Monday, November 23, 2015


Arising out of legal compulsions following the renewed interim order dt 7/9/2015 by the Supreme Court,LIC hurriedly got some amounts credited to the bank accounts of some pre-August 1997 retirees before 30th September,but consciously and deliberately refrained from furnishing the calculation sheets in respect of the amounts credited.

Let us pause for a moment and imagine the implications that may emerge if LIC had provided the calculations.

It is very well known that the methodology followed by LIC would have been as follows:

1.Calculate the DR as at 1/8/1997 on the existing pension and merge it with the existing basic pension;

2.Take the resulting merged total as the revised basic pension as at 1/8/1997.

3.The DR per slab is calculated at 0.23% of the revised basic pension as at 1/8/1997.

4.Calculate the arrears by calculating the total of the revised basic pension and revised DR from 1/8/1997 to the date upto which the calculations are done and deducting the corresponding existing gross pension including existing DR upto the same date and credit 20% of the difference as the interim relief.

Issues arising out of the above methodology.

1.The revision of pension according to the above methodology is in fact upgradation of pension for pre- August 1997 retirees on 1/8/1997 without weightage of 11.25% extended to in-service employees on 1/8/1997 while revising wages.

2.The question that will next arise is why such upgradation was not worked out for post July 1997 retirees on 1/8/2002 and 1/8/2007 using the same methodology when this was required to be done in terms of the impugned judgments of Rajasthan and Punjab & Haryana High Courts which provided for upgradation of pension.(It has to be especially borne in mind that the SC order dt 7/5/2015 did not confine interim relief to only pre- August 1997 retirees).

3.Even for pre-August 1997 retirees,LIC failed to show consistency by extending the same methodology for further revision of pension on 1/8/2002 and 1/8/2007, instead freezing the revised pension at 1/8/1997 levels. 

4.Such anomalous and inconsistent approach of LIC has also resulted in anomaly in family pension getting reduced and necessitating recoveries when the aforesaid method is followed for family pensioners.

If LIC had given calculation sheets in respect of interim relief paid by it,the Corporation would not only have got exposed for their inconsistency and inadequacy in payment,but also its case in the Civil Appeals before SC further weakened.So it can be safely presumed that LIC deposited the amounts in the bank accounts of pensioners only to escape being hauled up for contempt by the Supreme Court. It is another matter that more than 20000 pre- August 1997 retirees and family pensioners have been denied even this inadequate relief as they were not fortunate enough to be respondents in the Civil Appeals, not to speak of post July 1997 retirees and family pensioners.

The point that has to be kept in mind by the three case managers is that the need to expose the deliberate lapse on the part of LIC in the matter of payment of interim relief cannot be delinked from the forceful arguments for upgradation of pension.

It does not appear likely that either Mr K M L Asthana or the Class I Retiree's Federation will raise the issue of non- compliance of the interim order dt 7/5/2015 at the Supreme Court on the next hearing date.But I am sure that the Chandigarh petitioners will definitely raise it before the SC Bench when the opportunity arises.

C H Mahadevan