SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1980 Supreme(SC) 473

SUPREME COURT OF INDIA
V.R. KRISHNA IYER, R.S. PATHAK AND A.D. KOSHAL, JJ.*
The Life Insurance Corporation of India, Appellant
Versus
D. J. Bahadur and others Respondents.
Civil Appeal No. 2275 of 1978** and Transfer Case No. 1 of 1979
Decided on 10-11-1980.
AND
Chandrasekhar Bose and others, Petitioners
Versus
Union of India and others, Respondents.

Advocates:
A.Subhashini, ADARSH GOEL, C.N.SHARMA, D.K.GARG, D.L.SENGUPTA, D.N.Mishra, G.B.PAI, G.MEENAKSHI SUNDERAM, JANARDAN CHAKRABORTY, K.J.JOHN, K.RAMAKRISHNA REDDY, K.VASUDEVA PILLAI, M.K.BANERJI, MADAN MOHAN DAS, Mukul Mudgal, P.K.CHATTERJI, P.R.KUMARAMANGALAM, P.S.KHERA, R.B.DATAR, R.K.GARG, R.N.SACH, RAJENDRA NATH MISRA, RATHIN DAS, S.K.NANDY, S.V.Gupta, SARIVA MITTER, V.J.Francis

Headnote:

Constitution of India,1950 - Articles 14 and 19 - Life Insurance Corporation Act, 1956 – Section 11 - Industrial Disputes Act, 1947 - Section 18 read with Section 2 (p) - Life Insurance Corporation (Modification of Settlement) Act, 1976 - Section 3 - Payment of Bonus (Amendment) Ordinance 1975 - Payment of Bonus (Amendment) Act, 1976 - Applications - Employees - Payment of bonus - Courts collective judgment an informed meeting of instructed minds, in many ways, is a since qua non - But torrent of litigation flooding the court drowns judges in daily drudgery of accumulated dockets - To gain leisure for fundamental reflections with some respite from paper-logged existence and supportive research from trained law clerks is a consummation devoutly to be wished if final court is to fulfil its tryst with Constitution and country - Indian judicial process, suit generis in some respects, has its problems, Himalayan in dimension but hardly appreciated in perspective and in true proportions two which have been mentioned in extenuation of great gap between closure for judgment and its actual pronouncement - Whether any person was a whole-time employee of an insurer - Whether any emloyee was employed wholly or mainly in connection with controlled business of an insurer immediately before appointed day question shall be referred to Central Government whose decision shall be final - Whether law does allow nullification of an industrial settlement is for judges to decide, not for Administration to say, why not? – Held, argument under examination in view of language of regulation 2 which merely signifies persons to whom regulations are to apply - All that it means is that if a contract, agreement or letter of appointment contains a term stating that concerned employee or employees shall not be governed by regulations, then such employee or employees shall not be so governed - Regulation 2 is definitely not susceptible of interpretation - It is nobodys case that settlements contain any such provision and regulation 2, does not come into play at all - Appeal is dismissed 2232 with costs to first, second and third respondents and Transfer Petition No. stands allowed insofar that a writ will issue to Life Insurance Corporation directing it to give effect to terms of settlements relating to bonus until superseded by a fresh settlement, an industrial award or relevant legislation - Costs in respect of Transfer Petition will be paid to petitioners by second respondent - Appeal dismissed - Transfer Petition allowed.

Judgement Key Points

Based on the provided legal document, here are the key points regarding the Life Insurance Corporation of India v. D. J. Bahadur case:

1. Judicial Delay and Consensus Building The Court explained the significant delay between the closure of oral submissions and the pronouncement of the judgment. This delay was not due to procrastination but was a result of "plural toil" and the need for a collective judgment among the judges to evolve a broad consensus from initial dissensus, ensuring conformity with democratic judicial functionality. (!) (!)

2. Social Justice as a Guiding Principle The Court emphasized that Indian law is a "warm-blooded art" derived from the Constitution, which must serve social justice, particularly for the weaker sections like the working class. The interpretation of statutes must be guided by the Directive Principles of State Policy (Part IV of the Constitution) rather than Victorian rules of construction. (!) (!) (!)

3. The Nature of Industrial Settlements under the ID Act The Industrial Disputes Act (ID Act) is a special legislation designed to maintain industrial peace. Settlements and awards made under the ID Act create a statutory contract that supersedes the previous contract of service. Even after the period of operation expires or a notice of termination is given under Section 19(2) or 19(6), the terms of the settlement continue to govern the relations between the employer and employees until they are replaced by a new settlement, award, or valid legislation. (!) (!) (!) (!) (!) (!) (!)

4. Precedents on the Survival of Settlements The Court relied on a catena of precedents, including South Indian Bank Ltd. v. A. R. Chacko and Md. Quasim Larry's case, which established that the termination of an award or settlement does not extinguish the rights flowing therefrom. Instead, it merely prevents enforcement in the prescribed manner until a new contract or adjudication replaces it, preventing a "lawless void" in industrial relations. (!) (!) (!) (!) (!) (!)

5. Conflict Between ID Act and LIC Act (Special vs. General) The core legal issue was whether the Life Insurance Corporation Act (LIC Act) was a special law that overrode the ID Act. The Court held that while the LIC Act is special regarding the nationalization of insurance business, the ID Act is the special law specifically regarding industrial disputes between workmen and employers. The maxim generalibus specialibus non derogant applies here, meaning the ID Act prevails over the general provisions of the LIC Act concerning industrial settlements. (!) (!) (!) (!) (!)

6. Powers under Section 11(2) of the LIC Act While Section 11(2) of the LIC Act empowers the Central Government to alter terms and conditions of service (including reducing remuneration) notwithstanding anything in the ID Act, this power was interpreted as being primarily linked to the process of transferring service of existing employees to ensure uniformity and viability. However, the Court noted that subsequent case law (specifically Justice Pathak's dissenting opinion in the majority judgment) argued that this power was exhaustive and could be exercised to alter settlements, though the majority held the ID Act settlements remained valid until superseded by a fresh agreement or award. (!) (!) (!) (!) (!) (!) (!) (!)

7. Outcome of the Case The Supreme Court dismissed the appeal filed by the Life Insurance Corporation. It directed the Corporation to fulfill its obligations under the 1974 settlements regarding bonus payments to Class III and IV employees. The Court issued a writ of mandamus compelling the Corporation to give effect to the settlement terms until they were superseded by a fresh settlement, an industrial award, or relevant legislation. (!) (!) (!) (!)


JUDGMENT

KRISHNA IYER, J. :- A preliminary divagation has become necessary since applications and enquiries had been made more than once about the postponement of the judgment. The first anniversary of the of closure of oral sub-missions in the above case is just over; and this unusual delay between argument and judgment calls from me, the presiding judge of the bench which heard the case, a word of explanation and clarifications os that misunderstanding about the judges may melt away in the light. A better appreciation of this courts functional adversities and lack of research facilities will promote more compassion than criticism and in that hope I add this note.

A Word of Explanation

2. The judicature, like other constitutional instrumentalities, has a culture of national accountability. Two factors must be highlighted in this context. A court is more than a judge; a collegium has a personality which exceeds its members. The price a collective process, free from personalilty cult, has to pay is long patience, free exchange and final decision in conformity with the democracy of judicial functionality. Sometimes, when divergent strands of thought haunt the mentations of the members, we pause, ponder and reconsider because we follow the words of Oliver Cromwell commended for courts by Judge Learned Hand: "My brethren, I beseech you, in the bowels of Christ, think it possible that you may be mistaken." Utter incompatibility exists between judicial democracy and dogmatic infallibility; and so, in this case, we have taken time, more time and repeted extension of time to evolve a broad consensus out of our initial dissensus. Not procrastination but plural toil is the hidden truth behind the considerable interval.

3. Secondly, when important issues demand the courts collective judgment an informed meeting of instructed minds, in many ways, is a since qua non. But the torrent of litigation flooding the court drowns the judges in the daily drudgery of accumulated dockets. To gain leisure for fundamental reflections with some respite from paper-logged existence and supportive research from trained law clerks is a consummation devoutly to be wished if the final court is to fulfil its tryst with the Constitution and country. The Indian judicial process, sui generis in some respects, has its problems, Himalayan in dimension but hardly appreciated in perspective and in true proportions two which have been mentioned by me in extenuation of the great gap between closure for judgment and its actual pronouncement. Having said this, I must proceed to deal with the merits of the case and the conclusions we have reached in our diverse opinions. By majority, any way, we dismiss the appeal and find no merit in the contentions of the appellant.

4. The fundamental differences in approach - My learned brother Koshal, J. has, after long reflection on the issues in this appeal, expressed his conclusion with which I respectfully disagree. Our difference stems from basic divergence in legal interpretation and judicial perspective.

5. Law is no cold-blooded craft bound by traditional techniques and formal forceps handed down to us from the Indo-Anglian era but a warm-blooded art, with a break from the past and a tryst with the present, deriving its soul force from the Constitution enacted by the People of India. Law, as Vice President G. S. Pathak used to emphasise in several lectures, is a tool to engineer a peaceful civil revolution one of the components of which is a fair deal to the weaker human sector like the working class. The striking social justice values of the Constitution impact on the interpretation of Indian laws and to forget this essential postulate while relying on foreign erudition is to weaken the vital flame of the Democratic, socialist Republic of India. Chief Justice Earl Warren of the United States has spelt out with clarity and felicity the correct judicial approach to the issues at stake in this case :

Our judges are not monks or scien
































































































































































































































































































































































Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top