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Issues Involved:
1. Validity of the Nagar Nigam Karamachari Privarik Kalyan Yojna scheme. 2. Applicability of Section 30 of the Life Insurance Corporation Act, 1956. 3. Jurisdiction of the State Government under Section 421 of the Madhya Pradesh Municipal Corporation Act, 1956. Issue-wise Detailed Analysis: 1. Validity of the Nagar Nigam Karamachari Privarik Kalyan Yojna Scheme: The Jabalpur Municipal Corporation had implemented a scheme known as Nagar Nigam Karamachari Privarik Kalyan Yojna (Family Benefit Fund Scheme) to provide financial benefits to the dependents of employees who died while in service. The scheme involved monthly contributions from employees and paid out a sum upon the employee's death or retirement. The Government of Madhya Pradesh questioned the scheme's validity, considering it potentially violative of the Life Insurance Corporation Act, 1956, and the Insurance Act, 1938. Subsequently, the government directed the suspension of the scheme, but later allowed the continuation of deductions until further orders. The High Court, however, ruled in favor of the scheme, stating that it did not fall within the ambit of life insurance business and that the State Government had no jurisdiction to suspend or cancel it under Section 421 of the Madhya Pradesh Municipal Corporation Act, 1956. 2. Applicability of Section 30 of the Life Insurance Corporation Act, 1956: Section 30 of the Life Insurance Corporation Act, 1956, grants the Life Insurance Corporation of India the exclusive privilege of carrying on life insurance business in India. The term "Life Insurance Business" is defined under Section 2(11) of the Insurance Act, 1938, as the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death or any contingency dependent on human life. The Supreme Court found that the scheme run by the Jabalpur Municipal Corporation had the attributes of life insurance business, as it assured payment upon the death or retirement of the employee. Consequently, Section 30 was applicable, and the scheme was deemed illegal since it was not run by the Life Insurance Corporation of India. The High Court's narrow interpretation of life insurance business was found to be incorrect. 3. Jurisdiction of the State Government under Section 421 of the Madhya Pradesh Municipal Corporation Act, 1956: Section 421 of the Madhya Pradesh Municipal Corporation Act, 1956, empowers the State Government to suspend any resolution or order of the Municipal Corporation if it is not in conformity with law or likely to cause injury or annoyance to the public. The Supreme Court held that since the scheme violated Section 30 of the Life Insurance Corporation Act, 1956, the State Government was within its rights to exercise its power under Section 421 to stop the scheme. The High Court's view that the scheme did not fall within the ambit of Section 421 was found to be erroneous. Conclusion: The Supreme Court allowed the civil appeal, holding that the scheme run by the Jabalpur Municipal Corporation was a form of life insurance business, thus falling under the exclusive domain of the Life Insurance Corporation of India as per Section 30 of the Life Insurance Corporation Act, 1956. The State Government's action to suspend the scheme under Section 421 of the Madhya Pradesh Municipal Corporation Act, 1956, was upheld as valid. The High Court's judgment was set aside, and the appeal was allowed with costs.
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