Grant of exemption from provisions of Deposit Linked Insurance scheme.

Dr. A. S. Anand, C.J.

Appellants were the writ petitioners in Writ Petition No. 7557 of 1984. Appellants 1 to 7 are the legal representatives of some deceased employees of the respondent-management. They sought a writ of mandamus to direct the respondent-management to release and settle the withheld payments of death benefits due to them as dependents of the deceased employees, and to pay an amount of Rs. 10, 000 each together with interest thereon at the rate of 12 per cent annum calculated from the due date. The writ petition was resisted and by judgment dated 14th December, 1984, the learned single Judge dismissed the writ petition. Hence this appeal.

2. The facts are not in dispute. Seven employees viz., (1) Shanmugam (2) G. Kulandaiswamy (3) R. Selvanathan (4) R. Mariappan (5) Sambandam (6) C. Chellappan and (7) Md. Usman died while in the service of the management-respondent on 26th June 1977, 8th May 1982, 30th October 1983, 2nd October 1983, 27th December 1983, 30th August 1983 and 1st October 1983 respectively.

3. While the employees were in the service of the respondent-management which is a Government-owned Undertaking, a scheme was introduced called "The Group Life Insurance" in April 1977. Under the scheme all employees of the management-respondent who contributed to the provident fund were to join the scheme and that was treated as a condition of service for the future employees also. Under the scheme each of the employees was assured for a sum of Rs. 10, 000. Rules were framed for the working of the Group Insurance Scheme. Some of the relevant clauses of the Rules require a notice at this stage.

"4. Evidence of age :

The Company shall arrange to submit to the Corporation evidence of age in respect of each member at the time of entry into the Scheme.

5. Premiums :

(a) The Company shall pay to the Corporation in respect of each members on the Entry Date and the relevant Annual Renewal Dates such premiums as are required to secure the benefits of these Rules.

(b) If there is any default by the Company in payment of the premium within the stipulated time, the Corporation will intimate that fact to the Regional Provident Commissioner.

6. Assurances :

On the Entry Date, an assurance shall be effected on the life of each member one year Renewable Group Term Insurance Plan for a sum assured equal to Rs. 10, 000.

8. Benefits of Death whilst in service :

Upon the death of the members whilst in service, the Sum Assured under the Assurance shall become payable to the Company for the benefit of the Nominee.

16. Nomination :

Upon the death of the member whilst in service, the sum assured under the Assurance on his life will become payable to the Company for the benefit of the Nominee or Nominees appointed by the member under the Provident Fund. If no nomination subsists or if the nomination relates only to part of the benefits, then the whole sum assured or part thereof, as the case may be, shall become payable to the members of his family in equal shares as provided in the Employees Deposit Linked Insurance Scheme, 1976." *

4. At the time when the scheme was introduced, the employees of the respondent-management were also covered by Deposit Linked Insurance Scheme, 1976, framed under Provident Fund and Family Pension Act, 1952, under which the employer had been cast with an obligation of making contribution to the scheme without any contribution from the employees and in the event of the death of the employee, the dependents as the beneficiaries were entitled to be paid the sum assured directly by the Provident Fund Commissioner. The said scheme had been put into operation somewhere in 1976.

5. After the death of the employees of the respondent-management referred to above, some amounts were paid to the appellants under the Deposit Linked Scheme. Claims were preferred by the management in respect of the death of the employees to the Life Insurance Corporation and the Life Insurance Corporation settled those claims in respect of