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Sunday, April 10, 2016

NEED OF THE HOUR - HOLY MAHAGADBANDHAN


Respected Septuagenarian Pensioners,

          I begin by quoting the opening para of the 1982 SC judgement in the DS Nakara Case:

          WITH a slight variation to suit the context Wolsey's prayer : "had I served my God as reverently as I did my King, I would not have fallen on these days of penury"; is chanted by petitioners in this group of petitions in the Shellian tune: 'I fall on the thorns of life I bleed'. Old age, ebbing mental and physical prowess, atrophy of both muscle and brain powers permeating these petitions, the petitioners in the fall of life yearn for equality of treatment which is being meted out to those who are soon going to join and swell their own ranks.”

          There have been several posts in this Pan-India Blog expressing dismay to the terms of the latest SC  judgment. One could sense the disappointment, anger and frustration among the Pensioners, but what is more important is to look at the impact the judgment has made on the cause of the Pensioners viz past, present & future.

          Rather than the impression projected by some that the judgment has done little to advance the cause of pension up gradation and has also been disappointing to the pre-1997 retirees, let me point out how the SC has united the pre-1997 Pensioners who seek removal of DR anomaly and the Pensioners who seek up-gradation of pension parallel to each wage revision to the serving employees.

I        Wage Revision vs Basic Pension & DR

a.       Wage revision:

Year
Date of effect
AICPI Index
1996
01.08.1992
1148 Points
2000
01.08.1997
1740 Points.
2005
01.08.2002
2328 Points

At the time of notification of the Pension Rules, the scales of pay and allowances of the employees of the Corporation were linked to All India Consumer Price Index (AICPI) 800 points.

b.       Minutes of the Board Meeting (cited in the SC Judgment) “…………it is suggested that the following updation formula to upgrade the basic pension/family pension in respect of employees who have retired between 01.01.1986 to 31.07.1997 may be adopted.”

“The basic pension/family pension payable in relation to AICPI 600 points or 1148 points, as the case may be, shall be upgraded by merging the Dearness Relief payable upto AICPI 1740 points, and On the pension so upgraded, Dearness Relief of 0.23% of basic pension shall be paid or become recoverable for every 4 point rise or fall of AICPI from 1740 points.”

c.       Board Resolution

On the basis of the said Minutes, a resolution was passed by the Board on 24th November, 2001, excerpts of which is reproduced below:

“Amendment to LIC of India (Employees) Pension Rules, 1955 – UPGRADING OF Basic Pension to AICPI 1740 Points and 100% DA neutralization thereon in respect of Retirees prior to 01.08.1997:

………the Board approved the proposal and suggested that it should be implemented prospectively after obtaining Government approval.”


II       Pension Regulations:

The relevant portions of the Pension Regulations and SC Judgment are reproduced below

a.       36. **Minimum pension

The amount of minimum pension shall be,-

……….  ***(c) rupees 1,100/- per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, who have retired or died on or after the first day of August, 1997;

***(d) in case of any wage revision in future the amount of minimum pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that the amount of minimum pension shall be rupees 1480/- per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, who have retired or died on or after the first day of August, 2002);


** Rule 36 was amended vide Govt. Notification No. GSR 349(E), Part-II, Section 3, Sub-section (i) dated 14.5.1999.
*** Notified in Gazette of India, Part-III Section 3 dated 22.6.2000 (GSR No. 553(E)).


b.       37. Dearness Relief -

(1) Dearness relief shall be granted on basic pension or family pension or invalid pension or on compassionate allowance in accordance with the rates specified in appendix IV.

(2) Dearness relief shall be allowed on full basic pension even after  commutation.

APPENDIX-IV

@3(A) In case of employees who have retired or died on or after the 1st day of August 1997, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.23 per cent of the Basic Pension;
@3(B) In case of any wage revision in future the rate of dearness relief payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that in case of employees who have retired or died on or after the 1st day of August 2002, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 2328 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.18 per cent of the Basic Pension).

@ Notified in Gazette of India, Part-III Section 3 dated 22.6.2000

c.       Pension regulation foot note:

Foot Note : The principal rules were published vide GSR No.525(E) dated 28.6.1995 and subsequently amended as under :
1. GSR No. 265(E) dated 03.07.1996
2. GSR No. 225(E) dated 22.04.1997
3. GSR No. 349(E) dated 14.05.1999
4. GSR No. 804(E) dated 06.12.1999 and
5. GSR No. 553(E) dated 22.06.2000.

**** In exercise of powers conferred by Sec. 48 Of the L.I.C. Act,1956 (31 of 1956), the Government of India while Notification dated 05.09.2005 Revised the Pay Scales and other service conditions of employees of the L.I.C. of India w.e.f. 01.08.2002.

As a consequence of the same the relevant provisions of LIC of India (Employees) Pension Rules are necessary to be amended. The Government of India vide Notification dated 22.06.2000, empowered the Corporation to amend the relevant provisions to determine the amount of Minimum Pension, Dearness Relief and Family Pension.

The instructions based on this Rule have been amended w.e.f. 01.08.2002.

d.       According to para 14 & 15 of the Judgement of the Honourable SC, “The thrust of the matter is whether the approval of the Union of India is necessary. Mr. Gupta, learned senior counsel appearing for the respondents has drawn our attention to Rule 55 of the 1995 Rules, which reads as

          “55. Power to issue instructions – The Chairman of the Corporation may from time to time issue instructions as may be considered necessary or expedient for the implementation of these rules.”

Relying on the same, it is urged by Mr. Gupta that with regard to pay revision, the Chairman of the Corporation has been issuing circulars from time to time and the same is being followed by the Corporation and hence, the interpretation placed on Sections 21 and 48 of the Act by the Corporation is absolutely uncalled for and totally unjustifiable.

15. On scanning of anatomy of Rule 55 of the 1995 Rules, we are absolutely clear that it does not confer power on the Chairman of the Corporation to issue any instructions that can travel beyond the rules. In terms of Rule 55, he has been authorized to issue instructions which are necessary and expedient for the implementation of the rules. The Board had passed the resolution. The Board can pass a resolution and the Chairman can be the head of the Board, but it does not authorize the Board to take a decision with regard to certain matters which are within the domain of the rule making authority. On a perusal of Section 48, it is clear as crystal that conferment of benefit, either pension or anything ancillary thereto has to be conferred by the rules and the rule as prescribed under Section 48 of the Act is to be tabled before the Parliament. In the absence of a rule, in our considered opinion, no benefit can be granted on the basis of the resolution passed by the Corporation. This being the legal position, the High Court could not have held to the contrary on the basis of the concession given by the counsel for the Union of India.

III.     Discussions:

          1. 36 ( c ) & ( d ) as well as 3A  &   3B of Appendix IV were given statutory effect due to the Notification of the same in the Govt Gazette dt.22.6.2000.

2. From the above, it is also clear that the Govt. vide its notification dt.22.6.2000 has empowered the LIC to determine the amount of Minimum Pension and Dearness Relief payable to an employee (3B). The notification has neither made it applicable only for those employees who retire on or after any arbitrary cut-off date nor it has prohibited the Corporation to determine the amount of Minimum Pension and Dearness Relief in respect of existing pensioners.

3. There is no doubt, that at the time of Passing Board Resolution 24.11.2001, LIC already has powers conferred upon it vide Gazette Notification dt.22.6.2000 to determine Basic Pension & Dearness Relief in respect of pre-1997 Pensioners, but for reasons best known to it, has referred the matter to Govt for approval.

4. Further LIC has determined the Minimum Pension and Dearness Relief only for such of the employees who have retired or died on or after the 1st day of August 2002.

5. It appears that though there were further Wage revisions for the serving employees 2005, Minimum Pension and Dearness Relief were not revised by LIC (may be due pending Court Cases) after 2005.

          6. The revision of basic pension & Dearness Relief for those who have retired on or after 1.8.2002 by LIC does not seem to have been sent for Govt Approval and Gazette Notification, because LIC was empowered to decide the same vide Notification dt.22.6.2000. Such being the case, BR dt.24.11.2001 of similar nature could have been implemented by LIC in exercise of the powers conferred upon it by the Govt.

7. Here the rulemaking authority the govt has already framed rules under Reg 48 of the Act by empowering the Corporation to determine the minimum pension and the rate of dearness relief corresponding to the index to which the scale is linked and The Chairman has derived powers from the above and fixed the same for those who have retired on or AFTER 1.8.97 AND On OR AFTER 1.8.2002. The Pension Rule does not contain any reference to Gazette Notification for the same.

           8. But it was misconstrued that The Chairman has the authority under Reg 55 to issue instructions which are necessary and expedient for revision of basic pension and dearness relief only for the pensioners who have retired on or AFTER 1.8.97 AND On OR AFTER 1.8.2002.

9. The crux of my argument is that the Rule Maker, i.e. the Govt vide The Gazette Notification 22.6.2000 has not fixed any discriminatory cut-off date for restricting the basic pension & DR for the existing Pensioners at the prevailing index and for fresh determination of basic pension & DR corresponding to the index to which the scale is linked for the employees who were going to retire subsequent to pay revision.

10. Thus it is clear that the provisions of 36 ( c ) & ( d )  and Appendix IV 3A & 3B of the Pension Rules amended vide gazette Notification dt.22.6.2000 is applicable to the existing pensioners as well the employees due to retire. This fact needs to be highlighted in further pleading before the Delhi HC as the Chairman already been conferred powers to determine the basic pension and DR for all the pensioners vide gazette notification dt.22.6.2000.

IV      Interim Relief:
          
The Honourable SC has directed that the Corporation shall pay 40% as per Para 3A of the Appendix to each of the employees and that it shall be applicable to the similarly placed persons.
          
No doubt that we must ensure that LIC pays the same in accordance with NOIP(BMS)’ letter dt.9.4.16, as per Shri.CHMji’s opinion dt.9.4.16 and Shri.SNji’s post dt.10.4.16, both published in this Blog:

a.       NOIP(BMS)’s Letter dt.9.4.16 to LIC Chairman

……..3) The basic pension/family pension has to be revised duly up grading the basic pay consequent upon wage revision as on 01-08-1997 in an exactly similar manner in which in-service employees as on 01-08-1997 were fitted in revised basic pay.

4) On arriving revised basic pension as in (3) above, Dearness Relief at 0.23% of such revised basic pension has to be calculated up to 30-04-2016. (of course from 01-08-1997)

5) 40% of the total arrears payable as in (4) above has to be paid to all pre 8/97 pensioners.

b.       Shri.CHMji’s opinion on 9.4.16

As per para 27 of the SC judgment dt 31/3/2016, LIC will have to calculate IR by taking DR as per para 3A of Appendix IV. This means that pre-August 1997 retirees will have to be fixed at a Basic Pension as if their pay scales are revised on 1/8/1997.


V       Precedent Cases:

The SC has observed that pleadings are not adequate as it should have been while assailing a constitutional validity of a provision and passed orders to
i. set aside the orders passed by the High Courts of Rajasthan, Delhi and Punjab & Haryana at Chandigarh

ii. transfer the writ petitions from the High Courts of Rajasthan and Punjab & Haryana to the High Court of Delhi, which will decide the constitutional validity of Para 3A of the Appendix to the Rules

iii. to deal with the cases of the persons, who have retired after the cut-off date, consider the contentions raised by Mr.Gupta, learned senior counsel and the other contentions to be raised.

In the DS Nakara Case as well as in other cases viz., SPS Vain and KJS Buttar cases the highest Courts have held that the classification of pensioners by an artificial cut-off dates as arbitrary/Discriminatory. Of course no two cases are exactly similar in nature. In fact in the DS Nakara case, the SC has passed the following orders:



Existing clause in the 1972 Pension Rules
SC Orders
"that in respect of the Government servants who were in service on the 31st March, 1979 and retiring from service on or after that date"

The Words are held as unconstitutional and are struck down with this specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement.
"the new rates of pension are effective from 1st April 1979 and will be applicable to all service officers who became/become non-effective on or after that date."

In SPS Vain case, the Honorable Court has held that “….. the pay of all pensioners in the rank of Major General and its equivalent rank in the two other Wings of the Defence Services be notionally fixed at the rate given to similar officers of the same rank after the revision of pay scales with effect from 1.1.1996, and, thereafter, to compute their pensionary benefits on such basis with prospective effect from the date of filing of the writ petition….”

In our case, the Honourable Court has observed that “……..there are two categories of employees, namely, the employees who have retired prior to the cut-off date i.e. 1st August, 1997, as a consequence of which they are not getting the benefit of dearness relief, and the employees who have retired after the said date but are not extended the benefit of dearness relief despite subsequent pay revisions. Needless to say, the quantum of pension is affected…..”

Therefore, on the analogy of DS Nakara Case, we may challenge the constitutional validity of not only 3A, but also 3B by praying for the following modifications:

Existing Pension Regulation
Modification to be sought
36 (c) rupees 1,100/- per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, who have retired or died on or after the first day of August, 1997;

36 (c) rupees 1,100/- per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, in respect of all the Pensioners w.e.f. first day of August, 1997;

***(d) in case of any wage revision in future the amount of minimum pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.
(The Corporation has determined that the amount of minimum pension shall be rupees 1480/- per month in respect of employees belonging to Class-I, Class-II, Class-III and Class-IV, who have retired or died on or after the first day of August, 2002);


***(d) in case of any wage revision in future the amount of minimum pension payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.
(The Corporation has determined that the amount of minimum pension shall be rupees 1480/- per month in respect of all the Pensioners w.e.f. first day of August, 2002);

APPENDIX-IV
@3(A) In case of employees who have retired or died on or after the 1st day of August 1997, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in
the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be
at the rate of 0.23 per cent of the Basic Pension;

@3(A) with effect from 1st day of August 1997, in respect of all Pensioners, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in
the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be
at the rate of 0.23 per cent of the Basic Pension;

@3(B) In case of any wage revision in future the rate of dearness relief payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that in case of employees who have retired or died on or after the 1st day of August 2002, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 2328 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.18 per cent of the Basic Pension).

@3(B) In case of any wage revision in future the rate of dearness relief payable to an employee shall be determined by the Corporation corresponding to the index to which the scale is linked.

(The Corporation has determined that with effect from 1st day of August 1997, in respect of all Pensioners, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 2328 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.18 per cent of the Basic Pension).



The Terms of Reference are set by the SC. The battle lines are clearly drawn. Some kind of Interim Relief has been granted to pre-1997 pensioners. The forgoing analysis clearly indicate removal of anamoly for pre-1997 pensioners is ENTANGLED with that of  UPGRADATION OF PENSION ON EACH WAGE REVISION. Both are same. If the constitutional validity of 3A is upheld, both pre and post 1997 retirees lose. Both the 3A and the instructions found under 3B are arbitrary and 3A is part of the bigger struggle.

VI      To summarize,

1. The precedent cases are for removal of discriminatory and arbitrary cut-off dates.

2. The Gazette Notification dt.22.6.2000 clearly empowers Corporation to determine the Basic Pension & DR to determine the amount of Minimum Pension and Dearness Relief payable to an employee (under 3B). The notification has neither made it applicable only for those employees who retire on or after any arbitrary cut-off date nor it has prohibited the Corporation to determine the amount of Minimum Pension and Dearness Relief in respect of existing pensioners.

3. There is no doubt, that at the time of Passing Board Resolution 24.11.2001, LIC already has powers conferred upon it vide Gazette Notification dt.22.6.2000 to determine Basic Pension & Dearness Relief in respect of pre-1997 Pensioners, but for reasons best known to it, has referred the matter to Govt for approval.

4. Further LIC has determined the Minimum Pension and Dearness Relief only for such of the employees who have retired or died on or after the 1st day of August 2002, which is discriminatory against the pre-2002 retirees.

5. The validity of 3A & 3B should be challenged accordingly and modifications should be sought as elucidated supra on the analogy of DS Nakara Case.

6. The Court has allowed 40% IR despite setting aside HC Judgments. But ordered for fresh pleadings on the constitutional validity of 3A and for subsequent upgradations. The Court cannot grant a relief based on inadequate pleadings. Anomaly or upgradation, 3A or 3B, both are one and the same. Either both sail together or hang together. The honourable SC judgement is a blessing is disguise.

Yours humbly,

S ANAND