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PENSION CASE -  SUPREME COURT ADMITTED SPECIAL LEAVE PETITION BUT
DIRECTED LIC TO DEPOSIT RS.51 CRORES WITH RAJASTHAN HIGH COURT REGISTRY.


- T.K.VELAYUDHAN, JT.SECRETARY, LIC PENSIONERS ASSON, CALICUT BEREAVED.
His Son Shaju (33) expired on 15-11-11.


___________________


JAIPUR HC JUDGMENT  -  DATES AND DEVELOPOMENTS

12-01-2010 –Historical Judgment given by Single Judge Hon'ble Mr Justice M.N.Bhandari of the Jaipur High Court in Civil Writ Petition Nos 6676 of 1998 and 654 of 2007 in favour of Petitioner Shri KML Asthana and Ors. against GOI and LIC.

21-01-2011- The Divisional Bench of the High Court dismissed both writ appeals.

Date : Writ Appeals 493 and 494/2010 filed by LIC Divisional Bench of Jaipur High court.

 

23-02-2011 - LIC moved the High Court for review of the Order of the Divl. Bench. Civil Review Petition No 86 and 87/2011

 

15-07-2011 – LIC filed SLP 16117 and 16118 of 2011 in Supreme Court against Order of the Divisional Bench. Supreme Court disposed of these appeals with remarks that since the petitions filed by LIC for review of the order are pending for consideration by the Divisional Bench of Jaipur High Court, SLP filed by LIC in the Supreme Court are are dismissed.

19-08-2011 – The Divisional Bench of the High Court in its final order dismissed the Review Petitions.

01-10-2011 - LIC filed appeal in Supreme Court

SUPREME COURT OF INDIA

Special Leave Petition (Civil) 29956 and 29957 OF 2011

L.I.C. .Vs. KRISHNA MURARI LAL ASTHANA & ORS. ETC.

Next Date of listing is : 14/11/2011

 31-10-2011 - S.B. Civil Contempt Petition No. 760 of 2010

Shri KML Asthana had filed Contempt Petition in High Court of Jaipur under Sections 10 and 12 of the Contempt of Courts Act for deliberate intentional contempt of this Hon'ble Court in the matter of judgment dated 12^th January, 2010 passed by Hon'ble Justice Shri Munishwar Nath Bhandari in S.B. Civil Writ Petition No. 654 of 2007. This case came up for hearing on 31-10-2011.

Mr. Ajay Tyagi, advocate was present for contemnors i.e. LIC Officers.Following Order was passed by the Jaipur High Court.

 

"Mr. Tyagi undertakes that he will get the order complied with within a period of four weeks. Time prayed for is allowed. If the order is not complied with within the aforesaid period, the contemnors respondents no. 2 and 3 will remain present before this court on the next date. "

 

COM. T.P. VELAYUDHAN BEREAVED

SRI SHAJU (33) SON OF T.P. VELAYUDHAN, JOINT SECRETARY,  LIC PENSIONERS ASSOCIATION, KOZHIKODE DIED AT CALICUT TODAY.  CREMATION TOOK PLACE AT 2 PM AT MAVOOR ROAD CREMATORIUM.

WE OFFER OUR HEART FELT CONDOLENCES TO THE BEREAVED FAMILY.

SUPREME COURT ADMITS SPECIAL LEAVE PETITION

    AGAINST RAJASTHAN HIGH COURT JUDGMENT

THE SUPREME COURT OF INDIA TODAY ADMITTED THE SPECIAL LEAVE PETITION FILED BY LIFE INSURANCE CORPORATION OF INDIA AGAINST THE JAIPUR HIGH COURT DIVISION BENCH JUDGMENT.

AFTER HEARING THE ARGUMENTS FOR BOTH THE SIDES, COURT ASKED LIC TO DEPOSIT THE AMOUNT INVOLVED IN THE COURT WITHIN TWO WEEKS. 

LIC INFORMED THE COURT THAT THE AMOUNT INVOLVED WAS RS.51 CRORES BUT WANTED MORE TIME TO DEPOSIT THE AMOUNT.  COURT ALLOWED THIS REQUEST AND DIRECTED LIC TO DEPOSIT THE AMOUNT WITHIN A PERIOD OF 3 WEEKS INSTEAD OF 2 WEEKS.

EARLIER LIC'S COUNSEL HAD INFORMED THE COURT THAT THEY WERE PREPARED TO IMPLEMENT THE JUDGMENT BUT APPROVAL OF UNION OF INDIA WAS NEEDED FOR THIS PURPOSE.  IT WAS LIC'S PRAYER THAT COURT ISSUE NOTICE TO CENTRAL GOVERNMENT BUT COURT DECLINED THE REQUEST SAYING: "LET THEM COME FIRST".

***

BREAKING NEWS........

SPECIAL LEAVE PETITION FILED BY LIFE INSURANCE CORPORATION OF INDIA IN SUPREME COURT HAS BEEN ADMITTED.

RAJASTHAN HIGH COURT JUDGMENT STAYED.

FURTHER PARTICULARS AWAITED.

ALL INDIA INSURANCE PENSIONERS' ASSOCIATION

Bharat Insurance Building (Annexe)

133, Anna Salai, Chennai 600 002

Circular: Conference/Special – II 22^nd October 2011

---

Dear Comrades,

Fifth General Conference – Another Milestone in the Onward March

In our earlier circular, we had focused on the core decisions of the Conference and the points of views of certain leaders. Here in below, we have attempted to apprise our members of the equally important views of other Leaders and nuances of the decisions of the Conference.

Special Addresses
Elaborating that struggle for achieving demands should be an inclusive struggle against privatization with enlarged scope, Com. Chandrasekhar Bose, the Veteran Leader of the Insurance Employees' Movement, complimented the Comrades of Delhi for having undertaken responsibility of hosting two All India Conferences and successfully fulfilling the same. He felt Insurance Pensioners were getting a raw deal and to remedy the situation and to defend the right of pension, they should join the struggles of the Left Parties, as the Government has usurped the management's power in so far as they relate to service conditions.
Com. A. K. Bhatnagar, Joint Secretary, AIIEA from Northern Zone, complimented the Pensioners of Delhi Division who had come forward to contribute for the success of the Diamond Jubilee Conference of AIIEA and said NZIEA took a conscious decision to host the Conference of AIIPA, as they valued the sacrifices by the Pensioners. Castigating the Dr. Man Mohan Singh Government for the policies pursued, Com. Bhatnagar said, united struggles against these policies was the only course correcting measure.
Com. Bhagwan Swaroop Sharma, former Vice-President of AIIEA, dwelt at length on Sections 21, 48 and 49 of the LIC Act and said that all eyes were on this Conference, as Pensioners desired solutions to their problems and expected the Conference to come out with decisions for getting solutions. Averring that anyone can approach the Court, Com. Bhagwan said, the outcome cannot be predicted.
Citing the Residuary Provisions in the Pension Rules, he said that Civil Service Pension Rules were applied, where there was no specific provision in our Pension Rules, but even in RBI Case, the Government did not agree for updation.
Com Priyabrata Bagchi, Vice-President, AIIEA, explained difficulties in organizing employees especially in North Eastern States and dwelt on situation in West Bengal where more and more left cadres are getting displaced.
Com. R.C. Sharma, President, NZIEA said, it seemed the focus was on Jaipur Case and court verdicts were not followed in letter and spirit and cited a case in Rajasthan.
Com .S. Rajappa, former Vice-President, AIIEA, though did not speak, was there at the Conference to inspire the audience.

Debate on the Report – Total Unanimity of Understanding

Earlier, Com. K. Natarajan, General Secretary, AIIPA, had placed an exhaustive and comprehensive Report on the happenings and developments, both economic and political, in our country and the world over as also the efforts of AIIPA to find solution to the issues of Insurance Pensioners and activities of the Organization since the last Conference held at Vijayawada in 2008.
The Conference was attended by 247 delegates including three women comrades and some of the comrades had undertaken strenuous journey for long hours to reach Delhi. Some comrades had to cancel their trip due to uncertainties of train movements.
Thirty One Delegates, including two Lady Delegates, participated in the deliberations and all of them agreed with the formulations in the Report. Certain Delegates desired some improvements in MediClaim Scheme, enhanced Family Pension, improvements in the procedure for disbursement of pension, improvement in system of payment/recovery of MediClaim Premium, etc.
The whole discussion exhibited unanimity of views, showed the mature level of putting across view points and above all, the cohesion in the organizational set up of All India Insurance Pensioners' Association.

Kudos to Comrades of Delhi

When it was the occasion for the summing up of discussions, Com. K. Natarajan, General Secretary, rose to the standing ovation of the Delegates, Observers and Leaders. Beginning his reply with encomiums to senior experienced Comrades of Delhi Pensioners' Association and young, energetic Comrades of NZIEA for the manner in which arrangements had been made, planned and executed meticulously Com. Natarajan applauded their efforts.
The scores of volunteer comrades, comprising of Pensioners and Employees, deserved all praise for the commitment and dedication with which they carried out the tasks assigned to them, Com. Natarajan said. Appreciating how all aspects of the arrangements were planned well in advance, how every minute detail was taken care of and how everyone of the volunteers took upon himself the onerous task, Com. Natarajan complimented all of them. Com. Natarajan appreciated how fruitful it was to have stay accommodation, catering and meeting venues under one roof for sticking to time schedule. The General Secretary put on record the services of volunteers, who received the Delegates and Observers at various points in odd hours and how other volunteers attended to their needs when they reached the venue in untimely hours. Com. Natarajan pointed out that due to the disruption of train services, some Divisions could not make it up and he said the Conference missed them.

General Secretary's Reply

Talking of the Organisation, the General Secretary said, we have grown in numbers with membership at 19400, an increase of 1345 since the last Conference held at Vijayawada and most of the units were functioning effectively and there was still scope to improve further.
On the specific issue of Full Neutralisation, Updation, Increase in Ex-Gratia, Com. Natarajan said that the Organisation had been following up vigorously and it could achieve a near breakthrough, though nothing concrete came out, presumably because of exterior circumstances.
Com. Natarajan said that the benefit of Pension being enjoyed, had come through a Notification under powers vested with the Government and modifications and improvements also had come through Notifications and even the LIC's Board Resolution of November 2001 talked of implementation after Notification by the Government.
AIIPA cannot compete with others but will have to take a rational decision. Others outside our fold are spreading all sorts of news and our Organisation cannot and will not respond to every such news.
Com. Natarajan said, effective pursuance of issues with the managements urging them not to procrastinate in the garb of court cases, effective use of our friendly forces to focus the issue before the Government and mobilizing of our members behind the Organisational efforts were only the surest means to get solutions to the issues of the Insurance Pensioners..
Com. Natarajan suggested observance of All India Demands Day on December 17, 2011 with Gate Meetings, Submission of Memoranda etc., by Insurance Pensioners. In case of any difficulty to observe the day on that day (being Saturday), General Insurance units may observe it on 19^th December 2011.
Pointing out that struggles for safeguarding Public Sector LIC and GIC should be combined with our struggles on demands and broader struggles with other Financial Sector Organizations and joining in struggles with Left and Democratic forces would usher in an atmosphere wherein our demands would get favourable solutions, Com. Natarajan said.
The House, after reply by Com. Natarajan, General Secretary, unanimously adopted the Report. The House also adopted unanimously, Audited Statements of Accounts for three years (2008, 2009 and 2010) and appointment of Auditor for the ensuing period.
Intervening during the deliberations, Resolutions were adopted unanimously and the details of some of the Resolutions are given below.

• Against Economic Policies of the Government
• Demanding increase in Ex-Gratia of pre-1986 retirees
• For resolution of long pending issues of Insurance Pensioners
• Grant of difference in Gratuity to GIC officers (Retired) and Grant of Pensionary Benefit to SVRS optees
• Increase in Family Pension
• Improvements in Group Mediclaim

As a gesture of appreciation of the services of 'Insurance Worker' and 'Bima Mazdoor'(NZIEA's House Magazine), the Reception Committee handed over cheques of Rs.25000/- each to Com. Amanulla Khan and Com. A.K. Bhatnagar.
The Conference elected Office Bearers and Central Committee Members for the ensuing term.

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President :	Com.M.L.Setiya (Delhi)
Vice-Presidents :	Com.Pabitra Mukherjee (Kolkata) Com.G.P.Chandolkar (Raipur) Com.K.N.Bajpai (Kanpur) Com.G.N.Mohanty (Cuttack) (General Insurance) *
General Secretary :	Com.K.Natarajan (Chennai)
Joint Secretaries :	Com.V.Devanathan (Chennai) Com.J.R.Mehta (Delhi) Com. R.Janardhan (Machilipatnam) Com.M.J.Damle (Mumbai) (General Insurance) *
Treasurer :	Com.V.Ranganathan (Chennai)

* The names for the posts of Vice-President and Joint Secretary for General Insurance Sector will be decided later.
The Names of Central Committee Members (elected) will be intimated separately.
The 5^th General Conference will be another milestone in the history of AIIPA and will be remembered and cherished by all those who attended the same.
LONG LIVE AIIPA !
With Greetings,
Yours Comradely,

(K.NATARAJAN) General Secretary

SUPREME COURT ORDER DATED 15-7-2011 ON SLP FILED BY LIC

LIC OF INDIA HAD MOVED THE SUPREME COURT WITH A SPECIAL LEAVE PETITION AGAINST THE RAJASTHAN HIGH COURT JUDGEMENT BUT THE SUPREME COURT REFUSED TO ADMIT THE SLP FOR THE REASON THAT A REVIEW PETITION WAS PENDING WITH THE RAJASTHAN HIGH COURT.

THE ORDER IS REPRODUCED BELOW.

 

(AFTER THE REVIEW PETITION WAS DISMISSED BY RAJASTHAN HC,HOWEVER, A FRESH SPECIAL LEAVE PETITION HAS NOW BEEN FILED BEFORE THE SUPREME COURT WHICH IS COMING UP FOR HEARING SHORTLY.)

ITEM NO.20            COURT NO.10            SECTION XV

S U P R E M E    C O U R T   O F    I N D I A                              

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Civil) No(s).16117-16118/2011

(From the judgement and order dated 21/01/2011 in DBSAW No.493/2010 in

SBCWP No. 6676/1998 & DBSAW No. 494/2010 in SBCWP No.654/2007 of The

HIGH COURT OF RAJASTHAN AT JAIPUR)

LIFE INSURANCE CORP. OF INDIA & ORS.       Petitioner(s)

                   VERSUS

KRISHNA MURARI LAL ASTHANA & ORS.          Respondent(s)                   

(With prayer for interim relief)

Date: 15/07/2011    These Petitions were called on for hearing today.

CORAM :

          HON'BLE MR. JUSTICE G.S. SINGHVI

          HON'BLE MR. JUSTICE H.L. DATTU

For Petitioner(s)       Mr. T.R. Andhyarujina, Sr.Adv.

                        Mr. A.V. Rangam,Adv.

                        Mr. Buddy A. Rangandhan, Adv.

For Respondent(s)       Mr. Abhinav Sharma, Adv.

                        Mr. R.K. Singh, Adv.

                        Mr. Rameshwar Prasad Goyal,Adv.

             UPON hearing counsel the Court made the following

                                 O R D E R                  

These petitions are directed against order dated 21.1.2011 passed by the

Division Bench of the Rajasthan High Court whereby the special appeals

filed by the petitioners against the order of the learned Single Judge

in the matter of grant of dearness allowance to the respondents were

dismissed. We have heard learned senior counsel for the petitioners

and perused the record.

                  

Since the petitions filed by the petitioners for review of the order

passed by the Division Bench are pending consideration, these petitions

are disposed of with a request to the Division Bench of the High Court

to make an endeavour to decide the review petitions as early as possible,

but latest within three months from the date of receipt/production of

copy of this order.

            

We also direct that till the disposal of the review petitions, the

proceedings initiated against the officers of petitioner No.1 under

the Contempt of Courts Act, 1971 shall remain stayed.

(RAJASTHAN HIGH COURT JUDGEMENT AS ALSO ORDER OF THE SAME COURT ON REVIEW PETITION  FILED BY LIFE INSURANCE CORPORATION OF INDIA HAS BEEN REPRODUCED ELSEWHERE.)

JAIPUR ORDER

1. S.B. Civil Writ Petition No.6676/1998 Krishna Murari Lal Asthana Vs. Union




of India & Ors.










2. 2. S.B. Civil Writ Petition No.654/2007 Krishna Murari Lal Asthana & Ors.




Vs. L.I.C. of India & Ors. Date of Order : 12th January, 2010 HON'BLE MR.




JUSTICE M.N. BHANDARI Mr.Abhinav Sharma Ms.Anita Aggarwal,G.C. - for




petitioners Mr. Anurag Aggarwal Mr.Manoj Singh Ragav Mr.S.S. Raghav -




for respondents BY THE COURT: REPORTABLE










These two writ petitions involve common issues, thus are being heard and decided by




this order.




The petitioners are those who retired from the service of Life Insurance Corporation




of India (for short 'the LIC of India'). First ground raised by the petitioners and common in both




the writ petitions is regarding discrimination in grant of pensionary benefits. It is stated that




on 28.6.1995, LIC of India (Employees) Pension Rules, 1995 (for short 'the Pension Rules')




were notified. The Pension Rules were made applicable to the employees, who were in service




of the respondent Corporation on or after 1.1.1986, on their exercising options to be




governed by the Pension Rules and refunding the contribution of provident fund with interest.




For those employees, who retired after 28.6.1995, the Pension Rules were made compulsory.




Chapter – IV of the Pension Rules provides rates of pension. Rule 35(2) of the Pension Rules




provides that if an employee has completed qualifying service of not less than 33 years, then




his pension would be 50% of the average emoluments. The grievance of the petitioners is in




regard to the grant of dearness allowance, inasmuch as, dearness allowance benefit has been




attached on the basic pension and not on the basic pay. To clarify the above, it is submitted




that benefit of dearness allowance after revision of the pay scale in the year 1996 was




provided as under:-




"Dearness formula"




Basic Pay Rate of DA for every 4 points




i) Up to Rs.4800 0.35% of pay




ii) Rs.4801 to 7700 0.25% of 4800 plus 0.29% of pay in excess of Rs.4800




iii) Rs.7701 to 8200 0.35% of 4800 plus 0.29% of difference between Rs.7700 and Rs.4800 plus




0.17% of pay in excess of Rs.7700




iv) Rs.8201 and above 0.35% of Rs.4800 plus 0.29% of difference between Rs.7700 and




Rs.4800 plus 0.17% of difference between Rs.8200 and Rs.7700 plus 0.09% of basic pay in




excess of Rs.8200 Aforesaid formula was available till Pension Rules came in the year 1995.




Under the Pension Rules, the benefit of dearness allowance was provided in the




following manner:-




Scale of Back pension per month Rate of dearness relief as a percentage of basic




pension i) Upto Rs.2400 0.35% ii) Rs.2401 to 3850 0.35% of Rs.2400 plus 0.29% of basic




pension in excess of Rs.2400 iii) Rs.3851 to 4100 0.35% of Rs.2400 plus 0.29% of the




difference between Rs.3850 and Rs.2400 plus 0.17% of basic pension in excess of Rs.3850 iv)




Above Rs.4100 0.35% of Rs.2400 plus 0.29% of difference between Rs.3850 and Rs.2400 plus




0.17% of the difference between Rs.4100 and Rs.3850 plus 0.09% of basic pension in excess




of Rs.4100 In view of the aforesaid, benefit of dearness allowance at the first step being 0.35%




remains upto basic pension of Rs.2400/- only whereas aforesaid percentage of dearness




allowance is allowed on the basic pay upto Rs.4800/-.




To understand the aforesaid difference, a comparative chart was submitted by




the petitioners, which is quoted hereunder:- "Comparative Chart" Pay upto Rate of DA/DR




Pension Upto 4800 0.35% of pay Upto 2400 From 4801 to 7700 0.29% of pay From 2401 to




3850 From 7701 to 8200 0.17% of pay From 3851 to 4100 Above 8200 0.09% of pay Above




4100.




Perusal of the aforesaid Chart shows that increase in the DA/DR was less for the pensioners




because the benefit of DA/DR was reduced to the extent of 50% on proportion basis from the




basic pay as an employee having qualifying pensionable service of 33 years or more gets 50%




of the pay as pension. Learned counsel for petitioners prayed that slab of dearness allowance




should be kept the same as is payable to the employees. In other words, it should not be




reduced proportionately to the basic pension.




Thus, first grievance of the petitioners is in regard to reduction of benefit of dearness




allowance.




The other issue raised in S.B. Civil Writ Petition No.6676/1998 – Krishna Murari Lal Asthana




Vs. Union of India and Others pertains to non-grant of benefit of stagnation increment.




Learned counsel for petitioners, advancing the arguments for first issue, submitted that nongrant




of due benefit of dearness allowance to the retired employees is not only arbitrary but




discriminatory in nature. After filing of the writ petition by Krishna Murari Lal Asthana, the LIC




itself passed a resolution in its meeting held on 24.11.2001. On realizing the mistake, the LIC




decided to sort out the issue by proper remedy, but finally left it to the discretion of the Union




of India to take a final decision. If the resolution dated 24.11.2001 is implemented, then




grievance of the petitioners can come to an end.




This is more so when the LIC is an independent body constituted under the Act of




Parliament and is controlled by its Board.




The Central Government cannot sit on the decision taken by the Board within the




framework of the Rules. However, in the present matter, despite the Board's resolution,




petitioners have not been given relief for the reason that Government of India has not taken




any decision on the aforesaid resolution dated 24.11.2001.




Referring to the provisions of Section 21 of the LIC Act, it was submitted that only in




regard to the matter of policy involving public interest, the Central Government may issue




guidelines. Thus, aforesaid provision does not bar for implementation of the resolution passed




by the Board as it is not otherwise contrary to the public interest. This is more so when the




pensioners who retired after 31.7.1997 are getting the benefit of dearness allowance on the




basic pay and not on the basic pension, thus pensioners have been divided in two categories




in a discriminatory manner. Even the cut off date fixed becomes arbitrary between the two




categories of pensioners more so when benefit of dearness allowance was not a new benefit.




Thus, any change in the benefit of pension has to be mad without a cut off date. The legal




position in that regard is quite clear. In view of the catena of judgments of the Hon'ble Apex




Court, if there is a change in the benefit of existing pensioners, change has to be made




effective to all without a cut off date inasmuch as cut off date in such cases are held to




be arbitrary. In a case where pension is allowed for the first time, then a cut off date can be




provided. My attention was drawn towards the judgment of the Hon'ble Apex Court in the




case of V. Kasturi Vs. State Bank of India reported in AIR 1999 SC 61 wherein aforesaid issue




has been dealt with. Same view has been expressed by the Hon'ble Apex Court in the case of




Union of India Vs. Dr. Vijayappurapu Subhayamma reported in AIR 2000 SC 3113 and was even




reiterated in the case of Subrata Sen Vs. Union of India reported in (2001) 8 SCC 71. In




reference to aforesaid judgments, it was urged that there can be no difference in the benefit




of dearness allowance to the employees retired before 31.7.1997 and those retired after the




aforesaid date.




In reference to Section 21 of the LIC Act, it is submitted that a formal approval of the




Government of India was not required to the Board's decision dated 24.11.2001.




A reference of the judgment in the case of UGC Class-I Officers' Association Vs. University




Grants Commissioner reported in 2000 (7) SLR (Delhi) 17 was made apart from the judgment




of the Hon'ble Apex Court in the case of HEC Voluntary Retd. Employees Welfare Society Vs.




Heavy Engg. Corporation reported in 2006 (3) SCC 708. Therein it was held that a body




created under the Act or even the Government agency need not to seek approval of every




decision taken by its Board for day-to-day functioning of the Company. In reference to




aforesaid, it is submitted that when the Board of Directors have already taken a decision on




24.11.2001, then there is no need of its sanction by the Central Government.




Learned counsel for petitioners has further submitted that there exists anomaly even in




regard to the revision of the pay scale. The benefit of revision in the pay scale from time to




time was not extended to the pensioners. In view of aforesaid, even an officer retiring in the




higher pay scale started getting less pension than to the employee retiring subsequently in




lower pay scale. Aforesaid aspect was also considered along with the first issue, by the Board




in its meeting held on 24.11.2001 and following decision was taken:-




"Executive Director (Personnel) introducing the subject mentioned that there was three




different rates for different groups of pensioners at present depending on their dates of




retirement, which cause considerable administrative inconvenience. Chairman pointed out




that he has since received a communication from Dr. S. Ram Khanna, Board Member, which




refers to his meeting with the Retirees Federation and requested examining the proposal in




detailed. The Note is in line with the demands made by the Federation, viz., giving effect to




the proposal from 1.11.1993 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 actuarially




determined at Rs.51.37 crores and the annual outlay be in the region of 6 to 8 crores. After




some discussion the Board approved the proposal and suggested that it should be




implemented prospectively and after obtaining Government approval."




In view of aforesaid decision, the respondent Corporation was under an obligation to




implement the decision without further delay as formal approval was not required from the




Government. In view of aforesaid, it is prayed that relief claimed in the writ petitions may be




granted to the petitioners. The prayer for grant of stagnation increment was not pressed. Per




contra, learned counsel appearing for respondent – Corporation submits that benefit of




dearness allowance has been provided on rational basis, thus petitioners are not entitled to




any benefit. This is more so when the benefit is as per the Rules. By virtue of the aforesaid,




even if retirees are divided in two or three groups for grant of pensionary benefits, it cannot




be said to be arbitrary or discriminatory in nature. The Board of Directors took a favourable




decision in its meeting held on 24.11.2001, but the Central Government has not granted




approval to the same till date. Thus, it could not be given effect.




In view of aforesaid, so far as the respondent Corporation is concerned, it has taken a




favourable decision for the employees, but on account of inaction on the part of the




Government of India, the Board's decision could not be given effect for redressal of the




grievance raised by the petitioners herein. Learned counsel appearing for the Union of India




submits that the Board's resolution dated 24.11.2001 is pending decision before the




Government of India.




The LIC was otherwise free to take its own decision. Thus, in these circumstances and as per




the provisions of the Act, there was no need to send the Board's resolution for its approval by




the Government of India. I have considered rival submissions of the parties and scanned the




matter carefully. First issue is in regard to non-grant of due benefiting of dearness allowance.




It is stated that employees retiring after 31.7.1997 are getting due benefit of pension with




dearness allowance whereas those retired prior to aforesaid date are being deprived to get




similar benefit. The issue for consideration, thus, remains is as to whether there can be a




different method for grant of pensionary benefits for the retirees based on cut off date? The




legal position in that regard is quite clear.




In view of the several judgments of the Hon'ble Apex Court, issue regarding cut off date for




providing pensionary benefits can be summarized in the following manner:-




(i) If there are change in benefit of pension then no cut off date can be provided. The benefit




on account of change in pensionary benefits would have retrospective effect.




(ii) If the pension is introduced for the first time, a cut off date can be fixed.




Aforesaid issue has been settled by the Hon'ble Apex Court in various judgments cited by




learned counsel for petitioners. In the case of V. Kasturi Vs. State Bank of India (supra), it was




held that if a person was eligible for pension at the time of his retirement and if he survives till




the time of subsequent amendment of the relevant pension scheme, he would become




eligible to get enhanced pension or would become eligible to get more pension as per new




formula. Accordingly, he would be entitled to get similar benefit from the date it is given to




other members. Same view has been reiterated in the cases of Dr. Vijayappurapu




Subhayamma (supra), Subrata Sen (supra) and in the case of All India Reserve Bank Retired




Officers' Association Vs. Union of India reported in 1992 Suppl. (1) SCC 664. In Paras 9 & 10 of




All India Reserve Bank Retired Officers' Association's case, aforesaid issue was decided after




referring earlier judgment of the Hon'ble Apex Court in the case of D.S. Nakara Vs. Union of




India (AIR 1983 SC 130). Relevant Paras of aforesaid judgment are reproduced hereunder:-




"9. The scheme introduced by the Regulations is a totally new one. It was not in existence




prior to its introduction with effect from November 1, 1990.




The employees of the Reserve Bank who had retired prior to that date were admittedly




governed by the CPF scheme. They had received the benefit of employer's contribution under




that scheme and on superannuation the amount to their account was disbursed to them and




they had put it to use also. There can, therefore, be no doubt that the retiral benefits




admissible to them under the extant Rules of the Bank had been paid to them. That was the




social security plan available to them at the date of their retirement. The Bank employees




were, however, clamouring for a pension scheme, firstly on a restricted basis as a third retiral




benefit and later in lieu of the CPF scheme. The Central Government had not approved of a




pension scheme, as a third retiral benefit. After that proposal was spurned it appears that the




employees of the Bank demanded a pension scheme on the pattern of the scheme available




to Central Government employees in lieu of the CPF Scheme. This was approved by the




Central Government and consequently it was introduced with effect from November 1, 1990




under the Regulations. There can, therefore, be no doubt that if the CPF retirees were not




admitted to this new scheme they could not make any grievance in that behalf. They had no




right to claim coverage under the new pension scheme since they had already retired and had




collected their retiral benefits from the employer. But the moot question is whether it was




open to the employer to grant the benefit of the pension scheme to one group of CPF retirees




who had retired from Bank service on or after January 1, 1986 and deny the same to all who




had retired on or before December 31, 1985. Is this division of CPF retires discriminatory and




violative of Article 14 of the Constitution?




10. Nakara judgment has itself drawn a distinction between an existing scheme and a new




scheme. Where an existing scheme is revised or liberalized all those who are governed by the




said scheme must ordinarily receive the benefit of such revision or liberalization and if the




State desires to deny it to a group thereof, it must justify its action on the touchstone of




Article 14 and must show that a certain group is denied the benefit of revision/liberalization




on sound reason and not entirely on the whim and caprice of the State. The underlying




principle is that when the State decides to revise and liberalize an existing pension scheme




with a view to augmenting the social security cover granted to pensioners, it cannot ordinarily




grant the benefit to a section of the pensioners and deny the same to others by drawing an




artificial cut-off line which cannot be justified on rational grounds and is wholly unconnected




with the object intended to be achieved. But when an employer introduced an entirely new




scheme which has no connection with the existing scheme, different considerations enter the




decision making process. One such consideration may be the financial implications of the




scheme and the extent of capacity of the employer to bear the burden. Keeping in view its




capacity to absorb the financial burden that the scheme would throw, the employer would




have to decide upon the extent of applicability of the scheme.




That is why in Nakara case this Court drew a distinction between continuance of an existing




scheme in its liberalized form and introduction of a wholly new scheme; in the case of the




former all the pensioners had a right to pension on uniform basis and any division which




classified them into two groups by introducing a cut off date would ordinarily violate the




principle of equality in treatment unless there is a strong rational discernible for so doing and




the same can be supported on the ground that it will subserve the object sought to be




achieved. But in the case of a new scheme, in respect whereof the retired employees have no




vested right, the employer can restrict the same to certain class of retirees, having regard to




the fact-situation in which it came to be introduced, the extent of additional financial burden




that it will throw, the capacity of the employer to bear the same, the feasibility of extending




the scheme to all retirees regardless of the dates of their retirement, the availability of




records of every retiree, etc. It must be realized that in the case of an employee governed by




the CPF scheme his relations with the employer come to an end on his retirement and receipt




of the CPF amount but in the case of an employee governed under the pension scheme his




relations with the employer merely undergo a change but do not snap altogether. This is the




reason why this Court in Nakara case drew a distinction between liberalization of an existing




benefit and introduction of a totally new scheme. In the case of pensioners it is necessary to




revise the pension periodically as the continuous fall in the rupees value and the rise in prices




of essential commodities necessitates an adjustment of the pension amount but that is not




the case of employees governed under the CPF scheme, since they had received a lump sum




payment which they were at liberty to invest in a manner that would yield optimum return




which would take care of the inflationary trends.




This distinction between those belonging to the pension scheme and those belonging to the




CPF scheme has been rightly emphasized by this Court in Krishena case". Perusal of aforesaid




Paras reveals that there exists difference between introduction of new Scheme then the




existing Scheme. In the light of the aforesaid, if the facts of this case are looked into, then it




becomes clear that amongst the pensioners there exists discrimination more specifically when




the pension has been made admissible to the employees who retired on or after 1.1.1986. In




view of aforesaid, there can be no different basis for dearness allowance or other benefits to




those retired on or before 31.7.1997. The existing pensioners are entitled for the benefit of




dearness allowance with the same measure as is admissible to the pensioners on or after




31.7.1997. The discrimination amongst the pensioners on that count is not permissible and if




there exists rule, making discrimination amongst the existing pensioners, it is held to be




violative of Articles 14 & 16 of the Constitution of India. The respondent Corporation has




already taken up the aforesaid issue in its Board meeting and a resolution was also passed on




24.11.2001 after taking note of the fact that three different rates for different groups of




pensioners exist depending upon their dates of retirement. It is not only causing




administrative inconvenience but creating anomaly amongst the pensioners also. Accordingly,




decision was taken but was made subject to final approval by the Central Government.




The question now comes as to whether such Board's resolution requires Central




Government's approval or can be implemented at the level of the respondent Corporation




itself.




If we look to Section 21 of the LIC Act, things become very clear.




For ready reference Section 21 of the LIC Act is quoted hereunder:- "Section 21. In the




discharge of its functions under this Act, the Corporation shall be guided by such directions in




matters of policy involving public interest as the Central Government may give to it in writing;




and if any question arises whether a direction relates to a matter of policy involving public




interest, the decision of the Central Government shall be final".




Perusal of the aforesaid Section reveals that it is only in regard to discharge of its functions




under the Act, the Corporation shall be guided by such directions of the Central Government,




which involve public interest and is otherwise matter of policy. In the present matter, it has




not been shown that any guideline was issued by the Government of India as a policy decision




in public interest. Thus, the position herein is reverse. It is the Board which passed a resolution




and sent it for approval of the Government of India, which cannot be said to be as per Section




21 of the LIC Act. In fact, position would be different if the Government of India would have




issued guidelines on policy matters in the public interest. This is apart from the fact that on




realizing the mistake, the Board had taken a cautious decision even for administrative




convenience. Thus, there was no reason to seek approval because day-to-day decisions are




not required to be sent for approval of the Central Government. The law, in this regard, is




settled in view of various judgments cited by




learned counsel for petitioners and has not otherwise been debated by learned counsel for




the respondent Corporation. Even learned counsel for Union of India had accepted the




aforesaid proposition and submitted that it is only a policy decision, that too, involving public




interest and not every decision of Board, which needs approval by the Central Government. It




is otherwise not made clear as to what is the element of public interest involved herein, if the




resolution of the Board is implemented. In fact, implementation of the Board's resolution




would take away discriminatory treatment amongst the pensioners apart from keeping the




LIC away from the administrative inconvenience.




Thus, in the light of the aforesaid discussion, there cannot be a cut off date for existing




pensioners for providing benefits but further fact is that to cure the aforesaid mistake, the




Board's resolution should have been given effect to, which will otherwise redress the entire




grievance of the petitioners. In the facts and circumstances of the case, I am of the view that




resolution passed by the Board of LIC does not need approval of the Central Government thus




the Corporation may give effect to its resolution dated 24.11.2001 to avoid discrimination




amongst existing pensioners.




In light of the discussion made above, both the writ petitions are allowed. The respondent




Corporation is directed to take a decision for implementation of the resolution dated




24.11.2001 passed by the Board. The respondent Corporation cannot provide different criteria




for grant of dearness allowance to the existing pensioners based on cut off date i.e.




31.7.1997.




The benefit arising out of the directions above would, however, be considered by the




respondent Corporation so that every retired employee may get the same benefit. Costs




made easy.