NAGAR NIGAM, ALLAHABAD THROUGH ITS MUNICIPAL COMMISSIONER vs LIFE INSURANCE CORPORATION OF INDIA THROUGH ITS DIRECTOR

The Supreme Court upheld the Allahabad High Court's judgment that the Life Insurance Corporation of India (LIC) does not fall under the definition of 'insurance company' as per the notification dated 30.01.1999 issued by the Nagar Nigam. The Court interpreted Section 438 of the Uttar Pradesh Municipal Corporations Act, 1959, emphasizing that the distinction between insurance companies under the Insurance Act, 1958 and LIC under the Life Insurance Corporation of India Act, 1956 is clear. The principle of statutory interpretation favors the assessee when two interpretations are possible, leading to the conclusion that LIC is not liable for the license fee imposed by the Nagar Nigam.