# 19~1 tah of Wrtrt Bc11{af v. S.N. B:21ak 19C:?

- **Citation:** [1963] 2 S.C.R. 56
- **Court:** Supreme Court of India
- **Decided:** 1963
- **Bench:** A. K. Sarkar, K. SuBBA RAO, J. R. M:unaoLKAR
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/19-1-tah-of-wrtrt-bc11-af-v-s-n-b-21ak-19c-2522
- **Pages:** 17

## Headnote

/nsura11 ce-"PertJOn making the reference" --Meaning of1./0 P'riod preacribed for moving the Corporation-EJ!ecl-Life
Insurance Corporation Act, 1956 (31of1956), ••· 16(2) 48 (2)
(f) -Life ln1urance Corporation Ru/ea, 1956, r. 12 Sub-rr. (•),
(ii),. (iii).
The Life Insurance business of the insurer. The Andhra
Insurance Company Ltd., vcs1ed in the Life Insurance Corporation of India and it became entitled in compensation
under s. 16 of the Life Insurance Corporation Act. The Corporation made an offer of it and claimed variou• deductions. The
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)
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2 s.c.R.
SUPREME OOURT REPORTS
57
insurer raised certain disputes and on August 6, 1957, made
an application to the tribunal constituted on M•y 25, 1957
for ire .. assessment of the compensation and also for extension
of time for making the application by three months from
the; date of its constitution. On September 21, 1957, the
insurer filed another statement giving details of its claim.
In 'answer to the claim the Corporation filed its written statement. The tribunal held that the claim for compensation
was time-barred under r. 12 of the Rules framed under the
Act: and dismissed the application.
It also held that under
s. J6(2) of the Act the insurer had no right to move directly
the: tribunal regarding the amount of compensation, but
could move corporation for making a reference of the dispute to the tribunal and that it did not show any cause for
extending time to
make the reference to the tribunal.
Against the judgment of the tribunal, the insurer obtained
spetial leave to add and thereafter amalgamated with
Hindustan Ideal Insurance Company 1.td. which was substituted as appellant in place of the insurer.
Held,
(Per Subba Rao and Mudholkar, JJ.) That
while sub-s. (1) of s. 48 confers a power on the Central
Government, sub-s. (2) of s. 16 imposes a duty upon it
and therefore, it is obligatory upon the Central Government
to ,prescribe the period within which the insurer is to move
the' Corporation for referring the claim to the Tribunal.
When the law requires a period to be prescribed for doing a
thing, that period should be clearly specified with specific
reference to the particular purpose.
The specific purpose
r~ferred to in Sub·s. (2) of s. 16 is, to have the matter
refl'rred to the tribunal for decision. "Making of the reference is thus in the hands of the corporation and not in these
of ]insurer who can only move the corporation for making the
reference. Time has to be pre•cribed for enabling the insurer
to move the Corporation. Prescribing time for making a
reference is not prescribing time for moving the corporation
to make the reference.
Prescribing time by implicatfon
would not be compliance with the provisions of Sub-s. (2} of
•. 16.
' West Durby Union v. Metropolitan Life ABBuranee Oo.
[1897] A. C. ti47, referred to.
While framing r. 12 the Rule making authority lost
sight of the fact that Sub-s. (2) of s. 16 contemplates a reference not by the insurer but by the corporation. The proceeding taken before the tribunal were therefore misconceived.
No question of limitation arises because the oeriod within
196~
Hindusian lde'a I
lnsuruce Co. Ltd •
v.
Life lnJUt•nce
Clf'poralion of Indio
1962
Bt"ndrulcn ld~cl
ltUllltlftU Co. Ltd.
••
Lije llUU'Onc.
~dionoflnJi4
58
SUPREME COURT REPORTS
(1963]
which an insurer must move the corporation to make a
reference has not yet been pre•crfbed as required by Sub·s.(2)
of s. 16. It would be open to the appellant to move the
corporation under s. 16(2) after such period is prescribed .
It was urged by the insurer that the claim cannot treated as
barred by time and this was a fit case for extension of time
und<r the proviso tor. 12.
Held, As r. 12, read by itself does not show clearly
whether it appli.,. to the corporation or it applies to an
insurer or a chief agent or a special agent, it is permissible to
look into the proviso for ascertaining the scope of the main
provisions of that rule.
Reading it along with the proviso
w

## Text

19~1
tah of Wrtrt Bc11{af
v.
S.N. B:21ak
19C:?
56
SUPREME OOURT REPORTS (1963]
only provides that those which
the court
already inherently poRseBBes shall be preserved
and is inserted as their Lordships think, lest
it should be considered that the only powers
possessed by the court are those expressly
conferred by the Criminal Procedure Code and
that no inherent powers had survived the
passing of that Act".
With this interpretation, which has been put on the
•
statutory duties and powers of the police and of
r
the powers of the- Court, we are in accord. The
•
High 0ourt was in error therefore in interfering
with the powers of the police in investigating into
the offence which was alleged in the information
sent to the Officer-in-charge of the police station.
W c therefore allow this appeal and set &Bide
the order of the High Court. The investigation will
now proceed in accordance with law.
Appeal allawed.
HINDUSTAN IDEAL INSURANCE CO. LTD.
v.
LIFE INSURANCE OORPORATION OF INDIA
(A. K. SARKAR, K. SuBBA RAO and
J. R. M:unaoLKAR, JJ.)
/nsura11 ce-"PertJOn making the reference" --Meaning of1./0 P'riod preacribed for moving the Corporation-EJ!ecl-Life
Insurance Corporation Act, 1956 (31of1956), ••· 16(2) 48 (2)
(f) -Life ln1urance Corporation Ru/ea, 1956, r. 12 Sub-rr. (•),
(ii),. (iii).
The Life Insurance business of the insurer. The Andhra
Insurance Company Ltd., vcs1ed in the Life Insurance Corporation of India and it became entitled in compensation
under s. 16 of the Life Insurance Corporation Act. The Corporation made an offer of it and claimed variou• deductions. The
•
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·~ • •
)
I~
2 s.c.R.
SUPREME OOURT REPORTS
57
insurer raised certain disputes and on August 6, 1957, made
an application to the tribunal constituted on M•y 25, 1957
for ire .. assessment of the compensation and also for extension
of time for making the application by three months from
the; date of its constitution. On September 21, 1957, the
insurer filed another statement giving details of its claim.
In 'answer to the claim the Corporation filed its written statement. The tribunal held that the claim for compensation
was time-barred under r. 12 of the Rules framed under the
Act: and dismissed the application.
It also held that under
s. J6(2) of the Act the insurer had no right to move directly
the: tribunal regarding the amount of compensation, but
could move corporation for making a reference of the dispute to the tribunal and that it did not show any cause for
extending time to
make the reference to the tribunal.
Against the judgment of the tribunal, the insurer obtained
spetial leave to add and thereafter amalgamated with
Hindustan Ideal Insurance Company 1.td. which was substituted as appellant in place of the insurer.
Held,
(Per Subba Rao and Mudholkar, JJ.) That
while sub-s. (1) of s. 48 confers a power on the Central
Government, sub-s. (2) of s. 16 imposes a duty upon it
and therefore, it is obligatory upon the Central Government
to ,prescribe the period within which the insurer is to move
the' Corporation for referring the claim to the Tribunal.
When the law requires a period to be prescribed for doing a
thing, that period should be clearly specified with specific
reference to the particular purpose.
The specific purpose
r~ferred to in Sub·s. (2) of s. 16 is, to have the matter
refl'rred to the tribunal for decision. "Making of the reference is thus in the hands of the corporation and not in these
of ]insurer who can only move the corporation for making the
reference. Time has to be pre•cribed for enabling the insurer
to move the Corporation. Prescribing time for making a
reference is not prescribing time for moving the corporation
to make the reference.
Prescribing time by implicatfon
would not be compliance with the provisions of Sub-s. (2} of
•. 16.
' West Durby Union v. Metropolitan Life ABBuranee Oo.
[1897] A. C. ti47, referred to.
While framing r. 12 the Rule making authority lost
sight of the fact that Sub-s. (2) of s. 16 contemplates a reference not by the insurer but by the corporation. The proceeding taken before the tribunal were therefore misconceived.
No question of limitation arises because the oeriod within
196~
Hindusian lde'a I
lnsuruce Co. Ltd •
v.
Life lnJUt•nce
Clf'poralion of Indio
1962
Bt"ndrulcn ld~cl
ltUllltlftU Co. Ltd.
••
Lije llUU'Onc.
~dionoflnJi4
58
SUPREME COURT REPORTS
(1963]
which an insurer must move the corporation to make a
reference has not yet been pre•crfbed as required by Sub·s.(2)
of s. 16. It would be open to the appellant to move the
corporation under s. 16(2) after such period is prescribed .
It was urged by the insurer that the claim cannot treated as
barred by time and this was a fit case for extension of time
und<r the proviso tor. 12.
Held, As r. 12, read by itself does not show clearly
whether it appli.,. to the corporation or it applies to an
insurer or a chief agent or a special agent, it is permissible to
look into the proviso for ascertaining the scope of the main
provisions of that rule.
Reading it along with the proviso
would not violate any well accepted rule of construction.
Held (per Sarkar, J.), that the insurer had no right to
move the tribunal directly and the proceedings commenced
by it before the tribunal were therefore wholly misconceived
and no relief could be granted by the tribunal to the insurer.
As the insurer had no right to move the tribunal, no question
of extending time for it to do so really arose. If the application for extension of time to move the tribunal is treated
""competent under the proviso of r. 12 of the rules, then also,
the appellant is not entitled to any relief, for there is no
justification on the merits to interfere with the tribunal's
order refusing to extend time.
The proceedings being incompetent, an enquiry as to whether it had been started out
of time would be wholly irrelevant and it is therefore unneees·
sary to express any opinion on the correct interpretation of
r. 12 of the Rules. The proceeding being incompetent from
the beginning it is not possible for this Court to grant any
relief and, therefore, the appeal must fail in any case.
Crvn. APPELLATE JURIBDICT.ION : Civil Appea.1
No. 82 of 1960 .
.Appeal by specia.l lea.ve from judgment end
order dated February 17, 1958, of the Court of
Life Insure.nee Tribunal, Nagpur, in case No. 16/
XVIA of 1957.
B. K. B. Naidu, for the appellant.
'
•
8. T. De.8<1i, S. J. l/anaji er:d E. L. Hothi, for
~
the reepondent.
l
2 S.C.R.
SUPREME COURT REPORTS
59
1962.
April 12.
The following Judgment.a
were delivered. The Judgment C>f Subba Rao and
Mudholkar, JJ; was delivered by Mudholkar, J.
·SARKAR J.-The Andhra Insurance Company
Ltd., hereafter called the insurer, carried on life
insurance and other imluranoe business. On September 1, 1956, the life insurance business of the
insurer became vested in the Life Insurance Corpo·
't ration of India under the provisions of the Life
(
Insurance Corporation Act,
1956. The insurer
thereupon became entitled to compensation from
the Life Insurance Corporation under s. 16 of the
Aot.
On February 19, 1957, the Corporation hav.
ing determined the amount of the compensation
and obtained the Central Government's approval
made an offer of .it to the insurer as provided in
s. 16. By the letter making the offer, the Corpora·
\--
tionta~laimd~d vtariousitde?uotiotns. The insure; raisehd
oer Ill
1spu es.
1s no
necessary 1or t e
purpose of this appeal to refer to these disputes.
On August 6, 1957, the insurer ma.de an appli·
cation to the Tribunal whioh had been constituted
on May 25, 1957 for an order for re-asseSBment of
;
the compensation payable to it. In that application
it also made a prayer that the Tribunal might, if
)..
ne~ssary, extend the time for making the a.pplica-
,1.
tion by three months from the date of its constitution. On September 21, 1957, the insurer filed in
the Tribunal another statement giving the details
of its claim. The Corporation in its tum filed its
written statement in answer ·to the claim of the
insurer.
The Tribunal by its judgment dated February
'
17, 1958 held that under s. 16 of the Act an insu·
"'1 rer had no right to approach the Tribunal directly
for deciding any dispute with the Corporation regarding the a.mount of the oompensation but ha.d
Hbtllusl"" lde•I
ln•tiraN• Co. Ltd.
v.
LiJ• ,,,,.,.,..,.
Corporlilion •f lnii•
Sar/et" J.
/!J6:t.
H1ndu1£ar1 Id.al
frJsurance Co. Ltd.
v.
Life lnJuronce
CAtJ>orGlion of India
Sarkar J.
60
SUPREME OOURT REPORTS [1963)
to move the Corporation to make a reference of
tho dispute to the Tribunal and this, the present
insurer had not done. It also held that the insurer
had not shown any cause why the time to make
the reference to the Tribunal should ue extended.
It further held that the claim for compensation
was by time. In the result, the Tribunal dismissed
the insurer's application.
The insurer obtained special leave from this
Court to a.ppoal a~a.inst tho j111lgment of the Tribunal and under that leave has prrSl'nted this appeal.
Aftor th<> leave was granted, tho insurer amalgamated with another company called the Hindustan Ideal
Insurance Company Ltd. and the latter company
was substituted as ~he appellant in the place of
the insurer.
Now s. l6 of the Act is in these terms :
S. 16 ( 1) "Where the controlled busine88 of
an insurer h:ui been transferred to and vested
in the Corporation under this Act, compensation shall be given by the Corporation to
that insurer in accordancp, with the principles
contained in the First Schedule.
(2)
The a.mount of the compensation
to be given in accordance with t.qe aforesaid
principles shall be determined by the Corporation in the first insurance, and if the
Amount so deformined is approved by the
Central Governmc-nt it shall be offored to the
insurer in full satisfaction of the compensa·
tion payable to him under this Act, and if,
on the other hand, the amount so offered is
not acceptable to the insurer he may within
such time as may be prescribed for tho purpose have the matter reference to the Tribunal
for decision.''
It is obvious from the terms of sub-sec. (2) of s. 16,
and it is indeed not seriously in dispute, that the
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2 s.c.R.
SUPREME COURT REPORTS
61
Tribunal can be moved by an insurer only through
the Corporation. An insurer has no right under
the section to approach the Tribunal directly. The
procedure contemplaten is that an insurer has to
move the Corporation and the Corporation has
thereupon to refer the dispute raised by tha insurer
to the Tribunal. l'his inevitably follows from the
words : in section, namely, "he may ...... have the
matter referred to the Tribunal for decision." The
section no doubt does not mention the Corporation
but it is clear from the Aot as whole that the refer.
nee contemplated was through the Corporation.
The insurer had to move some authority to make
the reference and the only authority under the Act
could be the Corporation. On this part of the case
I am in agreement with the view expressed in the
judgment of my brother Mudholkar.
In the present case however the insurer had
directly moved the Tribunal. This it had no right
to do.
The proceedings commenced by it were
therefore wholly misconceived. That being so, the
insurer could not have obtained any relief from
the Tribunal nor could the Tribunal have granted
it any relief. In this appeal, therefore, it is not
possible for the Court either to grant any relief
to the insurer or its successor-in-interest, the appellant. The proceeding being incompetent from the
beginning, the appellant cannot ask for anything
in it.
It would have been noticed that the insurer
had. asked the Tribunal to extend the time to
enable it. to make the application to the Tribunal: As it had no right to move the Tribunal,
no question of extending any time to do so really
arose.
Now r. 12 ..,f the Rule framed under the Act
~ provides for "the time within which a reference
195S
Hindust•n I deal
I nsu•ance of Incli•
••
Life lnsur•nCI
C or/Jaralion oJ Int/id
Sarkar J.
lllel
Hindudc.n ldul
ln.ntrm&t C.. Ltd.
..
LiJ• /111uratte1
C 01jwol ion of Indio
Sark•rJ.
62
SUPltEME OOURT ltEPORTS (1963]
may be ma.de to the Tribunal in respect of the determination of compensation pa.:r_able under the
Act."
The time prescribed for the present caae
was three months from the date on which the
compensation was offered to the insurer. Within
these three months the insurer had done nothing.
Thie rule, however, contains a. proviso which is in
these terms :
"Provided that any such reference may be
admitted by the Tribunal after thti period of
limitation prescribed thereunder this rule, if
the person ma.king thtJ reference satisfies the
Tribunal that he had sufficient ca.use for
not ma.king the reference within the ea.id
period.
If it ie contended that the insurer was entitled to
move the Tribune.I directly under this proviso and
had in fact done so, then, I think, it must be held
that the Tribune.I was right in its view·tha.t nooause
had been shown by the insurer why time should be
extended. Therefore if the a.pplica.tion so far as
it asked for extension of time is tr11&ted as a. competent one under this proviso, then also on the
merits, the appellant is not entitled to any relief,
for there
is no justification to interfere with the
order that the Tribune.I ma.de in this behalf. The
appeal must in any case fa.ii.
I do not feel ca.lied upoQ to go into any question of limitation in the present case. The proceeding being incompetent, an inquiry as to whether it
had been started of time would be wholly irrelevant. I, therefore, think it unnecessary to express
any opinion on the interpretation of r. 12 of the
Rules ma.de under the Act.
The result ie that the appeal is dismissed.
As to cost.B, I think that as the Corporation itself
had not before the Tribune.I contended that the proceeding wu incompetent nor had ra.illed any such
,-
T <
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·•
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.,
2 s.c.B. SUPREME COURT REPORTS
6a
ii·
point in its statement of case in this appeal it is
not entitled to any.
,
MuDHOLKAR, J.-The Andhra Insurance Co.,
Ltd., (hereinafter called the Company) was a composite insurance company, that is, doing business in
life insurance, fire insurance and general insurance.
By virtue of the provisions of s. 7(1) of the Life
Insurance Corporation Act, 1956 (31 of 1956) (here·
inafter called the Act) all its assets and liabilities
'
pertaining to the life insurance business stood trans·
/
ferred and vested in the Life Insurance Corporotion
on September 1, 1956. Under s. 16(1J of the Act
the Company was entitled to receive compensation
from the Corporation determined in accordance
with the principles contained in First Schedule to
the Act. On February 14, 1957, the Corporation
wro~ to the Company stating, among other things,
. that the amount of' compensation payable to it
under s. 16( l) of the Act as determined by the
,
Corporation and approved by the Central Govern-
~. ment comes to Rs. 6,14,636. The Corporation made
an offer of this amount to the Company in full
satisfaction of the compensation payable to it. The
Corporation further stated in its letter that the part
of the paid up capital of the Company and assets
I
representing such part which have been allocated
to the life business of the Company in accordance
with s. 18 of the Life Insurance Corporation Rules,
.~ l 9/i6 (hereinafter called the Rules) amounts to
;. Rs: 3, 76,117/- and that as the aforesaid assests have
not been transferred to the corporation the said
amount ofR~. 3,76,117/- will be set off against and
deducted from the amount of compensation payable
to ·the Company. Certain correspondence then
ensued· between the Company and the Corporation
and it would appear from it that while the Company
accepted the oomputa.tion of the a.mount of com-
~ pensation ma.de by the Corporation there was disagreement between the parties over the valuation
1gs2
Hindusl,. Id.a I
Insurane~ Co. Ltd.
••
Lift Insur_,
CO'fporati(lll ef India
Al wlholltM .T.
IPlll
>li•lrulM ldMI
,,,,..,.,...c..Lti
••
Li/1 J,u.,race
C••rtd'-t e/ I Mia
MuAa/htJ.
64
SUPREME OOURT REPORTS [1963]
of the &88ets of the Company which stood transferred to the Corporation. The Company objected to
the deductione of Rs. 3,76,117/. Eventually on
August 6, 1957 the Company preferred a petition
of appeal before the L..ife Insurance Tribunal,
Nagpur, constituted by the Central Government
under s. 17(1) of the Act, On September 21, 1957
the Company lodged its statement of olsim before
the Tribunal. The Corporation resisted the claim
put forward by the Company on various grounds. ,
The Tribunal framed 27 issues but it gave its find-
\
ings only on the first three issues and dismissed the
claim. We may mention that we are not oonoemed
with any of the issues except No. 3 because it is on
the basis of its finding thereon that it dismissed the
olaim of the Company. That issue is whether the
claim of the Company is barred by time.
It does not appear from the writter statement
of the Corporation that it had raised a plea of
limitation. All the same the Tribunal in its order
hae aaid that as the Compaay did not lodge a claim
before it within three months of February 14, 1957,
which was the date on which compensation was
offered by the Corporation to the Company it was
barred by r. 12 of the Rules framed under the Act.
The Tribunal further observed that the Company
had to move tho Corporation under s. 16(2) of the
Act to make a reference to the Tribunal, it failed to
do so and that it did not show any cause whatsoever for its failure to do so, but instead submitted
its claim direct to the Tribunal on August 12, 1957.
No question, therefore, excusing delay under the
proviso to r. 12 arose.
Aggrieved by the decision of the Tribunal the
Company moved this Court under Art. 136 of the
Conetitution for grant of special leave to appeal.
Leave was granted by this Con rt on August 18, 1958. ""'
Subsequent to the grant of leave by this Court the ·
Company in pul'lluanoe of its soheme sanctioned by
•
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•
I
2 S.C.R.
SUPREME COURT REPORTS
65
the High Court of Andhra Pradesh was amalgamated with the Hindustan Ideal Insurance Co., Ltd.
By reason of this the letter has now been RU bstituted
as appellant under the orders of this Court dated
April 14, 1959.
On behalf of the appell1mt Mr. B.K.B. Naidu
contended that since the Tribunal itself waR not
appointed before the expiry of the period of three
months providrd in r, I 2, the claim made by the
Company cannot be treated as barred, by time
because in his submission limitation would not
commence to run till the date on which the Tribunal was constituted.
Alt.ernatively he contended
that this was a fit case in which, under the proviso
tor. 12, time should have been extended.
On behalf of the Corporation Mr. S. T. Desai
contended that under sub-s.2 of s. 16 it was not open
to an insurer like the Compan,v to prefer a claim
directly before the Tribunal and that all that the law
entitled the Company to do was to move the Corpl'ration to make a reference, that this had to be done
within three months and that therPupon the
Corporation had to make a reference to the Tribunal
within the p~1icd of three months prescribed by
r. 12.
Since this procedure was not adopted the
proceedings before the Tribunal were incompetent.
Sub-section 2 of s. 16 reads thus :
•·The amount of the compensation to be
given in accordanre with the aforesaid prinriples shall bP determined by the Corporation in
first instance, and if the amount so determined
is approved by the Central Government it shall
be offered to the insurer in full satisfaction of
the compensation payable to him under this
Act, and if, on the other hand, the amount so
offered is not acceptable to the insurer he may
within such time as may be prescribed for the
purpose have the matter referred to the Tribunal for deoieion."
1961 -
Hindustan Ide4l
Ins .. ,ance Co. Ltd.
"'
L je lniuronce
Corpo·atinn of ltuli•
Mudt1olka• J,
1962
lliwli1R•on ftiro/
lr.111r,,ru:e CO. Ltd.
v.
Life ln11nanu
Oarparation a/ Indio
Mu:f.~olka1 J.
66
SUPREME COURT REPORTS [1963]
A plain rPading of this proviRion shows that the
reference had to he ma.de not by the insurer but by
someone else. Though that someone is not expressly specified in sub-a. :!, the context shows that
that someone would be none other than the Corporation. The Central Go..-ernmont has not at any
rate specifically prescribed the period within which
the insurer has to move the Corporation for referring its claim to the Tribunal for decision.
According to this provision the insurer is
entitled to have the matter referred to the Tribunal
for decision "'\'•ithin such time as may be prescribed
for the purpose."
"Prescribed" means prescribed
by l{ull'B.
It would, therefore, follow that the
Central Government has to make a rule prescribing
the period within which the insurer must move the
Corporation for making the reference.
Mr. Desai,
however, contendij that that is not provision means.
A~cording to him the provision bas to be read
along with a. 48(:!)(f; of the Act. Section 48 is the
provision which confers power on the Central
Government to make rules.
Clause (f) of sub-s. 2
enable it to prescribe the time within which any
matter which mav be referred to the Tribunal for
a decision under t
0he Act may be so referred. Therefore, accordini;: to learned counsel, it is the period
of limitation for this purpose which the Central
Government bas to prPscribe and not the p· riod
within which the insurer must move the Tribunal.
He, however, says that the inaurer has to move
the Corporal ion before the expiry of the period
within which the Corporation is to make a reference to the Tribunal.
We cannot accept the contention. On the
plain language of sub-s. 2 of s. 16 it is obligatory
upon the Central Government to prescribl' the
period within which the insurer is to move the ,
Corporation for r1:fcrring its claim to the Tribunal.
No doubt, cl. (f) does not refer to the prescription
. '
r
l •
• ,.
.-i
•
)
2 S. C. R.
SUl>REME COURT REPORTS
57
of time for such a purpose. But the provisions of
sub-s. I of s. 48 are wide enough to enable the
Central Government to prescribe tl!.e time for this
purpose. Under that sub-seJtion the Central Government is empowered to make rules to carry out
the purposes of the Act. One of the purpose of the
Act is to prescribe the time within which an insurer
has to move the Corporation for making a reference.
While sub-s. 1 of s. 4$ confers a power on the
Central Government, sub-s. 2 of s. 16 imposes a
duty upon it and, therefore, it is obligatory upon
the Central Government to make a rule in this
behalf by exercising the power under s. 48 (1).
Mr. Des!1i then contends that, the rule actually
framed by the Cdntral Government that is, r. 12
must be deemed to be sufficient for his purpose.
That rule is in following terms :
"Reference to Tribunal.-The time with-
,, in which a reference may be made to the
Tribunal in respect of the determination of
compensation payable under the Act, shall be
as follows, namely :-
(i)
in the case of an insurer to whom compensation is payableunder Part A or Part
B or Part C of the First Schedule to the
Act, within three months from the date
. .1
on which the compensation determined
~
by the Corporation is offered to the insu-
•
rer;
(ii) in the case of an insurer to whom compensation is payable under Part B of the
First . Schedule to the Act, within six
months . from the date on which the
compensation determined by the Corporation is offered to the insurer ;
(iii) in ·the case of compensation payable to a
Chief agent or special agent under the
1961
Hindus/an Ideal
lnsurone~ Co. Ltd.
Y.
Life liuurtJ11ee
Cor/JoTation of fnrlia
Mud!r,olkor J.
19G~
Hindu&le.n ltf1ol
lnSUJ anc1 Co. L!t/.
v.
68
SUPREME COURT REPORTS (1963)
proviso to section 36 of the Act, within
three months from the date on which the
compensation determined b.v the CorpoLift ln1Uf'linC4
Corpor .. lhn of lndi2
ration is offen'd to the chief a.gent or
special a.gent, a.s the case ma:v be :
JI iulhdkar , ' .
Provided that any such reference may be
arlmitted by the Tribunal after the period of
limitation prescribed therefor under this rule,
if the person making the reference satisfies
the 'fribunal that he h&d sufficient cause for
not ma.king the reference within the said
period."
According to Mr. Desai, under eub-r. (l) of
th.is Rule the Corporation has to make a ref.,renoe
to the Tribunal within three months. It would,
thArefore, a.ccordin~ to him, follow that the insurer
must move the
Corporation before the expiry
of that p!'lriorl and that, therefore, by framing this
rule the Central Government has not only carried
out the requirements ofol. (fl of sub-s. 2 of s. 48
but also of sub-11. 2 of s. 16.
It is difficult to appreciate this argument for
two reasons. The first one is that when the law
requires a. period to be prescribed fo; doing & thing,
that period should be clE>arly specified with specific
reference to the particular purpose. The specific
purpose referred to in Hub-s. 2 of s. 16 is "to have
•
the matter referred to the Tribunal for decision."
Making of the reference is thus in the hands of the
C'-0rporation and not the insurer who can only
move the Corporation for making the refenmce.
Time is required to be prescribed for doing this act
by the inaurer. Prescribing time for ma.king a.
reference is not prescribin!! time for moving the
,. Corporation to make the referl"nce. It ma.y be that
· when the latter period is prescribed it . would be •
possible to say that before the expiry of that period
the insurer must move the Corporation. But
• •
I
2 s.c.R.
SUPREME C'OURT REPQR,TS
69
prescribing time by implication would not be compliance wfoh the provisions of sub-s. 2 of s. 16. For,
when a period is prescribed for doing an act the
person who has to do that act is entitled to do it
even on the last day. If the construction of learned·
counsel is accepted it would mean that the insurer
would be within time under r. 12 if he moves the
Corporation on the date· on which the period of
three months expires. If he does that how would
it be. possible for the Corporation to make a reference to the Tribunal al·.o on \he same <lay ?
The second reason for not accepting the
construction placed by learned counsel is that the
proviso to r. 12 empowers the Tribunal to admit
a reference after the period of limitat.ion prescribed
therefor if the "person making the reference" satisfies the Tribunal that he had sufficient cause for
not. making the reference within the prescribed
period. The proviso thus indio'.l.tes that the reference
to the Tribunal contemplated by r. 12 is to be
made by the insurer and not by the Corporation.
This appears to be so from the language of the
proviso itself. ·No doubt r. 12, considered without
the proviso, may well be construed as applying to
reference to be made by the Corporation. But
considering the rule along with the proviso it would
appear that the rule was meant to govern a reference by someone else and not the Corporation.
That someone could be either the insurer or a
chief agent or special agent wh? also is entitled to
compensation!under the proviso to s. 36.
J..earned counsel then advanced a rather novel
argument. The argument is this. While the opening words of r. 12 may apply to the Corporation as
to an insurer, a chief agent or a special agent sub-rr.
(i), (ii) and !iii) thereof apply only to the Corpoi ration, whereas the proviso applies only to an insul'er or a ohief agent or special agent as the case may
be. If the provision, that ie, the whole or r. 12-ii
I
19112
Hindusfa11 l1hal
lnsurJnca Co.Ltd.
v.
Life lnsuronce
Corporatiori oj Indid
M udlmlf, at J .
70
SUPREME COURT REPORTS (Hl63]
I9RI
read thus, the contention procredP, there would be
n;nd.,••n Id.al
no lacuna in the rnles, and the provibo lo r. 12
I"'""""' Co. Lil.
would not be rendered 1·eciundant.
Y,
Lift lruuran~
Oorporolion of Intli4
M 11dJiolA ar J.
All that l\Ir. Desai could s1<y in support of Lis
contention thut •ub-rr. (i), (ii) and (iii) of r. 12
must be eonst1 ucd to apply to the Corporation
alone is that such a construction would avoid a
lacuna ill the rules.
But what is the lacuna? We
have already pointed out that tho lacuna is in not
vrescribing the time within which an insurer must
move the Corporation for making a reference. That
l .. mna will not be removed even if we accept the
const1 uction pressed by learned counsel.
That
apart, upon the language of the sub·rules, they
cannot be oonstrued as applying to the Corporation
alone.
Learned counsel then contendl'd that if we
construe the proviso in such a way us to make the
substantive provisions of r. 12 applicablti to an
insurer or a chief agent and not to the Corporatian
we would be limiting the scope of the main enacting provision and that is not permissible.
There is no doubt that where the main provision is clear its effect cannot be cut down by the
proviso.
But where it is not clear the proviso,
which cannot be presumed to t,e a surplusage, can
properly be looked into the ascertain the me1ming
and 1;eope of the mai.n 1 roviMion.
.By looking at
the provii;o for this purpooe the rule of ::onitl uction
refened to by learned counsel will not be infringed.
.
In the West Derby Union v. M etrapolitJm Life
A68'urance Co .. (1) Lord Watson observed:
" ......... I p.erfoctly admit the.t there may
be and are many oases which the terms of e.n
intelligible proviso may throw conaidera.ble •
(I) ( 1897) A.C. 'f I, 6~2.
•
'
-+
I
-1
I
2 S.C.R.
SUPREME CO ORT ,REPORTS
71
·light on the ambiguous import of the statu·
. tory words."
Tn the same case Lord Herschell admitted that a
proviso may be a useful guide in the selection of
one or other of two possible constructions of words
in the enactinen t or to show the soo pe of the latter
in a doubtful case.
Here we find that r. 12 read by itself does
not show clearly whether it appeals to the Corporation special agPnt. It is thernfore, permissible to
look into the proviso for' ascertaining the scope of
the main provisions of r. l:!. As we have stated
earlier the proviso cannot, upon its proper construction apply to the Corporation.· When, therefore,
we read r. 12 as a whole, that is, along with the
proviso we woμld not be violating any well-accepted rule of construction though by so reading it we
came to the conclusion that r. 12 applies only to
an insurer or a chief agent or a special agent but not
to the Corporation.
We may further point out that the proviso
would be rendered useless if we are to bold that
r. 12 deals with a reference made by the Corporation . only. The reason why we say that it will
be rendered useless is this. Supposing an insurer
moves the Corporation beyond three months for
making a reference, would the Corporation be
bound to make the reference ? Upon the terms of
aub-s. 2 of s. 16 the Corporation would only be
bound to make a reference if is moved by the insurer within the prescribed period. If that is so,
then no occasion would ariRe for enabling the insurer to move the Tiibunal for condoning the delay.
According to Mr. Desai, however, the Corporation
could be compelled by mandamus to make the reference. The short answer to that is that there being
no duty upon the Corporation to make a reference
after the expiry or the period prescri'Jed by r. 12 no
mandamus can issue to it.
1962
Hindust,.,n Ideal
. 1uuronce Co. Ltd,
v.
LiJe /nJ11rtmce
Co1poru.1ion of Ltd.
Mudho/kar J.
1961
Binli.;stan ttlul
lruur~1i.c. QJ. U4.
••
Life Jn1uranc•
Cwj>otaho11 of India
Jlu4/wlk«' J,
12
SUPREME COURT REPORTS [1963]
Another reason for not accepting the contention of learned couusal is that the proviso speak of
the person making the reference eatisfying the Tribunal that he has sufficient cause for not making tho
reference withiu the samtl period. If the insur<r is
not the person making the reference, how can he
be said to be permitted to Hatisfy .the Tribunal
about the sufficiency of the cause for condoning the
delay in making the reference ? Mr. Desai, however, suggest that we should read the words "if
the person making tho rtlference satisfies tho Tribunal. .. etc." as if they read "if the person at whoso
instance the reference is made satisfies the Tribuual. .. etc." That would be re-writing the pro vi.
sion which we cannot do.
It seems to us that while framing r. 12 the
rule making authority lost sight of f~ct that subs. 2 of s. 16 conttin:plates a reference not hy the
insurer but by the Corporation.
Learned counsel
urged that we should not place an interpretation
upon the rule which will leave a serious lacuna in
the working ol the act. We appreciate his contention but there is no esoa.pe from the result.
The proceedings before the Tribunal were misconceived because the only way in which they
could be initiated was by a reference by the Corporation and there was no such reference. No question
of limitation arises because the period within which
an in8urcr must move the Corporation to make a
reference has not yet been prescri berl as required by
sub-s. 2 of s. 16. It will be open to the Appellant
to move the Corporation under a. 16(2) after such
period is prescribed.
In the result we quash all the proceedings before the Tribunal but in the particular circumstances make no order as to costs.
Appeal Dismisse.d.
• •
•
•