Points For Arguments on our SLPs

Just before the hearing  fixed in the first week of February 2020 on our SLPs  in the Supreme Court,I had prepared a brief of points to be used by our counsel and circulated it to Mr M P Agnihotri and Mr D Krishnan.I have  fine- tuned the points by making some additions.I thought it will be useful for our pensioner friends to be in the know of the important points. The following points will also be useful as and when hearing is resumed in the Supreme Court on our SLPs post improvement in the Covid 19 situation . 

I give below my  updated write- up.

C H Mahadevan

Points for the hearing in the SLP

 

·       Any adjournment sought by LIC should be opposed.Even,if the Court is inclined to give further time for compliance,hearing should commence on the main points of the SLPs. Many old pensioners have died since the SLP  has been filed.

·       LIC has already considered in its  Board  Meeting of  24/11/2001 and decided in favour of upgradation of pension and made recommendations to the Government.Now LIC is taking a stand in the case contrary to their own earlier stand.

·       The amounts paid in the Jaipur Registry and the P&H  Chandigarh HC Registry  and also the interim relief paid as per the Supreme Court order dt 31/3/2016 were based on the principle of upward revision of basic pension as at 1/8/1997.

·       The DHC decision in their judgment dated 27/4/2017 modifying the formula of Dearness Relief as per Appendix IV was not on accepted principles followed  on the basis of merger of DA with Basic Pay as per changes in  All India Consumer Price Index at the time of every wage revision.Thus the DR formulae ordered by DHC became arbitrary and can be only rectified by upgradation of pension with every wage revision.

·       The upgradation of minimum pension ordered by DHC in their judgment has also created anomalies whereby in borderline cases where those drawing more than minimum pensioners,are, after upgradation is provided in minimum pension,  getting less gross pension.The only remedy for this is upgradation of pension.

·       The principle of upgradation was already followed at the time of notification of  LIC Pension Rules 1995 in Appendix III where a methodology was adopted to update pension on 1/8/1987 for employees who retired from 1/1/1986 to 31/7/1987.But this was restricted as one time updation  for one small segment of retirees without adopting the same  methodology for other  subsequent generations of retirees and without bringing in the principle of updation in chain with every wage revision.

·       Rule 56 provides that where there is no express provision in any of these Rules,the CCS Pension Rules 1972 & the CCS Commutation  of Pension Rules  1981will apply.Upgradation of Pension was not in vogue when LIC Pension Rules 1995 were notified.But 5^th CPC recommendations accepted by the Central Government provided for upgradation w e f 1/1/1996.So the practice should be made applicable to LIC employees also.

·       Rule 55B inserted in the Rules on 23/8/ 2001 enabled Chairman & MDs retired after 1/1/1996 to be governed by CCS Pension Rules 1972 and this has created a separate class of pensioners under the same pension  rules.This attracts the ratio of D S Nakara judgment of the Supreme Court & consequently there is violation of Articles 14 & 21 of the Constitution.

For  retirees covered by  Rule 55B, the basic pension is fixed by calculating emoluments/average emoluments under CCS Pension Rules.

For all retirees other than  those covered by Rule 55B,basic pension is calculated by taking 50% of average emoluments as per Rule 35(2).So those who are covered by Rule 55B enjoy more beneficial terms.

 

·      One more ironical situation that has arisen is that a few MDs (both retired & in service) as also the Chairman who had earlier skipped exercising option for pension originally were provided one more option for pension(OMOP) and these officers are also automatically getting benefit of updation of pension by virtue of Rule 55 B and being covered by the CCS Pension Rules 1972, while tens of thousands of pensioners are stagnating at the lower pension fixed at the time of retirement for decades before revision suffering from disparities even in comparison with cadres several steps lower retiring in the latest post- wage revision period.

·       Financial parameters cannot come In the way of upgradation of pension as pension is a statutory obligation provided in Rule 5(3) of  the LIC Pension Rules 1995.

·       Also IRDAI have clarified in their recent circular issued to all life insurers that any amount of expenses spent  in excess of Statutory/ Regulatory norms should be charged to Shareholders’ Account and not to  Policyholders’ Account.So policyholders’ bonus will not be affected by LIC at any time exceeding expense norms.Exceeding of expense norms may not merely occur on account of updation of pension,but can occur even on account of regular five yearly wage revisions provided to serving employees.

·       Funding of pension is no ground for denying upgradation as creation of a fund for payment of statutory obligation of pension payment is only a mechanism to ensure adequacy of fund as a sound accounting practice.RBI have provided updation of pension to their employees in March 2019 even though theirs is also a funded scheme.

·       LIC should be estopped from backtracking on its own decision to recommend upgradation  of pension in its own Board Meeting held on 24/11/2001

C H Mahadevan