LIFE INSURANCE CORPORATION OF INDIA & ANOTHER ETC. versus S.S. SRIVASTAVA & OTHERS

Citation: [1987] 3 S.C.R. 180 · Decided: 05-05-1987 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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LIFE INSURANCE CORPORATION OF INDIA & 
ANOTHER ETC. 
v. 
S.S. SRIVASTAVA & OTHERS 
MAY 5, 1987 
[E.S. VENKATARAMIAH AND K.N. SINGH JJ.] 
' 
Life Insurance Corporation of India (Staff) Regulations 1960-
-4' •
Retirement of Class I and Class II Employees appointed on or after 
September 1, 1956 at 58 years-Whether valid and legal. 
"#' 
Life Insurance Corporation Act, 1956--Section 11(2)-Fixation 
of 60 years as age of superannuation for transferred employees-
Whether unreasonable. 
Constitution of India, 1950-Articles 14 and 16-Different ages of 
D retirement for Class I and II Officers-Classification of employees into 
two categories for fixing of age of superannuation depending on dates of 
entry into service-Whether valid and legal. 
The Life Insurance Corporation was established 011 September 1, 
1956 under the Life l11Sura11ce Act of 1956 (Act 31 of 1956) by 
E amalgamati11g about 200 i11surers carrying on life insurance business in 
the country. It had no employees ofits own to carry on the vast business 
which had been taken over and the nature of the work was such that the 
Corporation required the services of employees with experience and 
expertise in running life insurance business. In order to meet the above 
need, Sectio11 11 ol'the Act came to be enacted. Sub-section (1) provided 
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that with e!Tect from September 1, 1956, every whole time employee of 
the erstwhile insurers would become an employee of the Corporation 
and hold oftice therein by the same tenure, at the same remuneration, 
and upon the same terms and conditioPS and with the same rights and 
privileges as to pension and gratuity and other matters as he would have 
held on September 1, 1956, had the Act not been passed. 
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The conditions of service of the employees whose services were 
transferred to the Corporation under Section U(l) were not uniform. 
The conditions governing the retirement of those employees were also 
diverse and dill'erent. In some cases the age of retirement had been 
fixed at 55 years, in some at 58 years and in some others at 60 years. In 
H many cases, the insurers had permitted their employees to continue in 
180 
L.I.C. v. S.S. SRIVASTAVA 
181 
their services even beyond 60 years depending upon their etliciency and 
physical capacity. 
For the purposes of rationalising the pay scales of the transferred 
employees, under sub-section (2) of Section 11 the Central Government 
was empowered to alter the terms of service of the employees as to their 
remuneration in such manner as it thought lit. The sub-section was 
amended by Acts 17 and 36of19S7. 
Clause (bb) of sub-section (2) of Section 49 conferred power on the 
Corporation to make regulations with the previous approval of the 
Central Government as regards 'the terms and conditions of service of 
persons who had become employees of the Corporation under sub-
section (1) of Section 11'. 
Under clauses (b) and (bb) of Section 49(2) of the Act, Begulations 
were framed prescribing the ages of retirement of the employees of the 
Corporation belonging to different categories with the previous 
approval of the Central Government and were incorporated in the Life 
Insurance Corporation of India (Stall) Begulations, 1960 made by the 
Corporation which came into effect on July, 1960. 
Under Begulation 19(1), all transferred employees were entitled 
to remain in service till they completed 60 years of age but the appoint· 
ing authority was empowered to retire any such transferred employee 
on completion of 55 years of age or at any time thereafter, if his elli· 
ciency was found to have been impaired. Under Regulation 19(2) emp· 
Ioyees appointed to the service of the Corporation on or after September, 
1956, were required to retire on completion of 58 years of age but the 
appointing authority was empowered to retire any such employee on 
completion of 55 years of age or thereatler if his elliciency was found to 
have been impaired. 
In the case of the transferred employees this regulation was made 
in conformity with the 'standardisation order' passed in respect of 
Class III and Class IV transferred employees. in whose case the age of 
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t retirement was fixed at 60 years. The result was that the regulation 
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made a clear and distinct classitication of all the employees of the 
Corporation belonging to all dasses into two groups-transferred emp· 
loyees and the employees appointed after September 1, 1956 for 
purposes of the age of retire
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