Kerala High Court | LIC Housing Finance Declared ‘State’ Under Article 12, Writ Petition Maintainable | Termination Orders Quashed, Reinstatement Directed
Isabella Mariam
The High Court of Kerala, Division Bench of Justice Amit Rawal and Justice K.V. Jayakumar set aside the termination of an Assistant Manager of LIC Housing Finance Limited (LICHFL), holding that the company falls within the definition of “State” under Article 12 of the Constitution. The Court ruled that the employee’s resignation, governed by Rule 12 of the LICHFL Service Rules, 1990, could validly be withdrawn before the expiry of the three-month notice period. Consequently, the Bench directed LICHFL to reinstate the petitioner with all consequential service benefits within two months.
The writ appeal arose from the dismissal of a petition challenging the termination of Vivek V., an Assistant Manager employed with LIC Housing Finance Limited (LICHFL). The appellant had submitted a resignation letter on 27 January 2020, specifying that his employment would conclude on 27 April 2020. The company accepted the resignation on 17 February 2020. However, before the expiry of the three-month notice period, on 26 April 2020, the appellant sought to withdraw his resignation. The withdrawal request was rejected by LICHFL through an order dated 27 April 2020 and a subsequent communication on 30 June 2020.
The appellant filed a writ petition challenging these orders, which was dismissed by a Single Bench. The dismissal was on two grounds: that LICHFL was not a “State” under Article 12 of the Constitution of India, and that resignation once accepted could not be withdrawn. The appellant argued that under Rule 12(f) of the LICHFL (Remuneration and Certain Other Terms and Conditions of Service of Employees) Rules, 1990, withdrawal was permissible before the expiry of the notice period. He further contended that since 26 April 2020 was a Sunday, the notice period extended until 27 April 2020, making his withdrawal valid.
The respondents argued that the writ petition was not maintainable, as LICHFL did not fall under Article 12. They also contended that the withdrawal was submitted to the Regional Manager rather than the competent authority, the Chief Executive Officer, and that no intimation was received before the effective date.
Evidence relied upon included resignation and withdrawal letters, service rules of LICHFL, and documents showing LIC’s shareholding and Articles of Association. Statutory provisions discussed included Article 12 of the Constitution of India and Sections 4 and 7 of the Indian Contract Act, 1872. The appellant also relied upon the precedent of Padia Timber Company Private Limited v. Board of Trustees of Visakhapatnam Port Trust (2021) 3 SCC 24, which addressed withdrawal of contractual offers before expiry.
The Division Bench framed two questions: (1) whether LICHFL was a “State” under Article 12, and (2) whether the withdrawal of resignation prior to expiry of the notice period was legally valid.
The Division Bench recorded that the Articles of Association of LICHFL specified the promoter as the Life Insurance Corporation of India, a statutory body established under the Life Insurance Corporation Act, 1956. It noted: “Once the LIC is established under the Act with the full share capital of Central Government, in our considered view, the LICHFL would be also falling within the realm of Article 12 of the Constitution of India.”
The Court further stated: “Considering the shareholding of the Life Insurance Corporation, we are of the view that the finding of the learned Single Judge, holding LIC not to be a ‘State’, reflects a complete misappreciation of law and suffers from erroneous reasoning.”
On the question of resignation withdrawal, the Bench observed: “On a conjoint reading of Rule 12(a) and Rule 12(f), it is evident that whenever an employee intends to resign, the resignation remains valid for a period of three months. In such circumstances, as per the ratio decidendi culled out in Padia Timber Company Private Limited, the resignation can be withdrawn during the subsistence of the resignation letter.”
It noted that the appellant’s resignation was effective until 27 April 2020, as 26 April was a Sunday. The Court recorded: “It has not been explained how, and in what manner, the respondent–LICHFL accepted the resignation prior to the expiry of the three-month period. Thus, it is a wholly premature act, unknown and contrary to the provisions of any law or rule.”
The Court stated: “Accordingly, we set aside the orders Exts. P6 and P9 and consequently, judgment under challenge and direct LIC to treat the petitioner to the rolls of LICHFL and to pay all consequential benefits to which he is entitled in accordance with law.”
“Let this exercise be undertaken within a period of two months from the date of receipt of a certified copy of this judgment.”
Advocates Representing the Parties
For the Petitioner: Shri. K.M. George, Kum. Chithra P. George, Sri. Mathews P. George
For the Respondents: Shri. R.S. Kalkura, Shri. R.S. Kalkura, Standing Counsel, KEXCON
Case Title: Vivek V. v. LIC Housing Finance Limited & Ors.
Neutral Citation: 2025:KER:67382
Case Number: WA No. 904 of 2022
Bench: Justice Amit Rawal, Justice K.V. Jayakumar
