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Thursday, May 19, 2016

Short payment of 40% IR and the road ahead‏


Mr SN’s  comparative  presentation of the IR paid and IR payable as per SC Order and Mr Ganagraju’s  comments assume a lot of significance in the context of the legal response that LIC’s action warrants both at the Supreme Court and Delhi HC.

At Delhi HC, an opportunity is available to original petitioners and the fresh petitioner/s to file a response to the affidavit that has to be filed by LIC on the 40% IR paid by them in ‘compliance’ with the Supreme  Court order dated 31/3/2016.

Concurrently, an opportunity is also available at the Supreme Court for filing a contempt petition against LIC.Understandably there is a general reluctance on the part of pensioners at large to support the idea of filing a contempt petition on the fear that it may delay the case at Delhi. But we must also remember that the stakes are high for the following reasons:

1.     The eligible pensioners retired between 1/1/1986 and 31/7/1992(31/3/1993) have received an IR of hardly 13% of the entitled amount;

2.     The eligible pensioners retired between 1/8/1992(1/4/1993) and 31/7/1997 have received an IR of hardly 31%( in the case of the Class III employee  with basic pension 3442 and retired on 30/9/1994,the amount received is just 11.2% of the entitled amount as per Mr SN’s calculations(12% as per my calculations), as lower the basic pension, the lower the percentage of amount paid to entitled amount);

3.     The pensioners in the first category with basic pension of less than 1250 and those in the second category with less than 2399 would have got single digit amounts as for more than 212 months they would have got negative differences.

4.     Family pensioners would have also got at the most single digit amounts thanks to rounding off of revised Basic family pension to higher rupee.

In the light of the above the case managers have to decide upon the legal strategy for response to LIC’s action on this issue.

* I attach a note prepared by me on ‘How LIC is wrong on IR calculations’.

Greetings.

C H Mahadevan

* Published as separate post.