JUDGMENT : K.M. Thaker, J. 1. Heard Mr. A.K. Clerk, learned advocate for the petitioner, and Mr. Nirjar Desai, learned advocate for the respondents. 2. In present petition, the petitioner - Life Insurance Corporation of India has challenged instructions issued by present respondents vide communication dated 9.4.2010 and the petitioner corporation has prayed, inter alia, that:- "26(a) Quashing and setting aside the instructions dated 09.04.10 issued by the respondent No. 1 to the petitioner corporation. (b) Restraining the respondent No. 1 from initiating prosecution against the petitioner corporation and/or its officers for alleged violation of the instruction dated 09.04.10." 3. The said communication and action of the respondents are challenged on diverse grounds including the contention that the respondents transgressed territorial jurisdiction while issuing the impugned instructions and that the Vadodara office of the corporation had already complied earlier instructions by the respondent and had also submitted compliance report and despite such compliance the impugned instructions directing the Vadodara office/branch to comply the instructions at all India level came to be issued. The instructions are challenged also on the ground that the impugned instructions and the actions of the respondents are vitiated on account of legal malafides. 4. So far as the factual background is concerned, the petitioner has averred and stated that:- "2. The petitioner corporation is a statutory corporation established under S. 3 of the Life Insurance Corporation of India Act, 1956. 3. The petitioner states that on 16.12.08 the respondent No. 2 visited the office of the petitioner and made an inspection report stating that 36 employers whose names were mentioned in Annexure-A have not been paid interest on delayed payment of gratuity. 4. The petitioner sent the compliance report dated 17.01.09 stating that all the 36 employees have been paid interest on delayed payment. A copy of the same was also sent to respondent No. 1. 5. Though the copy of the compliance report dated 17.01.09 was sent to the respondent No. 1, the respondent No. 1 wrote to the petitioner after 8 months on 08.09.09 stating that his office has not received any compliance report and that the petitioner should depute a representative to meet the respondent No. 1 on 22.09.09. It is evident that the respondent No. 1 had not verified with the office of ALC (Central) Vadodara before writing the letter dated 08.09.09. 6. It is evident that the respondent No. 1 had not verified with the office of ALC (Central) Vadodara before writing the letter dated 08.09.09. 6. The petitioner again sent a copy of the compliance reported dated 17.01.09 to the respondent No. 1 along with the letter dated 15.09.09. 7. The representative of the petitioner met the respondent No. 1 in his office on 22.09.09 in compliance of the letter of the respondent No. 1 dated 08.09.09. The respondent No. 1 asked for the details of employees whose services have been terminated during the period from 01.04.04 to 31.08.09 all over India. 8. The petitioner received another letter dated 16.09.09 from the respondent No. 1 which was received on 24.09.09 to remain present before him on 05.10.09. However, on inquiry the petitioner was told that in view of the meeting dated 22.09.09, it is not necessary to remain present on 05.10.09. 9. On 24.09.09 the petitioner wrote to the respondent No. 1 that the corrective action have already been taken and therefore the matter of the inspection report dated 16.12.09 will be closed. 10. On 24.10.09 the Executive Director of the petitioner corporation wrote to the respondent No. 1 seeking extension of 1 month to submit the data sought for by the respondent No. 1 vide his in the meeting dated 22.09.09.... The respondent No. 1 orally granted extension of 1 month to the representative of the petitioner who had met him on 30.10.09 in person with a copy of the letter dated 24.10.09. 11. On 26.11.09 the Executive Director of the petitioner corporation wrote to respondent No. 1 furnishing him the data sought for by the respondent No. 1. 12. On 11.12.09 the respondent No. 2 wrote to the petitioner stating that he shall verify the correctness of the compliance report on 14.12.09. 13. On 14.12.09 the respondent No. 2 verified the correctness of the compliance report and reported that the compliance report is satisfactory. 14. Despite this the respondent No. 1 wrote to the petitioner corporation on 04.02.10 stating that in case of 2 employees compliance report is incomplete and the respondent No. 1 did not specify the names of other employees. 15. On 14.12.09 the respondent No. 2 verified the correctness of the compliance report and reported that the compliance report is satisfactory. 14. Despite this the respondent No. 1 wrote to the petitioner corporation on 04.02.10 stating that in case of 2 employees compliance report is incomplete and the respondent No. 1 did not specify the names of other employees. 15. On 27.02.10 the petitioner wrote to the respondent No. 1 that in case of the 2 employees mentioned in the letter dated 04.02.10 the delay had occurred on account of late submission of discharge voucher by the concerned employee. 16. Thereafter by the letter dated 24.03.10 the respondent No. 1 called the representative of the petitioner in his office on 09.04.10. 17. By letter dated 07.04.10 the Executive Director of the petitioner corporation wrote to the respondent No. 1 stating that the data has already been sent through courier on 06.04.10 however another copy was being sent through the representative. 18. On 09.04.10 the respondent No. 1 has instructed that by 30.04.10 the petitioner corporation should pay interest in all the cases in question all over the country and submit compliance. The corporation is also directed to issue circular modifying the circular dated 24.06.91." 5. Despite notice to the respondents at initial stage and even after service of the process issued by the Court and the petition was admitted, any affidavit explaining the facts and circumstances on account of which such instructions were issued and/or justifying the impugned instruction is not filed by the respondents. 6. Mr. Clerk, learned advocate for the petitioner submitted that the instructions issued by the respondent to pay interest in case of the employees who had worked and retired from the office/branch at Vadodara were complied and interest in accordance with provisions under the Act was also paid to the concerned employees and requisite compliance report was also filed in the office of the respondent. He further submitted that when the respondent authorities informed the petitioner that the compliance report was not received, again copy of the compliance report dated 17.1.2009 was submitted on 15.9.2009. Mr. Clerk, learned advocate for the petitioner also submitted that after the petitioner corporation had complied the instruction suddenly the respondent vide communication dated 22.9.2009 directed the petitioner to ensure payment of interest to the concerned employees all over India and submit compliance report. 6.1 Mr. Mr. Clerk, learned advocate for the petitioner also submitted that after the petitioner corporation had complied the instruction suddenly the respondent vide communication dated 22.9.2009 directed the petitioner to ensure payment of interest to the concerned employees all over India and submit compliance report. 6.1 Mr. Clerk, learned advocate for the petitioner submitted that on 25.9.2009 the petitioner again informed the respondent No. 1 that all necessary action and corrective measures have been taken. According to the learned advocate for the petitioner, in response to the instruction vide communication 24.9.2009 the Executive Director of the petitioner corporation requested for one month's extension vide communication dated 24.10.2009 and on 26.11.2009 furnished details called for by the respondent No. 1. Mr. Clerk, learned advocate for the petitioner submitted that on 14.12.2009 the respondent No. 2 informed the corporation that on verification by the authority, the compliance report was found satisfactory. According to learned advocate for the petitioner corporation despite such facts and circumstances the respondent issued instruction dated 9.4.2010. Mr. Clerk, learned advocate for the petitioner during his submission reiterated issues and points of condition mentioned in paragraph No. 20 and 21 of the petition. 7. Mr. Desai, learned advocate for the respondent could not dispute the fact that the petitioner corporation had submitted compliance report and/or the fact that the respondent No. 2 had informed the petitioner corporation that the compliance report was found satisfactory. Mr. Desai, learned advocate for the respondent also could not dispute the fact that in compliance of the Act different officers are appointed for different areas and territorial jurisdiction of the officer's is specified under the notification appointing officer. 7.1 Mr. Desai, learned advocate for the respondent submitted that if there is noncompliance of the provisions under the Act then duly appointed officer for the particular area has powers to take action and also has powers to enforce compliance. 8. I have considered the submissions by learned advocate for the petitioner and the learned advocate for the respondent and I have also examined the material on record. 9. 8. I have considered the submissions by learned advocate for the petitioner and the learned advocate for the respondent and I have also examined the material on record. 9. So as to consider and appreciate the grievance of the petitioner it is appropriate to take into account some of the observations made by the respondent in his impugned notification dated 9.4.2010 9.1 In the said communication dated 9.4.2010 the respondent called for compliance report with regard to (a) another circular by the Central Office to all the Zonal Managers which suitably modified above mentioned circular dated 24.6.1993 for ensuring timely payment of gratuity and payment of interest (in case of delay) as per law and (b) making payment of interest in all cases in question all over the country and to submit compliance report. In the said communication dated 9.4.2010 the respondent also mentioned and observed that:- "However, they are advised to comply with the above requirement and submit compliance to this office on or before 30.4.2010 failing which the management shall be rendering themselves liable for prosecution." 9.2 At this stage, it is also relevant to take into account the instruction which was issued by the respondent on 22.9.2009:- "The employees are advised to furnish the following information in respect of all employees whose services have been terminated as per Section 491 during the period from 1.4.2004 to 31.8.2009, all over India 1. Name and designation 2. Date of joining 3. Date of termination 4. Last Wages Drawn 5. Amount of Gratuity Payable as per Section 4(4) 6. Amount of Gratuity actually paid 7. Date of payment of Gratuity 8. Amount and the date of payment of Interest if any paid. They are also advised to identify all cases of delay in payment of gratuity in which interest has been paid on account of delay during the said period, and to ensure payment of interest to the concerned persons all over India and submit compliance to this office on or before 31.10.2009, failing which legal action by way of prosecution would be considered." 9.3 At this stage it is also relevant to recall that actually on 17.1.2010 when the respondent had undertaken inspection at the premise of the petitioner corporation, noncompliance in respect of 36 employees was detected. 9.4 It appears that the petitioner corporation had subsequently informed the respondent that so as to comply the instruction steps have been taken by the corporation and the instructions are duly complied on 17.1.2010. 9.5 In the said communication dated 17.1.2009 the corporation informed the respondent that: "1. We have now submitted you the notice of changes in the name/address of employer vide form No. B dated 10.1.2009. 2. We have displayed the Notice in English/Hindi specifying name of officer with designation authorized by employer to receive on his behalf mentioned under as per rule 4(1) 3. We have now displayed an abstract of the Act and Rules in Hindi as per rule 20. 4. Interest on delayed payment of Gratuity is made on 17.1.2009 to all the ex-employees as per your Annexure : A. The list of ex-employees with payment particulars is enclosed herewith for your ready reference." 9.6 The corporation also submitted the statement reflecting details about the amount paid to said 36 persons on 17.1.2009. 4. Interest on delayed payment of Gratuity is made on 17.1.2009 to all the ex-employees as per your Annexure : A. The list of ex-employees with payment particulars is enclosed herewith for your ready reference." 9.6 The corporation also submitted the statement reflecting details about the amount paid to said 36 persons on 17.1.2009. The statement which was submitted by the petitioner along with its communication dated 17.1.2009 reads thus:- S/N. Favour of Amount Cheque No. Dated 1 R.H. Shah 853 172563 17-01-2009 2 N.A. Tailor 6273 172564 17-01-2009 3 R.M. Pandya 900 172565 17-01-2009 4 Aditi Basrur 2703 172566 17-01-2009 5 A.S. Tyeb 139 172567 17-01-2009 6 Smt. Sunita S. Pawar 9205 172568 17-01-2009 7 M.V. Akolker 136 172569 17-01-2009 8 Smt. J.R. Vasava 2667 172570 17-01-2009 9 Smt. Ash J. Khalsa 4123 172571 17-01-2009 10 Smt. Laxmiben S. Solanki 3412 172572 17-01-2009 11 H.B. Purohit 792 172573 17-01-2009 12 A.M. Ankleshwariya 1550 172574 17-01-2009 13 R.N. Solanki 3640 172575 17-01-2009 14 G.K. Pandey 641 172576 17-01-2009 15 G.K. Neetaben K. Katar 8715 172577 17-01-2009 16 Smt. Seema N. Gandhi 3268 172578 17-01-2009 17 M.C. Chauhan 5945 172579 17-01-2009 18 J.M. Solanki 669 172580 17-01-2009 19 B.D. Chaudhary 3977 172581 17-01-2009 20 S.S. Dixit 5233 172582 17-01-2009 21 M.R. Desai 3839 172583 17-01-2009 22 V.J. Tadvi 838 172584 17-01-2009 23 M.D. Pathak 1834 172585 17-01-2009 24 Smt. Urmilaben H. Solanki 929 172586 17-01-2009 25 D.M. Almoula 5199 172587 17-01-2009 26 Smt. Prabhavati G. Mehta 3334 172588 17-01-2009 27 P.K. Tattu 5128 172589 17-01-2009 28 Smt. Nixaben J. Shah 4315 172590 17-01-2009 29 R.N. Rathwa 1604 172591 17-01-2009 30 Smtp Narmada U. Chaudhary 4844 172592 17-01-2009 31 Smt. Leelaben C. Vasava 3260 172593 17-01-2009 32 S.M. Ayer 1740 172594 17-01-2009 33 Smt. Nirmalaben P. Parmar 4662 172595 17-01-2009 34 Smt. Pushpaben M. Parmar 2334 172596 17-01-2009 35 J.R. Patel 1375 172597 17-01-2009 36 M.D. Shah 3242 172598 17-01-2009 Total 114571 9.7 It appears from the record that after the receipt of said communication, verification of said details was undertaken and a report was prepared by the respondent (which was forwarded to the petitioner corporation). In the said verification report the respondent mentioned that:- Irregularities, deleted in Inspection Report No. BRC/LCO/86 (18)/08 dated 16.12.2008 has been reached, hence, compliance report is satisfactory. In the said verification report the respondent mentioned that:- Irregularities, deleted in Inspection Report No. BRC/LCO/86 (18)/08 dated 16.12.2008 has been reached, hence, compliance report is satisfactory. 9.8 Despite the said position, the respondent forwarded communication dated 22.9.2009 (relevant portion whereof is extracted above) 9.9 It appears that the corporation also informed the respondent that:- "We have instructed our Zonal Offices to submit the required data. Our Central Office is located in Mumbai and we have 8 zonal offices and under these zonal offices we have as many as 109 Divisions spread over the country. The job pertaining to settlement of final dues at the time of retirement of employees is being attended to at the Divisional Office. This being the case, our zonal offices are required to collect the data from Divisional Offices. In view of the above, we request you to allow us an extension of one month i.e. upto 30th November 2009 for submissions of data." 9.10 The abovementioned events and developments culminated into impugned communication dated 9.4.2010. 10. When impugned communication is examined and considered in light of above mentioned details and correspondence/reports, it emerges that the impugned communication/instruction order is issued without considering the details conveyed by the petitioner and their own (respondent's) reports or the authority is acting arbitrarily and it is colourable exercise of power. 11. At this stage it is relevant to take into account Section 3 of the Act which reads thus:- "3. Controlling authority the appropriate Government may, by notification, appoint any office to be a controlling authority, who shall be responsible for the administration of this Act and different authorities may be appointed for different areas." 11.1 From the said provision, it comes out that the territorial authority of the officer appointed for enforcing provisions of the Act would be restricted to the area for which he is appointed. 11.2 In that view of the matter coupled with the fact that the petitioner corporation has already submitted the compliance report in respect of the defect detected during inspection and having regard to the fact that compliance report was found satisfactory by the respondent and having regard to the fact that the respondent lacks necessary authority in law to enforce compliance of the instructions in respect of the employee appointed/posted beyond his territorial jurisdiction the impugned direction does not deserve to be and cannot be sustained. 12. 12. Therefore while clarifying that if the competent authority appointed under the Act, upon actual and physical verification of any record of the petitioner corporation at any of its office/branch in any area detects any noncompliance then the duly authorized officer may instruct the responsible officer of the petitioner corporation to ensure the compliance and in event of failure, appropriate action in accordance with law may be taken. However, such general direction and that too without recording any remarks or conclusion that there is noncompliance of previous instructions and/or that fresh defects (in respect of different/subsequent) have been detected, such general instruction or direction cannot be issued to the local or regional office of establishment which has office/branch in more than one state. With the aforesaid clarifications the petition is partly allowed and the impugned notice/instruction dated 9.4.2010 is set aside. Rule is made absolute to the aforesaid extent. Office is directed to permit Mr. Desai, learned advocate to file his appearance note.