P P RAVINDRANATHAN Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is a writ petition by (1) an employee in National Insurance Company Limited, and (2) the workmen of National Insurance Company Limited, through petitioner No. 1, the General Secretary of the General Insurance Employees' Association, Calcutta. The National Insurance Company Limited is an insurance company registered under the Indian Companies Act 1913, and Insurance Act, 193S. It is an insurer as defined in the Insurance Act. The said insurance company is engaged in general insurance business such as fire, marine and miscellaneous under certificates of registration obtained from the Controller of Insurance and, as such, it is governed by the provisions of the Insurance Act (4 of 1938).

(2.) BY letter dated 26-9-1962, the petitioners approached the Central Government under section 31-A of the said Act with a request to decide and declare the quantum of bonus for the year 1961, which would be reasonable, and payable to the petitioners. This was followed by another letter dated 8-7-1963, addressed to the Finance Minister, Government of India, requesting, "we would now request you kindly to declare two months pay as bonus payable reasonably to the employees of the National Insurance Company Limited for each years 1961 and 1962 pending amendment of the Insurance Act." The letter of 8th July, 1963, was replied to by the Under Secretary to the Government of India by his letter dated 6-8-1963, in which, it is said,".........I am directed to state that the National Insurance Company has intimated that it is not in a positron to pay bonus to its employees for the year 1961." BY this writ petition, the petitioners have asked for a writ of Mandamus against the Union of India directing it to decide the quantum of bonus for the year 1961 payable to the petitioners by the said Insurance Company in accordance with law. It is said on behalf of the petitioners that, in view of section 31-A of the said Act, all references of industrial disputes to the tribunal under the Industrial Disputes Act are barred so far as payment of bonus is concerned and it is for the Central Government to decide the dispute and require the Insurance Company to pay such bonus to its employees, as the Central Government may consider reasonable. Raliance has been placed on the judgment of their Lordships of the Supreme Court in Workmen of the Hercules Insurance Company Limited v. Hercules Insurance Company Limited, Calcutta and particularly the following passage- "This provision which constitutes an exception to the rule prescribed by section 31-A (1) (c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed an amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees. If the financial position of the insureres is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made. In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority. Having regard to the scheme of the Act which purports to supervise and regulate the working of Insurance Companies the legislature thought that the payment of bonus by the Insurance Companies to their employees should normally be prohibited and its payment should be permitted subject to the over-riding control of the Central Government to prescribe the maximum in that behalf. If the Central Government decides that no bonus should be padi, no bonus can be paid by the insurer. If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit. That, in our opinion, is the effect of proviso (vii) to section 31-A (1) " On behalf of the respondent, it is said that clause (vii) of the proviso to section 31-A of the said Act does not constitute the 'Central Government' as a tribunal required to decide a dispute at the instance of the workmen. All that section 31-A. contemplates is that whereas section 31-A (1) (c) prohibits, inter alia, employment of any person whose remuneration or any part thereof takes the form of commission or bonus in respect of the general insurance business of the insure, caluse (vii) of the proviso removes the prohibition with respect to the payment of bonus in any year on a uniform basis to all salaried employees etc. for a period which, in the opinion of the Central Government, is reasonable having regard to 'the circumstances of the case. According to the respondent, all that it means is that the Insurance Company cannot pay bonus even under clause (vii) to the proviso beyond such an amount as is considered reasonable by the Central Government, but that does not mean that the employees can call upon the Central Government to adjudicate a regular dispute between the employers and the employees. In support of this argument, it is said that there is no power given to the Central Government to give any binding decision or even to call for the records or enforce the attendance of any witness to enable it to make a regular enquiry. It is said that in these circumstances the Central Government was justified in the attitude it took by its letter dated 6-8-1963. I think the plea of the Respondent 1s sound. The Central Government is empowered to limit the quantum, which an insurance company may be wanting to pay to its employees, but, in my judgment, it is not constituted as a tribunal to which a reference can be made by the employees and whom the employees can call upon to decide upon their claim. In this view, the petition must fail and is dismissed, bat there will be no order as to costs.