ORDER
Ram Mohan Reddy, J.
1. In these writ petitions, the Life Insurance Corporation of India has assailed the show cause notices and demand notices issued by the respondent-Labor Inspectors under the provisions of the Karnataka Shops and Commercial Establishment Act, 1961 (for short 'Act of 1961) r/w the Karnataka Shops and Commercials Establishment Rules, 1963 (for short 'Rules of 1963) and the Karnataka Labour Welfare Fund Act, 1965 (for short 'Act of 1965'). The parties being common and common questions of fact and that of law having arisen, with the consent of the learned counsel for the parties, the petitions are clubbed, heard together and are disposed of by this common order.
2. The petitioner having questioned the issue of show cause notices and demand notices calling upon it to comply with the provisions of the aforesaid Acts, has in addition sought for a declaration that it is exempt from the application of the provisions of the Act of 1965 and the Act of 1961.
3. The claim of the petitioner is that the provisions of Life Insurance Corporation Act, 1966 (for short 'LIC Act'), read with Rules and Regulations framed thereunder provides for the welfare of its employees and the scheme of the Act does not admit any other regulatory measure by any other Law. The employees of the corporation are under the protective umbrella of the 'LIC Act' and the Rules and Regulations. The Regulations framed under the provisions of Section 49 of the 'LIC Act', it is said, provides for service conditions of employees of LIC and that Agents are not employees in view of Regulation (2) of the LIC Staff Regulations, 1960. It is further contended that, for the welfare of the employees it has provided benefits such as Provident Fund, Gratuity, Term Assurance, Medical Benefit Scheme, etc. In addition it is stated that the employees are entitled to medical/casual/privilege leave. Lastly, it is contended that the enactments of the State cannot encroach upon the field fully occupied by the Central Act namely LIC Act, 1956 read with Rules and Regulations. In terms of the aforesaid pleadings, it is contended that the provisions of the Act of 1965 and the Act of 1961 read with the Rules of 1963, have no application to the petitioner, although petitioner admits that one of its branches at Chintamani, by an erroneous understanding of law made payment to the welfare fund. Hence these writ petitions.
4. The respondents have opposed the petition in W.P. No. 23950/ 1996 by filing the statement of objections dated 3.3.1996 inter alia contending that the petitioner-Life Insurance Corporation carries on business of insurance which falls within the definition of the term 'commercial establishment' under the Act of 1961 and not being an establishment under the Central Government, is not exempt from the application of the provisions of the Act of 1961 and the Act of 1965. In addition, it is contended that the commission paid to the agents of the petitioners, is in fact wages and therefore, the Officers of the agents also fall within the meaning of the term 'commercial establishment' under the aforesaid Acts. In paragraph 7 of the statement of objections, reference is made to the decision of the Apex Court in S.K. Verma v. Mahesh Chandra and Anr., 1983(2) LLJ 429 where in the Apex Court deprecated the conduct of the petitioner in raising frivolous claims as regards the meaning of the term 'workman' under the Industrial Disputes Act, 1947.
5. Sri Nagaraj a, learned Counsel for the petitioner would contend that a conspectus of the provisions of the Life Insurance Corporation Act, 1956 in particular Sections 3, 4, 5, 6, 11, 17, 48 and 49 would indicate that the Central Government has pervasive control over the Life Insurance Corporation, hence an establishment under the Central Government, hi addition, learned Counsel would contend that though Sub-section (e) of Section 2 of the Act of 1961 defines 'commercial establishment' to include insurance establishment but Clause (a) of Sub-section (1) of Section 3 of the Act of 1961 exempts the application of the Act to the petitioner being an establishment under the Central Government. The learned Counsel would further point out to Sub-section 4(iii) of Section 2 of the Act of 1965 to contend that it provides for exclusion of the application of the provisions of the said Act to the petitioner establishment. Lastly, Sri Nagaraja, learned Counsel would submit that though the word 'of is used in Section 2(4)(iii) in the Act of 1965, it is to be read as 'under' and applying the same, excludes the application of the Act to the petitioner, an establishment of the Central Government. In support of the said contentions, Learned Counsel would place reliance upon a judgment of the High Court of Kerala in the case of Life Insurance Corporation v. Appellate Authority, 1991 II LLJ 226.
6. Per contra, learned High Court Government Pleader for the respondents would contend that the Life Insurance Corporation being a 'commercial establishment' falling within the definition of the said term under the Act of 1961 and not a Central Government establishment, is not exempt from the application of the Act of 1961 and the Act of 1965.
7. Having heard the learned Counsel for the parties, the only question that arises for decision making is whether the petitioner Life Insurance Corporation is an establishment under the Central Government exempt from the application of the Act of 1961 and the Act of 1965?
8. Life Insurance Corporation of India is established under the Life Insurance Corporation Act, 1956. A conjoint reading of Sections 3, 4, 5, 6 and 17 coupled with the power of the Central Government, to make Rules under Section 48 and promulgate the service conditions of employees under Section 49 of the LIC Act, it is beyond cavil of doubt that the Central Government has all pervasive control over the Life Insurance Corporation. If that is so, it goes without saying that the petitioner is an establishment under the Central Government. In the circumstances the judgment of the Apex Court in C.V. Raman v. Management of Bank of India, 1988 II LLJ 423 is apposite:
'If the 'Criteria' laid down above is applied to the facts of the instant cases it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and its employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression 'under the Central Government', in view of the existence of deep and pervasive control of the Central Government over these banks'.
9. In Life Insurance Corporation's case, supra, what essentially fell for consideration was whether the Corporation is a creature of the statute. The High Court of Kerala, having considered the various provisions of the LIC Act, and the control exercised by the Central Government, following the principles laid down by the Apex Court in C.V. Raman's case, held that the petitioner Corporation falls within the purview of the expression 'under the Central Government'. Applying the same to the exclusion provision under Section 3(1)(c) of the Kerala Shops and Commercial Establishments Act, 1960, it was further held that the said Act has no application to the petitioner establishment.
10. I do not see any reason to deviate from the view taken by the Kerala High Court. For the very same reasons, I am of the considered opinion that therefore the petitioner corporation, is an establishment under the Central Government and applying the exclusion Clause (a) of Sub-section (1) of Section 3 of the Act of 1961, is exempt from the application of the said Act.
Sub-Section 4(iii) of Section 2 of the Act of 1965 specifically defines 'establishment' to mean a factory, motor omni, any establishment including a society registered under the Karnataka Societies Registration Act, etc., but not to include an establishment of the Central or State Government. Having held that the petitioner is an establishment under the Central Government, though the word 'of' is used in the said section the same is to be read as 'under', whereby the petitioner stands excluded from the application of the said Act.
The writ petitions are allowed and it is declared that the establishment of the petitioner is exempt from the application of the provisions of Karnataka Labour Welfare Fund Act, 1965 and the Karnataka Shops and Commercial Establishments Act, 1961 and the Rules 1963. The impugned show cause notices and demand notices stand quashed.