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REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No 50] NEW DELHI, MONDAY, DECEMBER 19, 1983/AGRAHAYANA 28, 1905

Separate paging is given to this Part in order that it may be filed

as a separate compilation

LOK SABHA

The following Bill was introduced in Lok Sabha on the 19th Decem- ber, 1983: —

BILL NO. 109 OF 1983

A Bill to provide, with a view to the more effective realisation of the objectives of nationalisation of lige insurance business, for the dis- solution of the Life Insurance Corporation of India and for the establishment of a number of corporations for the more efficient carrying on of the said business and for matters connected therewith or incidental thereto.

31 of 1956

WHEREAS the nationalisation of life insurance business In India was made by the Life Insurance Corporation Act, 1956 by transferring all such business to the Life Insurance Corporation of India established under section 3 of that Act;

AND WHEREAS for the more effective realisation of the objectives of such nationalisation, it is necessary to dissolve the said Corporation and establish, in its place, a number of corporations for the more efficient carrying on of the said business;

BE it enacted by Parliament in the Thirty-fourth Year of the Republic of India as follows: —

CHAPTER I

PRELIMINARY

1. (I) This Act may be called the Life Insurance Corporations Act, 1983.

Short title- and commence- ment.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

2. In this Act, ualoss the context othe; wit-e requires,—

(a | "Appellate Claims Tribunal'' mems the Appellate Claims

TriDun.i' I ' l n j t H u t . il u>irlfr s e c t i on 27;

(h) '"appointed day" means the date on which this Act comes

into force;

(c) "Bo m l" means the Life Insuran:e Board constituted under

section fS;

(d) "Cla;rrn Tribunal" means a Claims Tribunal constituted

under section 22;

(e) "Corporation" means a Life Insurance Corporation estab-

lished under sub-section (1) of section 4;

(f) "dissolved Corporation" neans the Life Insurance Corpora-

tion of India which shall stand dissolve i by virtue of section 3;

4 of 1938.

(g) "Insurance Act" means the Insurance Act, 1938;

31 of 1936.

(7t) "Life Insurance Act" means the Life Insurance Corporation

Act, lySOJ;

(i) "notification" means a notification published in the Official

Gazette;

0) "policy of life insurance" means a contract of insurance upon human life and includes any other contract, the business of effecting whereof constitutes life insurance business in accordance with the provisions of clause (11) of section 2 of the Insurance Act;

(k) "prescribed" means prescribed by rules made under this

Act;

(I) "Service Matters Tribunal" means a Service Matters Tribu-

nal constituted under section 31;

(m) words and expressions used in this Act but not denned herein and denned in the Insurance Act shall have the meanings respectively assigned to them in the Insurance Act.

Dissolution Of Lifo Insurance Corporation of India and repeal.

3. (1) On the appointed day, subject to the other provisions of this Act, the Life Insurance Corporation of India established under section 3 of the Life Insurance Act shall stand dissolved and the said Act shall stand, repealed.

(2) The capital provided to the dissolved Corporation by the Central Government, and the officers, other employees and insurance agents of, and the assets, rights and liabilities of, the dissolved Corporation immediately before the appointed day, and all other ma'.ters relating to the said Corporation, shall be dealt with in accordance with the provisions of the First Schedule.

CHAPTER II

ESTABLISHMENT OF T^FB INSURANCE CORPORATIONS AND THFIH CAPITAL

4. (1) There shall be established with effect from the appointed day,

the following Life Insurance Co/porafons, mmely: —

Establish- ment of Life Insurance Corpjrat'uns,

(i) the Central Life Insurance Corporation of India, with its

Head Office at Kanpur;

(>i) tna Ea^te'-n Life Insurance Corporation of India with itfl

Head Office at Calcuita.;

(IU) the Northern Life Insurance Corporation of India, with its Head Office at Delhi;

(iv) the Southern Liie Insurance Corporation of India, with its Head Office at Madras;

(v) the Western Life Insurance Corporation of India, with its Head Office at Bombay.

(2) $ach Corporation shall be a boJy corporate having perpetual suc- cession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose oi property, and ito contract, and may by its name sue and be sued.

Capital.

5. (I) The authorised capital of each Corporation shall be rupees five crores.

(2) The sum of rupees one crore which, by virtue of paragraph 2 of the Fitit Schedule, becomes transferred to each Corporation shall be deemed to be the paid-up capital provided to such Corporation by the Central Government.

(3) The Central Government may, on the recommendation of a Cor- poration, increase or reduce the paid-up capital of such Corporation to such extent and in such manner as that Government may determine, ^0, however, that the amount of the paid-up capital shall not be so increased as to exceed the authorised capital thereof.

C (1) Each Corporation hhall consist of such number of members,

Constitu- tion of Cor- porations.

not exceeding cixteen, as he Central Government may think fit to appoint thete o, and uiid oi them shall be appointed Ly the Central Gov- ernment lo be the Chairman thereof.

(2) Before appjiniinq q person to be a member of a Corporation, the CenU'ril Government shall satisfy itself that such person will have no such linanciJ or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member of that Corporation, and the Central Government shall also satisfy itself, from time .0 time, with respect to every member of a Corporation that he hi<; no such interest; and any person who is, or whom the Central Gov- ernment proposes to appoint as, and who has consented to be, a member of a Corporation shall, whenever required by the Central Government so to do, furnish to it such information as that Government may consider necessary for the performance of its duties under this sub-section.

(3) A member of a Corporation who is in any way directly or in- directly interested in a contract made or proposed to be made by that Corporation shall, as* soon as possible after the relevant circumstances have come to his knowledge,, disclose the nature of his interest in the contract to the Corporation; and such member shall not tab" part in any deliberation or discussion of the Corporation with resDfcf.* to that con- tract.

{4) It is hereby declared that for the purposes of sub-section (I), any pe^on holding the office of an Executive Director of a Corporation may be appointed as a member nf such Corporation and on such appoint- ment such person slnll function as a member of the Corporation in addition to his duties as an Executive Director.

7. (1) The Chairman and other members of a Corporation (except where any person is appointed as an ex officio member thereof) shall hold office for such term, not being less than three years, as may be prescribed, and shall be eligible for reappointment for a like term.

Term of office and condtioiw of servico of chairman and other members.

(2) A casual vacancy arising from the death, resignation or other- wise of a member of a Corporation may be filled up by the fresh ap- pointment of a person as a member of the Corporation and the person so appointed to fill the vacancy shall hold office for the remainder of the term of office of the member in whose place he is appointed.

(3) If the Chairman or any other member of a Corporation is, for infirmity or otherwise, incapable of carrying ou,t his duties or is absent on leave, the Central Government may appoint another person to act in his place for the period during which such Chairman or other mem- ber is unable to carry out his duties or is absent on leave.

(4) The Chairman of a Corporation shall be entitled to receive such salary and allowances, and shall be subject to such conditions of service in respect of leave, pension, provident fund and other matters, as may be prescribed, and the other members of a Corporation shall be entitled to such allowances as may be prescribed.

8. (2) No person shall be eligible to be appointed, or to continue, as

Disqualifi- cations and removal.

a member of a Corporation, or of the Board, who—

(a) is, or at any time has been, adjudicated as insolvent or has suspended payment of his debts or has compromised with his credi- tors; or

(b) is of unsound mind and stands so declared by a competent

court, or

(c) is, or has been, convicted of an offence which, in the opinion

of the Cenfxal Government, involves moral turpitude, or

(d) is, or at any time has been, convicted of an offence under

this Act, or

(e) has so abused, in the opinion of the Central Government, his position as a member of the Corporation, or of the Board, as to render his continuance as such member, detrimental to the interests of the Corporation, or of the Board, as the case may be.

(2) The Central Government shall, by order in writing, remove from office any member of a Corporation or of the Board who is, or has become, subject to any disqualification specified in sub-section (2):

Provided that no such removal shall be made unless the member concerned has been given a reasonable opportunity of showing cause against the proposed action.

(3) Notwithstanding anything contained in sub-section (1), or sub-

section (2),—

(a) the Central Government may terminate the appointment of the Chairman of a Corporation after giving him notice in writing of not less than three months without assigning any reason;

(b) the Chairman of a Corporation may resign his office by giving notice to the Central Government in writing of not less than three months without assigning any reason.

CHAPTER III

FUNCTIONS OF LIFE INSURANCE CORPORATIONS Functions

9. (I) Subjecl to the rules, if any, made by the Central Government °f

Q r^.

in this behalf, and the other provisions of this Act, it shall be the t i on general duty of each Corporation to carry on life insurance business, whether in or outside India, and each such Corporation, shall—

(a) be primarily responsible for the intensive development of life insurance business within the Zone, and, in particular, in the Divisions within the Zone, specified, or deemed to be specified, In the corresponding entries against its name in the Second Schedule; and

(b) so exercise its powers under this Act as to secure that life insurance business is developed to the best advantage of the com- munity.

Explanation I—For the purposes of this sub-section, and of section 11, "Zone" means a Zone specified in the Life Insurance Corporation Regulations, 1959, as in force immediately before the appointed day, and "Division" means a Division specified against a Zone in the correspond- ing entry in column III of the Second Schedule, and includes such other Division as may be established, within a Zone, after the appointed day, and on such establishment, such Division shall be deemed to be included in the corresponding entry in column III of the Second Schedule.

Explanation II.—The territorial limits of each Division specified in column III of the Second Schedule shall, until they are duly altered under this Act, be such as were specified, immediately before the appointed day, by the dissolved Corporation, and the territorial limits of any Division established after the appointed day shall be such as may be specified by the concerned Corporation.

(2) Without prejudice to the generality of the foregoing provisions of this section, but subject to the other provisions of this Act, each Cor- poration shall have power—

(a) to carry on capital redemption business, annuity certain business or reinsurance business in so far as such reinsurance busi- ness appertains to life insurance business;

(b) subject to the rules, if any, made by |the Central Govern- ment in this behalf, to invest 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 administering, 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 by it outside India to any other person or per- sons, if in the interest of the Corporation it is expedient so to do;

(c) 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 any other business in any case where such other business was being carried on, immediately befoie the appointed day, by the dissolved Corporation;

(h) 1o carry on, with the prior approval of the Central Govern- ment, any other business which may seem to the Corporation to be capable of being conveniently carried on in connection with its busi- ness and calculated directly or indirectly to render profitable the business of the Corporation;

(i) to do all sucli 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, each Corporation shall act, so far as may be, on business principles.

(4) Each Corporation shall, in the discharge of its functions under this Act, be guided by such directions in matters of policy involving pub- lic interest as the Central Government may give to it in writing; and if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government there- on shall be final.

Power to i mposo ron- Uittons etc,

10- (2) In entering into any arrangement with any concern, a Corpo- ration may impose such conditions as it may think necessary or expedient for protecting the interest of that Corporation and for ensuring that the accommodation granted by it is put to the best use by the concern,

1 of 1955.

(2) Where any arrangement entered into by a Corporation with any concern provides for the appointment by that Corporation of one or more directors of such concern, such provision and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956, or in any other law for the time being in force or in the memorandum, articles of association or any other instrument re- lating to the concern, and any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument, shall not apply to any director appointed by the Corporation in pursuance of the arrangement as aforesaid.

(3) Any director appointed as aforesaid,—

(a) shall hold office during the pleasure of the Corporation by which he was so appointed and may be removed, or substituted by any other person, by order in writing by that Corporation;

(h) shall not incur any obligation or liability by reason only of his being a director or for anything done or omitted to be done in good faith in the discharge of his duties as a director or for anything done in relation thereto;

<<_•; Mi ill nut be liable to retirement by rotation and the exist-

e nt ol such dnector shall not be taken into account while compu-

t e ., i V numbr.T of directors liable to such retirement-

CHAPTER IV

MANAGEMENT

!1. {1) The Head Office of each Corporation shall be at the place

•specified in relation to it in section 4.

Head Office and other offices of each Cor- poration.

(2) Each Corporation may establish as many Divisional Offices, Branches and other offices within the Zone specified against Its name In the Second Schedule as it may think fit:

Provided that a Corporation may establish, with the previous approval of the Central Government, any Divisional Office, Branch Office or other office at any place outside the Zone specified against it in the Second Schedule.

12. (I) The Chairman of a Corporation shall be the Managing Direc-

Chairman to be the Managing Director- tor theieof and shall, subject to such general or special directions as the Corporation or the Executive Committee constituted under sub-section (1) of section 13, may from time to time give, exercise all such powers as may be exercised, and do all such acts and things as may be done, by the Corporation.

(2) The Chairman of a Corporation shall be the President of each Committee of the Corporation constituted under section 13 and shall, in his capacity as the Managing Director of the Corporation, carry out the advice of the Investment Committee, constituted under sub-section (2) of section 13, in regard to investments of the funds of the Corporation;

Provided that it shall be open to the Chairman to reserve the question of any such advice on any particular item, for consideration by the Corporation.

Power o.' oach Cor- poration to constitute Committees .

13- (1) Each Corporation may constitute an Executive Committee consisting of its Chairman and not more than six and not less than four of i+s other members and may entrust to that Committee the genera] superintendence and the direction of the affairs and business of the Corporation and the Executive Committee so constituted may exercise all the powers and do all such acts and things, as may be delegated to i1 by the Corporation by which it is constituted.

(2) Each Corporation may also constitute an Investment Commit, tee for the purpose of advising it in matters relating to the inveslmeni of its funds, and the Investment Committee shall consist of the Chair man of the Corporation and not more than eight and not less than six other members of whom not less than four shall be members of tha Corporation and the remaining members shall be persons (whethei members of that Corporation or not) who have special knowledge of an-1 experience in, financial matters, particularly matters relating tc in vestment of funds

(.5) Each Corporation may constitute such other Committees as i may think fit for the purpose of discharging such of its functions as ma; he delegated to them.

(4) The members of a Committee constituted under this section, other than the members of the concerned Corporation, shall be paid euch fees and allowances as may be prescribed, for attending its meetings and for any other work of the Corporation,

(5) A Committee to which any powers or functions are delegated under this section by any Corporation shall exercise those powers or discharge those func'ions in the same manner and with the same effect as if they had been conferred on such Committee directly by this Act and not by way of delegation.

Power to appoint Executive Directors, etc.

14. (I) Each Corporation may, with the approval of the Central Gov- ernment, appoint one or more persons to be the Executive Directors of the Corporation, and every Executive Director so appointed shall bo a whole-time officer of the Corporation,

(2) Every Executive Director shall exercise such powers and per- form such duties, as may be entrusted or delegated to him by the Exe- cutive Committee or the Corporation.

(3) Subject to the rules, if any, made by the Central Government in this behalf, each Corporation may also employ a Secretary and such number of other officers and employees as may be necessary for the pur- pose of enabling it to discharge its functions under this Act.

(4) The terms and conditions of service of the Executive Directors, Secretary and other officers and employees of a Corporation shall be such as may be prescribed.

(5) Every person employed by a Corporation or whose services have been transferred to a Corporation under this Act, shall be liable to serve anywhere in India.

(6) Any Executive Director to whom any powers and duties are delegated by any Corporation or Executive Committee thereof, shall exercise those powers or perform those duties in the same manner and with the same effect, as if they had been conferred on such Executive Director directly by this Act and not by way of delegation.

CHAPTER V

THE LIFE INSURANCE BOARD

15. (1) The Central Government may, by notification, constitute a

onititution of the life

Board, to be called the Life Insurance Board, consisting of—

Insurance Board.

(a) the Chairman of each Corporation, ex ojfido, and

(b) such number of other members, not exceeding eleven, as the

Central Government may think fit to appoint thereto.

(2) The office of the Board shall be at New Delhi.

(3) One of +he members of the Board shall be appointed by the Central Government to be the Chairman thereof.

(4) Before appointing a person to be a member of the Board, the Central Government shall satisfy itself that such person will have no auch financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member thereof,

and the Central Government shall also satisfy itself, from time to time, with respect to every member of the Board that he has no such interest, and any person who is, or whom the Central Government proposes to appoint as, and who has consented to be, a member of the Board shall, whenever required by the Central Government so to do, furnish to it such information as the Central Government may consider necessary lor the performance of its duties under this sub-section.

(5) A member of the Board who is in any way directly or Indirectly interested in a contract made or proposed to be made by any one or more of the Corporations shall, as soon as possible after the relevant circumstances have come to his knowledge, disclose the nature of his interest in the contract to the Board and to the Central Government and such member shall not take part in any deliberation or discussion of the Board with respect to that contract.

it. (1) A member of the Board, other than an ex offlcio member thereof, shall hold office for such term, not being less than three years, as may be prescribed and shall be eligible for reappointment for a like ⁴°rm.

Conditions of service of mem- ben of the Board

{£) Notwithstanding anything contained in sub-section (1),—

(a) the Central Government may terminate the appointment of a member of the Board (other than an ex offitio member) at any time before the expiry of the term of office fixed under sub-section (1) by giving him a notice in writing of not less than three months, and

(b) every such member (other than an ex offlcio member) may resign his membership of the Board at any time before the expiry of Ihe term of his office by giving to the Central Government a no+ice in writing of not less than three months.

(3) A casual vacancy arising from the death, resignation or otherwise of a member of the Board may be filled by fresh appointment and the person appointed to fill the vacancy shall hold office for the remainder of the term of office of the member In whose place he is appointed.

(4) If the Chairman or any other member of the Board, is, for infirmity or otherwise, incapable of carrying out his duties or is absent on leave, the Central Government may appoint another person to act in his place for the period during which such Chairman or other member o{ the Board is unable to carry out his duties or is absent on leave.

(5) A person appointed as a whole-time member of the Board shall bo entitled to receive such salary and allowances, and shall be subject to such conditions of service in relation to leave, pension, provident fund and other matters as may be prescribed, and a person appointed as a part-timo member of the Board shall be entitled to such allowances and sh iH he tuiiject to such other conditions of service as may be determined by the Central Government.

CommittTi of tie Board 17. (1) The Board may constitute as many Committees consisting wholly of members of the Board or wholly of other persons or partly of members of the Board and partly of other persons and for such ptir- poses as it may deem fit.

(2) The members of a Committee (other than the members of a Cor- poration or of the Board) shall be paid such fees and allowances aa may be prescribed, for attending its meetings and for attending to any other work of the Board.

Meetings of the Board.

18. (1) For the purposes of this Act, the Board or any Committee of the Board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed.

(2) Notwithstanding anything contained in sub-section (1), a member of the Board who has any direct or indirect pecuniary interest in any matter [other than a contract referred to in sub-section (5) of section 15], coming up for consideration at a meeting of the Board or a Committee thereof shall, as soon as possible after the relevant circumstances have come to his knowledge, disclose the nature of his interest in respect of that matter at such meeting; and such member shall not take part in any deliberation or discussion of the Board or the Committee with respect to that matter.

19. (1) The Board may appoint a Secretary and such other officers and

employees as may be necessary for the performance of its functions.

Secretary and other staff of tha Board.

(2) The terms and conditions of service of the Secretary and other officers and employees of the Board shall be such as may be prescribed.

Function* of the Board.

20. (3) Subject to the other provisions of this Act and the rules made thereunder, the Board shall, from time to time, review the functioning of each of the Corporations and render such service to any Corporation as it may deem fit for the promotion of such measures as are, in its opinion, conducive to the development of life insurance business.

(2) In particular and without prejudice to the generality of the fore-

going provisions, the Board may—

(a) suggest measures for co-ordinating the working of the Cor^

poratJons;

(b) plan and organise training of—

(I) persons included in the management cadree end lay down norms for training of various persons in various other cadres, and

(U) insurance agents;

(c) inspect at all reasonable tiroes the offices of any Corporation;

(d) provide for research and evaluation of life insurance schemes;

0) provide assistance and guidance in relation to the following,

namely: —

(z) mortality and actuarial investigation on all-India basis in respect of assured lives, annuitants, impaired lives, lives covered under group insurance and pension schemes and fixation nf underwriting standards;

(ii) research and development of new plans for intensive de- velopment of life insurance business and for meeting specific insurance needs of various sections of the community;

(Hi) co-ordinating the activities in the matter of conducting

periodical actuarial evaluations;

(f) review procedurems and practices in the working of the

Corporations at all levels;

(g) perform such other functions as may be prescribed.

Finances of the Board.

21. (1) The Central Government may, from time to time, by general or special order and subject to any rules that may be made in this behalf, direct each Corporation, having regard to the premium income of that Corporation and other relevant considerations, to pay to the Board such amount as it may determine for meeting the expenditure of the Board.

(2) If any default is made by any Corporation in making payment to the Board of the whole or any part of the amount determined by the Central Government under sub-section (1), such amount shall be re- coverable in the same manner and to the same extent as if it were a decree passed by the civil court within the local limits of whose jurisdic- tion the Head Office of ^hat Corporation is situated.

CHAPTER VI

CONSTITUTION OF TRIBUNALS

22. (1) The Central Government shall, as soon as may be after the appointed day, by notification, constitute as many Claims Tribunals as it may deem necessary for deciding disputes with respect to claims under policies of life Insurance.

Power of Central Government to conititutc Claims Tribunals.

(2) Each Claims Tribunal shall consist of one member, or where the Central Government is of opinion that such Tribunal shall consist of more than one member, such number of members, not being lesb thnn three, as the Central Government may think fit to appoint.

(3) Where a Claims Tribunal consists of one member, that member shall be a person who is holding, or has held, for not less than seven years, a judicial office in the territory of India or ih, or has been, a member of the Indian Legal Service, and is holding, or has held, a post not below a post in Grade It of that Service, and where the Claims Tribunal consists of more than one member, not loss than one of the members of such Tribunal shall be a person qualified as aforesaid, and the remaining member or members shall be appofnted from amongst serving officers of a rank not below that of n Director to the Government of India or of an equivalent rank under a State Government or an insurance corpora- tion or the Board.

(4) Where the number of members of a Claims Tribunal is more than one, the Central Government shall appoint one of those members to be the President of that Tribunal, who shall preside over the meetings nl that Tribunal, and In the absence of the President, the seniormost mem- ber of the Tribunal shall preside ovor its meetings.

Explanation I.-—For the purposes of this section and of sections 27 and 31, "insurance corporation" means—

(a) the dissolved Corporation;

(b) a Corporation established under this Act;

57 of 1972.

(c) the General Insurance Corporation formed under the General Insurance Business (Nationalisation) Act, 1972, or any of its subsi- diaries.

Explanation If.—In computing, for the purposes of this section and of sections 27 and 31, the period during which a person has held judicial office in the territory of India, there shall be included any period, after he has held any judicial office, during which the person has been prac- tising as an advocate or has held the office of a member of a tribunal or any post under the Union or a State, requiring special knowledge of law.

(5) Any vacancy in the membership of a Claims Tribunal shall be filled up by the Central Government as soon as practicable.

Territorial limits of thr jurisdiction of a Claim s Tribunal.

23. (1) The Central Government shall, from time to time, define, by notification, the territorial limits within which a Claims Tribunal shall exercise its jurisdiction and where two or more Claims Tribunals have jurisdiction over the same territorial limits, the Centtral Govern- ment shall also provide, by notification, the distribution or allocation of work to be done by each of them.

(2) Each Claims Tribunal shall have jurisdiction to decide all dis- puteb with respect to maturity claims or death claims under policies of life insurance, arising within the territorial limits of its jurisdiction.

(3) Where a claimant has more than one maturity claim or death claim under policies of life insurance, he shall, while making any claim before a Claims Tribunal, include, in the application made by him under sec- tion 24, all the claims which he is entitled to make before such Tribunal:

Provided that he may, if he so desires, relinquish any portion of his claim-

Explanation.—For the purposes of this sub-section, "maturity claim" means a claim under a policy of life insurance in relation to which there is no doubt or dispute as to the compliance of all the terms and conditions of such policy of life insurance, including the payment of all premia payable thereunder.

(4) If the claimant fails or omits to include, in the application made by him under section 24, all his claims or relinquishes any portion of his claim, he shall not be entitled thereafter to make any application relating to any claim which he has so omitted to include in the appli- cation aforesaid or which he has so relinquished, and where any appli- cation under section 24 has been adjudicated upon by the Claims Tribunal or the Appellate Claims Tribunal, the claimant shall be debarred from instituting any suit or other legal proceeding in relation to any claim which he has failed or omitted +o include in such application or which has been so relinquished by him.

(5) Where a claimant has made claims before different Claims Tri- Dunals, having jurisdiction, he may apply to any of the said Tribunals to make an order, so that all the claims made by him may be heard by a single Tribunal, and thereupon the Tribunal in which such applica- xion is made may by order determine which of the said Tribunals shall aeai with all the claims and transfer to such Tribunal the claims pending with the other Tribunals and the Tribunal to which the claims

are so transferred shall deal with each such claim from the stage which was reached before the Tribunal irom which the claim has been so transferred.

24. (1) Any person aggrieved by—

{a) the decision of a Corporation rejecting the whole or any part

Applica- ions to Claims Tribunals.

of the maturity claim or death claim made by him under any policy of life

insurance, or

(b) the omission or failure of a Corporation to give its decision, within six months from the date of the application, on the whole or any part of the maturity claim or death claim made by him under any policy of life insurance,

ma> make an application to the Claims Tribunal having jurisdiction for the

determination of his claim and for the grant of such relief as the Tribunal may

think fit.

(2) Every application made under sub-section (1) shall be made in such form, be verified in such manner, and be accompanied by such fee, not exceed- ing five hundred rupees, as may be prescribed on a graded scale depending on the value of the claim.

(3) An application, under sub-seciion (1), for the determination of a claim

shall be made,—

(a) in the case of a decision referred to in clause (a) of that sub- section, within a peiiod of ninety days from the date on which the decision of the Corporation rejecting the claim, whether in whole or in part, was communicated to the applicant;

(b) in the case of any omission or failure referred to in clause (b) of that subsection, within a period of ninety days computed from the date on which the said period of six months expires:

Provided that the Claims Tribunal may admit any such application aftcf the expiry of the said period of ninety days if it is satisfied that the applicant was prevented by sufficient cause from making the application within the said period.

(4) Any peison referred to in sub-section (1) may, instead of making an application to a Claims Tribunal under sub-section ( I ), institute a suif or commence any other legal proceeding in a civil court having jurisdiction tat the tccovery of any amount due in vcspeoi of a maturity claim or death claim undei any policy ol lile insurance 01 foi any other relief in relation to such claim, and where any such suit or other legal proceeding is instituted or com- menced, no Claims Tribunal shall have jurisdiction to entertain any applicatior in relation to the maturity claim or death claim under any policy of life insur- ance in relation to which such suit or other legal proceeding has been institutec or commenced, unless such suit or other legal proceeding is withdrawn, withir the period specified in sub-section (3), by the person by whom it was institutec or commenced or, if he has died before the expiry of the said period, by hi: legal representative.

(5) Where a suit or other legal proceeding referred to in sub-sectioi (4) is withdrawn within Lhe period specified in sub-section (3), the aggrievec person may* mnkc, within tbc said period, an application under sub-section (1) (o (tie Claims Tribunal having jurisdiction for the determination of his clain

and for the grant of such relief as the Tribunal may deem fit and on such application being made, the Tribunal shall have jurisdiction to deal with the matter.

(6) No suit or other legal proceeding shall lie in a civil court in respect of any matter which is pending before, or which has been decided by a Claims Tribunal or the Appellate Claims Tribunal.

Benches of O.aims Tribunal.

25. The powers and functions of a Claims Tribunal may be exercised and discharged by Benches constituted by the President of that Tribunal, from amongst the membeis thereof:

Provided that the President of the Claims Tribunal, or any other mem- ber of such Tribunal authorised in this behalf by the President of that Tribunal, may, sitting singly, dispose of any claim which has been allotted to a Bench ot which he is a member, where die amount of the claim does not exceed twenty-five thousand rupees.

Orders of Claims Tribunals.

26. (1) A Claims Tribunal may, after giving the parties to the application an opportunity of being heard, pass such orders thereon as it may think fit, confirming, modifying or annulling the decision or order against which such application has been made or may remand the case to the Corporation by which such decision or order was made, with such directions as the Claims Tribunal may think fit, for fresh adjudication or decision, as the case may be, of the claim, after taking additional evidence, if necessary, or may grant such relief as may be just and proper in the circumstances of the case.

(2) A Claims Tribunal shall send a copy of every order passed by it

under sub-section (1), to the parties to the application.

(3) An order passed by the Claims Tiibunal under sub-section (1) shall,

subject to the decision of the Appellate Claims Tribunal, if any, be final.

27. (1) The Central Government shall, as soon as may be after the appointed day, by notification constitute on Appellate Tribunal to be called the Appel- late Claims Tribunal, consisting of as many judicial and technical members/ not being less than three, as it may think n't, for deciding appeals preferred under section 28.

Power of Central Govern- ment to constitute an Appel- late Claims Tribunal.

(2) A judicial member of an Appelluie Claims Tribunal shall be a person who has, for not less than ten years, held a judicial office in the territory of India or is, or has been, a member of the Indian Legal Service, and is holding or has held, for not less than three years, a post Jiot below a post in Grade I of tliat Service,- and a technical member of an Appellate Claims Tribunal shall be a person who is or has been an officer of a rank not below that of a Joint Secretary to the Government of India, or of an equivalent ljank under a State Government or an insurance corporation or the Board.

(3) The Central Government shall appoint one of the members of the

Appellate Claiam Tribunal to be the President thereof.

(/) The Central Government may appoint one or more members of the Appellate Claims Tribunal to be the Vice-President, or, as the case may be, Vice-Presidents, thereof.

(5) The Vice-president of the Appellate rinims Tribunal shall exercise suCh of the powers and perform such of the functions of Hie President of th$ Appellate Claims Tribunal as may bt delegated to him by the President of that Tribunal by a general or special order in writing.

(fi) Any vacancy in the membership of the Appellate Claims Tribunal shall be filled up by the Central Government "s soon as practicable.

28. (1) Any person aggrieved by an order passed by a Claims Tribunal under sub-section (1) of section 26 may prefer an appeal to the Appellate Claims Tribunal against such order,

Appeals to the Appellate Clalms Tribunal.

(2) Every memorandum of appeal to the Appellate Claims Tribunal shall be in such form, be verified in such manner and be accompanied by such fee, not exceeding five hundred rupees, as may be prescribed on a graded scale depending on the value of the claim.

(3) Every appeal under this section shall be filed within sixty days from the date on which the order sought to be appealed against was communicated to the appellant:

Provided that the Appellate Claims Tribunal may admit an appeal after the expiry of the aforesaid period of sixty days if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said * ' ^1 period.

Order of the Appellate Claims Tribunal.

29. (1) The Appellate Claims Tribunal may, after giving the parties to the appeal a reasonable opportunity of being heard, pass such orders thereon as it may think fit, confirming, modifying or annulling the order appealed against or may remand the case to the Claims Tribunal which had passed such order, with such directions to the Claims Tribunal as the Appellate Claims Tribunal may think fit, for fresh adjudication of the claim after taking additional evidence if necessary,

(2) The Appellate Claims Tribunal shall send a copy of every order" passed by it under sub-section ( I ), to the parties to the appeal.

(3) Every order passed under sub-section (1), other than an order remand- ing the case to the Claims Tribunal, shall be final and shall not be called in question in any court except by way of a petition under article 32, or article 136, or article 226, of the Constitution.

30. (1) The powers and functions of Ihe Appellate Claims Tribunal may be exercised and discharged by Benches constituted bv the- President of the Appellate Claims Tribunal from amongst the members thereof:

Benches of the Appellate Claims Tribunal.

Provided that the President of the Appellate Claims Tribunal, or anv oilier member of such Tribunal authorised in this behalf bv the President nf thai Tribunal, may. sitting 16 THE GAZETTE OF TNDIA EXTRAORDINARY [PART II—

(2) Subjtct to the provisions of subsection (1), and sub-section (3), a Bench shall consist of not less than one judicial member and not less than one technical member.

(3) Where, before or after the hearing of an appeal, a Bench whether consisting of a single member or more than one member, is satisfied that such appeal involves—

(a) a substantial question of law of general importance, or

(b) a question which is likely to affect the interests of any Cor- poration or the dissolved Corporation or the policy-holders generally,

it may either of its own motion or on the application of any of the parties, draw up a statement of the facts of the case and the point which, in its opinion, involves any such question and refer such appeal, together with such statement, to the President of the Appellate Claims Tribunal with a request to him to constitute a Special Bench for hearing the appeal, and on receipt of such reference, the President of the Appellate Claims Tribunal shall constitute a Special Bench, which shall consist of not less than three members, of whom not less than one shall be a judicial member and not less than one shall be a technical member.

(4) The Special Bench, after hearing the parties if they appear and desire to be heard, shall decide the appeal so referred to it, and shall transmit a copy of its order to the Bench by which the reference was made to it.

(5) The costs (if any) consequent on a reference for the decision of the Special Bench shall be the costs in the case.

31. (I) The Central Government shall, ;ts soon as may be after the ap- pointed day, by notification, constitute as m"ny Service Matters Tribunals as It may deem necessary for dealing with the applications made under section) 32 for the redressa] of the grievances relating to service mutter⁴).

Power of cen- tral Gov- ernment to consti- tute Service Matter9 Tribunals, (2) A Service Matters Tribunal may consist of one member, or where the Central Government is of opinion that such Tribunal shall consist of more than one member, such number of members, not beiiiR less than three, us the Central Government may think fit to appoint.

(3) Where a Service Matters Tribunal consists of one member, thut mem- ber shall be a person who is holding or has held, for no" less than seven years, a judicial office in the territory of India or is, or has been, n member of the Indian legal Service, and is holding, or has held, s post not below a pmst in Grade Tl of that Service, and where the Service Matters TrihiMiat consists of more than one member, not less than one of the members of such Tribunal¹ shall be a person who is qualified as aforesaid and he remaining member otf members shall be appointed from amongst officers who have ha4 experience in dealing with service matters, belnc officers of a rank not below that of a Director to the Government of India or of an equivalent ifcrak widen a State Government or an Insurance corporatten or the Board.

(4) Whete the number of members of a Service Matters Tribunal is more than one, the Central Government shall appoint one of those members to be •the President of that Tribunal, who shall preside over the meetings of that Tribunal, and in the absence of the President, the senionriost member of that Tribunal shall preside over its meetings

(5) The Central Government shall, from time to time, define, by notifica- tion, the territorial limits within which a Service Matters Tribunal shall exercise, its jurisdiction, and where two or more Service Matters Tribunals have jurisdic- tion over the same territorial limits, the Central Government shall also provide, by notification, the dftributian or allocation of work to be done by each of them

(6) Any vacancy in the membership of a Service Matters Tribunal shall bo tilled up by the Central Government as soon as practicable.

32. (1) In this section,—

(a) "service matter", in relation to an employee of a Corporation or of the Board, means any matter arising out of the terms and conditions of his service;

Redresaal of the grievance with res- pect to service matters.

(6) "grievance with respect to a service matter", in relation to an employee of a Corporation or of the Board, means a grievance of such employee to the effect that he has not been dealt with in regard to that service matter in conformity with the terms and conditions of his service;

(c) "terms and conditions of service", in relation to an employee of a Corporation or of the Board, means the terms and conditions of service, specified by any rule, regulation or order made under this Act, for the time being in force, and applicable to him.

(2) An employee of a Corporation or of the Board, aggrieved by—

(a) any decision or order of a Corporation or the Board rejecting his application or representation for the rcdressal of his- grievance with respect to any service matter, or

(6) the omission or failure of a Corporation or the Board to give its decision in relation to any application or representation made by him for the redressal -of his grievance with respect to any service matter,

may make an application to the Service Matters Tribunal, having jurisdiction, for the redressal of his grievance with respect to that service matter:

Pfovided that no application for the redrcssal of any grievance with respect to a service matter shall be entertained by the Service Matters Tribunal until the applicant has exhausted all the remedies available to him under the rules, regulations or orders relating to the terms and conditions of his service, for the time being in force, for the redressal of such grievance:

Provided further that the Service Matters Tribunal may, if it is satisfied that the applicant was prevented by sufficient cause from exhausting all the re- medics available to him under such rules, regulations or orders, entertain the application for the redressal of such grievance even though the applicant had not exhausted all such remedies,

(3) An application, under sub-section (2), for the redressal of the grievance of an employee of a Corporation or of the Board with respect to a service matter shall be made,—•

(a) in the case of a decision or order referred to in clause (a) of that sub-section, within a period of ninety days from the date on which the decision of the Corporation or Board rejecting his application or representation, as the case may be, was communicated to the applicant,

(/>) in the case of any omission or failure referred to in clause (b) of that sub-section, within a period of ninety days, computed from the date of expiry of the period of six months from the date on which the application or representation was submitted by him to the Corporation or the Board, as the case may be, for the redressal of his grievance:

Provided that the Service Matters Tribunal may admit any such application after the expiry of the .said period of ninety days, if it is satisfied that the applicant was prevented by sufficient cause from making the application within the said period:

Provided further that where a person who had, before the appointed day, filed with the dissolved Corporation, any application for the redressal of a grievance with respect to a service matter, and the dissolved Corporation had not communicated to such person its decision on such application for a pen'od of not less than six months from the date on which the application was filed by him, such person may, within ninety days from the appointed day, make an application under this sub-section to the Service Matters Tribunal having jurisdiction for the redressal of his grievance.

(4) An application under sub-section (2) shall be made in such form be verified in such manner and shall be accompanied by such fee, not exceeding one hundred rupees, as may be prescribed on a graded scale depending on the nature of the grievance.

(5) Nothing contained in this section shall empower any person lo make

any application under sub-section (2)-—

(a) if on the date on which the application is made, the institution or commencement of any suit or other letial proceeding relating to the service matter is barred by any law oif limitation for the time being in ' force; or

(h) if any suit or other lc"al proceeding had bern instituted or com- menced in any court, whether before or after the appointed day, with respect to any service matter, unless such s uit or other legal proceeding is withdrawn before the expiry of the period of limitation as aforesaid.

Benches of Service

33. The powers and functions of a Service Matters Tribunal may be exercised and discharged by Benches constituted by the President of that Tribunal from amongst the members of such Tribunal:

Mattel* Tribunal.

provided that the President of the Service Matters Tribunal, or any other member of such Tribunal authorised in this bchalif by the President of that Tribunal, may, sitting singly, dispose of any application which has been allotted to a Bench of which he is a member, if the subject-matter of such application does not relate to reduction in rank, suspension, removal or dis- missal from service.

SEC. U] THE GAZETTE OF INDIA EXTRAORDINARY 19

Orders of Service Matters Tribanals.

34. (1) A Service Matters Tribunal may, after giving the parties to the application a reasonable opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order against which such application has been made or may remand the case to the Corporation or the Board which passed such decision or order with such dhection as that Tribunal may think fit, for fresh adjudication or decision, as the ease may be, after taking additional evidence, if necessary, or may by orde£ grant such relief as may bo just and proper in the circumstances of the case.

(2) A Service Matters Tribunal shall send a copy ot every order passed

by it under sub-section ( i ), to the parties to the application.

(3) Every order passed under this section by a Service Matters Tribunal shall be final and shall not be called in question in any court except by way of a petition under article 32, or article 136, or article 226, of the Consti- tution.

CHAPTER VIL

PROVISIONS ATPLICABLH TO ALL TRIBUNALS

5 of 190(1.

35. (1) For the purports of discharging its functions, every Tribunal constituted under this Act (whelhei it is a Claims Tribunal or the Appellate Claims Tribunal or a Service; Mailers Tribunal) shall have the same powers as arc vested in a civil court under the Code 01 Civil Procedure, 1908, while tiying a suit, in respect of Lhe following matters, namely:—

(a) summoning and enforcing the attendance of any witness and

Powers of Tribunals to enforce attendance of witnesses and to regu- late their own proce- dure.

examining him on oath;

(b) discovery and inspection of any document or other material

object producible as evidence;

(c) compelling the production of books of accounts and other

documents;

(d) reception of evidence on affidavits; and

(e) issuing of any commission for the examination of any wit-

ness.

(2) Subject to the provisions of this Act and the rules made there- under, every Tribunal referred to in sub-section (1), shall have power to regulate its own procedure and the procedure of the Benches thereof in all matters arising out of the exercise of its powers or oE the dis- charge of its functions, including the places at which it or its Benches shall hold its, or their, sittings,

45 of lBflil.

Proceedings before Tribunals to be judi- cial pro- ceedings for certain pUrpo9*".

2 of 1974.

36. Every proceeding before a Tribunal constituted under this Act, (whether it is a Claims Tribunal or the Appellate Claims Tribunal or a Service Matters Tribunal), shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penjl Code; and every such Tribunal shall be deemed to be a civil court for* the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Procedure wthere'the •memberu of a Tribu- nal differ in thoir opinion.

37. Whero a claim or an appeal or an application relating to a grievance with respect to a service matter has been heard by a Claims Tribunal, or the Appellate Claims Tribunal, or a Service Matters Tribunal, as the case may be, or any Bench thereof, consisting of more than one member and the members differ _ in their opinion on any point, the decision on such point shah", where there is a majority, be according to the opinion of such majority, and where there is no majority and the members are equally divided in their opinion, they shall draw up a statement of the facts of the case and the point or points on which they differ in their opinion and make a reference of the claim or of the appeal or of the application relating to the service matter, as the case may be, to the President of such Tribunal, and on receipt of such reference, the President of the concerned Tribunal shall arrange for the hearing of such point or points by one or more of the other members of that Tribunal, and such point or points, or the appeal, shall be decided according to the opinion of the majority of the members of the con- cerned Tribunal who have heard the claim or appeal, or, as the case may be, relating to the grievance with respect to the service matter, including those who had first heard it.

Metho.l of determina- tion of equivalent rank.

38. In determining, for the purposes of sections 22, 27 and 31, whether an officer of a State Government or of an insurance corporation or of the Board holds any rank equivalent to that of a Joint Secretary or Director to the Government of India, regard shall be had to the scale of pay of the post held by that officer under the State Government or the insurance cor- poration or the Board, as trig case may be.

Costs.

39. (!) Subject to such conditions and limitations as may be pres- cribed, the costs of and incidental to all claims, appeals or applications, filed under this Act shall be in the discretion of the Tribunal (whether it is a Claims Tribunal or the Appellate Claims Tribunal or a Service mat- ters Tribunal), in which claim, appeal or application is filed and the Tribunal thall have full power to determine by whom and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid, and the fact that the Tribunal has no jurisdiction to deal with the claim or applica- tion or hear the appeal shall be no bar to the exercise of such powers.

⁴'2) Where any such Tribunal directs that any costs shall not follow the

event, the Tribunal shall state its reasons in writing.

CHAPTER VIII

FINANCE, ACCOUNTS AND AUDIT

Funds of Corpora- tions.

40. Every Corporation shall have its own Fund and all its receipts shall be credited thereto and all payments of the Corporation shall be made therefrom.

Audit

41. (1) The accounts of every Corporation and the accounts of the Board shall be audited by auditors duly qualified to act as auditors of companies under the law for the time being in force relating to com- panies, and the auditors shall be appointed by the Corporation whose accounts are to be so audited, or the Board, as the case may be, with the previous approval of the Central Government, and shall receive such remuneration from thi" concerned Corporation, or the Board, as the Central Government may fix.

(2) Every auditor in the performance of his duties shall have at all reasonable times access to the books, accounts and other documents of the concerned Corporation or, as the case may be, of the Board.

(3) The auditors shall submit their report to the Corporation or, as the case may be, to the Board, by which they were appointed, and shall also forward a copy of their report to the Central Government.

Actuarial valuation*.

42. Every Corporation shall, once at least in every two years, cause an investigation to be made by actuaries into the financial condition of the life insurance business of the Corporation, including a valuation of the liabilities of the Corporation in respect thereto, and submit the re- port of the actuaries to the Central Government.

Annual report of activities of Corpora- tion and the Board.

43. (1) Every Corporation and the Board shall, as soon as may be, after the end of each financial year, prepare and submit to the Central Government in such form as may be prescribed a report giving an ac- count of its activities during the previous financial year and shall also give an account of the activities, if any, which are likely to be under- taken by it in the next financial year.

(2) Every Corporation and the Board shall, in relation to its func- tions under this Act, furnish to the Central Government such reports, returns, statistics, accounts and other information as the Central Gov- ernment may, from time to time, require.

Surplus i from life- insurance

business how to be utilised.

44. If as a result of any investigation undertaken by a Corporation under section 42, any surplus emerges, ninety-five per cent, of such sur- plus or such higher percentage thereof as the Central Government may approve, shall be allocated to or reserved for the life insurance policy- holders of the Corporation and, after meeting the liabilities of the Cor- poration, if any, the remainder shall be paid to the Central Government or, if that Government so directs, be utilised for such purposes and in such manner as that Government may determine.

45. If, for any financial year, profits accrue from any business (other than life insurance business) carried on by a Corporation, then, after making provision for reserves and other matters for which provision is necessary or expedient, the balance of such profits shall be paid to the Central Government.

Piofltfrom any business (other than life insurance business)

how to b" utilised

Reports to 46. The Central Government shall cause the report of the auditors under section 41, the report of the actuaries under section 42 and the report under section 43 giving an account of the activities of every Cor- poration and of the Board to be laid before both Houses of Parliament as soon as may be after each such report is received by the Centra] Government.

be laid before Parliament

CHAPTER IX

MISCELLANEOUS

47. Except as otherwise expressly provided in this Act, on and from the appointed day, no person, other than a Corporation, shall carry on life insurance business in India.

Corpora- tions to have exclusive privilege of carrying on life insurance business.

48. (2) Notwithstanding anything contained in section 47 or in the Exceptions in the case of lifo insurance) business in respect of persons ordinarily residing outside Tndia.

Insurance Act, the Central Government may, by order, permit any per- son who has made an application in that behalf, to carry on life insur- ance business in India in respect of the lives of persons ordinarily resident outside India, subject to such restrictions and conditions as may be specified in the order and any such order shall be deemed to have effect as if it were a certificate of registration issued by the Controller to such person under section 3 of the Insurance Act in respect of that class of business.

(2) Nothing in sub-section (1) shall authorise any person who is permil'ed to carry on life insurance business of the nature referred to in ,that sub-section, to insure the life of any person ordinarily resident outside India, during any period of his temporary residence in India.

Powor-¹ of Corpora- tions to have official seals in certain cisbes.

49. Every Corporation may have for use in any Divisional Office, Branch Office or other office or in any office outside India, an official seal which shall be a facsimile of the common seal of the Corporation, with the addition on its face of the name of the Divisional Office, Branch Oflice or other office or any office outside India, where it is to be used, and any such official seal may be affixed to any deed or document to which the Corporation is a party.

50. The sums assured by all policies of life insurance issued by, or trans- ferred to or vested in3 a Corporation including any bonuses declared in respect thereof, whether before or after the appointed day, shall be guaranteed as to payment in cash by the Central {government.

Policies of lifciniurnncc to bo guaranteed by Contrai Govern- ment.

Liuuida- tion-

51- No provision of law relating to the winding up of companies or corporations shall apply to a Corporation established under this Act, and such Corporation shall not be placed in liquidation save by order of the Central Government and in such manner as that Government may direct.

Penulty for carrying on lifo insurance business in' con- travention of tho provisions of this Act.

52. If any person carries on life insurance business in India in contra- vention of the provisions of this Act, he shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to ten thousand rupees, or with both, and where such contravention is a continuing one, with further fine which shall not be lews than one thousand rupees, for every day, after the first, during which such contravention continues.

Penalty for withhold- ing property, etc.

53 If any person wilfully withholds or fails to deliver to a Corpora- tion as required by the provisions of the First Schedule, any property or any books, documents or other papers which may be in his possession or unlawfully retains possession of any property which has been trans- ferred to and vested in any Corporation under this Act or wilfully applies any such property to purposes other than those expressed in or authorised by this Act, he shall, on the complaint of the Corporation, be punishable with imprisonment for a term which may extend to one year, or with fine, or with both.

Offences by

companies.

54. (1) Whore an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed

to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided In this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or conni- vance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of thut offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

(a) "company" means any body corporate and includes a firm

or other association of Individuals; and

(b) "director", in relation to a firm, means a partner in the

firm.

Bat of iurisdictiotj of civil courts.

55. No civil court shall have jurisdiction to entertain any suit or other legal proceeding or to adjudicate upon any matter which a Service Matters Tribunal is empowered by this Act to adjudicate upon.

Enforce- ment of decisions and orders of Tribunals 56. Any decision given or order passed or made (including any order for costs made under section 39), by a Claims Tribunal, or the Appellate Claims Tribunal, or a Service Matters Tribunal may be enforced in the same manner and to the same extent by any civil court within the local limits of whose jurisdiction,—

(a) the Head Office of the Corporation against which such decision or order is to be enforced, is located, or, where such decision or order is to be enforced in relation to any claim arising within the area for which there is a Branch Office or other office of the concerned Corporation, such Branch Office or other office is located; or

(b) the office of the Board against which such decision or order

is to be enforced, is located; or

(c) the place at which the person against whom such decision or order is to be enforced, actually and voluntarily resides or carries on business or personally works for gain, or owns any property,

as if it were a decree passed, or order made, by such court.

57. (1) Save as otherwise provided elsewhere in this Act, the follow- ing sections of the Insurance Act shall, so far as may be, apply to every Corporation as they apply to any other insurer, namely: —

Aplication of the Insurance Act.

Sections 2, 2B, 18, 26, 33, 38, 39, 41, 45, 40, 50, 52, 110A, HOB,

HOC and 119.

(2) The Central Government shall, as soon as may be after the appointed day, by notification, direct that the following sections of the

Insurance Act shall apply to every Corporation subject to such condi- tions and modifications as may be specified in the notification, namely:—

Sections 2D, 10, 11, 13, 14, 15, 20, 21, 22, 23, 25, 27A, 28A. 40,

40A, 40B, 43, 44, 51, 102 to 106, 107 to 110, 111, 113, 114 and 116A.

(3) Section 42 of the Insurance Act shall have effect in relation to the issue to any individual of a licence to act as an insurance agent for the purpose of soliciting or procuring life Insurance business for a Corporation subject to the condition that the powers exercisable by the Controller under sub-section (I) thereof may also be exercised on behalf of the Controller, by every Corporation.

(4) The Central Government may, by notification, direct that all or any of the provisions of the Insurance Act other than those specified in sub-section (1), or sub-section (2), shall apply to every Corporation subject to such conditions and modifications as may be specified in the notification.

(5) Save as otherwise provided in this Act, nothing contained in the

Insurance Act shall apply to a Corporation.

43 of 1961

58. Notwithstanding anything contained in section 103 or section 194 of the Income-tax Act, 1961, no deduction of income-tax shall be made on any interest or dividend payable to a Corporation In respect of any securities or shares owned by it or in which it has full beneficial interest-

Deductions of incouwtuc not to p* nmde on interior dividend.

59. Nothing contained in this Act shall apply in relation to—

(a) the scheme, run by the Central Government, known as the

Act not to apply In cortain cuact-

Post Office Insurance Fund;

(b) any insurer to whom the Insurance Act does not apply by

reason of the provisions contained in section 2E thereof;

11 of 1922

(c) any approved superannuation fund as defined in clause (a) of section 58N of the Indian Income-tax Act, 1922, being a fund in existence on the date (hereinafter referred to as the specified date) on which the dissolved Corporation was established;

(d) any scheme in existence on the specified date or any scheme framed after the specified date with the approval of the Central Government, as the case may be, whereby, in consideration of certain compulsory deductions made by Government from the salaries of its employees as part of the conditions of service, the pay- ment of money is assured by Government on the death of the emp- loyee concerned or on the happening of any contingency dependent on his life;

(e) any Family Pension Scheme framed under the Coal Mines Provident Fund, Family Pension and Bonus Schemes Act 1948 or the Employees' Provident Funds and Miscellaneous Provisions Act 1952, for the purpose of providing family pension and life assurance benefits to th& employees covered by the said Scheme;

(f) any scheme of small savings run by the Central Govern- ment whereunder payment is a38Ured by that Government on the death of the person subscribing to the scheme or on the happening

S ^ r s n s *t he c e n t e ai G o v e r n m a it -"• * - " - •J

60. No act or proceeding oi. a Corporation or of the Board or of any Committee of any Corporation or of the Board or of a Claims Tribunal, the Appellate Claims Tribunal, or a Service Matters Tribunal, shall be invalid or called in question merely by reason of the existence of any vacancy therein or any delect in the constitution thereof.

Defects in constitution of a Cor- poration °r tho Board or of any tri- bunal not to invalidate acts or proceedings

Protection of action taken under

the Act, 81. No suit, prosecution or other legal proceeding shall lie against •ny member, Executive Director, or employee of a Corporation or of the Board for anything which is in good faith done or intended to be done under this Act.

Employees to be deemed to be public servants.

43 of1S60.

62. Every employee of a Corporation or of the Board or of a Claims Tribunal or the Appellate Claims Tribunal or a Service Matters Tribunal shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code.

63. (1) No person who is, on or after the appointed day,—

(a) an employee of the Government; or

Disqualifi- cation for appointment a" Insurance agent, (b) a holder of the office of Chairman or Director or of any other office in, or an employee of, a statutory corporation or a Government company; or

(c) the spouse of an employee referred to in clause (a) or clause (b), or, as the case may be, of the holder of an office referred to in clause (b),

•hall be eligible for the issue of, or shall accept, any licence to act as an insurance agent, and any such licence, if issued, shall be void.

(2) The licence issued, after the appointed day, to a person to act as an insurance agent shall become void upon such person becoming, after the issue of such licence,—

({) an employee of the nature referred to in clause (a) or

clause (b) of sub-section (1), or

(ii) the holder of an office of the nature referred to in clause

(b) of that sub-section:

Provided that the licence to act as an insurance agent issued to a person who becomes, after such issue, the spouse of such employee or of the holder of such office shall become void on the expiry of three months from the date on which such person becomes the sipouse of such emp- loyee or the holder of such office.

(3) Every insurance agent who immediately before the appointed day was, and continues to be on the expiry of three months from that day, an employee of the nature referred to in clause (a) or clause (b) of sub-section (1), or the holder of an office of the nature referred to in clause (b) of that sub-section, or the Rpouse of anv such employee or of the holder of any such office sh?ll, on the expiry of three months from the appointed day, cease to he an insurance agent-

Explanation.—For the purposes of this section,—

(i) "employee of a statutory corporation" includes any person employed for any of the purposes of the Act by or under which such corporation is established or constituted;

(ii) "Government company" means a Government company

1 oH956 within the meaning of section 617 of the Companies Act, 1950;

(Hi) "statutory corporation" means a corporation established or constituted by or under a Central, Provincial or State Act.

64. (I) No person who is—

(a) an employee of a Corporation or of the Board Or of a Claims Employees not to taka active part in politics.

Tribunal or the Appellate Claims Tribunal or a Service Matters Tribunal; or

(b) a member of a Corporation or of the Board; or

(c) a member of a Claims Tribunal or the Appellate Claims Tribunal or a Service Matters Tribunal,

shall be a member of, or be otherwise associated withj any political party or any organisation which takes part in politics nor shall he take part in, subscribe in aid of, or assist in any manner, any political move- ment or activity.

(2) If any question arises whether a party is a political party or whether any organisation takes part in politics or whether any move- ment Or activity falls within the scope of sub-section (1), the decision of the Central Government thereon shall be final.

(3) No such person as is referred to in sub-section (1) shall canvass or otherwise interfere with or use his influence In connection with, or take part in, an election to any Legislature or local authority:

Provided that—

(i) such person 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) such person shall not be deemed to have contravened the provisions of this section 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.

(4) The provisions of sub-sections (2), (2) and (3) shall be deemed to form a part of the conditions of service of the persons specified in clause (a), clause (b) and clause (c) of sub-section (1) and any contra- vention by any such person of any provision of sub-section (1), or, as the case may be, sub-section (3), shall be deemed to be a breach of the terms and conditions of such service and shall be dealt with accordingly.

Explanation /.—The display by such person on his person, vehicle or residence, of any electoral symbol shall amount to using his influence in connection with an election within the meaning of this section.

Explanation U.—For the purposes of this section, "Legislature" means—

(i) either House of Parliament,

(ii) the Legislative Assembly of a State, or in the case of a State having a Legislative Council, either House of the Legislature of that State,

SEC. £] THE GAZETTE OF INDIA EXTRAORDINARY 37

{Hi) Legislative Assembly of a Union territory constituted 20 of 1963.

under the Government of Union Territories Act, 1963,

(iv) the Metropolitan Council of Delhi constituted under 19 of 1966.

section 3 of the Delhi Administration Act, 1966, or

(v) District Councils and Regional Councils in the States of Assam and Meghalaya and in the Union territory of Mizoram aa provided in the Sixth Schedule to the Constitution,

as the case may be.

C5. (1) The Central Government may, by notification, make rules to carry out the provisions of this Act.

Power "•

maka

rulw.

(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for all or any of the following matters, namely: —

(a) the term of office of the Chairman and other members of a Corporation, as required by sub-section (1) of section 7, and the salaries and allowances which the Chairman of a Corporation shall be entitled to receive and the conditions of his service in respect of leave, pension, provident fund and other matters and the allowances which the other members of a Corporation shall be entitled to receive, as required by sub-section (4) of section 7;

(b) the matters specified under sub-section (1) of section 9 sub- ject to which each Corporation shall carry on life insurance business and the conditions subject to which investment of its funds shall be made by a Corporation, as required by clause (o) of sub-section (2) of section 9;

(c) the fees and allowances to be paid to the members of a Com- mittee constituted under sub-section (4) of section 13 for attending its meetings or for any other work;

(d) the appointment of Secretary and other officers and em- ployees, by a Corporation to enable it to discharge its functions, as required by sub-section (3) of section 14 and the terms and conditions of service of the Executive Directors, Secretary and other officers and employees of a Corporation, as required by sub-section (4) of section 14;

(e) the term of office of a member of the Board, and the salaries and allowances which a whole-time member of the Board shall be entitled to receive and the conditions of his service, as required by sub-sections (I) and (5) of section 16;

(f) the fees and allowances to be paid to members of Committees (other than the members of a Corporation or of the Board) for attend- ing meetings and for attending to other work, as required by sub- section (2) of section 17;

(g) the times and places at which the Board shall meet and thft procedure in regard to the transaction of business at its meetings

which shall be observed by the Board, as required by subjection (I) of section 18;

(k) the terms and conditions of service of Secretary and otKer officers and employees of the Board, as required by sub-section (2) of section 19;

(t) the manner in which the Board shall review the functioning of a Corporation and the service which the Board shall render to a Corporation, as required by sub-section (1) of section 20;

(j) the functions, other than those specified in sub-section (2) of section 20, which may be performed by the Board, as required by tub-section (2) of section 20;

(fc) the matters subject to which payment of an amount deter- mined by the Central Government shall be made by a Corporation to the Board, as required by sub-section (I) of section 21;

(1) the form in which an application under sub-aection (!) of section 24 shall be made to the Claims Tribunal and the manner In which such application shall be verified and the fee which shall accompany such application, as required by sub-section (2) of section 24;

,

(m) the form in which an appeal shall be filed to the Appellate Claims Tribunal, the manner in which the memorandum of such appeal shall be verified and the fee which shall accompany such memorandum of appeal, as required by sub-section (2) of section 28;

(n) the iorm m wnich an application shall be, made to the Service Mallei s Tribunal, the manner in which such application shall be venried and the tee which shall accompany such application, as re- quued by aub-section (4) of section 32;

(o) the ruaUers subject to which every Tribunal sihaU have powex to leguiate its own procedure and the procedure of the JhJenciies thereof, including the places at which it or its Benches shall hold its, or their, sittings, as required by sub-section (2) of section 35;

(p) the conditions and limitations subject to which costs may be awarded by any Tribunal, as required by sub-section (i) of section 39;

(q) the form in which a report giving an account of its activi- ties during the previous financial year shall be submitted by a Cor- poration and the Board, as required by sub-section (2) of section 43;

(r) the terms and conditions ol work of the insurance agents of a Corporation including those who become insurance agenjts of a Corporation on the appointed day, as required by sub-section (3) of section 57 of this Act, read with section 42 of the Insurance Act;

(s) such other matters as are required to be, or may be, pres-

cribed.

(3) The power to make rules conferred by sub-section (2) shall

include power—

(0 to give retrospective effect to the terms and conditions of

service of the employees or the terms and conditions of work of in- surance agents under such rules;

(ii) to amend by way of addition, variation or repeal such terms and conditions of service or work with retrospective effect,

from a date not earlier than the appointed day-

Power to oiaka regulation* 66. (1) Every Corporation may, with the previous approval of the Central Government, by notification, make regulations, not inconsistent with the provisions of this Act and the ruies made thereunder, (to pro- vide lor ail matiers ior which provision is expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:-—

(a) the powers and functions of a Corporation which may be delegated to the officers in charge of its Divisional Offices and Branch Offices;

(b) the method of recruitment of employees and insurance agen,ts of a Corporation;

(c) the manner in which the Fund of a Corporation shall be maintained;

(ti) the maintenance of separate funds and accounts at each of the Divisional Offices and Branch Offices of a Corporation;

(e) the jurisdiction of each. Divisional Office and Branch Office of a Corporation;

(f) the conduct of business at meetings of a Corporation;

(g) the formation of Committees of a Corporation and the delegation of powers and functions of the Corporation to such Com- mittees, and the conduqt of business at meetings of such Committees;

(h) the form and manner in which policies of life insurance may be issued and contracts binding on a Corporation may be executed;

(i) the classification of policies of life insurance, whether issued by a Corporation or transferred to a Corporation from the dissolved Corporation, for the purpose of declaring differential bonuses, wherever necessary;

(j) the manner in which and the intervals within which the accounts of various Divisional Offices and Branch Offices of a Cor- poration may be inspected and their accounts audited;

(k) the conditions subject to which any payment may be made by a Corporation.

(3) The power conferred by this Act to make rules in relation to the matters in respect of which regulations could be made under the Life Insurance Act shall be deemed, Tor the purposes of this Act, to carry with it the powers to amond, with retrospective effect from a day not earlier than the appointed day, the regulations, if any, made under the Life Insurance Act and in force immediately before the appointed day, "nd such regulations, as so amended, shall have effect accordingly.

Nofifica- tions, rules and regulations

to be laid before parliament.

67. Every notification made under sub-section (2), or sub-section (4), of section 57, every rule made under section 65, and every regula- tion made under section 66, shall be laid, as soon as may be after i,t is made, before each House of Parliament, while it is in session, for a total period oi thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the notification, rule or regulation or both Houses agree that the notification, rule or regula- tion should not be made, the notification, rule or regulation shall there- after have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification, rule or regulation.

Act to over- ride all other enactment*, etc.

14 of 1947.

(J8. The provisions of this Act and the rules made thereunder shall have effect notwithstanding anything contained in

Power to rrmove

difficulties.

69. (I) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty:

Provided that no such order shall be made after the expiry of a

period of two years from the appointed day.

(2) Every order made under this section shall be laid, as soon as may

be after it is made, before each House of Parliament.

70. Notwithstanding the repeal of the Life Insurance Act, by sub-

section (1) ol section 3,—

(a) anything done or any action taken under the Act so re-

pealed;

(6) any sums due to, or payable by, the dissolved Corporation,

immediately before ,the appointed day;

(c) any contract or agreement entered into, or arrangement made, by the dissolved Corporation, and in force immediately before the appointed day;

(d) any rules made under the Life Insurance Act, and in force

immediately before the appointed day;

(e) any regulations or any other provisions with respect to the terms and conditions of service of employees and the terms and conditions of work of insurance agents of the dissolved Corporation, as in force immediately before the appointed day;

(/) any other regulations, as in force immediately before the

appointed day,

shall, in so far as they are relatable to a zonal office of the dissolved Corporation, and the officers, employees and agents in, or attached to such office, be deemed, without prejudice to the provisions of the First Schedule, to have been done or taken, or, as the case may be, due to, or payable by, or entered into, or made by, the corresponding Corpora- tion, and every such rule, regulation, contract, agreement or arrangement shall, until it is duly altered under this Act, have effect notwithstanding any judgment, decree or order of any court or tribunal and notwithstaiid-

14 of 1947.

ing anything contained in the Industrial Disputes Act, 1947 or any other law or any agreement, settlement, award or other instrument for the time being in force-

Explanation.-—For the purposes of this Act, unless the context other- wise requires, "corresponding Corporation", in relation to a zonal office of the dissolved Corporation, means the Corporation which has its Head Office at the place at which that zonal office was located imme- diately before the appointed day.

THE FIRST SCHEDULE

(See section 3)

TRANSFER OF THE CAPITAL, THE OFFICERS AND OTHBR EMPLOYEES, AND THE ASSETS AND LIABILITIES, OF THE DISSOLVED CORPORATION AND OTHER MATTEBSL

Definiti on".

1. In this Schedule, unless the context otherwise requires,—

(a) "corresponding Corporation" has the meaning assigned to it in the Explanation to section 70;

(b) "paragraph" means a paragraph of this Schedule;

(c) "sub-paragraph" means a sub-paragraph of a paragraph;

(d) "zonal office" means a zonal office established under sub- section (2) of section 18 of the Life Insurance Act and includes divi- sional offices, branches and other offices in each zone.

2. Out of the capital of rupees five crores provided by the Central Government to the dissolved Corporation, there shall stand transferred, on the appointed day, to each of the Corporations, a sum of rupees one crore.

Capital provided by Central Govern, rnent to the dis- solved Corpora- tion to be trans- ferred to the Corpora- tions.

3. (1) Subject to the other provisions of this Schedule, every officer or other employee of the dissolved Corporation,—

Allocation of offlcrrs and other em- ployees of the dissolved Corporation.

(a) who was employed immediately before the appointed day in a zonal office, shall become on and from that day, an officer or other employee, as the case may be, of the corresponding Corporation;

(b) who was employed immediately before the appointed day, in any office, other than a zonal office, shall become, on and from the appointed day, an officer or other employee, as the case may be, of such Corporation, as the Central Government may, by gene- ral or special order published in the Official Gazette, specify, and until any order is made with respect to any such officer or other employee, he shall be deemed to have become, on and from the appointed day, an officer or other employee of the Board.

(2) An order under clause (b) of sub-paragraph (1) may be made

with retrospective effect from a date not earlier than the appointed day.

(3) In making an order under clause (b) of sub-paragraph (3)

for the purpose of allocating any officer or employee to any one of the Corporations, regard shall be had to the need,for the efficient discharge of its functions by such Corporation and the public interest and other relevant matters.

(4) Notwithstanding anything contained in the foregoing sub-para- graphs, it shall be open to any officer or other employee of the dissolved Corporation to opt in favour of not being an officer or other employee of the concerned Corporation by giving one month's notice of such option to such Corporation:

Provided that such notice shall be given,—

(a) before the expiry of three months from the appointed day, or

(6) where such officer or other employee is an officer or other employee referred to in clause (fa) of sub-paragraph (1), within three months from the date on which an order, applicable to him, is made under that clause-

(5) The option exercised under sub-paragraph (4) by an officer or

other employee shall take effect on the expiry of the period of notice of one month, but the taking effect of such option shall not prejudicially affect any disciplinary or other proceedings which may be pending against him on the date on which the notice was given, or which may be taken against such officer or other employee in respect of anything done or omitted to be done by him before his option had taken effect.

(6) An officer or other employee who exercises the option referred

to in sub-paragraph (4), shall—

(

(b) be paid, by way of gratuity, an amount calculated m accord

ance with the rules which would have applied in his case if the Life Insurance Act had not been repealed and he had retired from service on the date on which his option took effect, and for this purpose the requirement as to the minimum period of service which should have been rendered for becoming entitled to gratuity under those rules shall not apply and such gratuity shall be payable on the basis of the basic pay drawn by him immediately before the day on which his option took effect;

(c) be entitled to such other terminal benefits, other than gra- tuity, as would have been payable to him if the Life Insurance Act had not been repealed and he had retired from service on the date OIJ which his option took effect:

Provided that in the case of any officer or other employee against whom any disciplinary proceeding is pending immediately before the appointed day, or against whom a disciplinary proceeding may be taken thereafter, the payment of salary, allowances, gratuity or other terminal benefits under this paragraph shall be subject to the result of the said proceedings.

Transfer of acseu and liabilities of the dissol- ved Corpo- ration.

4. (1) On the appointed day, the rights and liabilities of the dissolved Corporation in respect of the policies of life insurance issued by it, and in force immediately before the appointed day, which were being serviced by a zonal office shall, subject to the other provisions of this Schedule, stand transferred to, and shall vest in, the corresponding Corporation,

(2) Save as otherwise provided in sub-paragraph (1), the assets and liabilities of the dissolved Corporation, as on the day immediately before the appointed day, shall be allocated amongst the corresponding Corporations in such manner and to such extent as the Central Govern- ment, having regard to the recommendation made by the Committee constituted under sub-paragraph (3), may, by order published in the Official Gazette, determine and such order may provide for the retransfer to a corresponding Corporation of any assets and liabilities which and been previously allocated to any other corresponding Corporation under any provisional order made under sub-paragraph , (5).

(3) The Central Government shall constitute a Committee consisting of not less than three and not more than five persons who, in its opinion, have special expertise in the matter of evaluation and allocation of assets and liabilities of bodies corporate, for the purpose of evaluating and re- commending the alloca'ion of the assets and liabilities of the dissolved Corporation amongst the corresponding Corporations in accordance with the provisions of sub-paragraph (4).

(4) The Committee shall—

(a) determine the value of the assets of the dissolved Corpora- tion; and in determining such value, the Committee shall have due regard to the net yield from loans and investments,

(b) determine, in accordance with the actuarial principles, the

liabilities in respect of the life insurance policies, which, by virtue of this Act, stand transferred to, and vested in, each corresponding Corporation,

and on such determination, make a recommendation to the Central Government for the allocation, in an equitable manner, of such assets amongst the corresponding Corporations, having regard to the liabilities which, by virtue of this Act, stand transferred to, and vested in, each corresponding Corporation:

Provided that the allocation of the assets and liabilities of the dis- solved Corporation amongst the corresponding Corporations shall be so made as (to ensure that immovable properties are allocated, as far as practicable, on "as is where is" basis and such allocation shall be so made as to ensure that the deficiency, if any, in the value of any immov- able property allocated to a corresponding Corporation is made good by the allocation to it of other assets of the dissolved Corporation.