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2008(2) Supreme 157
Supreme Court of india
(From Kerala High Court)
S.B. Sinha & Harjit Singh Bedi, JJ.
Life Insurance Corporation of India and others — Petitioners
versus
Retired L.I.C. Officers Association and others — Respondents
Appeal (civil) 1289 of 2007
Decided on : 12-02-2008
(2006) 3 SCC 708; (2005)13 SCC 161 – Relied upon.
(b)Life Insurance Corporation of India (Staff) Regulations, 1960 – Regulation 51(2) –Method of fixation, eligibility for the benefit of revision and the date from which the revisions shall apply are the only areas within which the Chairman can exercise jurisdiction – The effect of revision of pay scales on other spheres and which are otherwise governed by another statute or other provisions of the said Regulations would not come within the purview thereof – The words “incidental to” cannot be interpreted too broadly and read independently of the main provision – It cannot be permitted to encroach upon an area which is not within the jurisdiction of the Chairman of the Corporation. (Paras 20 and 21)
(c)Judicial Review – It is one thing to say that the court while exercising its jurisdiction would be entitled to exercise such incidental power for determination of the principal issue – It is another thing to say that a statutory authority in such matters would be held to have such power which is beyond the scope and purport of the principal provisions. (Para 22)
(d)Service Law – Retirement benefits – Gratuity – An employee is entitled to gratuity, it is not a bounty – Only because it employed the word “permanent basic pay”, the same will not itself lead to the conclusion that once an employee has retired, he would not be entitled to any revision of the amount of gratuity – When a retired employee became entitled to the benefit of the revised scale of pay, the same for all intent and purpose must be taken to be the permanent basic pay which is required to be taken into consideration for the purpose of computation of the amount of gratuity. (Para 25 and 26)
(e)Life Insurance Corporation of India (Staff) Regulations, 1960 – Regulation 51(2) –Once the Chairman fixes a cut off date for the purpose of giving effect to the agreement with the Unions vis-à-vis the payment of arrears in terms thereof, he cannot exercise further jurisdiction in respect of a matter which is not controlled by Chapter IV but is controlled by other provisions of statutes and Parliament Acts governing the field. (Para 27)
(2007) 6 SCC 35 – Relied upon.
(f)Administrative Law – A delegatee must exercise its powers within the four-corners of the statute – The power of a sub-delegatee is more restricted – While a delegatee cannot act in violation of a statute, a sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provisions – It must conform not only to the provisions of the Regulations and the Act but also other Parliamentary Acts. (Para 28)
(2006)4 SCC 327; (2006) 3 SCC 434; (2007) 2 SCC 365; 1961 (1) SCR 719; (1989) Supp. 1 SCC 347 – Relied upon.
(g)Administrative Law – The expression “incidental” or “connected” would not necessarily be matters which are of a casual nature only – The same, however, must have something to do with the nature of power granted to the authority concerned. (Para 29)
Facts of the case:
1.Respondent No.1 is an Association of officers who have retired from the services of the appellant-Corporation.
2.During the period of 1st August, 1992 and 31st July, 1994 a revision of scales of pay of the offices and employees of the Corporation took place. Different cut off dates were fixed for grant of different nature of allowances as also pay by the Chairman of the Corporation in purported exercise of his power under Regulation 51 of the Regulations.
3.Whereas 1st April, 1993 was the cut off date for revision of pay; 1st August, 1994 was fixed as the cut off date for the purpose of payment of gratuity on the basis of revised pay.
4.However, so far as those employees who had retired prior to 1st August, 1994 are concerned, they were directed to be entitled to reduced gratuity based on the reduced scale of pay with effect from 1st April, 1993 only. The arrears of pay were directed to be paid only w.e.f. 1st April, 1993.
5.Whereas the Gujarat and Kerala High Court upheld the validity of the instructions issued by the Chairman of the appellant-Corporation, the Karnakata High Court took a different view.
Findings of the Court:
Once the Chairman fixes a cut off date for the purpose of giving effect to the agreement with the Unions vis-à-vis the payment of arrears in terms thereof, he cannot exercise further jurisdiction in respect of a matter which is not controlled by Chapter IV but is controlled by other provisions of statutes and Parliament Acts governing the field.
Result : Appeal dismissed.
JUDGMENT
S.B. Sinha, J. —
1.Jurisdiction of the Chairman of the Life Insurance Corporation of India (Corporation) to issue instructions in terms of Regulation 51 of the Life Insurance Corporation of India Class-I Officers (Revision of Terms and Conditions of Service) Instructions, 1996 is in question in this appeal which arises out of a judgment and order dated 29th September, 1995 passed by a Division Bench of the Kerala High Court in Writ Appeal No. 32 of 2004.
2.We may notice only the admitted facts herein.
Respondent No.1 is an Association of officers who have retired from the services of the appellant-Corporation which is a statutory authority constituted and incorporated under the Life Insurance Corporation Act, 1956. During the period of 1st August, 1992 and 31st July, 1994 a revision of scales of pay of the offices and employees of the Corporation took place. Different cut off dates were fixed for grant of different nature of allowances as also pay by the Chairman of the Corporation in purported exercise of his power under Regulation 51 of the Regulations. Whereas 1st April, 1993 was the cut off date for revision of pay; 1st August, 1994 was fixed as the cut off date for the purpose of payment of gratuity on the basis of revised pay. However, so far as those employees who had retired prior to 1st August, 1994 are concerned, they were directed to be entitled to reduce gratuity based on the reduced scale of pay with effect from 1st April, 1993 only. The arrears of pay were directed to be paid only w.e.f. 1st April, 1993.
3.Indisputably, whereas the Gujarat and Kerala High Court upheld the validity of the instructions issued by the Chairman of the appellant-Corporation, the Karnakata High Court took a different view.
4.The claim of Respondent No.1 was allowed in part by a learned Single Judge of the High Court by his order dated 8th July, 2003 holding :-
“A reading of Ext.P.3 (instructions issued by the Chairman for supplementary of Revisionist in respect of class I officers and claimed IV will definitely go to show that it cannot operate as far as the claims for gratuity is concerned. It is admitted that at least certain officers, represented by the petitioner Association were deemed as having revised salary from April, 1993 onwards. In that view, at the time of retirement, they were deemed as getting a salary which alone could have been taken notice of for computing gratuity, if Regulation No.77 has any application. It is definite that the restriction in Ext. P.3 and benevolence in Regulation No.77 could not have co-existed because the Corporation is offering gratuity at the rate less than the amount an employee had notionally drawn at the time of their respective retirement. It is also pertinent to note that when powers were conferred on the Chairman under Regulation No.51(2), specific reference was there about the incidents of DA and other allowances. There is no reference to any alteration permissible in respect of gratuity. It leads to the position that the regulation did not permit the Chairman to disturb criterian for gratuity payment by exercise of powers under Regulation No.51 (2).”
It was further held :-
“There was no power on the part of the Bank Management in that case to disturb the settlement, and the gratuity was to be paid on the basis of last drawn pay. Likewise, in the present case, it would not have been permissible for the Chairman to unsettle the benefits that had been spoken to by Regulation No.77 while issuing Ext.P.3 order.”
5.A Division Bench of the said High Court on an intra court appeal preferred by the appellants herein upheld the said findings.
6.Mr. Patwalia, learned senior counsel appearing on behalf of the appellants, in support of this appeal, submitted :-
1)Pension and Gratuity having two different concepts, the High Court committed a serious error in holding that the Chairman of the Corporation had no jurisdiction to issue the instructions.
ii)Sub-regulation (2) of Regulation 51 being of wide am
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