MY RESPONSE TO CHAT COLUMN COMMENTS OF MR PATRUDU

MY RESPONSE TO CHAT COLUMN COMMENTS OF MR PATRUDU

 

RULE 55, RULE 55B AND RULE 56- THE TRUSTY TRIO

 

A few days ago, I had expressed my view that LIC Chairman in exercise of powers vested under Rule 55 of LIC Pension Rules 1995 can issue administrative instructions to implement Rule 56 -Residuary Provision. Mr  Patrudu  has 'respectfully' disagreed with me  for the reason that Rule 56 does not automatically confer any  legal right and the Central Government Pension Rules do not provide for upgradation of pension and the Central Government employees get upgraded pension separate administrative instructions. I thank Mr Patrudu for his response with respect shown to me.

Having said that, I would like to respond to his point by giving my viewpoints in a little more detail.

The Rule 56 and Rule 55B taken with Rule 55 are, in my opinion, very important in our current legal fight for upgradation of pension in the Supreme Court which is pending under SLPs filed by six petitioners. We also need to carefully delve into the background of developments before and after the Notification of LIC Pension Rules 1995.

Our Pension Rules 1995 were notified by the Central Government in exercise of powers under Sec 48(2)(cc) on 28/6/1995 after all the consultative process with LIC, on the pattern of Central Government Pension Rules of 1972 and Central Government Pension Commutation Rules 1981.The wordings in the Rules were almost verbatim reproduction of the CCS Pension Rules 1972.At that time the Central Government employees were drawing salary and pension only as per the 4^th Central Pay Commission Recommendations accepted by the Central Government. At that time, there was no provision for upgradation of pension with wage revisions to serving employees as per the CPC Recommendations. With the implementation of the 5^th CPC Recommendations by the Central Government, the Central Government employees also became entitled to upward revision of pension after 1/1/1996 on the principle of modified parity whereby the revised pension was fixed at 50% of the minimum of the revised pay scale corresponding to the pre-revised scale. While the CCS Pension Rules 1972 were not amended to provide for upgradation of pension, the 5^th CPC recommendations on upgradation were implemented by the Central Government by issue of O.M. 45/10/98-P&PW(A) dated 17 December 1998 which is available in public domain. Ever since, the Central Government pensioners have been getting upwardly revised pension after every ten years based on CPC Recommendations, the latest being effective from 1/1/2016. Under the Seventh  CPC recommendations, the Basic Pension has been upgraded by a multiple of 2.57 over the pre-2016 Basic Pension.

Thus even though the CCS Pension Rules 1972 have not been amended, by means of Office Memorandums issued by the Department of Pension & Pensioners' Welfare under the Ministry of Personnel, Public Grievances & Pensions of the Government of India. The issue of the O.M.s has given legal validity for payment of upgraded pension to the Central Government pensioners even in the absence of amendments in the CCS Pension Rules 1972.

 

Rule 55B of LIC Pension Rules 1995 reads as follows:

 

"55B. Pensionary benefits to employees mentioned in proviso to sub-rule(j) of Rule 2 and employees appointed as Managing Director under section 20 of the Act and who were in service on or after 1st January, 1996-

Notwithstanding anything contained in these rules, in respect of an employee appointed as Managing Director under section 20 of the Life Insurance Corporation of India Act, 1956, and in respect of an employee covered by proviso to sub-rule (j) of Rule 2, who was in service on or after 1st January, 1996, the pensionary benefits shall be calculated in accordance with the provisions contained in the Central Civil Services (Pension) Rules, 1972 and the Central Civil Services (Commutation of Pension) Rules, 1981, as applicable to Central Government servants and in accordance with the instructions issued by the Central Government there under from time to time;"

 

Under the above Rule, Chairman(appointed from among the Officers of the Corporation) and Managing Directors retiring from the services of the Corporation after 1/1/1996  have their pensionary  benefits calculated  as applicable to the Central Government employees. This is in spite of the fact that    these two cadres of officers are whole time officers of the Corporation and are governed  by the LIC Pension Rules 1995.Their pension is also paid out of the same Fund which also  carries the contributions in respect of the pension payable to lower cadre pensioners who don't get upgraded pension.

Rule 55 B is nothing but an evidence of selective implementation of Rule 56 for a very small segment of the pensioners covered by the LIC Pension Rules 1995 which is discriminatory.

Now coming to Rule 56, the rule under our Pension Rules reads as follows:

 

 

"56.

Residuary provisions -Matters relating to pension and other benefits in respect of which no express provision has been made in these rules shall be governed by the corresponding provisions contained in the Central Civil Services (Pension) Rules, 1972 or the Central Civil Services (Commutation of Pension) Rules, 1981 applicable for central government employees."

 

Regulation 56 of Public Sector Banks' Pension Regulations 1995, reads as follows:

 

"56. Residuary provisions

In case of doubt, in the matter of application of these regulations, regard may be had to the corresponding provisions of Central Civil Services Rules, 1972 or Central Civil Services (commutation of Pension) Rules, 1981 applicable for Central Government employees with such exceptions and modifications as the Bank, with the previous sanction of the central Government, may from time to time, determine."

 

The clarity of Rule 56 of LIC Pension Rules 1995 stands out very markedly with no qualifications as are found in the Regulation 56 of the Public Sector Banks' Pension Regulations 1995.No conditions are mentioned in Rule 56 for its implementation nor is there a mention of need to seek the previous sanction of the Central Government.

As far as LIC pensioners are concerned, as there is no express provision regarding upgradation of pension either in terms of admissibility or otherwise, for providing whatever benefits are enjoyed by Central Government pensioners. In the absence of such an express provision on upgradation of pension, Rule 56 requires that it should also  be extended to the employees /pensioners governed by the LIC Pension Rules 1995.This is already extended to officers covered by Rule 55 B from 1/1/1996.It only needs to be  extended to all employees covered by the Rules  for all the cadres from Sweepers to Executive Directors, and also Chairmen & Managing Directors retired prior to 1/1/1996.

Rule 55 gives the powers to the Chairman of LIC as follows:

"55. Power to issue instructions -The Chairman of the Corporation may from time-to-time issue instructions as may be considered necessary or expedient for the implementation of these rules."

"These rules' include Rule 56 which warrants urgent implementation in the present circumstances and I believe that it is well within the powers of the Chairman to implement Rule 56 in respect of upgradation of pension.

But we should also understand that it is a harsh reality that no Chairman of LIC would like to take such a bold step to implement the Rule against the wishes of the Central Government and all that we can do is to seek adjudication by the Apex Court by arguing on the above points when the hearing resumes.

 

I hope this write-up will be useful for the various petitioners under their SLPs as they will deem appropriate provided they agree with my above views.

 

C H Mahadevan

 

 

 

--
Rksahni

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