Kerala High Court
Life Insurance Corporation vs Appellate Authority on 7 August, 1990
Equivalent citations: (1991)IILLJ226KER
JUDGMENT Radhakrishna Menon, J.
1. Life Insurance Corporation of India, for short the Corporation, is the petitioner.
2. Ext.P1 order of the first respondent is under challenge. Gist of this order given in Ext. P2 reads:-
"It is hereby informed that orders have been passed in the above case. As per the order, the respondent is directed to reinstate the appellant in service with backwages of Rs. 29,552/- (Rupees twenty nine thousand five hundred and fifty two) for the period from 2-9-87 to the date of this order. In the event of failure to comply with the above directions, the appellant will be paid a lumpsum compensation of Rs. 35,000/- (Rupees thirty five thousand only). The above directions shall be complied with by the respondent within 30 days of receipt of the gist of this order, failing which steps will be taken to recover the same under Revenue Recovery Act, with 9% compound interest during the period of default".
Facts relevant and requisite to dispose of the dispute lie in a narrow compass. The service details of the second respondent are given in Ext.P3. It can be seen therefrom that at the time of his leaving the employment (the second respondent does not admit the details given in Ext.P3 except those relating to his designation and also the first and the last date of his appointment), he was a temporary Engineering Assistant (Elec.) Gr.III.
3. Contending that his services were dispensed without complying with the provisions contained in Section 18(1) of the Kerala Shops and Commercial Establishments Act, for short, the Commercial Establishments Act, the second respondent filed an appeal before the first respondent. In the written statement, the petitioner-Corporation raised mainly three contentions. (1) The petitioner-Corporation is not an establishment within the meaning of the Commercial Establishments Act. (2) Assuming that it is an establishment, since it is an establishment under the Central Government, within the meaning of Clause (c) of Sub-section (1) of Section 3, the Commercial Establishments Act has no application. (3) The pre-requisite to file an appeal namely that, the employee has been employed continuously for a period of not less than six months is not satisfied.
4. After considering the various aspects of the case, the first respondent rejected these contentions and as a consequence thereof has allowed the appeal.
5. The learned Counsel for the petitioner-Corporation reiterated the above contentions before this court. I shall first deal with the second contention covered by Clause (c) of Sub-section (1) of Section 3 of the Commercial Establishments Act. This clause reads:-
"3. Exemptions:-(1) Nothing contained in this Act shall apply to-
(c) establishments under the Central or any State Government, local authorities, the Reserve Bank of India and Cantonment authorities,".
This clause provides that the Commercial stablishments Act shall not apply to establishments under the Central Government and such other institutions made mention of thereunder.
6. The question in regard to this contention therefore is, can the Corporation be said to be an establishment under the Central Government? The answer depends upon the construction of the relevant provisions of the Life Insurance Corporation Act, 1956, for short, the Act. The Life Insurance Corporation is established under Section 3 of the Act.. It enables the Central Government to establish a corporation called the Life Insurance Corporation of India. Sub-section (2) thereof provides that the corporation shall be a body corporate, having perpetual succession and a common seal with power, and subject to the provisions of the Act, to acquire, hold and dispose of property, and may by its name sue and be sued. Section 4 provides that the Corporation shall consist of such number of persons not exceeding sixteen as the Central Government may think fit to appoint thereto and one of them shall be appointed by the Central Government to be the Chairman thereof. The power to appoint the members vests in the Central Government (vide Sub-section (2) of Section 4). The original capital of the Corporation is provided by the Central Government after due appropriation made by Parliament by law for the purpose (Section 5). Section 5 further provides that the terms and conditions relating to the provision of such capital shall be such as may be determined by the Central Government.. The functions of the Corporation are governed by the rules made by the Central Government in this behalf. It has been so stated in Section 6 of the Act. Transfer of service of existing employees of insurers to the Corporation is done under the immediate supervision of the Central Government (See Section 11). As regards the transfer of service of existing employees of chief agents of insurers to the Corporation in certain cases is governed by the rules, the Central Government may make in that behalf. To the said effect is Section 2. Section 17 provides that the Central Government may for the purpose of the Act constitute one or more Tribunals and each of the Tribunals shall consist of three members appointed by the Central Government; one of whom shall be a person who is, or has been, a Judge of a High Court or has been a Judge of the Supreme Court, and he shall be the Chairman thereof. The Central Government, under Section 48 has the power to make rules to carry out the purpose of the Act. Similarly the regulations governing the service conditions of the employees are promulgated by the Central Government (See Section 49 as amended by Act 1/1981). These and other provisions (I do not want to burden the judgment with the narration of the other provisions) positively indicate that the Central Government has a pervasive control over the Life Insurance Corporation.
7. The learned Counsel for the second respondent nonetheless contended that the Corporation, inasmuch as the same is a distinct juristic entity with a corporate structure of their own, cannot be treated as an establishment under the Central Government. Only if the Corporation is owned by the Central Government, it could be said that the Corporation is an establishment under the Central Government. The words 'under the Central Government' connotes complete control in the sense of being owned by the Central Government. This argument at the first blush is attractive but going deep into the same it could be opined that the same is without substance. In order to accept the above argument of the learned Counsel, the word 'under' will have to be substituted by the word 'of 'Clause (c) of Sub-section (1) of Section 3 of the Commercial Establishments Act. Considering a similar argument, the Supreme Court in C.V.Raman v. Management of Bank of India (1988-II-LLJ-423) has observed that it is without substance.
The said observation reads(p. 431):
"If the 'criteria' laid down above is applied to the facts of the instant cases it is obvious that even though the State Bank of India and the natonalised banks may not be owned as such by the Central Government and its employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks".
8. A conspectus of the Act as also Clause (c) of Sub-section (1) of Section 3 of the Commercial Establishments Act read with the meaning of the term 'under' makes it obvious that the Corporation clearly is an establishment under the Central Government.
9. The Corporation therefore does not come within the purview of the Commercial Establishments Act and hence the question as to whether the Deputy Labour Commissioner, the first respondent, has jurisdiction to entertain the appeal under Section 18 at the instance of an employee of the Corporation, requires to be answered against the employee. That means the first respondent has no jurisdiction to entertain the appeal.
10. Under the circumstances it is unnecessary to go into the other contentions the parties have raised in the Original Petition.