Judgement

VENKATARAMIAH, J. : - The question involved in these appeals by special leave which are filed against the judgment dated August 17, 1985 of the High Court of Allahabad in Civil Misc. Writ No. 6849 of 1984 : (reported in 1986 Lab IC 400) relates to the constitutional validity of Regn. 19(2) of the Life Insurance Corporation of India (Staff) Regulations, 1960, (hereinafter referred to as the (Staff) Regulations, 1960), as amended on 21-1-1977 by the Life Insurance Corporation of India (hereinafter referred to as the Corporation) which provides that an employee belonging to Class I or Class II appointed to the service of the Corporation on or after 1st September, 1956 shall retire on completion of 58 years of age but the competent authority may. if it is of the opinion that it is in the interest of the Corporation to do so, direct such employee to retire on completion of 50 years of age and at any time thereafter on giving him three months notice or salary in lieu thereof.

2. Prior to January, 1955 there were more than 200 insurers carrying on life insurance business in India. As it came to the notice of the Government that the Indian life insurers. with a few exceptions, were virtual, controlled by few individuals who were utilising the funds of those companies to the detriment of the industry and the policyholders. the Government decided to nationalise the life insurance business. Pursuant to the said decision, the President of India promulgated the Life Insurance (Emergency Provisions) Ordinance, 1956, on January 19, 1956 providing for the vesting of the management of the life insurance business (which was called the controlled business under the Ordinance) which was being carried on by any insurer in India on that day in the Central Government and providing for its management. On the passing of the said Ordinance the management of the controlled business of all the insurers in India thus vested in the Central Government and pending the appointment of the custodians for the controlled business of any insurer the person in charge of the management of such business immediately before the passing of the Ordinance was required to be in charge of the management of the business for and on behalf of the Central Government. The Ordinance contained detailed provisions for the carrying on of the life insurance business by the Government for the time being. The Ordinance was replaced by the Life Insurance (Emergency Provisions) Act, 1956 which was: published on 21st of March, 1956. The said Act was followed by the Life Insurance Corporation Act, 1956 (Act 31 of 1956) (hereinafter referred to as the Act) which was published in the Gazette on 18th June, 1956. The Act, however, came into force on 1st July, 1956. The Act provided for the establishment and incorporation of the Corporation. The Corporation was accordingly established on 1st September, 1956. Under the Act the expression appointed day is defined as the date on which the Corporation is established. The appointed day for the purposes of the Act is, therefore, September 1, 1956. By virtue of S. 7 of the Act on the appointed day all the assets and liabilities appertaining to the controlled business of all insurers the management of which (it) had been taken over earlier by the Central Government stood transferred to and vested in the Corporation. When the Corporation thus came into existence it had no employees of its own to carry on the vast business of the large number of insurers which had been taken over by it. It, therefore.

became necessary to transfer the services of the existing employees of the insurers to the Corporation because without the services of those employees it was almost impossible for the Corporation to run the life insurance business in India which involved management of the various offices situated in different parts of India, servicing of lakhs of insurance policies, the administration of the assets taken over from the insurers and several other activ