Case: Life Insurance Corporation of India Vs. K.R. Krishnamurthi

have put in at least 10 years service shall be eligible for appearing at the qualifying test."5. At the end of these administrative orders appears the following note by way of explanation of them6. Note 1. The term service where it occurs shall, unless otherwise explicitly stated, include service in the corporation, service with the previous insurer........and also service with any other insurer carrying on life insurance business provided there is no break of more than six months between successive appointments."The respondent wanted promotion to the cadres of superintendents and higher grade assistants. The question in dispute is whether the respondent had put in the requisite number of years of service under paragraphs 6 and 8 of the administrative orders7. It appears that the respondent first joined the Mysore Government of February 22, 1950. He was then employed in the food section as a purchase depot clerk at Malur. From November 16, 1953, he was appointed as a third division clerk in the taluka office at Malur. It was only on January 2, 1956, that the respondent joined the insurance department of the Mysore Government. From September 1, 1956, he has been in the employment of the appellant Corporation under section 11(1) of the Act. It is not in dispute that there was no break in his service of more than six months since he first joined the Mysore Government service on February 22, 19508. Now, the dispute in this case has arisen over the interpretation of the words "service with the previous insurer" occurring in Note 1 in the administrative orders which we have earlier set out. If these words refer to any service under the previous insurer, that is, whether in his life insurance business or not, then the entire service of the respondent from February 22, 1950, up to date has to be taken into consideration for the purposes of paragraphs 6 and 8 of the administrative orders. in that case, it must be held that the respondent had put in the requisite number of years of service prescribed in these paragraphs and that is precisely his contention9. The appellant contends that the proper interpretation of the words "service with the previous insurer" is service in the insurance business of the insurer in a case where, as in the present, the insurer had other activities also. In other words, the appellant contends that the employment of the respondent by the Mysore Government in the taluka office or in the food section was not "service with the previous insurer" within the meaning of the noteIt seems to us that the appellants reading of the note is the correct one. The Act and the Regulations, and the orders are concerned with the previous insurer and its employees only so far as the life insurance business of that insurer is concerned. With the other activities of the insurer or his other employees the Act has nothing to do. It may be pointed out that under section 11 of the Act only those employees of the insurer who are employed " wholly or mainly in connection with his controlled business immediately before the appointed day", that automatically pass into the service of the Corporation. No doubt, section 11 deals with persons employed immediately before the appointed day and is concerned with the transfer of the services of these people to the Corporation, but it certainly indicates what kind of employees of the previous insurer is contemplated by the Act. That kind consists of persons who had been wholly and mainly employed in the life insurance business of the insurer. With other employees of the insurer the Act is not concerned. When, therefore, orders are issued under powers conferred by the Act concerning the services of employees of previous insurers and the words "service with the previous insurer" are used, it is plain that they can only refer to service in the insurance business of the previous insurer10. Learned counsel for the respondent drew our attention to Regulation 13 of the Regulations made under section 49(2)(b) and (bb) of the Act, earlier mentioned. That regulation provides that " service of an employee shall be deemed to commence from the working day on which an employee reports for duty." There is an explanation to this regulation and that reads, " In the case of a transferred employee, his service shall be deemed to have commenced from the date on which his service commenced with the insurer." Learned counsel contends that this explanation shows that any service under the insurer would do and such service need not be only in the life insurance business of the insurer. We do not think that the explanation shows that. In our view, it raises the same question which has arisen in the present case and is of no assistance in answering that questionThe High Court thought that as under sub-section (1) of section 11 an employee whose services were transferred was entitled to the same rights and privileges in all matters relating to his service as prevailed before his services were transferred and the respondent was entitled under the Mysore Government Service Regulations to contend that his service had commenced on February 22, 1950, that right cannot be taken away by Administrative Orders or Regulations. The learned judge of the High Court, however, did not consider sub-section (2) of section 11 which gives the Central Government the power to alter the conditions of service notwithstanding anything contained in sub-section (1). It is under that power that paragraphs 6 and 8 of the administrative orders and the notes appended to them had been made. However, as we have said earlier, no question as to the validity of any of these orders and regulations was raised on behalf of the respondent at the hearing before us. In fact the respondent has proceeded on the basis of these orders and regulations and claimed to be entitled to certain rights under them. We also, therefore, decide the appeal on that basis

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. It appears that the respondent first joined the Mysore Government of February 22, 1950. He was then employed in the food section as a purchase depot clerk at Malur. From November 16, 1953, he was appointed as a third division clerk in the taluka office at Malur. It was only on January 2, 1956, that the respondent joined the insurance department of the Mysore Government. From September 1, 1956, he has been in the employment of the appellant Corporation under section 11(1) of the Act. It is not in dispute that there was no break in his service of more than six months since he first joined the Mysore Government service on February 22,seems to us that the appellants reading of the note is the correct one. The Act and the Regulations, and the orders are concerned with the previous insurer and its employees only so far as the life insurance business of that insurer is concerned. With the other activities of the insurer or his other employees the Act has nothing to do. It may be pointed out that under section 11 of the Act only those employees of the insurer who are employed " wholly or mainly in connection with his controlled business immediately before the appointed day", that automatically pass into the service of the Corporation. No doubt, section 11 deals with persons employed immediately before the appointed day and is concerned with the transfer of the services of these people to the Corporation, but it certainly indicates what kind of employees of the previous insurer is contemplated by the Act. That kind consists of persons who had been wholly and mainly employed in the life insurance business of the insurer. With other employees of the insurer the Act is not concerned. When, therefore, orders are issued under powers conferred by the Act concerning the services of employees of previous insurers and the words "service with the previous insurer" are used, it is plain that they can only refer to service in the insurance business of the previousregulation provides that " service of an employee shall be deemed to commence from the working day on which an employee reports for duty." There is an explanation to this regulation and that reads, " In the case of a transferred employee, his service shall be deemed to have commenced from the date on which his service commenced with thedo not think that the explanation shows that. In our view, it raises the same question which has arisen in the present case and is of no assistance in answering that questionThe High Court thought that as under sub-section (1) of section 11 an employee whose services were transferred was entitled to the same rights and privileges in all matters relating to his service as prevailed before his services were transferred and the respondent was entitled under the Mysore Government Service Regulations to contend that his service had commenced on February 22, 1950, that right cannot be taken away by Administrative Orders or Regulations. The learned judge of the High Court, however, did not consider sub-section (2) of section 11 which gives the Central Government the power to alter the conditions of service notwithstanding anything contained in sub-section (1). It is under that power that paragraphs 6 and 8 of the administrative orders and the notes appended to them had been made. However, as we have said earlier, no question as to the validity of any of these orders and regulations was raised on behalf of the respondent at the hearing before us. In fact the respondent has proceeded on the basis of these orders and regulations and claimed to be entitled to certain rights under them. We also, therefore, decide the appeal on that basis