K.D. Banerji vs Life Insurance Corporation Of India on 6 July, 1960
6. The petitioner was a Divisional Superintendent of the National Insurance Co. Ltd. from the
1st January, 1955 drawing a fixed salary of Rs. 350/-per month without any grade, Rs. 80/- as clearness allowance and Rs. 170/- as motor car allowance, On the 19th January, 1956 the Life Insurance (Emergency Commissions) Ordinance, 1956 came into force nationalising Life Insurance business in India from the 20th January. 1956. After the nationalisation the petitioner continued as Divisional Superintendent under the Custodian appointed by the Ordinance. The Life Insurance Corporation Act, 1956 came into force on the 18th June, 1956, the appointed day being the 1st September, 1956. Section 11 of the Act made provisions for transfer of service of existing employees of insurance companies to the Corporation. Now on taking over, the Life Insurance Corporation put the petitioner into the category of an Inspector now called Field Officer. The petitioner complained that he deserved a better post and made an application to the Patna High Court under Article 226 of the Constitution, now reported as P. C. Goyle v. Divisional Manager, Life Insurance Corporation of India, . Ramaswami, C. J. delivering judgment for the Division Bench of the Patna High Court with which Raj Kishore Prasad, J. agreed came to the conclusion that the rank of an Inspector of the Life Insurance Corporation was subordinate to that of a Divisional Superintendent in a controlled business which was transferred to the Corporation and that the terms and conditions of service of an Inspector were less advantageous than that of the Divisional Superintendent. In that decision it was held that the order of the Government of India No. 53 dated 1-6-57 made under Section 11(2) altering the remuneration and other terms and conditions of service of the employees applied only to those who were in supervisory, clerical or subordinate staff grades of the insurers on the 31st August, 1956 and that it had no application to officers and field workers of the insurers. It was, therefore, held by the Patna High Court that that order could not be relied upon to justify the reduction of a person who was working as a Divisional Superintendent to the rank of an Inspector under the Corporation. The Patna High Court, therefore, made the following order reported at page 227 of the report already cited: