Madan Mohan Pathak Vs. Union of India & Ors [1978] INSC 42 (21 February 1978)
1978 Latest Caselaw 42 SC

Madan Mohan Pathak Vs. Union of India & Ors [1978] INSC 42 (21 February 1978)

BEG, M. HAMEEDULLAH (CJ) BEG, M. HAMEEDULLAH (CJ) CHANDRACHUD, Y.V.

BHAGWATI, P.N.

KRISHNAIYER, V.R.

FAZALALI, SYED MURTAZA SHINGAL, P.N.

DESAI, D.A.

CITATION: 1978 AIR 803 1978 SCR (3) 334 1978 SCC (2) 50

CITATOR INFO :

D 1980 SC1682 (67,68) RF 1980 SC2181 (149) R 1982 SC1126 (2,12,13,17,19) D 1984 SC1130 (31) F 1984 SC1291 (12) D 1986 SC1126 (47,48,49,50) APL 1989 SC1629 (17,22,23,24) RF 1989 SC1741 (10) RF 1990 SC 123 (32) R 1992 SC 522 (17)

ACT:

Life Insurance Corporation (Modification of Settlement) Act, 1976-S. 3-Validity of-Corporation entered into Settlement with Class III and Class IV employees regarding bonus- Settlement was subject to the approval of Central Government-During emergency Central Government issued instructions not to pay bonus under the settlement-Employees filed Writ Petition in the High Court-A Single Judge allowed the Writ Petition-The impugned Act was passed when Letters Parent Appeal was pending before the High Court-Corporation withdrew the appeal-Impugned Act, if absolved the Corporation from obligation to carry out the Writ of Mandamus issued by the Single Judge.

Constitution of India: Art. 31-Bonus payable under the Settlement, if property within the mataning of Art. 31(2)- Stopping payment of bonus, if amounts to compulsory acquisition of property without payment of compensation.

HEADNOTE:

From time to time the Life Insurance Corporation and its employees arrived at settlement relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. Clause (8) of the Settlement dated January 24, 1974, which related to payment of bonus, provided-(i) that no profit-sharing bonus shall be paid but the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III and Class IV employees; (ii) that an annual cash bonus will be paid to all Class III and Class IV employees at the rate of 15% of the annual salary actually drawn by an employee in respect of the financial year to which the bonus relates and (iii) that save as provided therein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated June 26, 1972. Clause (12) of the Settlement which refers to the, period of settlement provided (1) that the Settlement shall be effective from April 1, 1973 for a period of four years and (2) that the, terms of the Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.

One of the administrative instructions issued by the Corporation in regard to the payment of cash bonus under cl. 8(ii) of the Settlement was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose, of determining the amount of bonus payable to the employee or his heirs and the other was that the bonus shall be paid along with the salary for the month of April but in case of retirement or death, payment will be made soon after the contingency.

The payment of Bonus (Amendment) Act. 1976 considerably curtailed the rights of the employees to bonus in industrial establishments. But in so far as the employees of the Corporation were concerned this Act had no application because by reason of s. 32 of the Payment of Bonus Act, the Corporation was outside the purview of its operation. The Central Government however decided that the employees of establishments which were not covered by the Bonus Act would not be eligible for payment of bonus but exgratia payment in lieu of bonus would be made to them. Pursuant to this decision the L.T C. was advised by the Ministry of Finance, Government of India, that no further payment of bonus should be made to its employees without getting the same cleared by the Government. The Corporation accordingly issued administrative instructions not to pay bonus to its employees under the existing provisions until further instructions. To the employees' assertion that the Corporation was bound to, 335 pay bonus in accordance with the terms of the Settlement the- Corporation contended that payment of bonus by the Corporation was subject to such directions as the Central Government might issue from time to time, and since the Central Government had advised it not to make any payment of bonus without its specific approval, bonus could not be paid to the employees. Thereupon, the All India Insurance Employees' Association moved the High Court for issue of a writ directing the Corporation to act in accordance with the terms of the Settlement dated January 24, 1974 read with administrative instructions dated March 29, 1974 and not to refuse to pay cash bonus to Class III and Class IV employees. A single Judge of the High Court allowed the writ petition. While the Letters Patent Appeal was pending, Parliament passed the Life Insurance Corporation (Modification of Settlement) Act, 1976 (which is the Act impugned in this case). In the Letters Patent Appeal the Corporation stated that in view of the impugned Act , there was no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal.

Since the effect of the impugned Act was to deprive Class III and Class IV employees of bonus payable to them in accordance with the terms of the Settlement, two of the associations filed writ petitions in this Court challenging the constitutional validity of the impugned Act. It was contended on their behalf that even if the impugned Act rendered cl. (8) (ii) ineffective with effect from April 1, 1975 it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandamus issued by the High Court and (2) that the right of Class III and Class IV employees to annual cash bonus for the years 1975-76 and 1976-77 under Cl. 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property.

without payment of compensation, it was violative of Art.

31(2) of the Constitution.

Allowing the writ petitions Beg C.J. (concurring with the majority)

HELD : Section 3 of the Life Insurance Corporation (Modification of Settlement) Act, 1976 is struck by the provisions of Art. 19(1)(f) and is not saved by Art. 19(6) of the Constitution. [346 A]

1. The Statement of Objects and Reasons of the Act discloses that the purpose of the impugned Act was to undo settlements arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974 and recognised by the High Court. In Smt. Indira Gandhi v.

Raj Narain this Court held that even a constitutional amendment cannot authorise the assumption of judicial power by Parliament. One of the tests laid down was whether the decision is of a kind which requires hearing to be given to the parties i.e., whether it involves a quasi-judicial procedure. A decision reached by the Central Government is the result of a satisfaction on matters stated there and would imply quasi-judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure. followed in this case does not require that to, be done. It would be unfair to adopt legislative procedure to undo a settlement which had become the basis of a decision of a High Court. Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of s. 18 of the Industrial Disputes Act, 1947 which had been held to be valid and enforceable by a High Court. [341 G, H, 342 A-C] 2(a) The object of the Act was in effect to take away the force of the judgment of the High Court. Rights under that judgment could be said to, rise independently of Art. 19, of the Constitution. To give effect to that judgment is not the same thing as enforcing a right under Art. 19. It may be that a right under Art. 19 becomes linked up with the enforceability of the judgment. Nevertheless the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside s. 3 would be invalid for trenching upon the judicial power. [343 B-D] 336 (b) A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. But the present is a pure and simple case of deprivation of rights of the employees without any apparent nexus with any public interest.

In the instant case the impugned Act is a measure which seeks to deprive workers of the benefits of settlement arrived at and assented to by the Central Government under the provisions of the Industrial Disputes Act. Such a settlement should not be set at naught by an Act designed to defeat the purpose. In judging the reasonableness of an Act the prospects held out, the representations made, the conduct of the Government and equities arising therefrom may all be taken into consideration. [342 E-F, 344 E-F]

3. Even though the real object of the Act was to set aside the result of mandamaus, the section does not mention this object. This was perhaps because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Art. 226 of the Constitution. Even if s. 3 seeks to take away the basis of the judgment without mentioning it, yet where the rights of the citizens against the State are concerned the court should adopt an interpretation which upholds those rights. Therefore, the rights which had passed into those embodied in a judgment and become the basis of a mandamus from the High Court, could not be taken away in an indirect fashion. [343 D-E].

4. Even though the Directive Principles contained in Art.

43, cast an obligation on the State to secure a living wage for the workers and is part of the principles declared fundamental in the governance of the country, it is not a fundamental right which can be enforced. Even though the Directive Principles give a direction in which the fundamental policies of the State must be oriented, yet this Court cannot direct either the Central Government or the Parliament to proceed in that direction. Even if the Directives are not directly enforceable by a Court they cannot be declared ineffective. They have the life and force of fundamentals. The best way to give vitality and effect to them is to use them as criteria of reasonableness.

[344 B-C] 5(a) Articles 358 and 359(1A) provide that as soon as the Proclamation of emergency cease to operate the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect.' [346 B-C] (b) The term "things done or omitted to be done", should be interpreted very narrowly. In the present case it means that the settlements are not to be deemed to be wiped off.

All that it means is that no payment of bonus could be demanded during the emergency but as soon as the emergency was over, the settlement would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. In other words valid claims cannot be washed off by the emergency per se. They can only be suspended by a law passed during the operation of Arts. 358 and 359(1A). [346 C-F] (Per Chandrachud, Fazal Ali and Shinghal, JJ.). Concurring with the majority.

The impugned Act violates Art. 31(2) and is, therefore, void. [369 G] (Per Bhagwati, Iyer and Desai, JJ.) Irrespective whether the impugned Act is constitutionally valid or not, the Corporation is bound to obey the Writ of Mandamus issued by the, High Court and to pay annual cash bonus for the year 1975-76 to Class III and Class IV employees. [352 D-E]

1. Section 3 of the impugned Act merely provided that the provisions of the Settlement, in so far as they related to payment of annual cash bonus to Class in and Class IV employees, shall not have any force or effect and shall not be deemed to have had any force or effect from April 1, 1975. The writ of Mandamus issued by the High Court was not touched by the impugned Act. The right of the employees to annual cash bonus' for the year 1975-76 became 337 crystallised in the judgment and this right was not sought to be taken away by the impugned Act. The Judgment continued to subsist and the corporation was bound to pay bonus in obedience to the writ of Mandamus. By the time the Letters Patent Appeal came up for hearing, the impugned Act had already come into force and the Corporation could have successfully contended in the appeal that since the Settlement, in so far as it provided for payment of annual cash bonus, was annihilated by the impugned Act with effect from 1st April, 1975 and so the employees were not entitled to bonus for the year 1975-76 and hence no writ of Mandamus could issue against the Corporation directing it to make payment of bonus. If such contention had been raised, there is little doubt that the judgment of the single Judge would have been upturned. But that was not done, and the judgment of the single Judge became final and binding oil the parties. [353 A-F, 355 C] Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality, [1970] 1 SCR 358 and Patel Gordhandas Hargovindas v. Municipal Commissioner, Alimedabad, [1964] 2 SCR 608; distinguished and held inapplicable.

2(a). The argument on behalf of the Corporation that on a proper interpretation of the clauses annual cash bonus payable under cl. 8(ii) was, by reason of cl. 8(i) subject to the directions issued by the Central Government from time to time and the Government having stopped further payment of bonus, the employees were not entitled to claim annual cash bonus, is erroneous. The employees had absolute right to receive annual cash bonus from the Corporation in terms of el. 8(ii) and it was not competent to the Central Government to issue any directions to the Corporation to refuse or withhold payment of the same. [356 D-H] (b) Although under regulation 58 of the Service Regulations non-profit sharing bonus could be granted subject to the directions of the Central Government and if the Government issues a direction to the contrary bonus could not be paid by the Corporation, in the instant case, as provided in cl.

12 of the Settlement, the Central Government approved the payment of bonus under cl. 8(ii). That having been done it was not competent to the Central Government thereafter to issue another contrary direction which would have the effect of compelling the Corporation to commit a breach of its obligation under s. 18(1) of the Industrial Disputes Act, 1947 to pay annual cash bonus under clause 8(ii). The overriding power given to the Central Government to issue directions from time to time contained in cl. 8(i) is conspicuously absent in cl. 8(ii). The power contained in cl. 8(i) cannot be projected or read into cl. 8(ii). These two clauses are distinct and independent. While cl. 8(i) is a general provision, el. 8(ii) specifically provides that cash bonus in the manner prescribed therein shall be paid to the employees. This specific provision is made subject only to the approval of the Central Government, which was obtained. [357 A-F] (c) Moreover, under cl. 8(ii) read with the administrative instruction issued by the Corporation, annual cash bonus accrued from day to day, though payable in case of retirement, resignation or death on the happening of that contingency and otherwise on the expiration of the year to which the bonus related, Thus the annual cash bonus payable for the year 1975-76 was a debt due and owing from the Corporation to each of the employees., On the date when the impugned Act came into force each of the employees was entitled to a debt due and owing to him from the Corporation. [357 H, 358 A] 3(a) The impugned Act must be held to be violative of Art.

31(2) since it did not provide for payment of any compensation for the compulsory acquisition of the debts.

[369 C] (b) The direct effect of the impugned Act was to transfer ownership of the debts due and owing to Class III and Class IV employees in respect of cash bonus to the Life Insurance Corporation and since the Corporation is a Corporation owned by the State, the impugned Act was a law providing for compulsory acquisition of the debts by the State within the meaning of Art. 31(2A). 1369 B-C] 338 (c) Choses in action can be acquired by the State. So long as the acquisition sub-serves a public purpose, it would satisfy the requirement of Art. 31(2). There is a fundamental distinction between a chose in action and money.

A chose in action has not the same mobility and liquidity as money, and its value is not measured by the amount recoverable under it but depends on a variety of factors.

Where money is given as compensation for taking money the theory of forced loan may apply, but it is not applicable where a chose in action is taken and money representing its value is given as compensation. [363 A, D-F] R. C. Cooper v. Union of India, [1970] 3 SCR 530; Madhav Rao Scindia v. Union of India : [1971] 3 SCR 9 reiterated.

State of Bihar v. Kameshwar Singh, [1952] S.C.R. 889; State of Madhya Pradesh v. Ranojirao Shinde, [1968] 3 S.C.R. 489;

dissented;

Deokinandan Prasad v. State of Bihar, [1971] Suppl. S.C.R.

634; State of Punjab v. K. R. Erray & Sobhag Rai Mehta, [1973] 2 S.C.R. 405; State of Gujarat, v. Sri Ambica Mills Ltd., [1974] 3 S.C.R. 760 and Slat(, of Kerala v. The Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd., [1974] 1 S.C.R. 671 followed;

State of Madhya Pradesh v. Ranojirao Shinde, [1968] 3 S.C.R.

489; State of Bihar v. Kameshwar Singh, [1952] S.C.R. 889 and Bombay Dyeing and Manufacturing Co. Ltd. v. State of Bombay, [1959] S.C.R. 1122; explained; [1968] 3 S.C.R. 489 and [1952] S.C.R. 889; held no longer good law.

(d) The debts due and owing from the Corporation in respect of annual cash bonus were clearly property of the employees within the meaning of Art. 31(2) and they could be compulsorily acquired under Art. 31(2). Similarly their right to receive cash bonus for the period from the date of commencement of the impugned Act upto March 31, 1977 was a legal right enforceable through Court of law. [360 B-C] (a) Property within the meaning of Arts. 19(1)(f) and 31(2) comprises every form of property, tangible or intangible, including debts and choses in action such is unpaid accumulation of wages, pension, cash grants etc. [360 A] R. C. Cooper v. Union of India, [1970] 3 S.C.R. 530; H. H. Maharajadhiraja Madhay Rao Jiwaji Rao Scindia Bahadur & Ors. v. Union of India, [1971] 3 S.C.R. 9; State of M.P. v. Ranojirao Shinde & Anr., [1968] 3 S.C.R. 489; Deokinandan Prasad v. State of Bihar, [1971] Supp. S.C.R. 634; State of Punjab v. K. R. Erry & Sobhag Rai Mehta, [1973] 2 S.C.R.

485; and State of Gujarat & Anr v. Shri Ambica Mills Ltd., Ahmedabad, [1974] 3 S.C.R. 760 referred to.

4(a) The contention of the Corporation that when ownership of a debt is transferred it continues to exist as a debt but that when the debt is extinguished it ceases to exist as a debt and that extinguishment of a debt does not therefore involve transfer of ownership of the debt to the debtor is not well founded. Where, by reason of extinguishment of a right or interest of a person, detriment is suffered by him and a corresponding benefit accrues to the State, there would be transfer of ownership of such right or interest to the State. The question would always be : who is the beneficiary of the extinguishment of the right or interest effectuated by the law ? If it is the State, then there would be transfer of ownership of the right or interest to the State, because what the owner of the right or interest would lose by reason of the extinguishment would be the benefit accrued to the State [367 H, 368 B-C] (b) Extinguishment of the debt of the creditor with corresponding benefit to the State or State owned/controlled Corporation would involve transfer of ownership of the amount representing the debt from the former to the latter.

This is the real effect of extinguishment of the debt and by garbing it in the form of extinguishment, the State or State owned/controlled Corporation cannot obtain benefit at the cost of the creditor and yet avoid' the applicability of 339 Art. 31(2). The verbal veil constructed by employing the device of extinguishment of debt cannot lot permitted to conceal or hide the real nature of the transaction [368 F-B]

ORIGINAL JURISDICTION: Writ Petitions Nos. 108 and 174-177 of 1976.

(Under Article 32 of the Constitution of India).

R. K. Garg, S. C. Agarwala & Aruneshwar Gupta for the petitioners in WP 108 Somnath Chatterjee, P. K. Chatterjee & Rathin Das for the petitioners in 174-77 S. V. Gupte, Attorney Genl., U. R. Lalit, R. N. Sacluhey & A. Subhashini for r. 2 in all the WPs.

S. V. Gupte, Attorney Gent. & D. N. Mishra for rr. 2 & 3 in WP 108 and rr. 2-4 in WP 174-77.

P. S. Khera for the Intervener (AIN LIC Employees Federation) The following Judgments were delivered BEG, C.J.-The Life Insurance Corporation was constituted under the Life Insurance Corporation Act 31 of 1956 (hereinafter to be referred to as "the Act"). On 1-6-1957, the Central Government issued, under s. 11 (1) of the Act, an order prescribing the 'Pay scales, dearness allowance and conditions of service applicable to-Class III and IV employees. Among these conditions it is, stated that no bonus would be paid but amenities like insurance and medical treatment free of cost would be provided. On 26-6-1959, an order was passed by the Central Government under s. 11(2) of the Act, amending para 9 of the 1957 Order inasmuch as it was provided that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 5001- per month. On 2nd of July 1959, there was. a settlement between the L.I.C. and the employees providing for payment of cash bonus at the rate of one-and-a-half month's basic salary which was to be effective from 1-9-1956 and valid upto 31-12-1961. In July 1960, regulations were framed under section 49 to regulate the conditions of service of classes of employees and regulation 58 provided for payment of non-profit sharing bonus to the employees. Orders were again passed on 14-4- 1962 and 3rd August 1963, the effect of which was to remove the restriction of Rs. 5001- for eligibility for payment of bonus. On 29th January 1963, another settlement was arrived at between the L.I.C. and its employees for payment of cash bonus at the rate of one-and-a-half month's basic salary.

This was to continue in operation until 31st March 1969. On 20th June 1970, a third settlement was reached for payment of cash bonus at the same rate which was to be effective upto 31st March 1972. On 26-6-1972, a fourth settlement for payment of cash bonus at the rate of 10 per cent of gross wages (basic and special pay and dearness allowance) was made effective from 1st 'April 1972 to 1973. On 21st January 1974 and 6th February 1974, settlements for payment of cash bonus at 15 per cent of gross wages, valid for four years from 1st April 1973 to 31st March 1977, were reached.

It is clear that this so called "bonus" did not depend upon profits earned but was nothing short of increas- 340 ed wages. The settlements were approved by the Board of Directors of the L.I.C. and also by the Central Government.

On 29th March, 1974, a circular was issued by the L.I.C. for payment of bonus in accordance with the settlement along with the salary in April. In April 1974, the payment of bonus for the year 1973-74 was actually made in accordance with the settlement. Again, in April 1975, *bonus for the year 1974-75 was made in accordance with the settlements.

On 25th September 1975, however, a Payment of Bonus Amendment Ordinance was promulgated. On 26-9-1975, the L.I.C. issued a circular stating that, as the payment of bonus was being reviewed in the light of the Ordinance, and, on 22nd of March, 1976, payment of bonus for the year 1975- 76 was to, be withheld until a final decision was) taken.

Against this, a writ petition was filed in the; High Court of Calcutta. On 21st May 1976, the Calcutta High Court passed an order recognising the right of petitioners to payment of bonus for the year 1975-76 which had become payable along with the salary in April 1976 and ordered that it must be paid to the employees. Apparently, bonus was treated as part of the right of the petitioners to property protected by Article 19( and 31(1) of the Constitution. On 29th May 1976, the Life Insurance Corporation Modification of Settlement Act 1976 was enacted by Parliament denying to the petitioners the right which had been recognised by the settlements, approved by the Central Government and acted upon by the actual payment of bonus to the employees, and, finally, converted into right under the decision of the Calcutta High Court on 21st May 1976.

Provisions. of section 1 1 (2) may read as follows "(2) Where the Central Government is satisfied that for the purpose of securing uniformity in the scales of remuneration and the other terms and conditions. of service applicable to employees of insurers whose controlled business has been transferred to, and vested in, the Corporation, it is necessary so to do, or that, in the interests of the Corporation and its policy-holders,, a reduction in the remuneration payable, or a revision of the other terms and conditions of service applicable, to employees or any class of them is called for, the Central Government may, notwithstanding anything contained in sub- section (1), or in the Industrial Disputes Act, 1947, or in any other law for the time being in force, or in any award, settlement or agreement for the time being in force, alter (whether by way of reduction or otherwise) the remuneration and the other terms and conditions. of service to such extent, and in such manner-as it thinks fit; and if the alteration is not acceptable to any employee, the Corporation may terminate his employment by giving him compensation equivalent to three months' remuneration unless the contract of service with such employee provides for a shorter notice of termination.

Explanation :-The compensation payable to an employee under this sub-section shall be in addition to, and shall not affect, any pension, gratuity, provident fund money 341 or any other benefit to which the employee may be entitled under his contract of service." Section 1 1 (2) of the Act shows that the Central Government had ample power to revise the scales of remuneration and other terms and conditions of service if it was satisfied that the interest of the Corporation or the policy-holders demanded this. Of course, such orders had to be passed as a result of satisfaction upon material placed before the Central Government relating to the interests of the Corporation or its policy holders. But, no such order was passed. What was actually done was that the Act was passed to set aside the terms of the settlements which had been incorporated in the Judgment inter-parties of the Calcutta High Court.

The objects and reasons of the Act were set out as follows "The provisions of the Payment of Bonus Act, 1965 do not apply to the employees employed by the Life Insurance Corporation of India.

However, the Corporation has, as a matter of practice, been paying bonus to its employees.

The bonus to Class I and Class II employees is being paid in pursuance of agreements between the Corporation and such employees. The bonus to Class III and, Class IV employees is being paid under the terms of settlement arrived at between the Corporation and such employees from time to time. In terms of the settlement arrived at between the Corporation and its Class III and class IV employees on 24th January, 1974 under the Industrial Disputes Act, 1947, which is in force up to the 31st March, 1977, bonus is payable by the Corporation to its Class III and Class IV employees at the rate of fifteen per cent, of their annual salary without any maximum limit.

2. It is proposed to set aside, with effect from the 1st April, 1975, these provisions of the settlement arrived at between the Corporation and its Class III and Class IV employees on 24th January, 1974 to enable the Corporation to make ex gratia payments to such employees at the rates determined on the basis of the general Government policy for making ex gratia payments to the employees of the non- competing public sector undertakings.

3. The bill seems to, achieve the above object." The statement of objects and reasons discloses that the purpose, of the impugned Act was to undo settlements which had been arrived at between the Corporation and Class III and Class IV employees on January 24 and February 6, 1974, and actually recognised by the order of the Calcutta High Court. The question could well arise whether this was really the exercise of a legislative power or of a power comparable to that of an appellate authority considering the merits of what had passed into a right to property recognised by the This Court has decided in Shrimati Indira Narain(1) that even a constitutional amendment cannot authorise the assumption of a judicial power by Parliament.

One of the tests laid down there was whether the decision is of a kind which requires hearing to be given to the parties, or, in other words, involves at least a quasi-judicial procedure, which the Parliament does not, in exercise of its legislative power, follow. A decision reached by the Central Government, under s. 11(2) of the Act, is the result of a satisfaction on matters stated there and would imply quasi-judicial procedure where the terms of a settlement had to be reviewed or revised. But, the legislative procedure, followed here, does not require that to be done. It would, in any event, be unfair to adopt legislative procedure to undo such a settlement which had become the basis of a decision of a High Court. Even if legislation can remove the basis of a decision it has to do it by an alteration of general rights of a class but not by simply excluding two specific settlements between the Corporation and its employees from the purview of the section 18 of the Industrial Disputes Act, 1947, which had been held to be valid and enforceable by a High Court. Such selective exclusion could also offend Article 14.

If Parliament steps in to set aside such a settlement, which the Central Government could much more reasonably 'have examined after going into the need for it or for its revision, the question also arises whether it violates the fundamental right to property guaranteed under Article 19 (1 ) (f ) of the Constitution, inasmuch as the right to get bonus is part of wages and, by its deprivation, a judicially recognised right to property is taken away and not saved by- the provisions of Article 19 (6) of the Constitution? A restriction upon a right may even cover taking away of the right to increased remuneration in the interests of the general public. Where was the question of any restriction here in the interests of the general public ? it seems a pure and simple case of a deprivation of rights of Class III and Class TV employees without any apparent nexus with any public interest.

The first hurdle in the way of this attack upon the Act undoing the settlement under Article 19 (1) (f) of the Constitution placed before us what that the Act of 1976 notified on 29-5-1976 was passed during the emergency.

Hence, it was submitted that Article, 358 of the Constitution is an absolute bar against giving effect to any right arising under Article 19 of the Constitution.

Furthermore, it was submitted that the effect of the Act was to wash off. the liability altogether after 1-4-1975 so that nothing remained to be enforced after 1-4-1975.

The Act is a very short one of 3 sections. After defining the settlement as the one which was arrived at between the Corporation and their workers on 24-1-1974 under section 18, read with clause (p) of section 2, of the Industrial Disputes Act, 1947 and the similar further settlement of 6-2-1974, section- 3 lays down (1) [1976](2)S.C.R.347.

343 "Notwithstanding anything contained in the Industrial Disputes Act, 1947, the provisions of each of the settlements, in so far as they relate to the payment of an annual cash bonus to every Class, III and Class IV employees of the Corporation at the rate of fifteen per cent of his annual salary, shall not have any force or effect and shall not be deemed to have any force or effect on and from 1st day of April, 1975." The object of the Act was, in effect, to take away the force of the judgment of the Calcutta High Court recognising the settlements in favour of Class III and Class IV employees of the Corporation. Rights under that judgment could be said to arise independently of Article 19 of the Constitution. I find myself in complete agreement with my learned brother Bhagwati that to give effect to the judgment of the Calcutta High Court is not the same thing as enforcing a right under Article 19 of the Constitution. It may be that a right under Article 19 of the Constitution becomes linked up with the enforceability of the judgment. Nevertheless, the two could be viewed as separable sets of rights. If the right conferred by the judgment independently is sought to be set aside, section 3 of the Act, would, in my opinion, be invalid for trenching upon the judicial power.

I may, however, observe that even though the real object of the Act may be to set aside the result of the mandamus issued by the Calcutta High Court, yet, the section does not mention this object at all. Probably this was so because the jurisdiction of a High Court and the effectiveness of its orders derived their force from Article 226 of the Constitution itself, These could not be touched by an ordinary act of Parliament. Even if section 3 of the Act seeks to take away the basis of the judgment of the Calcutta High Court, without mentioning it, by enacting what may appear to be a law, yet, I think that, where the rights of the citizen against the State are concerned, we should adopt an interpretation which upholds those rights. Therefore, according to the interpretation, I prefer to adopt the rights which had passed into those embodied in a judgment and became the basis of a Mandamus from the High Court could not be taken away in this indirect fashion.

Apart from the consideration mentioned above there are also other considerations put forward, with his usual vehemence, by Mr. R. K. Garg who relies upon the directive principles of the State Policy as part of the basic structure of our Constitution. At any rate, he submits that in judging the reasonableness of a provision the directive principles of State policy can be used, as this Court has repeatedly done, as criteria of reasonableness, and, therefore, of validity.

Mi. Garg bad relied strongly upon the provisions of Article 43 of the Constitution which says :

"43. The State shall endeavour to secure by suitable legislation or economic Organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage,, conditions of work ensuring a decent standard 344 of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co-operative basis in rural areas." He submits that Article 43 casts an obligation on the State to secure a living wage for the workers and is part of the principles "declared fundamental in the governance of the country". In other words, he would have us use Article 43 as conferring practically a fundamental right which can be enforced. I do not think that we can go so far as that because, even though the directive principles of State policy, including the very important general ones contained in Article 38 and 39 of the Constitution, give the direction in which the fundamental policies of the State must be oriented yet, we cannot direct either the Central Government or Parliament to proceed in that direction. Article 37 says that they "shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws." Thus, even if they are not directly enforceable by a court they cannot be declared ineffective. They have the life and force of fundamentals. The best way in which they can be, without being directly enforced, given vitality and effect in Courts of laws is to use them as criteria of reasonableness, and, therefore, of validity, as we have been doing. Thus, if progress towards goals found in Articles 38 and 39 and 43 are desired, there should not be any, curtailment of wage rates arbitrarily without disclosing any valid reason for it as is. the case here. It is quite reasonable, in my opinion, to submit that the measure which seeks to deprive workers of the benefits of a settlement arrived at and assented to by the Central Government, under the provisions of the Industrial Disputes Act, should not be set at naught by an Act designed to defeat a particular settlement. If this be the purpose of the Act, as it evidently is, it could very well be said to be contrary to public interest, and, therefore, not protected by Article 19(6) of the Constitution.

Furthermore, I think that the principle laid down by this Court in Union of India & Ors. v. M/s. Indo-Afghan Agencies Ltd.(1) can also be taken into account in judging the reasonableness of the provision in this case. It was held there (at p. 385) :

"Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its, own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." (1) [1968] (2)S.C.R.365.

34 5 In that case, equitable principles were invoked against the Government. It is true that, in the instant case, it is a provision of the Act of Parliament and not merely a governmental order whose validity is challenged before us.

Nevertheless, we cannot forget that the Act is the result of a proposal made by the Government of the day which, instead of proceeding under section 11(2) of the Life Insurance Corporation Act, chose to make an Act of Parliament protected by emergency provisions. I think that the prospects held out, the representations made , the conduct of the Government, and equities arising therefrom, may all be taken into consideration for judging whether a particular piece of legislation, initiated by the Government and en- acted by Parliament, is reasonable.

Mr. Garg has also strongly attacked section 3 of the Act as, violative of Article 14 of the Constitution which was also not available to the petitioners during the emergency. He alleges that the Corporation has been making very handsome profits so that the question of jeopardising the interests of the Corporation or Policyholders could not arise. He submits that the Act is nothing more than selective discrimination practised against the lower levels of the staff of the Life Insurance Corporation. I do not think that these contentions are devoid of force.

I am sorry that due to the very short interval left for me to dictate my opinion in this case I have not been able to fully set out the reasoning or to cite all the authorities I would have liked to have done. The pressure of work on hand is too great. I have several judgments to pronounce tomorrow, the last day on which I shall have the authority to participate as a Judge in the decisions of this Court. I have, however, thought it to be my duty to indicate my line of thinking briefly as I have my doubts whether Article 31(2A) is not an effective answer to complete reliance upon Article 31(2) of the Constitution.

It is true that the right to receive bonus which had been recognised by the Central Government both by its orders and conduct under a settlement is a right to property.

Nevertheless, since acquisition is defined by Article 31(2A) of the 'Constitution, I seriously doubt whether that definition of acquisition really satisfied by the facts in the case before us. The provision reads as follows :

"31(2A) Where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a Corporation evened or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning, of property, notwithstanding that it deprives any person of his property." I have, however, no doubt that the conclusion reached by my learned brother Bhagwati is quite correct inasmuch as the benefits of the rights recognised by the judgment of the Calcutta High Court could not be indirectly taken away by section 3 of the Act selectively directed against specified settlements only.

346 I think that section 3 of the impugned Act is struck by the provisions of Article 19(1) (f) of the Constitution and not saved by Article 19(6) of the Constitution. It is also struck by Article 14. If the fundamental rights guaranteed by Articles 14 and 19 are not suspended, but their operation is only suspended, a view which I expressed in A. D. M. Jabalpur v. Shivkant Shukla(1) the effect of the suspension is to restore the status quo ante. Would this not mean that only the validity of an attack based on Articles 14 and 19 is suspended during the Emergency ? But, once this embargo is lifted Articles 14 and 19 of the Constitution whose use was suspended, would strike down any legislation which would have been bad. In other words, the declaration of invalidity is stayed during the emergency. Both Articles 358 and 359(1A) provide that, as soon as a proclamation of emergency ceases to operate, the effect of suspension must vanish "except as respects things done or omitted to be done before the law so ceases to have effect".

The things done or omitted to be done could certainly not mean that the rights conferred under the settlements were washed off completely as the learned Attorney General suggested. To hold that would be to convert the suspension of invalidity into a validation of law made during the emergency. If the law was not validated but only its invalidation was suspended, we should not give any wider effect to the suspension. I think we should interpret "things done or omitted to be done" very narrowly. If this be so, it means that the settlements are not to be deemed to be wiped off. No doubt payments under them were temporarily suspended. This must obviously mean that no payment could be demanded under them during the emergency, but, as soon as the emergency was over, the settlements would revive and what could not be demanded during the emergency would become payable even for the period of emergency for which payment was suspended. Otherwise the enactment will have effect even after the emergency had ceased. This would clearly be contrary to the express provisions of Article 358 and 359(1A). In other words, valid claims cannot be washed off by the emergency per se.

They can only be suspended by a law passed during the operation of Article 358 and 359(1A) of the Constitution.

For the reasons given above, I reach the same conclusion as my learned brother Bhagwati although perhaps by a difference route. concur in the final order made by my learned Brother Bhagwati.

BHAGWATI, J.-These writ petitions are filed by employees of the Life Insurance Corporation challenging the constitutional validity of the Life Insurance Corporation (Modification of Settlement) Act, 1976. This unusual piece of legislation was enacted by Parliament during the emergency at a time when there could hardly be any effective debate or discussion and it sought to render ineffective a solemn and deliberate Settlement arrived at between the Life Insurance Corporation and four different associations of its employees for payment of cash bonus. It is necessary, in order to appreciate the various (1) A.T.R. 1976 S.C. 1207-[1976] Suppl. S.C.R. 172.

347 contentions arising in the writ petitions to recapitulate briefly the facts leading up to the enactment of the Life Insurance Corporation (Modification of Settlement) Act, 1976, hereinafter referred to as the impugned Act.

The Life Insurance Corporation is a statutory authority established under the Life Insurance Corporation Act, 1956 and under section 6 it is the general duty of the Life Insurance Corporation to carry On life insurance business, whether in or outside India, and it is required to so exercise its powers as to secure that life insurance business is developed to the best advantage of the community. It is not necessary to refer to the various provisions of the Life Insurance Corporation Act, 1956 which define the powers, duties and functions of the Life Insurance Corporation Act, since we are not concerned with them in these writ petitions. It would be enough to refer to section 49 which confers power on the Life Insurance Corporation to make regulations. 'Sub-section (1) of that section provides that the Life Insurance Corporation may,.

with the previous approval of the Central Government, make regulations, not in consistent with the Act, "to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions" of the Act and sub- section (2) enacts that in particular and without prejudice to the generality of the power conferred under sub-section (1), 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;" The Life Insurance Corporation has in exercise of the power conferred under clauses (b) and (bb) of sub-section (2). of section 49 and with the previous approval of the Central Government, made the Life Insurance Corporation (Staff) Regulations, 1960 defining the terms and conditions of service of its employees. There is only one Regulation which is material for our purpose, and that is Regulation 58 which is in the following terms "The Corporation may, subject to such directions as the Central Government may issue, grant non-profit sharing bonus to its employees and the payment thereof, including conditions of eligibility for the bonus, shall be regulated by instructions issued by the Chairman from time to time." We have set out Regulation 58 in its present form as that is the form in which it stood throughout the relevant period.

It will be a matter for consideration as to what is the effect of this Regulation on the Settlement arrived at between the Life Insurance Corporation and its employees in regard to bonus.

348 It appears that right from 1959 Settlement were arrived at between the Life Insurance Corporation and its employees from time to time in regard to various matters relating to the terms and conditions of service of Class III and Class IV employees including bonus payable to them. The last of such Settlement dated 20th June, 1970, as modified by the Settlement dated 26th June, 1972, expired on 31st March, 1973. Thereupon four different associations of employees of the Life Insurance Corporation submitted their charter of demands for revision of scales of pay, allowances and other terms and conditions of service on behalf of Class III and Class IV employees. The Life Insurance Corporation carried on negotiations with these associations. between July 1973 and January 1974 at which there was free and frank exchange of views in regard to various matters including the obligation of the Life Insurance Corporation to the policy- holders and;. the community and ultimately these negotiations culminated in a Settlement: dated 24th January, 1974 between the Life Insurance Corporation and these associations. The Settlement having been arrived at other-- wise than in the course of conciliation proceeding, was binding on the parties under section 18, sub-section (1) of the Industrial Disputes Act, 1947 and since the four associations which were parties to the. employees, the Settlement was binding on the Life Insurance Corporation and all its Class III and Class IV employees. The Settlement provided for various matters relating to the terms and conditions of: service but we are concerned only with Clause (8) which made provision in regard to bonus. That clause was in the following terms "(i) No profit sharing bonus shall be paid.

However, the Corporation may, subject to such directions as the Central Government may issue from time to time, grant any other kind of bonus to its Class III & IV employees.

(ii) An annual cash bonus will be paid to all Class III and' Class IV employees at the rate of 15% of the annual salary (i.e. basic pay including of special pay, if any, and dearness allowance and additional dearness allowance) actually drawn by an employee in respect of the financial year to which the bonus relates.

(iii) Save as provided herein all other terms and conditions attached to the admissibility and payment of bonus shall be as laid down in the Settlement on bonus dated tile 26th, June, 1972." It is also necessary to reproduce here Clause (12) as that has some bearing on the controversy between the parties "PERIOD OF SETTLEMENT:

(1) This Settlement shall be effective from 1st April, 1973 and shall be for a period of four years, i.e., from 1st April,, 1973 to 31st March, 1977.

349 (2) The terms of this Settlement shall be subject to the approval of the Board of the Corporation and the Central Government.

(3) This Settlement disposes of all the demands raised by the workmen for revision of terms and conditions of their service.

(4) Except as otherwise provided or modified by this Settlement, the workmen shall continue to be governed by all the terms and conditions of service as set forth and regulated by the Life Insurance Corporation of India (Staff) Regulations, 1960 as also the administrative instructions issued from time to time and they shall, subject to the provisions thereof including any period of operation specified therein be entitled to, the benefits there under." It was common ground between the parties that the Settlement was approved by the Board of the Life Insurance Corporation as also by the Central Government and the Chief of Personnel by his Circular dated 12th March, 1974 intimated to the Zonal and Divisional Managers that the approval of the Central Government to the Settlement having been received the Life Insurance Corporation should proceed to implement the terms of the Settlement. The Executive Director also issued a circular dated 29th March, 1974 containing administrative instructions in regard to, payment of cash bonus under clause 8 (ii) of the Settlement. These administrative instructions set out directions in regard to Various matters relating to payment of cash bonus and of these, two are material. One was that in case of retirement or death, salary up to the date of cessation of service shall be taken into account for the purpose of determining the amount of bonus payable to the employee, or his heirs and the other was that the bonus shall be paid along with the salary for the month of April, but in case of retirement or death, payment will be made "soon after the contingency".

There was no dispute that for the first two years, 1st April, 1973 to 31st March, 1974 and 1st April, 1974 to 31st March, 1975, the Life Insurance Corporation paid bonus to its Class III and Class IV employees in accordance with the provisions of Clause 8(ii) of the Settlement read with the administrative instructions dated 29th March, 1974. But then came the declaration of emergency on 26th June, 1975 and troubles began for Class III and Class IV ,employees of the Life Insurance Corporation.

On 25th September, 1975 an Ordinance was promulgated by the President of India called the Payment of Bonus (Amendment) Ordinance, 1975 which came into force with immediate effect.

Subsequently, this Ordinance was replaced by the Payment of Bonus (Amendment) Act, 1976 which was brought into force with retrospective effect from the date of the Ordinance, namely, 25th September, 1975. This amending law considerably curtailed the rights of the employees to bonus in industrial establishments, but it had no impact so far as the employees of the Life Insurance Corporation were concerned since the original Payment of Bonus Act was not applicable to the life Insurance Corporation by reason of section 32 which exempted the Life Insurance L5-277SCI/78 350 Corporation from its operation. The Central Government, however, decided that the employees of establishments which were not covered by the Payment of Bonus Act would not be eligible for payment of bonus but ex-gratia cash payment in lieu of bonus would be made "as may be determined by the Government taking into account the wage level, financial circumstances etc. in each case and such payment will be subject to a maximum of 10% and pursuant to this decision, the Life Insurance Corporation was advised by the Ministry of Finance that no further payment of bonus should be made to the employees "without getting the same cleared by the Government". The Life Insurance Corporation thereupon by its Circular dated 26th September, 1975 informed all its offices that since the question of payment of bonus was being reviewed in the light of the Bonus Ordinance dated 25th September,, 1975, no bonus should be paid to the employees "under the existing provisions until further instructions". The' All-India Insurance Employees' Association protested against this stand taken by the Life Insurance Corporation and pointed out that the Life Insurance Corporation was bound to pay bonus in accordance with the terms of the Settlement and the direction not to pay bonus was clearly illegal and unjustified. The Life Insurance Corporation conceded that payment of bonus was covered by the settlement but contended that it was subject to such directions as the Central Government might issue from time to time and since the Central Government had advised the Life Insurance Corporation not to make any payment of bonus without their specific approval, the Life Insurance Corporation was justified in not making payment to the employees. This stand was taken by the Life Insurance Corporation in its letter dated 7th February, 1976 addressed to, the All India Insurance Employees' Association and this was followed by a Circular dated 22nd March, 1976 instructing all the offices of the Life Insurance Corporation not to make payment by way of bonus.

The All-India Insurance Employees' Association and some others thereupon filed writ petition No. 371 of 1976 in the High Court of Calcutta for a writ of Mandamus and Prohibition directing the Life Insurance Corporation to act in accordance with the terms of the Settlement dated 24th January. 1974 read with the administrative instructions dated 29th March, 1974 and to rescind or cancel the Circulars dated 26th September, 1975, 7th February, 1976 and 22nd March, 1976 and not to refuse to pay cash bonus to Class III and Class IV employees along with their salary for the month of April 1976 as provided by the Settlement read with the administrative instructions. The writ petition was resisted by the Life Insurance Corporation on various grounds to which it is not necessary to refer since we are not concerned with the correctness of the judgment of the Calcutta High Court disposing of the writ petition. Suffice it to state, and that is material for our purpose, that by a judgment dated 21st May, 1976 a Single Judge of the Calcutta High Court allowed the writ petition and issued a writ of Mandamus and Prohibition as prayed for in the writ petition.

The Life Insurance Corporation preferred a Letters Patent Appeal against the judgment of the learned Single Judge but in the mean time the impugned Act bad already come into force and it was, therefore, stated on behalf of the Life Insurance Corporation before the Division Bench that there was 351 no necessity for proceeding with the appeal and hence the Division Bench made no order in the appeal. The result was that the judgment of the learned Single Judge remained intact : with what effect, is a matter we shall presently consider.

On 29th May, 1976 Parliament enacted the impugned Act providing inter alia for modification' of the Settlement dated 24th January, 1974 arrived at between the Life Insurance Corporation and its employees. The impugned Act was a very short statute consisting only of three sections.

Section 1 gave the short title of the impugned Act, section 2 contained definitions and section 3, which was the operative section, provided as follows :

"Notwithstanding anything contained in the Industrial Disputes Act, 1947, the provisions of the settlement in so far as they relate to the payment of an annual cash bonus to every Class III and Class IV employees of the Corporation at the rate of fifteen per cent, of his annual salary, shall not have any force or effect and shall not be deemed to have had any force or effect on and from the 1st day of April, 1975." Since the impugned Act did not set at naught the entire settlement dated 24th January, 1974 but merely rendered without force and effect the provisions of the Settlement in so far as they related to payment of annual cash bonus to Class III and Class IV employees and that too not from the date when the Settlement became operative but from 1st April, 1975, it was said to be a statute modifying the pro- visions of the Settlement. The plain and undoubted effect of the impugned Act was to deprive Class III and Class IV employees of the annual cash bonus to which they were entitled under clause 8(ii) of the Settlement for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 3 1 St March, 1977 and therefore, two of the associations along with their office bearers field the present writ petitions challenging the constitutional validity of the impugned Act.

There were two grounds on which the constitutionality of the impugned Act was assailed on behalf of the petitioners and they were as follows :

A. The right of Class III and Class TV employees to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 under clause 8(ii) of the Settlement was property and since the impugned Act provided for compulsory acquisition of this property without payment of compensation, the impunged Act was violative of Article 31(2) of the Constitution and was hence null and void.

B. The impugned Act deprived Class III and Class IV employees of the right to annual cash bonus for the years 1st April, 1975 to 31st March, 1976 and 1st April, 1976 to 31st March, 1977 which was vested in them under clause 8(ii) of the Settlement and there was, therefore, clear infringement of their fundamental right under Article 3 52 19(1) (f) and since this deprivation of the right to annual cash bonus, which was secured under a Settlement arrived at as a result of collective bargaining and with full and mature deliberation on the part of the Life Insurance Corporation and the Central Government after taking into account the interests of the policy-holders and the community and with a view to approximating towards the goal of a living wage as envisaged in Article 43 of the Constitution, amounted to an unreasonable restriction, the impugned Act was not saved by Article 19(5) and hence it was liable to be struck down as invalid.

We shall proceed to consider these grounds in the order in which we have set them out, though we may point out that if either ground succeeds, it would be unnecessary to consider the other.

But before we proceed, further, it would be convenient at this stage to refer to one other contention of the petitioner based on the judgment of the Calcutta High Court in Writ Petition No. 371 of 1976. The contention was that since the Calcutta High Court had by its judgment dated 21st May, 1976 issued a writ of Mandamus directing the Life Insurance Corporation to pay annual cash bonus to Class III and Class IV employees for the year 1st April, 1975 to 31st March, 1976 along with their salary for the month of April, 1976 as provided by the Settlement and this judgment had be- come final by reason of withdrawal of the Letters Patent Appeal preferred against it, the Life Insurance Corporation was bound to obey the writ of Mandamus and to pay annual cash bonus for the year 1st April, 1975 to 31st March, 1976 in accordance with the terms of clause 8(ii) of the Settlement. It is, no doubt, true, said the petitioners, that the impugned Act, if valid, struck at clause 8(ii) of the Settlement and rendered it ineffective and without force with effect from 1st April, 1975 but it did not have the effect of absolving the Life Insurance Corporation from its obligation to carry out the writ of Mandan’s. There was, according to the petitioners, nothing in the impugned Act which set at naught the effect of the judgment of the Calcutta High Court or the binding character of the writ of Mandamus issued against the Life Insurance Corporation.

This contention of the petitioners requires serious consideration and we are inclined to accept it.

It is significant to note that there was no reference to the judgment of the Calcutta High Court in the Statement of Objects and Reasons, nor any non-obstante clause referring to a judgment of a court in section 3 of the impugned Act.

The attention of Parliament does not appear to have been drawn to the fact that the Calcutta High Court had already issued a writ of Mandamus commanding the Life Insurance Corporation to pay the amount of bonus for the year 1st April, 1975 to 31st March, 1976. It appears that unfortunately the judgment of the Calcutta High Court remained almost unnoticed and the impugned Act was passed in ignorance of that judgment. Section 3 of the impugned Act provided that the provisions of the Settlement in so far as they relate to payment of annual cash bonus to Class III 353 and Class IV employees shall not have any force or effect and shall not be deemed to have had any force or effect from 1st April, 1975. But the writ of Mandamus issued by the Calcutta High Court directing the Life