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Saturday, May 20, 2017



Kind reference of the Hon.Bench to Rule 56 will also show, that the Rule 55B which refers to the CCS Pension Rules 1972 and the CCS(Commutation Rules) 1981 clearly reveals the intention of the Govt. to extend the benefits thereof to the LIC pensioners also.The words 'Matters relating to pension and other benefits in respect of which no express provision has been made in these rules be governed' in Rule 56 is referred to in Rule 55B to mean the “pensionary benefits shall be calculated  in accordance with.....................”.  There is no reason, therefore, to conclude that the CGCS (pension Rules) 1972 is not applicable but only restricted to 'Matters relating to pension and other benefits in respect of which no express provision has been made in these rules”. Thus taking both the Rule 55B & 56 together, it is a confirmation of the pensioners contention, the CGCS Pension Rules 1972 is specifically extended to them by inserting an amendment through the Rule 55B as against the Rule 56 which was in the Pension Rules from the date of publication of the Rules viz 28-6-1995.

                        To conclude, the prayer of the pensioners have been conceded by the Hon.Bench and it would have been simpler to order, in para 76 and 107 (iii)(b) of the judgement, that the pensioners who retired earlier to 1-8-1997 are held to be eligible for the same rate of DR as those who retired on and after 1-8-1997. Similarly if the Hon.Bench was made aware of the applicability of Rule 55B to all the pensioners in service on and after 1-1-1996, which incidentally cover all the pensioners, the Hon.Bench would have had no difficulty to hold so and which the petitioners have to  crave the Hon. Bench to rectify by an appropriate order of rectification or any other suitable order, in order to remove the error apparent as made out by the humble pensioners. It is prayed that if the concealement of the application of Para 2(j) is found by the Hon.Bench to be malicious, cost and interest, at a rate the Bench would consider reasonable, be imposed on the Corporation to be paid to the aged and infirm pensioners.

                        It is needless to again mention that the Funded method of providing pension is Mandatory under the Income Tax Laws and as per the Pension Rules itself and not being at the choice of the pensioners, should not be used against the poor pensioners. To cap all the submissions, the Pension Rules are a Contract, entered into with all the ingredients of a valid Contract under the Indian Contracts Act, and hence the interpretation thereof shall be strictly as per the language used and subject to the provisions of the Constitution of India. It is similarly very simple to comprehend, without the any gimmic of terming the pension as actuarially arrived as done by the LIC. The pension payments cannot drive the LIC into bankruptcy, because at the time of every quinqunniel wage revision, the existing cost of salaries, which also includes pension payments, would be taken into account along with the effect of the additional wage bill on various ratios to be adheared to. Even before the wage revision, the LIC always used such acturial estimations before every wage revision. The actuarial investigation as per Rule 11 is different and only limited to present value of future pensions against the Pension Fund, which is not a liability of the LIC but belongs to the Pension Fund Trust, a separate person.


                        The allocation of bonuses for the policy holders as a result of the Acturial valuation of the Life Fund is altogether different. It is brought to the notice of the Hon. Bench, that not all the policies issued are eligible for payment of bonus. Only with profit policies get bonus additions and that is not guaranteed, though an extra premium is payable and that extra payment, called 'bonus loading', alone determines the eligibility for bonus. Further not all the profits of the operation of the Corpn. is considered for bonus payment to the policy holders. In fact the details of the Valuation Report of the Actuaries are not in public domain and the details of the yard sticks of measurement are treated as confidential. Without adequate details of valuation and independent opinion, the Hon.Bench lacking knowledge of the Acturial principles going into the valuation, accepting the mere statement of the LIC in trust, is not justifiable in the humble opinion of the veterans of the life insurance industry, standing before to seek the interference of this Hon.HC.

(Shri Ramanathan has highlighted certain areas in different colours and fonts. Since our publication of articles will be generally in black and white only, our valuable contributors and readers may note we have not been able to reproduce all areas  in preferred colours. Ed.)