Case Summary: Madan Mohan Pathak v. Union of India (1978)
**Case Stats:**
Name of the Court: Supreme Court of India
Case No: Writ Petition Nos. 108 and 174-177 of 1976
Date of Decision: 21-02-1978
Bench: M. Hameedullah Beg, C.J; Y. V. Chandrachud, J; V. R. Krishna Iyer, J; S. Murtaza Fazal Ali, J; P. N. Shingal, J; P. N. Bhagwati, J; D. A. Desai, J
Type of Bench: Full Bench
Final Decision: Allowed
Citations: AIR 1978 SC 803; (1978) LabIC 612; (1978) 1 LLJ 406; (1978) 2 SCC 50; (1978) 3 SCR 334
[Judgment Source]
https://www.courtkutchehry.com/Judgement/Search/AdvancedV2?docid=265314
Facts of the Case
The Life Insurance Corporation (LIC) was created under the LIC Act, 1956. Multiple settlements between LIC and its Class III & IV employees provided for annual cash bonuses, approved by both LIC’s Board and the Central Government, and acted upon for years. The Calcutta High Court, in May 1976, recognized the employees’ right to receive the bonus for 1975-76. Soon after, Parliament enacted the Life Insurance Corporation (Modification of Settlement) Act, 1976, nullifying the settlements retrospectively from 1 April 1975, thereby overriding the High Court’s decision.
Law Points Raised
1. Whether Parliament could nullify a judicially recognized settlement via retrospective legislation.
2. Whether Section 3 of the 1976 Act violated Article 14 (equality) and Articles 19(1)(f) & 31 (property rights).
3. Whether Parliament, by enacting the 1976 Act, exercised judicial power, violating the separation of powers.
4. Whether rights under a High Court judgment could be extinguished indirectly without altering general law.
5. Whether deprivation of wages (bonus) without public interest justification was constitutionally permissible.
Acts / Provisions / Articles Referred
• Constitution of India — Articles 14, 19(1), 19(1)(f), 31(1), 31(2), 31A, 31B, 37, 38, 39, 43, 226, 358, 359(1A)
• LIC Act, 1956 — Sections 32, 49, 49(2)
• Industrial Disputes Act, 1947 — Sections 3, 18, 18(1), 18(2)(p)
• LIC (Staff) Regulations, 1960 — Regulation 58
Judgements Referred
• Shrimati Indira Gandhi v. Raj Narain (1976) — separation of powers and judicial review limits.
• Other precedents on legislative interference with judicial decisions and property rights.
Obiter Dicta
The Court emphasized that legislative bodies cannot use their power to directly overturn judicial mandates in specific cases without amending general law. Directive Principles, particularly Article 43, were highlighted as benchmarks for judging reasonableness of laws affecting workers' rights.
Ratio Decidendi
Section 3 of the 1976 Act was unconstitutional as it infringed judicial power by nullifying a High Court judgment without a valid legislative basis of general application. The deprivation of employees’ right to bonus, recognized as part of wages and property, lacked nexus to public interest and violated Articles 14 and 19(1)(f).
Final Ruling
The Supreme Court allowed the petitions, holding that the 1976 Act’s provisions were invalid to the extent they nullified the High Court judgment and deprived employees of their bonus entitlement.
Summary
This landmark judgment reaffirmed the limits of legislative power in interfering with judicial decisions. It protected employees’ contractual and judicially recognized rights, holding that Parliament cannot annul specific settlements upheld by courts without a general change in law. The ruling reinforced separation of powers and constitutional safeguards for property and equality rights.
[Judgment Source]
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