EXTRACTS FROM SUPREME COURT JUDGMENT
DATED 31/3/2016
Para 2
“It appears that the appellant, the Life
Insurance Corporation of India (for short' 'the Corporation') at one point of
time was enthusiastic to confer certain benefits on the respondent-employees,
may be without appreciating the legal nuances but its action irrefragably
instilled a concrete hope in thousands of employees”.
My remarks
Dictionary
meaning of ‘irrefragably’:
Not
liable to be refuted or disproved; indisputably
The
SC Bench has sensed that at one point of time LIC was enthusiastic to provide
benefits to retired employees and instilled hope in thousands of
employees(retirees).
Para
8
Minutes of the Board Meeting dated 24/11/2001
“An index linked Pension Scheme in lieu of
Corporation's Contribution to Provident Fund (CCPF) was introduced in the
Corporation vide Central Government Notification dated 28.06.1995. The Scheme
provides for payment of pensionary benefits with effect from 01.11.1993. The
employees of the Corporation, who retired between 01.11.1986 to 31.10.1993, are
also covered under the scheme for pensionary benefits.
2. 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. After the notification of the Pension Rules, the pay scales and
allowances of the employees of the Corporation have been revised on two
occasions – first in the year 1996 by linking it to AICPI 1148 Points and again
in the year 2000 by linking it to AICPI 1740 Points. The revision in the year
1996 was made effective retrospectively from 01.08.1992 and the revision in the
year 2000 was made effective retrospectively from 01.08.1997. Consequent upon
the revision of pay scales, the Pension Rules were suitably amended to give
effect to payment of pension commutation value and family pension as per the
revised scales of pay and allowances. However, the Dearness Relief on pension
is being paid to different generations of pensioners (depending upon their date
of retirement) on a graded structure upto 31.07.1997 as per the rates given in
Appendix-IV of the Pension Rules governing the rates of Dearness Relief is
given in Annexure-I to this note.
3.
It may be observed from the rates of Dearness Relief as given in Annexure-I,
that there are three different rates prescribed for different groups of
pensioners depending upon their date of retirement. Due to the different
rates of Dearness Relief to different groups of pensioners, the real value of
pension, which is being eroded over a period of time is not being protected
besides causing administrative inconvenience. It has thus become necessary to
rationalize the Dearness Relief structure and provide a suitable updation formula
to upgrade the basic pension to the employees of the Corporation who have
retired prior to 01.08.1997. It may be mentioned that such a provision to
upgrade the pension due to periodic revision in case of Central Government
employees is incorporated in the Central Civil Services (Pension) Rules, on the
basis of which the LIC of India (Employees) Pension Rules have been drafted.
4.
In view what has been stated in Para 3 above, 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.
a.
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 b. 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. It is suggested that
the above amendment shall be made from the date of its notification in the
official gazette and no arrears on account of Pension/Family
Pension/Commutation Value or Dearness Relief shall be payable. The one-time
financial implication of the above proposal has been actuarially determined to
be Rs.51.37 Crore.”
(underlining mine)
My remarks
These minutes of the LIC Board meeting clearly
record that different rate of DR result in erosion of real value of pension
over a period of time and not being protected. The necessity for rationalization
of DR formula and provide a suitable formula for updation for pre-August 1997 retirees has been
stressed.
It has also been mentioned that such a
provision to upgrade the pension due to periodic revision in case of Central Government employees is incorporated in the CCS(Pension)
Rules.
It is also clearly stated that LIC
(Employees) Pension Rules Have been drafted on the basis of CCS (Pension)
Rules.
The Minutes of the Board Meeting clearly
reinforce the importance and applicability of Rule 56 of the LIC Pension Rules
1995.
Para
9
Resolution
passed by the Board on 24/11/2001 on the basis of the Minutes
“Amendment to LIC of India (Employees)
Pension Rules, 1955(?1995) – UPGRADING OF Basic Pension to AICPI 1740 Points
and 100% DA neutralization thereon in respect of Retirees prior to 01.08.1997:
Executive Director (Personnel), introducing the subject mentioned that there
were three different rates for different groups pensioners at present depending
upon their dates of retirement, which causes considerable administrative
inconvenience. Chairman pointed out that he has since received a communication
for Dr. S. Ram Khanna, Board Member, which refers to his meeting with the
Retirees Federation and requests for examining the proposals as per Board Note
in line with the demands made by the Federation viz. Giving effect to the
proposals by 01.11.1993 and upgradation by giving weightage of 11.25% as in the
case of in-service employees. Chairman pointed out that these have been considered
before placing the matter to the Board and it was felt that the same would
increase the financial burden very substantially and may be unaffordable for
the Corporation. Chairman pointed out that the implications of the proposal
made have been actually determined at Rs.51.37 crore and the annual outlay
would be in the region of 5 to 6 crore. After some discussion, the Board
approved the proposal and suggested that it should be implemented prospectively
after obtaining Government approval.”
My remarks
Reading
the Minutes together with the Board Resolution, it is clear that the Board
approved the proposal for upgradation for pension w e f 1/8/1997 for the
pre-August 1997 retirees subject to Government approval. The import of the
Board Resolution is that there should be one rate of DR for all pensioners on
basic pension irrespective of the date of retirement. It is possible only with
upgradation of pension with wage revision. It is pertinent to note that on
that date the second Wage revision after
the Notification of LIC Pension Rules was the one dated 22/6/2000 effective
from 1/8/1997 merging DA with Basic Pay at AICPI of 1740. the first one being that on 18/7/1996
revising wages from 1/8/1992 on merger of DA at AICPI of 1148.Thus the
effect of the Board recommendation as on date is that all the generations of
employees retired upto 31/7/2017 become entitled to upgradation of pension from
the first effective date of wage revision after their retirement. What is more
even the employees covered by LIC Pension Rules in service will be entitled to
upgradation of pension similarly after their retirement in future. Now with the
Notification of wage revision w e f 1/8/2022, the latest generation of retirees
upto 31/7/2022 will also get entitled to upgradation of pension.
Para
16
“16. Having stated so, in all possibility,
we would have proceeded to record the conclusion but, a significant one, the
controversy of this nature does not see the sunset with such immediacy.”
My Remarks
This
is a very important observation by the SC Bench as, if it had just stopped with
setting aside the three High Court judgments, that would have been the end of
the road for LIC pensioners. A lifeline has been provided by the SC to LIC
pensioners later in the judgment where 6
Civil Appeals by Pensioners/Pensioner bodies are now to be adjudicated by SC.
Para
17
We are of the considered opinion that when
the issue of constitutional validity of Para 3A to the Appendix was raised, the
same deserved to be addressed by the High Court.
My Remarks
This seems to have been omission on the
part of Jaipur Benches and also DHC and Chandigarh HC Benches
Para
18
18. Mr. Gupta, learned senior counsel
appearing for the respondents, endeavoured hard to impress upon us to deal with
the same, but as we find certain facts are to be adverted to and the pleadings
are not adequate, we think it seemly to restrain from the same.
My Remarks
SC was particular that Para #A
Constitutional validity should be adjudicated at the High Court level.
Para
21
It is urged by Mr. Gupta that once the
employees are covered under Para 3A, being retirees after the cut-off date, the
benefit cannot remain static but has to change with the pay revisions regard
being had to the price index, for otherwise the provision does not spring to
life and, eventually, paves the path of arbitrariness.
My Remarks
This
is a significant intervention by Senior Counsel to emphasize on extending the
need for upgradation of pension beyond pre-August 1997 retirees
Para
22
Be it stated, there are two categories of
employees, namely, the employees who have retired prior to the cut-off date
i.e. 1st 23 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.
My remarks
Tone
set by SC for considering upgradation of pension with every wage revision.
Para
23
23. Regard being had to the piquant
situation, we are inclined to set aside the orders passed by the High Courts of
Rajasthan, Delhi and Punjab & Haryana at Chandigarh and 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, as argued by Mr. Panchu, learned senior counsel
appearing for the respondents, and also 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.
My Remarks
Lifeline provided by the SC Bench for LIC
Pensioners by remanding the case to Delhi HC.
Para
26
We feel the pain while remanding the
matter, but we have no option as the pleadings are not adequate as it should
have been while assailing a constitutional validity of a provision. It is well
settled in law that he who assails the constitutional validity of a statutory
provision or a rule, has to specially assert the grounds for such challenge.
The purpose of saying all this is as the
learned counsel for the respondents would agonizingly contend that the amount
of pension the respondents are getting is a paltry sum and it is difficult to
sustain in the present day. That apart, the Corporation should have been
gracious enough to recognize the services rendered by them and the Union of
India should have come with an affirmative response when the resolution was
passed by the Corporation.
My Remarks
SC Bench sympathised, but pleading was
inadequate to facilitate granting relief for pensioners.
Para
28
It does not require Solomon's wisdom to
state that an interim order is an interim order and does not have any impact at
the time of final verdict especially in such a situation and, therefore, we
direct that it shall be applicable to the similarly placed persons.
My Remarks
This was in respect of the interim relief of 20% sanctioned on 7/5/2015 and also the 40% interim relief sanctioned in the judgment( including earlier 20%) dated 31/3/2016.