Saturday, April 23, 2016

Constitutional validity of para 3A of Appendix IV

In my view the constitutional validity of para 3A of Appendix IV has to be considered in relation to the DR formula followed in respect of retirees of the period 1/1/1986 to 31/7/1997 from 1/11/1993.

Para 3A does not become invalid per se, but what has become invalid is the Appendix IV which was applicable for retirees from 1/1/1986 to 31/7/1997 as the pensioners were placed at a financial disadvantage on account of the dual formula for DA/DR for in service employees and retirees during that period. This discrimination was remedied in respect of retirees after 1/8/1997 beginning with the amendment of LIC Pension Rules introducing para 3A w.e.f 1/8/1997 and adopting the same pattern of DR from subsequent wage revision dates.

If para 3A is invalidated, what will it mean for retirees from
1/8/1997 to 31/7/2002? Does it mean that their DR formula will have to be brought on par with those of pre-August 1997 retirees making them suffer similar loss in DR? Then the constitutional validity of all amendments in DR formula in subsequent wage revision dates will also have to be questioned.

Unfortunately the DR anomaly prevailing right from 1/11/1993 for pre-August 1997 retirees has not been adequately highlighted by the Respondents’ counsel and Supreme Court should have been convinced to direct the GOI to equalize the DA/DR formula for both in-service employees and retirees for that period so that there will be no discrimination in the matter of DR for employees retired at different points of time.

So what needs to be stressed before the Delhi HC is not the
constitutional validity of para 3A but the constitutional invalidity of Appendix IV as notified in the LIC Pension Rules in respect of pre-August 1997 retirees in the context of amendment by para 3A of Appendix IV.

It has also to be particularly noted is that with all the gracious
direction of the Apex Court to LIC to pay 40% IR to all similarly place pensioners as per para 3A, the financial loss suffered by pre-August 1997 retirees and family pensioners of that category still begs to be made good.In fact if the case had been properly argued,the 40% IR could also have included that loss component. Let us hope that at least in Delhi HC ,this aspect is adequately taken care of.

Another area where injustice prevails is the non-implementation of the M C Jain case judgment which should benefit at least about 90-100 pensioners(including family pensioners). When the question of upgradation of pension is considered,the implementation of this judgment becomes very relevant as it will make a lot of difference in the benefits secured by this category of the people on upgradation right from 1/11/1993.

Alongside, the injustice to the family pensioners on account of the archaic AppendiX V (relating to Rule 39) should also be adequately emphasized before the Delhi HC especially when the LIC Pension Scheme has been patterned on the Central Government Pension Rules, 1972.

Let us hope all the case managers (sorry to use the term although it creates some palpable discomfort among some leaders), address the above aspects in the ensuing legal battle at the Delhi HC.

C H Mahadevan