Saturday, April 30, 2016


A Sr.Counsellor contended that Para. 3A of the Appendix IV to the Rule is violative of Article 14 of the Constitution of India in view of the decision rendered by the S.C. in D.S.Nakara & others v/s UOI 

Another Sr. Counsellor tried to convince the Bench that the employees once covered under Para. 3 A, the benefit cannot remain static but has to change with pay revisions regard being had to the price index, for otherwise, the provisions do not spring to life, and paves the path of arbitrariness. He presented the case in detail emphasising the need for DR at the same rate to both employees and pensioners and updation of pension along with pay revision of serving employees.

Hon. Justice held that Delhi and P&H.H.Cs have disposed off writ petitions placing reliance on the decisions of Rajasthan H.C. When the issue of the constitutional validity of Para.3A of the Appendix IV to the Pension Rule was raised, the same deserved to be heard by the Court. He ordered 40% IR to all the 'similarly placed' pre August, 1997 pensioners and family pensioners as per Para. 3A of the Appendix to Pension Rules and directed Delhi H.C. to decide the constitutional validity of the said Para.3A. The applicants are at liberty to file amended affidavits, if they so advised. All actions to be completed by 31-08-2016.

The constitutional validity of Para.3A..? What is / are the broader issue / s involved in its adjudication? What would be the repercussions of the outcome, if it is in the positive or if it is in the negative? All beyond a Layman's grasp!
RBI, Banks and LIC Employees Pension Regulations / Rules are framed mainly on the lines of GOI Pension Rules. All these institutions, had / have different pay scales but had extended the DR rates to its pensioners on tapering basis as was the practice with GOI.

LIC introduced pension scheme in 1995 and effective from Jan.1986.
Appendix IV of LIC Rules contained sub paras. as under : (in short) 

(1) To pensioners retired on or after 01-01-1986 but before 01-11-1993 : DR on basic pension shall be payable for -- 4 points over 600 points : up to Rs.1250...0.67% (i.e.100% neutralisation in DR) ,and thereafter on graded basis [ For working employees , it was ...up to Rs.2500/- ...0.67% ]

(2) To pensioners retired on or after 01-11-1993 but before 01-08-1997 : DR on basic pension shall be payable for ..4 points over 1148 points : up to Rs.2400/-...0.35% (I.e.100%) and thereafter on graded basis. [ For working employees : up to Rs.4800/- ..0.35% ]

GOI implemented the 5th CPC recommendations in Oct.1998 and GOI employees and pensioners started getting 100% DA/DR from 01-01-1996. No graded DA or DR to any of its employees or pensioners, the same of rate of DR to all, thence forward. [ HAD the pension was introduced in LIC in 2000 instead of 1995, the Scheme would have, probably, included, 100% DA/DR that GOI introduced from 01-01-1996. ] 

The wage revision of Aug. 1997 in LIC was delayed too much. However, it is to the CREDIT of LIC that it was the first institution to introduce 100% DA from 01-08-1997 to its employees. LIC with the approval of GOI vide its gazette notification dated 22-06-2000 introduced / incorporated Para.3A and 3B to the Appendix IV to its Pension Rules. But, it is DEBIT (it was wrong on the part of LIC) to the LIC that it did not make it (100% DR) applicable to pre Aug.1997 pensioners. They failed to adopt the GOI pension rules in its letter and spirit. After about fifteen long years, in May, 2015, the Hon. Justice Shri Dipak Misra advised LIC to pay 20% IR - now, on 31-03-2016 : 40% IR to 'similarly placed'

"After the Resolution (24-11-2001) was passed , the ED of the Corporation wrote to Jt.Secretary, Insurance & Banking on 31-12-2001seeking amendment to the Pension Rules_ to update the B.P. and DR 100%. But, nothing has been brought on record by the Corporation as to what ensued the said communication", the Hon.Justice has said, has persisted.
[ Pity, more pity the lack of follow up and / or unhelpful attitude of GOI bureaucracy. ]

3 A & 3 B In short :
(3 A) To pensioners retired on or after 01-08-1997 to 31-07-2002 : 4 points over 1740 points ...0.23% ; No tapering.
(3 B) DR payable to employees, on wage revision in future, shall be determined by the Corporation corresponding to the CPI index linked.

It is a simple arithmetical calculation. 0.23 (% of 1997) x 1740 / 2328 (merger points) = 0.1719 =0.18% per slab in 2002 revision; 0.18 x 2328 / 2944 = 0.15% per slab in 2007 revision ; and 0.15 x 2944 / 4708 = 0.10% per slab in 2012 revision. It may be noted that effect to these changes has been given by the office with the approval of GOI / after of issue of gazette notification under Sec.48 of LIC Act.1956.

Reverting to the constitutional validity of 3 A of the Appendix to Pension Rules : Paras. 3 A and 3 B are 'integral' as Para 3 ( sub paras.1 and 2...) of the Appendix IV to the Pension Rules. All the three paras. viz. 3(1), 3(2) and 3A are hostile to pensioners as a whole. The rate of dearness relief given under 3(1) and 3(2) to the Pre 1997 pensioners is not the same as given to the Pre 1997 in service employees. Para.3A gives DA rate at 0.23 % on their revised - with merger and weightage - to in service of employees of the period 01-08-1997 to 31-07-2002 but it has not been granted to pre 1997 pensioners. Those retired in 1997 pay scales have not been given the benefit revised pay and relevant DR rate as per 2002 revision. The same problem of discrimination among the otherwise homogeneous body of pensioners continues with subsequent pay revisions in 2007 and 2012. The pensioners who retired In the same grade / equivalent grade with the same length of service in the previous pay scale are getting less / much less compared to every subsequent pay revision. The grave disparity in pension could be viewed / realised from the Chart of the anomalous position as on 01-02-2016, among the pensioners retired in different pay scales at the maximum of their pay scales, computed by Sarvashri C H Mahadevan and RK Sahni. This kind of discrimination as provided in Para.3 (1) and (2) and 3 A and 3 B violate the fundamental rights of citizens - enshrined in Articles 14, 16, 21... of the Constitution of India.

The Hon.Justice Shri Misra has permitted to amend the affidavit/s, if so advised. No one now need to restrict the demand to 100% neutralisation in DR. A demand for periodic updating of pension is a must, more so, because of the following :

The days have changed. The GOI pensioners who got updation with pay revision in 1996 and 2006 on certain norms (40% more) are going to get OROP from 01-01-2016. The GOI pensioners and family pensioners have also been getting 20%, 30%, 40%,50% and 100% more pension on reaching the age 80, 85, 90, 95 and 100 right since 01-01-2006. The position of LIC pensioners retiring on different dates within the organisation and outside the organisation is discriminatory. It is necessary that the pensioners of nationalised institutions like LIC should get all that is equal, just, reasonable and comparable to their counterparts in the Central Government.

SN ( a 1992 pensioner )