THE LIFE INSURANCE CORPORATION OF INDIA versus D. J. BAHADUR & ORS.

Citation: [1981] 1 S.C.R. 1083 · Decided: 10-11-1980 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed

Cited by 10 judgment(s) · cites 17 · see the full citation network in Lexace

Judgment (excerpt)

THE LIFE INSURANCE CORPORATION OF INDIA 
...,_ 
v. 
D. J. BAHADUR & ORS. 
November 10, 1980. 
[V. R. KRISHNA IYER, R. S. PATHAK & A. D. KOSl!AL, JJ.] 
Life Insurance Corporation Act (Act 31), 1956, sections 11, 23 and 49, 
scope of-Whether a general law or a special law-Industrial Disputes Act 
(Act 14) 1947, sections 9A, 19(2), (6), 18, 23, 29-0bject of the Act, award 
and settlement, distinction from the point of view of legal force-Whether a 
special legislation 
vis-a-vis Life 
Insurance 
Corporation 
Act-Annual caslr 
bonus payable to Class-Ill and Class-IV employees of the Corporation under 
·the settlement of 1974, e/Jecl o>f-Ejject of notice of termination of the settle-
ments by the Corporation 
under 
sections 9A 
and 19(2) of the Industrial 
Disputes Act and section 49 of the Life .Insurance Corporation Act-Constitu-
tion of India, 1950, Articles 12, 38, 39 and 43 and Regulation 58 of the Life 
Insurance Corporation of India (Staff) Regulations, 1960. 
The Life Insurance Corporation came into existence on the 1st of 
September, 1956, as a statutory authority established under the Life Insurance 
Corporation Act (Act 3 l), 1956. 
As 
from the 
said date all institutions 
carrying on Life Insurance business in India were nationalised to 
th~ extent 
of such busine:ss and their corresponding assets and liabilities were transferred 
to the Corporation. Section 11 of the Act provided for the transfer of service 
of those employees of such institutions who were connected with Life Insurance 
business immediately before the, said date to the Corporation and for some 
other matters. 
Section 23 of the Life Insurance Corporation Act gave to the 
Corporation the power to employ such number of persons as it thought fit 
for the purpose of enabling it to discharge its functions under the Act and 
declared that every person so empioyed or whose services stood transferred 
to the Corporation under section 11 would be liable to serve anywhere in 
India. Section 49 conferred on the Corporation the power to make regulation~ 
for the purpose of giving effect to the prnvisions of the Act with the previous-
approval of the Central Government. Sub-section (2) of that section enumerated 
various matters in relation to which such power was particularly conferred. 
·On 1st of June, 1957 the Central Government promulgated the Life Insurance 
Corporation (Alteration of Remuneration and other Terms ar.d Conditions 
of Service of Employees) Order, 1957 altering the remuneration and other 
terms and conditions of service of those employees of the Corporation whose 
service had been transferred to it under sub-section (1) of section 11. Clause 
9 of the 1957 Order declared that no bonus would be paid but directed that 
the Corporation would set aside an amount every year for expenditure on 
schemes of general benefit to the employees such as free insurance scheme, 
medical benefit scheme and 
other 
am~nities to 
them. On the 26th June, 
1959, the Central Government amended clause 9 of the 1957 Order 'SO as to 
provide that non-profit sharing bonus would be paid to those employees of 
the Corporation whose salary did not exceed Rs. 500 per month. 
On 2nd 
of July, 1959 · there 
was a 
settlement 
between the 
Corporation and 
its 
employees providing for 
paym~nt to them of cash ·bonus at the rate of It 
• 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[1981] 1 S.C.R. 
A 
months' basic salary for the period from the 1st September, _1956 to the 
31st December, 1961. 
In the year 1960 the Life Insurance Corporation of 
lndta (Staff) Regulations, 1960 were framed and Regulation 58 dealt \Vttb 
the payment of grant of no:1-profit sharing bonus to its employees. On 14th 
April. 1962 and 3rd August, 1963 orders were again issued, the effect of which 
WJ.5 to remove the Emit of Rs. 5'00 on the basic salary as a cor;dition of 
~Jiaihi1ity for payment of Lonu1. 
lhe seaiemeoi dated 2r:d July, 1959 was 
D 
foMow(d bv three o~hers \vhich were arrived at on the 29th January, 1963. 
the 20th June, 1970 and the 26th June, 1972, respectively aroJ each one of 
VJtii£h · provided for payment of bonus at a particular rate. 
Disputes between the Corporation and its workmen in regard to the 
latter's conditions of service were received by two settlements dated the 24th 
)antJdl)'• 1974 and the 6th February, 1974, arrived at in pursuance of the 
C 
provisions of section 18 read with section 2(p) of the Industrial Disputes Act. 
-The Corporation was a part

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