1981 (12) TMI 171 - SC - Indian Laws

Issues Involved:
1. Validity of the Life Insurance Corporation (Amendment) Act, 1981.
2. Validity of the Life Insurance Corporation (Amendment) Ordinance, 1981.
3. Validity of the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981.
4. Violation of Articles 14, 19(1)(g), and 21 of the Constitution.
5. Excessive delegation of legislative functions.
6. Retrospective operation of rules and nullification of court orders.

Detailed Analysis:

1. Validity of the Life Insurance Corporation (Amendment) Act, 1981:
The Act was challenged on the grounds that it violated Articles 14, 19(1)(g), and 21 of the Constitution. The Court found that the claim based on the 1974 settlements is not a fundamental right enforceable under Article 19(1)(g) and that the argument under Article 21 was also untenable. The Court held that the Act did not infringe Article 14 as the petitioners failed to establish that the employees of the Life Insurance Corporation (LIC) were similarly circumstanced to those in other public sector undertakings. The Court also rejected the argument of excessive delegation, stating that the legislative policy was sufficiently clear and provided guidance to the rule-making authority.

2. Validity of the Life Insurance Corporation (Amendment) Ordinance, 1981:
The Ordinance, which preceded the Act, was replaced by the Act. The Court examined the changes introduced by the Ordinance, including the insertion of new sub-clauses and sub-sections in Section 48 of the principal Act. The Court found that the provisions introduced by the Ordinance were similar to those in the Amendment Act and upheld their validity for the same reasons.

3. Validity of the Life Insurance Corporation of India Class III and Class IV Employees (Bonus and Dearness Allowance) Rules, 1981:
The Rules were challenged for being retrospective and nullifying the effect of a writ issued by the Supreme Court in D.J. Bahadur's case. The Court held that while the Rules could operate prospectively from their date of publication (February 2, 1981), they could not nullify the effect of the writ issued in D.J. Bahadur's case, which directed the LIC to give effect to the terms of the 1974 settlements relating to bonus until superseded by a fresh settlement, an industrial award, or relevant legislation.

4. Violation of Articles 14, 19(1)(g), and 21 of the Constitution:
The Court found no substance in the challenges based on Articles 19(1)(g) and 21. Regarding Article 14, the Court held that the petitioners failed to demonstrate hostile discrimination, and the material provided by the Union of India and LIC, though not conclusive, suggested that the remuneration of LIC employees was higher than that of similarly situated employees in other public sector undertakings.

5. Excessive Delegation of Legislative Functions:
The Court rejected the argument of excessive delegation, stating that the Amendment Act laid down a clear legislative policy to guide the rule-making authority. The Court referred to previous decisions, including Harishankar Bagla's case, to support its conclusion that the delegation was within permissible limits and that the Act did not abdicate legislative authority.

6. Retrospective Operation of Rules and Nullification of Court Orders:
The Court held that Rule 3 of the 1981 Rules, which sought to supersede the terms of the 1974 settlements relating to bonus with retrospective effect, could not nullify the effect of the writ issued in D.J. Bahadur's case. The Court emphasized that the writ issued by the Supreme Court must be obeyed and that the retrospective operation of the Rules could not override the judicial mandate.

Conclusion:
The Court allowed the petitions to the extent that the 1981 Rules could only operate prospectively from February 2, 1981, and could not nullify the effect of the writ issued in D.J. Bahadur's case. The Court made no order as to costs.

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