PARAS NATH VERMA Vs. LIFE INSURANCE CORPORATION OF INDIA

JUDGEMENT

(1.) The petitioner, Sri Paras Nath Verma, was appointed as Organising Secretary of the Indian Globe Insurance Company Ltd., in July, 1954. In the month of October in the same year the petitioner was promoted as Branch Manager of the Company find was posted to the Patna Branch. On the 1st September, 1956, the Life Insurance Corporation of India was brought into existence by an official notification under Section 3 of the Life Insurance Corporation Act (Act 31 of 1956). After the passing of the Life Insurance Corporation Act, certain regulations, called the Staff Regulations of 1956, were made by the Life Insurance Corporation with the approval of the Central Government, in exercise of the powers vested in it under Section 49, Sub-section (2), Clause (b), of the Act, defining the terms and conditions of service of the staff of the Life Insurance Corporation of India. It appears that on the 30th December, 1957, the Central Government made an order in exercise o the powers conferred by Section 11, Sub-section (2), of the Life Insurance Corporation Act, called the Life Insurance Corporation Field Officers (Alteration of Remuneration and Other Terms and Conditions of Service) Order, 1957 (to be hereinafter called the Field Officer's Order). The case of the petitioner was examined by a Senior Services Committee of the Life Insurance Corporation appointed by the Government of India, and as a result the petitioner was required to work as a Field Officer at Patna (vide Annexures D, G, I and J), and a categorisation Sheet (Annexure K) was also served upon the petitioner. The case of the petitioner is that he is entitled to work as a Branch Manager under the Life Insurance Corporation, and the orders of the respondents requiring him to work as an Inspector and the categorisation Sheet (Annexure K) and the Annexures D, G, I and J are unconstitutional and illegal. The petitioner has accordingly moved the High Court, for grant of a writ in the nature of certiorari to quash all these orders of the respondents and for a writ in the nature of mandamus requiring (he respondents to appoint him as a Branch Manager under the Life Insurance Corporation.

(2.) Cause has been shown by the learned Government Advocate on behalf of the respondents to whom notice of the rule was ordered to be given. At the outset of his argument it was conceded by learned counsel for the petitioner that the Field Officers Order must be held to be constitutional and legally valid in view of the decision of a Bench of this Court in Chaturbhuj Lal Purayar v. Divisional Manager, Life Insurance Corporation, Misc. Judicial Case No. 164 of 1958, decided on the 12th January, 1960. It was also conceded by learned counsel for the petitioner that the only question for determination in this case is whether the petitioner has been properly classified as a 'Field Officer' within the meaning of Clause 2, Sub-clause (c), of the Field Officers' Order which Is in the following terms: 2. In this order, x x x x x (c) 'Field Officer' means a person whether designated by an insurer as Branch Manager, Branch Secretary, Assistant Branch Manager, Assistant Branch Secretary, Zonal Agency Manager, Super intendent of Agencies, Divisional Superintendent, Organiser or by any other name, who before the 1st day of September, 1956, was wholly or mainly engaged in the development of new life insurance business for the insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business, and who was remunerated by a regular monthly salary; and who has become an employee of the Corporation under Section 11 of the Act; but does not include any person now in the employment of the Corporation as Assistant Branch Manager, Branch Manager or in any higher capacity."

(3.) On behalf of the petitioner the main argument put forward is that the duties of the petitioner as Branch Manager of the Globe Insurance Company were administrative in character and the respondents have erred as a matter of law in classifying him as a Field Officer within the meaning of Clause 2(c) of the Order of the Government of India dated the 30th December, 1957. On behalf of the petitioner reference was also made to paragraph 3(iv) of thy affidavit dated the 7th April, 1959, wherein it is stated that the petitioner appointed Inspectors, subordinate staff viz., assistants and peons, without previous reference to the Head Office, and issued letters of appointment under his signature. It was stated in this paragraph that the petitioner expended money in the purchase of necessary articles for the office and undertook tours for organisation purposes and also fixed the salary and other remuneration of the Inspectors working under him. We are, however, unable to accept the argument addressed by learned counsel on behalf of the petitioner as correct. It is admitted in paragraph 4 of the petitioner's affidavit dated the 30th January, 1959, that the duties of the petitioner as Branch Manager of the Globe Insurance Company were to 'develop and supervise the work of Inspectors and other salaried field workers'. In paragraph 5(b) of the same affidavit the petitioner has said that 'as Branch Manager of the said Company he had to supervise the work of Inspectors and other salaried staff, agents and sub-agents and develop the business through them under a budget of business programme, but his service was neither based on contract to produce business through such agents, nor his salary was determined on the basis of any such contract. It is true that in paragraph 5(c) of the affidavit the petitioner has said that as Branch Manager he was in charge of all administrative work with the staff of clerks and peons working under him. But the test for deciding whether the petitioner is a Field Officer within the meaning of the Field Officer's Order is whether the petitioner was mainly engaged in the development of new life insurance business for the insurer by supervising, either directly or through one or more intermediaries, the work of persons procuring or soliciting new life insurance business. It is not a relevant circumstance for the purpose of applying Clause 2(c) that the petitioner was remunerated by a regular monthly salary. The question presented for determination in this case is whether the petitioner was mainly engaged in the development of new life insurance business for the Globe Life Insurance Company. In paragraph 7 of the counter-affidavit the respondents have said as follows: "7. That the statements made in paragraphs 4 and 5 are not correct inasmuch as on 31-8-1956 he was not holding a post equivalent and identical to the post of the Branch Manager of the Life Insurance Corporation of India. This is proved by the following facts: "(i) He had agency organisation working directly under him, although he was required to supervise the work of a few Inspectors of agencies not on fixed salary basis and whose appointments were terminated on 31-8-1956. (ii) As Branch Manager of the ex-Insurer, he was procuring new business only through Held workers and Agents and Special Agents on commission basis and not on fixed salary basis and he was required to bring new business under a budget of business programme and his remuneration, salary etc., as also his future prospects were dependent on the fulfilment of such programme. Thus will be evident from the fact that there was no increase in his salary since his appointment on 1st July 1954 till 31st August 1956, whereas in the Corporation the Branch Manager's remunerations and prospects (sic) and he has got a definite grade with scheduled increments on a time-scale. He has also other privileges like Provident Fund, Gratuity etc., which were denied to Shri P. N. Verma. x x x x" In paragraph 4 of the Supplementary counter-affi davit of the respondents, dated the 14th Septem ber, 1959, there is an allegation that the petitioner was originally appointed as Organising Secretary of the Indian Globe Insurance Company with a stipulated minimum business guarantee of first premium income of Rs. 12,000/- per year on assu rances of fifteen years Or over. Paragraph 4 of this counter-affidavit further states: