Shovakak Kanta vs Life Insurance Corporation of India

P.B. Mukharji, C.J.—This is an appeal from the judgment and order of D. N. Sinha J. discharging the Rule without prejudice to any other kind of legal action that the Petitioner before him might be advised to bring against the Life Insurance Corporation or any other authority.

The Appellant was employed previously under various life insurance companies. In 1956, he was working as an inspector in the Lakshmi Insurance Company at the Asansol branch. In that year the Life Insurance Corporation Act nationalizing all life insurance business in India came into force. In 1956, the Life Insurance Corporation was established. The Appellant thereafter became an employee of the said Corporation.

The Appellant thereupon became an employee of the said Corporation u/s 11(1) of the said Act whereby the employees of all insurers whose business was taken over by the Corporation were to continue under the employment of the Corporation under the same terms and conditions'' as before. Section 11(2) of the Life Insurance Corporation Act'' enables the Central Government to make rules for the purpose of rationalizing the pay scales and/or reducing the remuneration of the employees if it was to the benefit of the Corporation or the policy-holders. In exercise of this power, an order was promulgated by the Central Government on December 30, 1957, known as ''Categorisation Order''. It was also referred to as the ''Blue Order''. Under this order, the staff excepting those who were concerned purely with administrative posts like managers or assistant managers became known as ''Field Officers'' and they were governed by certain rules including the rule framed under Clause 10(a) of the Categorisation Order which is to the effect that before terminating their services they should be given an opportunity of showing cause.

Now, what has happened in this case is that some time on August 29, 1956, the Petitioner was notified that he was to be in the service of the Corporation as an inspector and his conditions of work were set out. A copy of this letter appears as annEx. ''A'' to the petition. It was stated in that letter that in order to give him sufficient time to adjust himself to the pattern of the Corporation''s organisation, his performance will be subject to scrutiny and review from time to time. The first of such scrutiny was to be on December 31, 1956, the second on March 31, 1957, and the third on June 30, 1957. The criteria for judging the performance was laid down.

It appears that the Petitioner''s performance was found to be extremely unsatisfactory and by a letter dated May 31, 1957, his services were terminated. A copy of the letter of termination appears as annEx. ''C to the petition.

What has been argued on behalf of the Petitioner was that as Field Officer as defined in the Categorisation Order, his services could not be terminated in this fashion, at least not before his performance was scrutinised, the last date for which was June 30, 1957, whereas he was discharged from service on May 31, 1957.

The order on which the Appellant wants to rely is the order of the Government of India dated December 30, 1957. This is the Categorisation Order. The main difficulty of the Appellant is that it came into force on December 30, 1957, long after his services were terminated. His services were terminated on May 31, 1957. Therefore, he cannot rely on the Categorisation Order.

I am satisfied that even if the Categorisation Order could be attracted the Appellant docs not come within it and especially within the definition of Field Officer. Under Clause 2(c) of this Categorisation Order, more fully called as the Life Insurance Corporation Field Officers'' (Alteration of Remuneration and Other Terms and Conditions of Service) Order, 1957, Field Officer has been defined. It means�

A person whether designated by an insurer as branch manager, branch secretary, assistant branch manager, assistant branch secretary, zonal agency manager, superintendent of agencies, divisional superintendent, organizer or by any other name, who before the 1st day of September, 1956, was wholly or mainly engaged in the development of new life insurance business for insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary, and who has become an employee of the Corporation u/s 11 of the Act; but does not include any person now in the employment of the Corporation as assistant branch manager, branch manager or in any higher capacity.

Many officers who are recruited as Field Officers are specifically mentioned, for instance, the branch manager, the branch secretary, the assistant branch manager, the assistant branch secretary, the zonal agency manager, the superintendent of agencies, the divisional superintendent and the organizer. The Appellant was an inspector. The Appellant was working as an inspector in the Lakshmi Insurance Company at its Asansol branch. His case is in para. 3 of the petition. It was stated there that, in or about August 1956 while the Appellant was working as an inspector in the Lakshmi Insurance Company at the Asansol branch, his services were automatically absorbed in the said Corporation and by Order No. DEV/IR920 dated December 29, 1956, passed by the Respondent No. 6, the Appellant was designated as inspector. Therefore, the Appellant''s contention that he is a Field Officer under this Categorisation. Order does not prima facie appear to be sound. The Appellant, therefore, falls back on the expression ''or by any other name'' appearing in the said definition clause. I do not think that the words ''or by any other name'' can bring in an inspector. The word ''other'' must be construed in an ejusdem generis sense, that is, of the same caliber and nature of work as especially named the officers of branch manager, branch secretary, assistant branch manager, assistant branch secretary, zonal agency manager, superintendent of agencies, divisional superintendent and organizer. So, even if the Categorisation Order applies to the Appellant''s case, which could not because of the fact that it came into existence on December 30, 1957, long after the termination of the Appellant''s services, the Appellant cannot come within the definition of Field Officer.

The provisions of Clause 10(a) of the Categorisation Order had no counter part in the terms and conditions of service existing previously. The result was that prior to the Categorisation Order the employees had either a contract of service or held service on terms and conditions similar to those under which they were holding their services under the Insurance company whose business had been taken over by the Corporation. In neither case, the Appellant can be called a civil servant or a person entitled, to protection under Article 311 of the Constitution of India. The Appellant would be governed by his own contract of service. If. there was a violation of such a contract, then an action for wrongful dismissal or damages for breach of contract can lie. But the Appellant cannot invoke the writ jurisdiction under Article 226 of the Constitution. Prior to the Categorisation Order there was no rule having the effect of law by which the Corporation was compelled to give a show-cause notice. The Appellant was an inspector in Lakshmi Insurance Company with effect from May 1, 1955, and his appointment was terminable on a thirty days'' notice on either side at any time. The letter of August 29, 1956, clearly stated that�"you (the Appellant) are designated as inspector and your area of work will be as under".

Mr. Arun Kumar. Dutt, appearing on behalf of the Appellant, admitted that u/s 11(1) of the Life Insurance Corporation Act, 1956, every whole-time employee of an insurer whose controlled business has been transferred to and vested in the Corporation and who was employed by the insurer wholly or mainly in connection with his controlled business immediately before the appointed day shall on and from the appointed day become an employee of the Corporation and shall hold his office therein by the same tenure at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension and gratuity and other matters as he would have held the same on the appointed day if this Act had. not been passed and shall continue to do so" unless and until his employment in the Corporation is terminated or until his remuneration, terms and conditions are duly altered by the Corporation.

Therefore, the Appellant was governed by his terms and conditions of his previous employment. But, Mr. Dutt. argues that by reason of Section 11(1) of the Life Insurance Corporation Act it has now become a statutory provision and, although it was the same terms and conditions of the previous employment, it is now u/s 11(1) of the Life Insurance Corporation Act. Therefore, he says, there is a statutory violation in the termination of the Appellant''s services and, hence, a writ will lie under Article 226 of the Constitution. Were it true, every contract would be governed by this principle, for every contract in India is governed by the Contract Act. I am satisfied that there is nothing more to be said in favour of the argument.

With regard to the performance of the work of the Appellant the record is quite clear. In the letter of December 29, 1956, the Appellant was informed that the total new business and premium income that was expected of him as also the other criteria for assessment of his performance were clearly pointed out in the said letter.

A review of the Appellant''s performance of work on December 31, 1956, showed:

(i) Business completed .... Nil

(ii) Premium Income (new business) .... Nil.

(iii) Activities of agents .... Nil

The letter dated March 1, 1957, referred to in the petition was issued to the inspectors whose performance as reviewed in the review of December 31, 1956, was extremely poor and conveyed no commitment to the Appellant. The time limit of seven months _as shown in the said letter and argued by Mr. Dutt creates an estoppel. He, therefore, argued that the Appellant could not be dismissed before that limit of seven months had expired. But that letter only indicated the time that was left from the date of the issue of the letter to the proposed date of final categorisation without any commitment explicit or implied that no action would be taken even on continued poor performance till the expiry of the said period. It was clearly pointed out that another review would be made as on March 31, 1957, and the Appellant whose performance was evidently hopeless was urged to improve his position so that he might find himself comfortably placed by the end of March 1957. In spite of the said warning, the Appellant''s performance of work during the period from March 1, 1957, to May 1957 was the same, namely.

(i) Business completed.... Nil;

(ii) Premium income (new business).... Nil; and

(iii) Agents activities. Nil.

Haying regard to this unsatisfactory and poor performance of the Appellant, his services were terminated on May 31, 1957. It was terminated with effect from that date and it gave him one month''s remuneration instead of the notice. That satisfied the terms and conditions of his service. In that view of the matter, Mr. Dutt''s reliance on the case of Century Spinning and Manufacturing Company Ltd. and Another Vs. The Ulhasnagar Municipal Council and Another, cannot help. That case decided that public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice. Nothing of the kind has happened here. This was not an estoppel The letter of August 29, 1956, is not a representation and besides the Appellant did not alter his position to his prejudice.

A point was taken before the learned Judge who heard the Rule -that the divisional manager has no power to terminate his services. The point has not been argued before us. The point has not been taken in the petition. This point not only required specific pleading, but the facts concerning it would have to be indicated so that the Respondents might have an opportunity of meeting them.

Also there is no demand for justice on this point. Had it been pointed out to the Corporation that the divisional manager had no jurisdiction, the Respondents might have shown facts or indicated the document which had conferred that right. This is clearly, as the learned trial Judge expressed, an after-thought and cannot be allowed to be agitated at this stage.

Some references were made on behalf of the Appellant to some of the decided cases. The first case was Life Insurance Corporation of India v. Nilralan Banerjee 75 C.W.N. 26 (3), a Division Bench decision of this Court. That decision after a review of the previous decisions came to the conclusion that a statutory body when it conducts its affairs with its employee, independently of any statutory provisions, it is amenable to the writ jurisdiction of the Courts under Article 226 of the Constitution. It dealt with the decisions of Pannalal Binjraj Vs. Union of india (UOI), ; Union of India v. T. Verma AIR 1957 S.C. 883 ; Associated Cement Works, Surajpur v. P. N. Sharma AIR 1965 SIC. 1595 ; Bhagwan v. Ram Chand; V.D.L. Board, Calcutta v. Jaffar Imam V.; Durga Sankar Mehta v. Thakur Raghuraj Singh and Ors.; V. Jaswant Sugar Mills v. Lakshmi Chand; V.S.R. Tewari v. District Board, Agra AIR 1964 S.G. 1680 and Life Insurance Corporation of India Vs. Sunil Kumar Mukherjee and Others, . That case seems to go entirely against the contention of the Appellant. In Life Insurance Corporation of India and Ors. v. Sunil Kumar Mukherjee and Ors. the two outstanding points of difference were (i) that the dismissal order was made after the Categorisation Order came into force and (ii) that he was appointed specifically as a Field Officer.

For these reasons, we dismiss the appeal. But there will be no order as to costs.

B.C. Mitra, J.

I agree.