Delegated legislation must stay within statutory purpose: the 1980 insurance pay revision scheme was held ultra vires and invalid.

Section 16(1)(g) permitted rationalisation or revision of pay scales and service conditions, but that power had to be read with the Act's preamble, Section 16(2), and the statutory scheme for merger or amalgamation of insurance companies. A delegated scheme unconnected with that legislative purpose could not be justified merely because it dealt with service conditions. The Court held that delegated legislation must stay within the policy and authority conferred by the parent Act, and the 1980 pay revision scheme was therefore ultra vires and invalid.

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Issues: Whether the 1980 general insurance pay revision scheme was within the Central Government's power under Section 16 of the General Insurance Business (Nationalisation) Act, 1972.

Analysis: Section 16(1)(g) permitted rationalisation or revision of pay scales and service conditions, but that power had to be read with the preamble, Section 16(2), and the scheme-making purpose disclosed in the legislative material. The statutory object was to provide for merger or amalgamation of insurance companies and to secure the existence of four effective companies; a scheme unrelated to that object could not be supported merely because it dealt with service conditions. The Court held that delegated legislation must remain within the legislative policy and cannot extend beyond the authority conferred by the parent statute.

Conclusion: The 1980 scheme was beyond the scope of the delegated power under the Act and was therefore invalid.

Final Conclusion: The petitions succeeded and the impugned scheme was struck down, leaving the parties to adjust their rights as if the scheme had not been framed.

Ratio Decidendi: A delegated scheme is valid only if it is anchored to the statutory purpose and policy of the parent Act, and a scheme that is unconnected with that purpose is ultra vires the enabling provision.

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