Judgment

SUBBA RAO, J. : This appeal by special leave is directed against the order of the Life Insurance Tribunal, hereinafter called the "Tribunal", determining the dispute that was referred to it under S. 16 of the Life Insurance Corporation Act. 1956 (31 of 1956), hereinafter called the Act.

2. The appellant is a company duly incorporated under the Indian Companies Act, 1882, and the Insurance Act, 1938. Prior to December 1957, its registered office was at Ajmer, but now it is in Calcutta. It was a composite insurer carrying on life insurance and general insurance business. The Act was passed to provide for the nationalization of life insurance business in India by transferring all such business to a Corporation established for the purpose. The Act came into force on July 1, 1956. On September 1, 1956, under S. 3 of the Act the Central Government established a Corporation called the Life Insurance Corporation of India, hereinafter called the Corporation, which is the respondent in this appeal. Under S. 7 of the Act on the appointed day, which was September 1, 1956 all the assets and liabilities appertaining to the controlled business of all insurers were statutorily transferred to and vested in the Corporation Accordingly, the controlled business of the appellant as defined under the Act, i. e., all the business pertaining to its life insurance business was transferred to and vested in the Corporation. Thereafter disputes arose between the appellant and the respondent in the matter of ascertainment of the compensation payable to the appellant and in respect of incidental and consequential maters thereto. By a letter dated May 21, 1957, the respondent offered to pay to the appellant towards compensation certain amount after setting off the amount due to it from the appellant in respect of part of the paid-up capital of the controlled business and assets representing that part. By letter dated August 9, 1957, the appellant refused to accept the said offer in toto. On August 20, 1957, the respondent wrote a letter to the appellant informing it that as its offer was not accepted by the appellant it had referred the dispute to the Tribunal. In due course both the parties, i.e., the appellant and the respondent, appeared before the Tribunal and filed their respective statements; and the Tribunal framed as many as 8 issues. Issues Nos. 5, 6A, 7A and 7B which are relevant to the present enquiry read thus:

Issue 5. Whether the petitioner (appellant herein) is entitled to the sum of Rs. 12,36,415/- or in the alternative to Rs. 6,60,369/- or in the further alternative to Rs. 5,95,764/- as worked out respectively in annexures A to C to the Statement of Claim.

Issue 6 (A) Whether the petitioner is entitled to the unpaid dividends attributable and pertaining to the General Insurance Business of the petitioner as claimed in paragraph 6 of the Statement of Claim.

Issue 7 (A). Whether the Tribunal has jurisdiction to grant interest on the amount of compensation.

Issue 7(B). If so at what rate and for which period.

On issue 5 the Tribunal calculated the amount payable by the respondent to the appellant on the following lines: Amount payable towards compensation to the appellant was Rs. 5,95,764/- out of the allocable paid up capital of Rs. 2,79,683/- the respondent had already received assets equivalent to Rs. 1,35,919/-; the balance receivable under that head was, therefore, Rs. 1,43,764/- out of the sum of Rs. 5,95,764/- payable to the petitioner-appellant, the respondent was entitled to deduct Rs. 1,43,764/- and the balance payable by the respondent to the appellant was Rs. 4,52,000/-. Briefly stated what the Tribunal did was that it ascertained the compensation payable to the appellant and set off against that amount the balance of the amount due to it from the appellant towards the allocable paid-up capital.

3. On issue 6(A) it held that the appellant showed the un-paid dividends in the balance-sheets as the liability of the life department, t