochitief Gammon v. 
State of Orrissa, [1975] 2 SCC 649; MJ. Sivanf and Ors. v. State of Kar-
nataka, SLP No. 11012/1991 etC. dated April 17, 199S; Pr~ga Tools Corpn. 
H v. CA. !manual,
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