Case Summary: LIC of India vs Consumer Education and Research Centre (1995)
Citation: AIR 1995 SC 1811: (1995) 84 CompCas 168: (1996) 2 GLR 83: (1995) 4 JT 366: (1995) 3 SCALE 627: (1995) 5 SCC 482: (1995) 1 SCR 349 Supp: (1995) 2 UJ 442
Case No: Civil Appeals Nos. 7711 of 1994 and 5651 of 1995
Date of Decision: 10-05-1995
Appellant: LIC of India and Another
Respondent: Consumer Education and Research Centre and Others
Bench: Justice N. Venkatachala, Justice K. Ramaswamy (Division Bench)
Final Decision: Dismissed
[Judgment Source] https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=266716
Law Points Raised
1. Whether exclusionary conditions in LIC policies violate fundamental rights under Articles 14, 19(1)(g), and 21 of the Constitution.
2. Whether public sector insurance companies can impose arbitrary eligibility criteria inconsistent with social justice mandates in Part IV of the Constitution.
3. Scope of judicial review in commercial insurance contracts under Article 226.
4. The obligation of state-owned enterprises to align commercial policies with Directive Principles of State Policy.
Ratio Decidendi
The Court held that Life Insurance Corporation (LIC), being a state instrumentality, must frame insurance policies in line with constitutional mandates, especially the principles of equality and social justice. It ruled that exclusionary clauses denying insurance under Table 58 to individuals not employed in organized sectors were discriminatory and violated Article 14. The Court emphasized that even economic policies must pass constitutional muster.
Final Ruling
The Supreme Court dismissed LIC's appeal and upheld the Gujarat High Court's decision striking down discriminatory clauses in Table 58. The Court held that such conditions were arbitrary and violative of Articles 14 and 21, and mandated LIC to ensure wider and inclusive insurance access.
Relevant Paragraph Numbers
Key references: Paragraphs 2–5 (arguments on commercial contract vs constitutional obligations), Paragraphs 6–8 (Sezhiyan Committee insights and social coverage), Paragraph 9 (revised terms during litigation), and final analysis on equality and policy structure.
Summary
This landmark judgment reinforced that state-owned corporations like LIC must act in accordance with constitutional principles, especially those promoting socio-economic justice. The Court invalidated exclusionary insurance conditions that favored only salaried or government employees and reaffirmed the need to extend benefits to self-employed and unorganized sector workers. The ruling strengthens judicial oversight on commercial policies that impact public welfare.
[Judgment Source] https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=266716