JUDGMENT

MOHAN, J.:- Leave granted.

2. Life Insurance Corporation of India is the appellant.

3. The Jabalpur Municipal Corporation formulated a scheme for the benefit of its employees known as Nagar Nigam Karamchari Parivarik Kalyan Yojna. That scheme provided, in the event of death of an employee while in service, a sum of Rs. 10,000/- or Rs. 5,000/- payable to the dependents, depending upon the rate of monthly contribution. If the monthly contribution was Rs. 10/- the amount payable was Rs. 10,000/- and where the monthly contribution was Rs. 5/- the amount payable was Rs. 5,000/-. The scheme was also known as Family Benefit Fund Scheme. It was implemented with effect from 1-6-75 by effecting appropriate monthly deductions from the salaries of the employees. The payment of specified amount in terms of the scheme was also made to the retiring employees as also to the dependents of the employees who died while in service.

4. While the scheme was in operation the question arose as to the validity of the scheme. The Government of Madhya Pradesh examined that question from the perspective whether the said scheme was violative of the provisions of the Life Insurance Corporation Act, 1956 (