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2022 (10) TMI 690 - HC - Indian LawsConstitutional validity of of amendment to LIC Act - Money Bill of not - Sections 128 to 146 of the Finance Act, 2021 - Section 5(9) of the Life Insurance Corporation Act, 1956 and Sections 128 to 130 and Sections 132 to 146 of the Act of 2021- case of petitioner is that every participating policyholder was entitled to a minimum of 90% of the surplus arising from non-participating policies, but the amendment under challenge has reduced their entitlement to nil and, therefore, being a policyholder, she has challenged Sections 128 to 146 of the Act of 2021, apart from Section 5(9) of the Act of 1956. Whether the amendments fall within the realm of the subject-matters under Article 110 of the Constitution of India? HELD THAT - The issue in this regard was considered by the Apex Court in the case of Justice K.S.Puttaswamy (Retd.) , 2018 (9) TMI 1733 - SC ORDER , and ROJER MATHEW VERSUS SOUTH INDIAN BANK LTD. OTHERS 2019 (11) TMI 716 - SUPREME COURT . It was held that Money Bill cannot be construed in a restrictive sense and that the wisdom of the Speaker of the Lok Sabha must be valued, save where it is blatantly violative of the scheme of the Constitution - It is now settled law that mere reference to a Larger Bench does not stop operation of the judgment till it is reversed by the Larger Bench and, thereby, the judgments of the Apex Court in the cases of Justice K.S.Puttaswamy (Retd.) , and ROJER MATHEW, remain operational and binding on this court. The view aforesaid is fortified by the judgment of the Supreme Court in the case of ASHOK SADARANGANI ANR. VERSUS UNION OF INDIA ORS. 2012 (3) TMI 587 - SUPREME COURT wherein it has been held that a mere reference of an issue to a Larger Bench would not make the judgment inoperative. The judgments of the Apex Court in the cases of Justice K.S.Puttaswamy (Retd.) , and Rojer Mathew , can be applied to the present case. It is, however, necessary to deal with this case even independent to the judgments, cited supra, because the Notes on Clauses to the amendments elaborates the reason to bring in the amendment. It has been stated that the amendment is brought in to allow the Central Government to float the IPO and receive the money into the Consolidated Fund of India. In view of the above, the reason for amendment is to bring the money into the Consolidated Fund of India and all other amendments were required as a consequence thereof and are saved by Article 110(1)(g) of the Constitution of India, because payment of moneys into the Consolidated Fund or the Contingency Fund of India is covered by Article 110(1)(c) of the Constitution of India - it is opined that the amendment in the case on hand falls within the purview of Article 110 of the Constitution of India. The word only used in the definition of Money Bills given under Article 110 of the Constitution of India has to be read along with Article 110(1)(g) of the Constitution of India. If the word only is meant to govern only the subject-matters falling in any of the categories given under sub-clauses (a) to (f) of clause (1) of Article 110 of the Constitution of India, then it would make Article 110(1)(g) of the Constitution of India redundant, as Article 110(1)(g) of the Constitution of India provides for any matter incidental to any of the matters specified in sub-clauses (a) to (f) of clause (1) of Article 110 of the Constitution of India. Therefore, the word only has to be read in conjunction with Article 110(1)(g) of the Constitution of India. The petitioner has challenged the amendment in reference to Article 110 of the Constitution of India without challenging the certificate issued by the Speaker of the House of the People, though his decision is taken as final as per Article 110(3) of the Constitution of India. Moreover, as recorded in the previous paragraphs, when the petitioner was asked as to whether he would challenge the certificate issued by the Speaker of the House of the People, he answered in the negative and this shows that the challenge is made to the amendment ignoring the constitutional mandate under Article 110(3) of the Constitution of India. There are no merits in the writ petition to challenge the Act of 2021 in reference to the amendment in the Act of 1956 - petition dismissed.
Issues Involved:
1. Challenge to Sections 128 to 146 of the Finance Act, 2021 and Section 5(9) of the Life Insurance Corporation Act, 1956 as ultra vires Article 110 of the Constitution of India. 2. Validity of the amendments to the Life Insurance Corporation Act, 1956 introduced by the Finance Act, 2021. 3. Whether the Finance Bill, 2021 was correctly classified as a Money Bill under Article 110 of the Constitution of India. 4. Impact of the amendments on the policyholders of LIC and the allocation of surplus. Issue-Wise Detailed Analysis: 1. Challenge to Sections 128 to 146 of the Finance Act, 2021 and Section 5(9) of the Life Insurance Corporation Act, 1956 as ultra vires Article 110 of the Constitution of India: The petitioner, a policyholder of LIC, challenged Sections 128 to 146 of the Finance Act, 2021, and Section 5(9) of the LIC Act, 1956, arguing that these provisions were introduced as a Money Bill under Article 110 of the Constitution, though they did not fall within the category of a Money Bill. The petitioner contended that the amendments reduced the entitlement of participating policyholders from 90% of the surplus to nil, thus affecting their rights. 2. Validity of the amendments to the Life Insurance Corporation Act, 1956 introduced by the Finance Act, 2021: The amendments to the LIC Act, 1956, were brought through the Finance Act, 2021, to allow the Central Government to sell up to 49% of its ownership in LIC via an Initial Public Offering (IPO). This included changes to the capital structure, the introduction of equity shares, and provisions for the listing of LIC on stock exchanges. The amendments also introduced new governance structures and compliance requirements in alignment with listing standards. 3. Whether the Finance Bill, 2021 was correctly classified as a Money Bill under Article 110 of the Constitution of India: The court examined whether the amendments fell within the scope of Article 110, which defines a Money Bill. The respondents argued that the amendments aimed to receive money into the Consolidated Fund of India, thus falling under Article 110(1)(c) and (g). The court referred to the judgments in Justice K.S. Puttaswamy (Retd.) and Rojer Mathew, which emphasized that the definition of a Money Bill should not be construed restrictively and that the Speaker's certification holds significant weight unless blatantly unconstitutional. 4. Impact of the amendments on the policyholders of LIC and the allocation of surplus: The court noted that the amendments allowed for the allocation of up to 100% of the surplus from non-participating policies to shareholders, reducing the share for participating policyholders. This change was seen as part of the broader objective to float the IPO and receive funds into the Consolidated Fund of India. The court found that these amendments were incidental to the main objective and thus fell within the permissible scope of a Money Bill under Article 110(1)(g). Conclusion: The court dismissed the writ petition, holding that the amendments to the LIC Act, 1956, introduced by the Finance Act, 2021, were valid and fell within the scope of a Money Bill as defined under Article 110 of the Constitution. The court emphasized that the primary objective of the amendments was to receive money into the Consolidated Fund of India, and other changes were incidental to this purpose. The decision of the Speaker of the House of the People to certify the Finance Bill as a Money Bill was deemed final and not challenged by the petitioner. The court also noted that the petitioner approached the court at a late stage, just before the IPO, indicating potential laches.
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