Bal Raj Tuli, J. - (1.) A Division Bench has referred the following question of law for determination by this Bench:-- "Whether the restriction placed by regulation 25 (4) of the Life Insurance Corporation of India (Staff) Regulations, 1960, framed under Section 49 (2) (b) and (bb) of the Life Insurance Corporation Act debarring the employees of the Corporation from taking part in any election does or does not amount to a disqualification for being chosen as a member of the Punjab Legislative Assembly within the meaning of Sub-clause (e) of Clause (1) of Article 191 of the Constitution." Regulation 25 (4) of the Life Insurance Corporation of India (Staff) Regulations, 1960 (hereinafter referred to as the Regulations), which places the restriction, reads as under:-- "No employee shall canvass or otherwise interfere or use his influence in connection with or take part in an election to any legislature or local authority. Provided that-- (i) an employee qualified to vote at such election may exercise his right to vote but, where he does so, he shall give no indication of the manner in which he proposes to vote or has voted. (ii) an employee shall not be deemed to have contravened the provisions of this regulation by reason only that he assists in the conduct of an election in the due performance of a duty imposed on him by or under any law for the time being in force; (iii) the Chairman may permit an employee to offer himself as a candidate for election to a local authority and the employee so permitted shall not be deemed to have contravened the provisions of this regulation."
(2.) On behalf of the respondents, it is submitted that this regulation prescribes a disqualification for an employee of the Life Insurance Corporation (hereinafter referred to as the Corporation) from being chosen or for being a member of the Legislative Assembly of the State as it has been made under a law made by Parliament, that is, Life Insurance Corporation Act, 1956 (hereinafter referred to as the Act).
(3.) The Act was enacted to provide for the nationalisation of life insurance business in India by transferring all such business to a Corporation established for the purpose and to provide for the regulation and control of the business of the Corporation and for matters connected therewith or incidental thereto. The Corporation has been established under Section 3 of the Act. It is a body corporate having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold and dispose of property, and may by its name sue and be sued. Original capital of the Corporation was Rupees five crores which was provided by the Central Government after due appropriation by Parliament. Section 6 states the various functions of the Corporation and is in the following terms:- "6 (1) Subject to the rules, if any, made by the Central Government in this behalf, it shall be the general duty of the Corporation to carry on life insurance business, whether in or outside India, and the Corporation shall so exercise its powers under this Act as to secure that life insurance business is developed to the best advantage of the community. (2) Without prejudice to the generality of the provisions contained in sub- section (1) but subject to the other provisions contained in this Act, the Corporation shall have power-( a) to carry on capital redemption business, annuity certain business or reinsurance business in so far as such reinsurance business appertains to life insurance business; (b) subject to the rules, if any, made by the Central Government in this behalf to investment the funds of the Corporation in such manner as the Corporation may think fit and to take all such steps as may be necessary or expedient for the protection or realisation of any investment; including the taking over of and administer ing any property offered as security for the investment until a suitable opportunity arises for its disposal. (c) to acquire, hold and dispose of any property for the purpose of its business (d) to transfer the whole or any part of the life insurance business carried on outside India to any other person or persons, if in the interests of the Corporation it is expedient so to do; (e) to advance or lend money upon the security of any movable or immovable property or otherwise; (f) to borrow or raise any money in such manner and upon such security as the Corporation may think fit. (g) to carry on either by itself or through any subsidiary any other business in any case where such other business was being carried on by a subsidiary of an insurer whose controlled business has been transferred to and vested in the Corporation under this Act; (h) to carry on any other business which may seem to the Corporation to be capable of being conveniently carried on in connection with its business and calculated directly or indirectly to render profitable the business of the Corporation; (i) to do all such things as may be incidental or conducive to the proper exercise of any of the powers of the Corporation. (3) In the discharge of any of its functions the Corporation shall act so far as may be on business principles." Section 7 provides for the transfer of assets and liabilities of existing insurers carrying on controlled business to the Corporation. Section 21 provides that the Corporation shall be guided, in the discharge of its functions under the Act, by such directions in matters of policy involving public interest as the Central Government may give to it in writing and the decision of the Central Government as to whether any question relates to a matter of policy involving public interest or not, shall be final. Section 23 provides for the employment of the staff by the Corporation and is in the following terms:- "23 (11 For the purpose of enabling it to discharge its functions under this Act, the Corporation may employ such number of persons as it thinks fit. (2) Every person employed by the Corporation or whose services have been transferred to the Corporation under this Act, shall be liable to serve anywhere in India." Section 30 vests in the Corporation the exclusive power to carry on Life Insurance business in the country. Under Section 37, all policies issued by the Corporation are guaranteed by the Central Government, Section 48 authorises the Central Government to make rules to carry out the purposes of the Act. All such rules are to be laid for not less than 30 days before both Houses of Parliament as soon as possible after they are made and are subject to such modifications as Parliament may make during the session in which they are so laid or in the session immediately following. Section 49 gives power to the Corporation to make regulations, with the previous approval of the Central Government, which shall not be inconsistent with the Act and the rules made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of the Act Clauses (b) and (bb) of Sub-section (2) of Section 49 read as under:-- "In particular and without prejudice to the generality of the foregoing power, such regulations may provide for-- (b) the method of recruitment of employees and agents of the Corporation and the terms and conditions of service of such employees or agents; (bb) the terms and conditions of service of persons who have become employees of the Corporation under Subsection (1) of Section 11.";