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Delegatee cannot act in violation of statute: court

Legal Correspondent

LIC’s appeal against Kerala High Court verdict dismissed

LIC Chairman can exercise jurisdiction only in limited areas
An employee is entitled to gratuity

New Delhi: “A delegatee must exercise powers within the four corners of the statute. The power of a sub-delegatee is more restricted. A delegatee cannot act in violation of statute,” the Supreme Court has held.

A Bench consisting of Justices S.B. Sinha and H.S. Bedi was examining the jurisdiction and powers of the Chairman of the Life Insurance Corporation to give instructions on fixation of cut-off dates for payment of gratuity to retired officers contrary to regulations. The court gave its ruling on a special leave petition by the LIC against a Kerala High Court judgment partly allowing claims of the Retired LIC Officers Association.

According to the association, pay scales were revised for officers and other employees during August 1, 1992-July 31, 1994. The Chairman fixed different cut-off dates for grant of various allowances and pay including payment of gratuity to retired officers. The High Court held that the Chairman had no jurisdiction to issue the instructions.

Assailing the judgment, the LIC said the regulations, with wide amplitude, gave the Chairman powers to fix cut-off dates for not only pay and allowances but also gratuity.

Rejecting the contention, the Bench said: “The method of fixation, eligibility for the benefit of revision and the date from which the revision shall apply are the only areas within which the Chairman can exercise his jurisdiction. The effect of revision of pay scales on other spheres and which are otherwise governed by another statute or other provisions of the said regulations would not come within the purview thereof.”

Writing the judgment, Mr. Justice Sinha said: “When a benefit is extended to a group of employees the effect of such benefit, if otherwise comes within the purview thereof, must be held to be applicable to other groups of employees also. An employee is entitled to gratuity. It is not a bounty. It is payable on successful tenure of service.”

The Bench pointed out that the LIC Chairman himself had given retrospective effect to pay scales revision. Retrospective effect was also given to benefit a class of employees. Further, the employees, whether they had superannuated or not, were given the benefit of pay arrears from August 1, 1993. By reason of the grant of the benefit to serving and superannuated employees, both classes became entitled thereto as of right.

The Bench said: “A sub-delegatee cannot exercise any power which is not meant to be conferred upon him by reason of statutory provisions. It must conform not only to the provisions of the regulations and the Act but also other parliamentary Acts.”

The Bench dismissed LIC’s appeal with Rs. 25,000 as costs.

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