Delegated legislation and retrospective effect: amendment valid, but it could not nullify an existing mandamus retroactively.

The challenge to the Life Insurance Corporation (Amendment) Act, 1981 and the rules made under it failed on Article 14 and excessive delegation grounds because no material showed hostile discrimination, and the amendment disclosed a clear legislative policy to protect the Corporation and policy-holders while controlling administrative costs. The rule-making power, subject to parliamentary laying, was treated as valid delegated legislation and not an unconstitutional abdication. However, the retrospective operation of the amended provisions and Rule 3 could not nullify a subsisting writ of mandamus directing payment under the 1974 settlements; the new regime could operate only prospectively from publication of the rules.

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Issues: (i) Whether the Life Insurance Corporation (Amendment) Act, 1981 and the rules made thereunder were invalid for hostile discrimination under Article 14 or for excessive delegation of legislative power. (ii) Whether the retrospective operation of the amended provisions and Rule 3 could nullify the earlier writ of mandamus directing payment of bonus under the 1974 settlements.

Issue (i): Whether the Life Insurance Corporation (Amendment) Act, 1981 and the rules made thereunder were invalid for hostile discrimination under Article 14 or for excessive delegation of legislative power.

Analysis: The challenge under Articles 19(1)(g) and 21 was not accepted, and the attack under Article 14 failed for want of material showing that the Corporation employees and employees of other establishments were similarly situated so as to establish hostile discrimination. On the delegation point, the amendment supplied a legislative policy in the preamble, namely, securing the interests of the Corporation and policy-holders and controlling administrative costs by expeditious revision of service conditions. The provision for laying rules before Parliament also showed continuing legislative control. The delegated power to frame rules overriding inconsistent laws was therefore not treated as an unconstitutional abdication of essential legislative function.

Conclusion: The amendment and the rules were not struck down on the grounds of hostile discrimination or excessive delegation.

Issue (ii): Whether the retrospective operation of the amended provisions and Rule 3 could nullify the earlier writ of mandamus directing payment of bonus under the 1974 settlements.

Analysis: The earlier writ had directed observance of the 1974 settlements until superseded by fresh settlement, industrial award or relevant legislation. Although the 1981 amendment and rules constituted relevant legislation, the Court held that they could not retrospectively make the writ nugatory. The rule-making power could not be used to defeat a subsisting judicial command with retrospective effect; the legislation could operate only from the date of publication of the rules.

Conclusion: The retrospective part of the amendment and Rule 3 could not override the prior writ, and the new regime operated only prospectively from 2 February 1981.

Final Conclusion: The challenge failed except to the extent that the impugned amendment and rules could not retrospectively take away the benefit of the 1974 bonus settlements or neutralise the earlier mandamus; relief was confined to prospective operation.

Ratio Decidendi: A valid piece of legislation or delegated legislation may alter service conditions and may override inconsistent law, but it cannot retrospectively nullify a subsisting writ of mandamus unless the legislative intent and authority to do so are clear and constitutionally effective; where the statute supplies policy and remains under parliamentary control, the delegation is not excessive.

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