* CHRONICLE - PENSIONERS CONVERGE HERE, DISCUSS ISSUES OF THEIR CHOICE * CHRONICLE - WHERE EVEN THE CHAT COLUMN PRODUCES GREAT DISCUSSIONS * CHRONICLE - WHERE THE MUSIC IS RISING IN CRESCENDO !

               
                                   

AIIPA Note dated 14-10-2014 placed in Kanpur Conference.

AIIPA 6th All India Conference - Kanpur - NOTE ON COURT CASES

ALL INDIA INSURANCE PENSIONERS ASSOCIATION
6th All India Conference – Kanpur
October 14-16, 2014
NOTE ON COURT CASES

All India Insurance Pensioners Association (AIIPA) 
has been at pains ever since the earlier favourable inclination of the 
Central Government for positive decision on full neutralization on 
Dearness Relief for pre-August 1997 Pensioners and increased ex-gratia 
for pre-1986 retirees along with wage revision due August 2007 got 
stuck in the web of officialdom and the hardened attitude of the 
Government, to impress upon the Management of LIC to initiate 
measures to get its Board Resolution of November 2001, implemented 
without any further delay and not to get bogged down in court cases.  
However LIC has been repeatedly engrossing itself in judicial proceedings.

LIC had filed separate SLPs in relation to the judgements of Hon’ble High Courts of Jaipur, New Delhi and Chandigarh and these SLPs have been converted as Civil Appeals and are pending adjudication in Supreme Court.

The Management of LIC has not been proactive in pursuing the issues with the Government and though AIIPA has repeatedly sent letters to LIC on this score and had during meetings with LIC officials stressed on this, LIC was going its own way.  Though AIIPA had continued with its endeavours, LIC presumably at the instance of the erstwhile Central Government, had been reluctant.  With the formation of the new Government, the Organisation has again urged upon LIC to take up afresh with the Government and had also written to the Finance Minister in this regard.  With the stalemate continuing, AIIPA felt a proper perspective of the prevalent situation and the legal nuances of the litigation process should be focussed before the Conference as vested interests were trying to blow hot and cold on this issue.

The Note circulated during the Fifth Conference of AIIPA held in October 2011, our Circular on Agenda Note and LIC Board Resolution of November 2001 after the Nagpur Central Committee Meeting in July 2012, our Circular issued in April 2013, tracing the developments and putting things in proper perspective were meant to keep the pensioners abreast.  The Circular of July 2012 on Agenda Note clearly explained that LIC Board Resolution only meant full neutralization and not updation.  The April 2013 circular clearly pointed out how the Hon’ble Supreme Court initially restricted the scope of deposit to the petitioners as against the demand for all pensioners and how the Hon’ble Supreme Court ordered that no further directions to LIC were necessary in the matter of deposit of amount when deposit for updation of pension was sought.

As had been said earlier, numerous IAs were filed that had ostensibly delayed the hearing of the main petition.  However with the Apex Court deciding against any fresh order on the amount of deposit to be made by LIC, stage was set and later the LIC’s SLPs were dismissed.  Pensioners would recall, there were jubilant messages all across, when LIC’s SLPs were dismissed.  Again, when the order dismissing LIC’s petition but allowing LIC to file fresh SLPs was out, there were messages stating fresh SLPs were bound to be not entertained as time barred!

When SLP against the Judgment of Punjab and Haryana High Court getting converted into Civil Appeal and with the fresh SLPs against the Order of the Division Bench of Hon’ble Jaipur High Court and the one against judgement of Delhi High Court becoming Civil Appeals and tagged together, the Organisation feels a thorough retrospect is necessary at this juncture.

The Civil Contempt Petition that got stayed when the earlier SLPs were pending got revived after dismissal of earlier SLPs and the present incumbents in LIC were added as fresh condemners and it had reached a crucial stage.  When the revived Contempt Petition was taken up on October 22, 2013, there were reports agog that the Hon’ble Jaipur High Court had ordered LIC to report compliance of the judgment dated January 12, 2010, and one could witness euphoria across the country and there were encomiums showered for the “success achieved”.  However the Hon’ble Judge had only granted time for filing of reply by LIC!

After postponements, LIC had filed its counter and the contentions ARE THAT  the Order of Hon’ble High Court remained unenforceable due to the pendency of Civil Appeal in Supreme Court and as orders of Jaipur High Court and Supreme Court have been complied with by LIC, there can be no contempt.

During the hearing in last week of January 2014, after hearing the counsels, the Hon’ble Court advised LIC to furnish details of amounts deposited and to state whether the deposits were in consonance of the LIC Board Resolution or not, the details of action, if any, taken for implementation etc. 

Contesting the stand of LIC, the petitioner wanted and was granted to file another affidavit which he did.  The matter came up for hearing on February 2014 and at the end, the Hon’ble Court opined no contempt was involved and the petitioner was allowed to withdraw the Contempt Petition.  With this, the issue again rests with the Apex Court for its verdict.

LIC had submitted details of amounts deposited with details of amounts in respect of petitioners, specifically stating that this had been done in consonance of the Board Resolution.

However, fresh writs have been filed in Jaipur High Court instead of seeking clarifications to implement the Order of the Single Judge Bench of 12th January 2010.

Even after Contempt Petition was withdrawn in Jaipur High Court, a similar petition came up in Punjab & Haryana High Court, and LIC was asked to deposit money and it has done so.  There are even now messages circulated that LIC’s deposits are not proper and deposits should include for updation.

An application for implementation of Hon’ble Delhi Court Order to grant of full neutralization to pre-August 1997 pensioners came up before the Supreme Court and LIC has been advised to file its objections and is to be heard in the Supreme Court.

Pointing out the facts of the case and the ethical standards, AIIPA had told LIC its objections could only be technical and had urged upon the management to find solutions even before the matter again comes up.

Salient Features of the Affidavit filed by LIC in Supreme Court in SLP 29956-29957

The powers to frame Rules and Regulations inter alia on terms and conditions of service of employees got vested with the Central Government under Section [48] of the LIC Act after amendments were incorporated by LIC (Amendment) Act, 1981 and the Supreme Court had held these amendments could not have retrospective effect and hence LIC Employees Bonus and Dearness Allowance, without restriction, could be protected up to February 2, 1981, the date of first Notification under the amended LIC Act.  Most of the LIC Pensioners would well remember those days when this singular achievement got them Bonus up to February 2, 1981 and unlimited DA up to a particular level till March 31, 1983.

It would be remembered that later changes in service conditions like reduction in retirement age for recruits after March 1983 and increase in retirement age to 60 for all in 1998, service conditions relating to wages in 1985, 1989, 1996, 2000, 2005 and 2010 and introduction of Pension in lieu of Corporation contribution towards PF etc. in June 1995, came to be implemented after Notifications were issued by the Central Government under Section [48] of LIC Act, 1981 as amended.  Even changes in Pension Rules for granting consequential benefits after wage revision came through Notifications till June 2000.

It may also be noted that in 2000, LIC was given limited power to change the Basic Pension and Rates of Dearness Relief, Minimum pension and Family Pension after every wage revision in respect of those who had ceased to be in service after the effective date of wage revision, which provision enabled the Chairman, LIC to modify the Basic Pension Rates of Dearness Relief, notified under the Annexure IV of LIC (Employees) Pension Rules 1995, Minimum Pension and Family Pension in relation to those with cessation of service after effective date of wage revision.  The notification specifically states “the power of the Chairman is in respect of employees and when wage revision is effected retrospectively, retirees after the date are deemed as employees for the purpose.”  This Annexure provided for revision of Dearness Relief every six months beginning February and August.

The bone of contention by the litigant was three fold viz. grant of Dearness Relief, not as per Annexure but as per Revision Rules, both in respect of levels of Basic Pay and periodicity implying thereby payment of increased Dearness Relief every three months as for in-service employees and percentage of neutralization as per salary scale slabs and grant of stagnation increment and in the writ filed in 2007 in Jaipur High Court, the plea was for grant of Pension to correspond to current scales of pay.

The Writ filed in 2007 in the Jaipur High Court had referred to the Resolution passed by the LIC Board in November 2001 for grant of uniform rate of Dearness Relief for pre-August 1997 retirees.

The Resolution and the Agenda Note were placed before the LIC Board in November 2001, for consideration and the Resolution, referred to the proposition made by a Board Member, for giving weightage of 11.25% after merger and it also said the cost would be huge and pointed out that the Agenda Note had made proposals that would cost about Rs.51 crores initially and about Rs.5 to 6 crores annually.  The Agenda Note had made proposals to upgrade Basic Pension at 600 and 1148 points to 1740 points, by merger of Dearness Relief payable up to 1740 points and pay Dearness Relief @ 0.23% thereon and if approved by the Central Government to implement prospectively from the date of publication in Official Gazette.  Presumably, the calculations that added up to Rs.51 crores were for payment of Dearness Relief at 100% for the pre-August 1997 pensioners with Basic Pension modified to 1740 points by merger of Dearness Relief upto 1740 points payable but without any weightage for the revision granted in wage structure from August 1997.  The Resolution said the Board, after some discussion, approved the proposal.

The acceptance by the LIC Board only signified full neutralization by merger of actual Dearness Relief paid with tapering off of percentage higher basic pension and prospective implementation from the date of publication in Official Gazette.

The Jaipur High Court Single Judge Bench which heard the two writ petitions, allowed the two writs and ordered that LIC could consider implementation of the Board Resolution and there could not be any discrimination in the matter of grant of Dearness Relief with a cut-off date 31-7-1997.

When the LIC went on appeal to the Division Bench, the Hon’ble Court observed that counsel for the Government had averred before the Single Judge Bench that the Board Resolution was pending before the Government and LIC was free to take its decision and said that since the Government had not come on appeal, the appeal filed by LIC were dismissed.

In the Review Petition, LIC has contended that LIC Act as amended in 1981 has not come under challenge and till such time the amendments are in vogue, the power vests with the Government only.

Disposing of the Civil Review Petition filed by the LIC, the High Court ordered dismissal, as there was no error apparent on the face of record to warrant a review under Review Jurisdiction.

The SLPs filed by LIC have been dismissed by the Supreme Court on the ground that Judgement of Division Bench of the Jaipur High Court had not come under challenge and that the petitioner could not show error apparent on the face of record in the order dismissing Review Petition.

The order of 8th August 2013 of the Supreme Court had stated that, that order did not preclude LIC from filing fresh SLP and condonation of delay in filing of SLP cannot be claimed as a matter of right.  Subsequently LIC had filed SLPs and they have been admitted with condonation of delay.

The grounds adduced by LIC in the SLPs

The grounds adduced by LIC in the SLPs are given in brief herein below:-

LIC stated in its affidavit that consideration of the scope and applicability of Section 48 of LIC Act has arisen in deciding whether the Board Resolution proposing amendments to the pension rules framed by the Central Government, be capable of being implemented without amendment of the rules.

LIC’s grounds of appeal are:

The Jaipur High Court erred in rejecting Review Petition on the ground there is no error apparent on the face of record as ground (submitted) before the High Court in support of Review Petition would indicate errors apparent on the face of records;

The High Court erred in ignoring the principle that when a particular thing has to be done in a particular way it can only be done in that way and in no other way;

The High Court further did not take into account the legal principle that the Court ought not to have compelled a party to do something which would not be permissible under law;

The High Court, in law, could not issue a mandamus directing the Petitioners to implement the Board Resolution without waiting for amendment of Pension Regulations;

The High Court, in law, could not treat Resolution by which government was approached into a self-operating decision and the Resolution cannot have the force of law in the absence of statutory amendments;

The High Court ought to have appreciated Petitioners, LIC cannot be placed in a position acting contrary to the law, which created the Life Insurance Corporation of India;

The High Court was in error in preferring oral submissions of the learned counsel for the Central Government, in preference to the express words of the statute;

The High Court erred in holding that there cannot be a cut off date for existing pensioners for providing benefits as such a finding is untenable and goes counter to the law framed by the Supreme Court;

It was contended on behalf of LIC, the High Court ought to have seen that by virtue of Statutory Rules framed by the Central Government, quantum of Dearness Relief depends upon the quantum of Pension computable on the basis of pay at the time of retirement;

The Agenda note and Resolution refer to rationalization of Dearness Relief that depends on quantum of pension and judgement dated 12-01-2010 is completely silent so far as the quantum of pension is concerned.

In simple terms, the contention of LIC is

(i)     that service conditions can be changed only through Government notification and in no other way;

(ii)    Court cannot direct LIC to implement its Board Resolution of November 2001, without Government notification, as it is not permissible under law;

(iii)   LIC cannot be placed in a position, acting contrary to law, which created the Life Insurance Corporation of India, as Section (48) of LIC Act, vests the power to frame regulations on service conditions with the government.

LIC has contended further that:

(i)    LIC Board Resolution and agenda note talked about quantum of pension on which modified rate of Dearness Relief was payable and Hon’ble Jaipur High Court Order had not dealt with this aspect but has only ordered on Dearness Relief.

(ii)    LIC Board Resolution cannot have force of law without statutory amendments to Pension Rules.

(iii)   Oral submissions by Government Counsel cannot over-ride the provisions of statute.

LIC wanted the Supreme Court to decide:

1.  Whether Jaipur High Court was correct in holding Review Petition do not call for interference in Review Jurisdiction;

2.  Whether Jaipur High Court was correct in holding there is no apparent error on the face of record;

3.  Whether Jaipur High Court could have issued a writ of mandamus for implementation of a Resolution seeking Government’s exercise of its statutory powers before amendment of rules;

4.  Whether High Court could have issued a writ of mandamus directing parties to do something which is not permitted by law; and

AIIPA has endeavoured to give a bird’s eye view of the issues involved but it must be thoroughly understood that the Organisation does not attempt to hold brief for the LIC management vis-à-vis the legal proceedings.

In order that pensioners are not misled by the not-so whispering campaigns, AIIPA feels our rank and file and especially our leadership at various levels should sift the details enumerated and repose faith in the Organisation.
14th October 2014.
(concluded)