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1964 DIGILAW 69 (CAL)

Bepin Behari Das v. Zonal Manager Eastern Zone Life Insurance Corporation of India

1964-03-19

A.K.Mukherji, R.S.Bachawat

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Judgment 1. APPELLANT Bepin Behari Das was an employee in the Life Insurance Section of the New Asiatic Insurance Co. Ltd. In 1953 he became the Superintendent of Agencies in the Calcutta branch of the insurance company on a salary of Rs. 250/- and a conveyance allowance of Rs. 50/- per month. He continued to serve the insurance company in that capacity until the nationalisation of life insurance business took place. The history of this nationalization is set out in the judgment of Gajendragadkar, J. as he then was in S. C. A. Nos. 909 of 1963 (Life Insurance Corporation of India v. Sunil Kumar Mukherjee and others) (1) decided on November 22, 1963. At first by Ordinance No. 1 of 1956 the Central Government took over the management of the life insurance business of the insurance companies. This Ordinance came into effect on January 19, 1956 and was replaced on March 21, 1956 by Act IX of 1956. Soon thereafter by Act XXXI of 1956 the ownership of the "controlled business" i.e., of the life insurance business of the insurance companies was vested in a corporation known as the Life Insurance Corporation of India which was specially created for that purpose. Act No. XXXI of 1956 was passed on June 18, 1956 and came into force on the appointed day i.e., on September 1, 1956. The Act was amended from time to time. The appellant complains that in the new set up, his conditions of service were altered to his detriment and he was not given a proper assignment according to law. 2. The Act was amended from time to time. The appellant complains that in the new set up, his conditions of service were altered to his detriment and he was not given a proper assignment according to law. 2. HE challenges the validity of the order dated November 21, 1956 (Annexure D to the petition) whereby he was asked to work as inspector, the order dated September 11, 1957 (Annexure E to the petition) directing him to operate as an inspector of agencies under City unit No. 10 at Calcutta, "the categorization or fitting in of the existing salaried Field Workers" published on September 30, 1957 and the revised version thereof published on December 2, 1957 (Annexures F and G to the petition), "the Life Insurance Corporation Field Officers (Alteration of Remuneration and other Terms and Conditions of Service.) Order, 1957" (Annexure H to the petition) and "the Life Insurance Corporation of India (Fixation of Pay and Allowances of Field Officers Regulation, 1958)" (Annexure I to the petition), Banerjee, J. found that the validity of the orders contained in Annexures D. E. F. and G. to the petition need no longer be considered, because the appellant is now governed by the order and the Regulation contained in Annexures H and I to the petition. This finding is no longer challenged. Nor does the appellant impugn before us the validity of Annexure I to the petition. The attack of the appellant before us was solely directed towards the validity of the Life Insurance Corporation Field Officers (Alteration of Remuneration and other Terms and Conditions of Service)Order, 1957 being Annexure H to the petition. The object of this order was to secure uniformity in the scales of remuneration and the other terms and conditions of service applicable to certain classes of employees of insurers whose controlled business had vested in the corporation, and in the interest of the Corporation and its policy holders to secure a reduction in the remuneration payable and a revision of the other terms and conditions applicable to those classes of employees. The order applies to the employees falling within the class of "field Officer" as defined in paragraph 2 (c) of the order. The order applies to the employees falling within the class of "field Officer" as defined in paragraph 2 (c) of the order. Paragraph 2 (c)reads thus: ("c") "field Officer" means person whether designated by an insurer as Branch Manager, branch Secretary, Assistant Branch Manager, Assistant Branch Secretary, Zonal Agency Manager, Superintendent of Agencies, Divisional Superintendent, Organiser or by any other name, who before the 1st day of September, 1956, was wholly or mainly engaged in the development of new life insurance business for the insurer by supervising, Either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary, and who has become an employee of the Corporation under section 11 of the Act, but does not include any person now in the employment of the Corporation as Assistant Branch Manager, Branch Manager or in any higher capacity. "In 1962 the designation "field Officer" was changed into "development Officer" but no consequential change was made in the title of the order. Though the appellant was designated as the superintendent of Agencies, Calcutta Branch while in the employ of New Asiatic Insurance Co. Ltd., he was employed as an organising person of the company and was concerned, and connected with the production of the requisite insurance business and premium collection under his own organisation. Banerjee, J. has found that the nature of the appellant's work under he New Asiatic Insurance Co. Ltd. was primarily field work as stated in the affidavit-in-opposition. This finding is not challenged before us. The appellant was a person who though designated as Superintendent of Agencies was a person who before September 1, 1956 was mainly engaged in the development of new life insurance business for the insurer by supervising the work of persons procuring or soliciting new life insurance business and who was remunerated by a regular monthly salary. He was, therefore, a field officer within the meaning of paragraph 2 (c) of the 1957 order and came within the purview of the order. 3. THE sudden take over of the life insurance business of numerous companies by the life Insurance Corporation of India gave rise to many problems of grave magnitude. One of such problems was the absorption of the employees' of the insurers in the new set up. 3. THE sudden take over of the life insurance business of numerous companies by the life Insurance Corporation of India gave rise to many problems of grave magnitude. One of such problems was the absorption of the employees' of the insurers in the new set up. The designation of the employee under his previous employer was often misleading. The identity of the name or designation of an office in different companies did not necessarily indicate identical duties, functions and responsibilities. Even with identical duties and responsibilities, the size of the company and the nature of its operation meant different degrees of training and experience. This led to considerable difficulties in assessing the relative claims of officers as to seniority and gradation. The impugned order seeks to integrate the officers classified as field officers into one well-knit cadre. The definition in paragraph 2 (c) of the order creates a well defined class of field officers. The distinctive feature of the class is the nature of the; work done by the officers before September 1, 1956. By whatever name the officers of this class might have been employed previously, the nexus which connects them is their being "wholly or mainly engaged in the development of new life insurance business for the insurer by supervising either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary". There is a rational and intelligible differentia which demarcates this class of employees from other employees. The gravamen of the charge of the appellant before us is the exclusion from the class of field officers of persons who were on December 30, 1957 "in the employment of the Corporation as Assistant Branch Manager, Branch Manager or in any higher capacity". The appellant concedes that but for this exclusion the definition of "field Officer" in paragraph 2 (c) of the Order would have been legal and could not be challenged as discriminatory or repugnant to section 11 (2) of the Life Insurance Corporation Act, 1956 or violative of Article 14 of the Constitution. The appellant concedes that but for this exclusion the definition of "field Officer" in paragraph 2 (c) of the Order would have been legal and could not be challenged as discriminatory or repugnant to section 11 (2) of the Life Insurance Corporation Act, 1956 or violative of Article 14 of the Constitution. The sole contention of the appellant is the exclusion of the persons in the employment of the corporation on December 30, 1957 as assistant Branch Manager, Branch Manager or in any higher capacity vitiates paragraph 2 (c) of the order and renders the entire order repugnant to section 11 (2) of the Life Insurance Corporation Act, 1956, and Article 14 of the Constitution. 4. IN Schedule 1 to the petition, the appellant gives a list of several officers who, according to him, held before September 1, 1956 offices lower in rank to the office actually held by him under the New Asiatic Insurance Co. Ltd., but who are now posted as Branch Managers and Assistant Branch Managers In Schedule 2 to the petition, he gives a list of officers who according to him, held before September 1, 1956 offices of the same rank, but who now are posted as Assistant Branch Managers (Development. The appellant contends that the posting of the officers mentioned in Schedules 1 and 2 to the petition, to those higher offices are discriminatory and that he has been arbitrarily assigned the inferior post of a field officer. Now both parties appearing before us relief upon paragraphs 14 and 15 of the report of the activities of the Life Insurance Corporation of India published in August, 1957 and also the letter written by the respondent's advocate to the appellant's advocate dated the 19th January, 1962. It appears that between January 19, 1956 and September 1, 1956, the Central Government had collected full information relating to the officers in various insurance companies drawing a salary of Rs. 500/- or more, numbering 688. Selections to the senior posts in the Corporation were made on the basis of this data and after an interview by a committee headed by Sri M. C. Shah, Minister for Revenue and Civil Expenditure. Broadly, the criteria for selection were qualifications, experience and the training which the officers had received and the length of service in responsible positions. Selections to the senior posts in the Corporation were made on the basis of this data and after an interview by a committee headed by Sri M. C. Shah, Minister for Revenue and Civil Expenditure. Broadly, the criteria for selection were qualifications, experience and the training which the officers had received and the length of service in responsible positions. For other posts of officers, selections from these as well as other employees of insurers were made by committees composed of the senior officers designate in each Zone. Apparently the selections of the persons whose names appear in Schedules 1 and 2 to the petition were so made and letters of appointment to them were issued before September 1, 1956. All these appointments were made on a provisional basis. There is reason to believe that these appointments had no legal effect before September 1, 1956. But all these appointments were ratified by the Corporation at its first meeting. 5. THE appointments continued to be provisional pending a review by the Corporation on the basis of a detailed study of all individual cases. Subsequently a committee set up under the chairmanship of Sri S. Lall submitted a report dealing with the problem of seniority amongst the officers. The recommendations of this committee were considered by the then Board of the Corporation. The affidavit-in-op-position states that all the selections of the officers mentioned in Schedules 1 and 2 to the petition were made on a consideration of their merit, ability and suitability for the posts which they now occupy. 6. THE appellant contends that under section 11 (2) of the Life Insurance Corporation Act, 1956, the Central Government could revise the terms and conditions of the service of employees generally or of employees who formed a well-defined class before September 1, 1956, but it could not revise the terms and conditions of service of some members of that class only after excluding from that class other persons who also belonged to that class before September 1, 1956. We are unable to accept this contention. Section 11 (2) empowers the Central Government to revise the terms and conditions of service applicable to "employees or any class of them". We are unable to accept this contention. Section 11 (2) empowers the Central Government to revise the terms and conditions of service applicable to "employees or any class of them". The argument of the appellant is that having regard to the context of section 11 (2) the words "employees or any class of them" means employees of insurers whose controlled business has been transferred to and vested in the Corporation or any class of them. Bui there is nothing in section 11 (2) to warrant the construction that the Central Government cannot revise the terms and conditions of officers classified according to the nature of work done by them before September 1, 1956, and excluding from purview of that class persons who though belonging to that class before September 1, 1956 were upgraded subsequently and in fact belonged to a different class on the date of the order. The class of Field Officers from which a well-defined sub-class is excluded is a well-defined class of employees within the meaning of section 11 (2). The appellant next contends that the exclusion of the persons who held the office of Assistant Branch Manager, Branch Managers or higher posts on December 30, 1957 is discriminatory and is violative of Article 14 of the Constitution. We are unable to accept this contention. The appellant argues that that the appointment of the persons mentioned in Schedules 1 and 2 to the petition to the posts of Branch Managers and Assistant Branch Managers have no legal basis and exclusion of persons who factually held the posts of Branch Managers and Assistant Branch Managers but could not legally hold those posts must be held to be discriminatory, because in the eye of the law those persons continue to be field officers and nothing more. There is no substance in this contention. 7. THE petition does not charge that the appointments of the persons mentioned in Schedules 1 and 2 to the petition had no legal basis or were invalid. The appellant contends that the terms and conditions of service of those persons could not be altered under section 11 (1) and therefore their assignment to higher posts were invalid. Now section 11 (1) guarantees to the employees the rights and privileges as to pension and gratuity and other matters which they enjoyed before September, 1956. The appellant contends that the terms and conditions of service of those persons could not be altered under section 11 (1) and therefore their assignment to higher posts were invalid. Now section 11 (1) guarantees to the employees the rights and privileges as to pension and gratuity and other matters which they enjoyed before September, 1956. In other words, the service conditions of the employees could not be altered to their detriment without their consent. But we see no warrant for the construction that section 11 (1) prohibits the change of the service conditions of an employee to his advantage by mutual agreement between the employee concerned and the corporation. Section 11 (1) contemplates that the old service conditions will continue until they "are duly altered by the Corporation." We think that the service conditions of an employee are duly altered within the meaning of section 11 (1), where they are altered to the advantages of the employees concerned by mutual agreement between him and the corporation. The Corporation by virtue of its general power to carry on the Life Insurance business under section 6 (1) and more specifically by section 23 (1) has power to employ persons for carrying on the business. The Corporation could in the exercise of their power under the Act lawfully appoint officers. The appointment of some of the existing officers of the insurers to higher posts with their consent cannot be said to be invalid or illegal. The appellant contends alternatively that having regard to the fact that the appointments were made on a provisional basis pending a review by the Corporation on the basis of detailed study of all individual cases, the exclusion of the persons so appointed on a provisional basis from the definition of field officers in paragraph 2 (c) of the order is discriminatory. We are unable to accept this contention. 8. THE selections of all these persons to the higher posts, though provisional were made after a study of their individual merit and suitability for the higher posts. Factually and legally those persons occupied higher posts on December 30, 1957. To demote those persons to lower posts might be detrimental to the interests of the corporation and the policy holders. The exclusion of those officers from the definition of Field Officers may well be justified on the ground of business expediency. Factually and legally those persons occupied higher posts on December 30, 1957. To demote those persons to lower posts might be detrimental to the interests of the corporation and the policy holders. The exclusion of those officers from the definition of Field Officers may well be justified on the ground of business expediency. One of the objects sought to be achieved by the impugned order is the revision in the terms and conditions of the employees in the interest of the Corporation and its policy holders. It appears to us that the exclusion of the persons who held the posts of Assistant Branch Managers, Branch Managers or other higher posts on December 30, 1957 has a rational relation to the object sought to be achieved by the order. The persons mentioned in the main part of the definition in paragraph 2 (c) of the order and the persons excluded from their definition were not equally circumstanced. Besides the proviso to paragraph 2 (c) of the order is clearly severable from the main part of the definition. Even if the proviso is struck down as unconstitutional, it will not lead to the grant of any relief to the petitioner, see the observations of Rajagopalan, J. of the Madras High Court in Writ Petitions No. 1016 of 1958 and 53, 123, 345 and 346 of 1958 (S. Vaidyanatha v. Life Insurance Corporation of India) (2) decided on the 17th day (if Chaitra, 1882 Saka. 9. IN our opinion there is no substance in the argument of the appellant that paragraph 2 (c) of the order is discriminatory. Somewhat similar arguments were advanced and rejected by Sinha, J. in Girija Sankar Sen Gupta v. Zonal Manager, L. I. C. (3) 67 C. W. N. 811 decided on June 12, 1963, by P. B. Mukharji, J. in Civil Revision Case No. 2305 of 1959 (Murari Mohan Ghose v. Zonal Manager, L. I. C.) (4) decided on February 20, 1964, by the Patna High Court in Miscellaneous Judicial Case Nos. 164 and 778 of 1958 (Chaturbhujlal Puraayar and another v. Divisional Manager, Life Insurance Corporation of India and others) (5) decided on January 12, 1960, by Shelet, J. of the Bombay High Court in Misc. Petition No. 533 of 1958 (Mangharam Ramchand Bhambhani v. Life Insurance corporation of India) (6) decided on August 11, 1959, and by Rajagopalan, J. in the case mentioned above. Petition No. 533 of 1958 (Mangharam Ramchand Bhambhani v. Life Insurance corporation of India) (6) decided on August 11, 1959, and by Rajagopalan, J. in the case mentioned above. No other contentions were advanced before us on behalf of the appellant. There is no merit in this appeal. We pass the following order. The appeal, be and is hereby dismissed. There will be no order as to costs.