( 1 ) IN these writ petitions, the Life Insurance Corporation of India has assailed the show-cause notices and demand notices issued by the respondent-Labour Inspectors under the provisions of the Karnataka shops and Commercial Establishments Act, 1961 (for short, 'act of 1961') read with the Karnataka Shops and Commercial Establishments rules, 1963 (for short, 'rules of 1963') and the Karnataka Labour welfare Fund Act, 1965 (for short, 'act of 1965' ). The parties being common and common questions of fact and that of law having arisen, with the consent of the learned Counsels for the parties, the petitions are clubbed, heard together and are disposed of by this common order.

( 2 ) THE petitioner having questioned the issue of show-cause notices and demand notices calling upon it to comply with the provisions of the aforesaid Acts, has in addition sought for a declaration that it is exempt from the application of the provisions of the Act of 1965 and the Act of 1961.

( 3 ) THE claim of the petitioner is that the provisions of Life Insurance corporation Act, 1956 (for short, 'lic Act'), read with Rules and regulations framed thereunder provides for the welfare of its employees and the scheme of the Act does not admit any other regulatory measure by any other Law. The employees of the Corporation are under the protective umbrella of the 'lic Act' and the rules and regulations. The regulations framed under the provisions of Section 49 of the 'lic Act', it is said, provides for service conditions of employees of LIC and that agents are not employees in view of Regulation 2 of the Life Insurance corporations Staff Regulations, 1960. It is further contended that, for the welfare of the employees it has provided benefits such as Provident fund, Gratuity, Term Assurance, Medical Benefit Scheme, etc. In addition it is stated that the employees are entitled to medical/casual/privilege leave. Lastly, it is contended that the enactments of the State cannot encroach upon the field fully occupied by the Central Act namely, LIC act, 1956 read with Rules and Regulations. In terms of the aforesaid pleadings, it is contended that the provisions of the Act of 1965 and the act of 1961 read with the Rules of 1963, have no application to the petitioner, although petitioner admits that one of its branches at chintamani, by an erroneous understanding of law made payment to the welfare fund. Hence these writ petitions.

( 4 ) THE respondents have opposed the petition in W. P. No. 23950 of 1996 by filing the statement of objections dated 3-3-1996 inter alia contending that the petitioner-Life Insurance Corporation carries on business of insurance which falls within the definition of the term "commercial establishment" under the Act of 1961 and not being an establishment under the Central Government, is not exempt from the application of the provisions of the Act of 1961 and the Act of 1965. In addition, it is contended that the commission paid to the agents of the petitioner, is in fact wages and therefore, the offices of the agents also fall within the meaning of the term "commercial establishment" under the aforesaid Acts. In paragraph 7 of the statement of objections, reference is made to the decision of the Apex Court in S. K. Verma v mahesh Chandra and Another, wherein the Apex Court deprecated the conduct of the petitioner in raising frivolous claims as regards the meaning of the term 'workman' under the Industrial Disputes Act, 1947.

( 5 ) SRI Nagaraj, learned Counsel for the petitioner would contend that a conspectus of the provisions of the Life Insurance Corporation Act, 1956 in particular Sections 3, 4, 5, 6, 11, 17, 48 and 49 would indicate that the Central Government has pervasive control over the Life insurance Corporation, hence an establishment under the Central government. In addition, learned Counsel would contend that though sub-clause (e) of Section 2 of the Act of 1961 defines 'commercial establishment' to include insurance establis

Click Here to Read the rest of this document