THE GENERAL ASSURANCE SOCIETY LTD. versus THE LIFE INSURANCE CORPORATION OF INDIA

Citation: [1964] 5 S.C.R. 125 · Decided: 18-10-1963 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

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Judgment (excerpt)

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5 S.C.R. 
SUPREME COURT REPORTS 
125 
commence from the first day of April 1954. It is 
1963 
clear therefore that his tenancy was by the calendar 
month. It commenced on the first day of the month 
Raj Kishore 
and expired on the last day of the month. This 
Tewari 
period of monthly tenancy was in no way affected 
v. 
by the provisions of sub-s. (2) of s. 13 whose effect Govinda Ram 
was simply this that the sub-tenant instead of being 
Bhansa/i 
sub-tenant of the tenant who had been ejected, got 
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a direct connection with the landlord and became Raghubar Dayal 
his tenant-in-chief or, as the Act describes, tenant in 
J. 
the first degree. The statutory provision just brought 
about a change in the landlord of the sub-tenant. The 
proprietor-landlord took the place of the tenant-
in-chief from whom the sub-tenant had secured the 
tenancy. 
We are therefore of opinion that the High Court 
was right in rejecting the contention of the appellant 
with respect to the invalidity of the notice for eject-
ment dated March 19, 1957. The result is that the 
appeal fails and is dismissed with costs. 
Appeal dismissed. 
THE GENERAL ASSURANCE SOCIETY LTD. 
v. 
THE LIFE INSURANCE COR_PORATION OF 
INDIA 
(P.B. GAJENDRAGADKAR, K. SUBBA RAo, K.N. 
WANCHOO, J.C. SHAH AND RAGHUBAR DAYAL JJ.) 
Life Insurance Corporation Act, 1956 (31 of 1956), s. 7(1). If 
amounts representing dividends declared fall within 
"assets and 
liabilities" of controlled 
business--Compensation and paid up 
capital allocable for controlled business-Tribunals Jurisdiction to 
set off-Life Insurance Corporation Rules, 1956, r. 12A (iv) and (vi)-
Insurance Act, 1938 (4 of 1938)-Whether precludes challenge of 
certified balance sheets-Interest on compensation. 
On the enactment of the Life Insurance Corporation Act, 
providing for the nationalisation of life insurance business, the 
1963 
October 18 
126 
SUPREME COURT REPORTS 
[1964] 
1963 
controlled business i.e., the life insurance business of the appellant, 
a composite insurer, vested in the respondent-corporation. There-
The General As- after disputes arose between the appellant and the respondent 
surance Society in the matter of .ascertainment of the compensation payable to 
L d 
the appellant and m respect of mc1dental and consequential matters 
t · 
thereto. The respondent offered to pay the appellant towards 
v. 
compensation a certain amount after setting off the amount due 
The Life 
to it from the appellant in respect of part of the paid up capital 
Insurance 
of the controlled business and assets representing that part. The 
Corporation of appellant refused to accept this offer in toto. The dispute was 
India. 
referred to the Tribunal. The Tribunal ascertained the compensa-
tion payable to the appellant and set off against that amount the 
bala.nce of the amount due from the appellant towards the allocable 
paid up capital. Relying upon the books of account of the appel-
lant to find out whether the unpaid dividends of any share holder 
·of the appellant was the liability of one department or the other, 
the Tribunal held that the entire liability for the unclaimed dividends 
and assets appertained to the controlled business, and therefore, 
statutorily vested in the respondent. The Tribunal held that 
it had no jurisdiction to award interest on the amount of compen-
sation. On appeal by special leave, it was contended (i) that the 
Tribunal had no jurisdiction to decide on the question of the capital 
allocable to the controlled business as there was no dispute thereto 
between the parties and the said question was not referred to it; 
(ii) the liabihty of the appellant for the unclaimed dividends and 
assets equivalent to the liability were not transferred to and vested 
in the respondent under s. 7(1) of the Act, and (iii) that the appel-
lant would be entitled to interest on the amount of compensation 
payable to it and the Tribnnal had jurisdiction to award the same. 
Held: The dispute between the parties related not only 
to compensation, but to the set off also, that the dispute was re-
ferred to the Tribunal, and the Tribunal had jurisdiction to decide 
that dispute. A combined reading of els. (iv) and (vi) of r. 12A 
of the Rules under the Act makes it abundantly clear that a claim 
for set off is certainly covered by the wide phraseology of cl. (iv) 
of r. 12A. 
The calculations under r. 18(1) show that there is an integral 
connection between the compensation payable to the insurer

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