1980 (11) TMI 157 - SC - Indian Laws

Supreme Court affirms changes to LIC employee terms, upholding Regulation 58 and LIC Act authority.

THE LIFE INSURANCE CORPORATION OF INDIA Versus DJ. BAHADUR & ORS.

The Supreme Court upheld the validity of the new Regulation 58 and clause 9 of the 1957 Order, allowing for the alteration of terms and conditions of ... - Issues Involved:1. Validity and applicability of the new Regulation 58 and clause 9 of the 1957 Order.2. Interpretation of Section 11(2) of the Life Insurance Corporation Act (LIC Act).3. Relationship between the Industrial Disputes Act (ID Act) and the LIC Act.4. The effect of notice under Section 19(2) of the ID Act on the settlements of 1974.5. Constitutionality of the new Regulation 58 and clause 9 of the 1957 Order.Detailed Analysis:1. Validity and Applicability of the New Regulation 58 and Clause 9 of the 1957 Order:The High Court concluded that the new Regulation 58 and clause 9 of the 1957 Order were ineffective against the 1974 settlements under the ID Act. However, the Supreme Court found that both the new Regulation 58 and clause 9 were valid and effective. The Court held that Section 11(2) of the LIC Act grants the Central Government overriding powers to alter terms and conditions of service, including bonus, notwithstanding any settlement under the ID Act.2. Interpretation of Section 11(2) of the LIC Act:The Supreme Court interpreted Section 11(2) of the LIC Act to apply not only to transferred employees but also to all employees of the Corporation. The Court held that the power under Section 11(2) can be exercised more than once and is not limited to a single occasion. The deletion of the words 'from time to time' from the section did not restrict the Central Government's power to alter terms and conditions of service as needed.3. Relationship Between the ID Act and the LIC Act:The High Court viewed the ID Act as a special law overriding the LIC Act, a general law. The Supreme Court, however, held that the LIC Act, specifically Sections 11 and 49, is a special law concerning the terms and conditions of service of LIC employees and thus overrides the ID Act. The Court emphasized that the LIC Act contains specific provisions for altering service conditions, which take precedence over the general provisions of the ID Act.4. Effect of Notice Under Section 19(2) of the ID Act on the Settlements of 1974:The High Court held that the notice under Section 19(2) did not terminate the settlements but merely paved the way for fresh negotiations. The Supreme Court disagreed, stating that the settlements ceased to be binding after the notice period expired, and the new Regulation 58 and clause 9 of the 1957 Order validly altered the terms and conditions of service, including bonus.5. Constitutionality of the New Regulation 58 and Clause 9 of the 1957 Order:The Supreme Court found no constitutional infirmity in the new Regulation 58 and clause 9. The Court held that these provisions did not violate Articles 14 or 19 of the Constitution. The Court rejected the argument that the provisions discriminated against LIC employees or that they were an unreasonable restriction on their rights.Conclusion:The Supreme Court dismissed the appeal, affirming the validity of the new Regulation 58 and clause 9 of the 1957 Order, and held that these provisions validly altered the terms and conditions of service, including bonus, for LIC employees. The Court also clarified that the LIC Act, being a special law concerning the service conditions of LIC employees, overrides the general provisions of the ID Act.