WHY THERE IS NO FINALITY ON THE JAIPUR BENCH JUDGMENT DATED 6/12/2021?
The judgment of the Jaipur Bench of the RHC under WP No 14446 of 2010 in my opinion will not able to stand scrutiny if challenged in the Supreme Court for the following reasons:
Mr K M L Asthana retired on 31/12/1996 after the wage revision was notified on 18/7/1996 effective from 1/8/1992 for Class III & IV employees and from 1/4/1993 for Class I Officers.
The Pay Scale of AO as on the date of his retirement was 5950-230-8970.
The Fixed Personal Allowance was Rs 230.
Para 15 of the judgment by the Jaipur Bench of RHC , inter alia,quotes definition of average emoluments and 'pay'as given in in the Pension Rules as under:
"2(d) "average emoluments" means the average of the pay drawn by an employee during the last ten months of service ;
2(o) 'pay' includes
(b) in relation to an employee who retires in service on or after the 1st day of November 1993,
(i)the basic pay including the stagnation increments if any, and
(ii)all allowances counted for the purposes of making contribution to the Provident Fund and for the payment of dearness allowance, and
(iii) fixed personal allowance not exceeding the last increment in the scale of pay; and
(iv)dearness allowance calculated upto indexnumber1148 in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100."
The average emoluments as per the aforesaid definition have to be worked out as follows:
(i) Basic Pay : 8970
(ii) Allowance counted for PF & DA purpose: Nil(Presumed)
(iii) Fixed Personal Allowance: 230
(iv) DA upto index No 1148: Nil
Total: 9200
AS per the above definition 'pay' for calculating average emoluments, DA up to CPI 1148 is to be taken into account.
As per para 3(A)(c) of the wage revision notification dated 18/7/1996, DA is to be calculated at the prescribed rate 'for every four points' in the quarterly average of the All India Consumer Price Index above 1148 points. So, at 1148 the number of slabs would be zero.
Dearness Allowance = Rate of DA x Basic Pay x Number of slabs above 1148, and there shall be no addition of DA for determining 'pay' for calculation of average emoluments, in this case.
The Hon'ble Judge had apparently erred in taking average emoluments on the basis of last drawn emoluments as on the date of retirement, i.e, 31/12/1996 (on revised pay scales), which takes into account the DA up to CPI prevailing on 31/12/1996, i.e., 1684, much above 1148 which was only the index as at 1/8/1992.
Mr K M L Asthana is reported to have obtained details of last drawn pay before retirement date, i.e., 1//1/1997 through RTI application, which were inclusive of DA upto CPI existing as on 31/12/1996 and the same were submitted before the Court by way of an additional application. Neither the LIC's advocate nor the Hon'ble Judge seems to have paid attention to the fact that DA was to be taken only up to CPI 1148 which was existing on 1/8/1992 for addition to the Basic Pay as per sub-clause (iv) of 2(o).
THE LEGAL DIMENSIONS
Now let us examine how legally the judgment can stand scrutiny in further appeal in the Supreme Court.
As per para 15 of the judgment, the Hon'ble judge has relied upon the definition of 'pay' as was given in original Pension Rules, 1995 vide Rule 2 (o), where clause (b) reads as under:
"(b) in relation to an employee who retires or dies while in service on or after the 1st day of November, 1993, -
(i) the basic pay including the stagnation increments if any; and
(ii) all allowances counted for the purposes of making contribution to the Provident Fund and for the payment of dearness allowance; and
(iii) fixed personal allowance not exceeding the last increment in the scale of pay; and
(iv) dearness allowance calculated up to Index number 1148 in the All India Average Consumer Price Index for Industrial Workers in the series 1960-100."
After the wage revision notification dated 18/7/1996, which were effective from 1/8/1992, Pension Rules were also amended vide LIC of India (Employees) Pension (Third Amendment) Rules, 1999 notified on 14/5/1999. As per aforesaid amendment, in Rule 2 for clause (o) the following contents were deemed to have been substituted with effect from 1/11/1993:
"(o) "pay" includes, -
(i) the basic pay including the stagnation increments if any; and
(ii) all allowances counted for the purpose of making contribution to the Provident Fund and for the payment of dearness allowance; and
(iii) fixed personal allowance not exceeding the last increment in the scale of pay; if any, and
(iv) in a case covered by the proviso to clause (j) or where the salary and other conditions have been fixed with the approval of the Central Govt., the dearness allowance calculated upto Index No.1148 in the All India Average Consumer Price Index for Industrial workers in the series 1960=100 applied on the basic pay drawn by him in the scale of pay notified by the Central Govt., for the post."
Thus, in the amended definition of 'pay', for all the employees except the Chairman and MDs, the provision for adding dearness allowance calculated up to CPI 1148 was deleted. It was done for the simple reason that after wage revision notification dated 18/7/1996 (which was effective from 1/4/1993 for class I officers), the revised basic pay was inclusive of DA up to CPI 1148 as also enhanced by a given percentage as weightage after DA merger. The said wage revision notification was not applicable to Chairman and MDs as on the date of notification and hence for them the old provision continued.
The amended Rule 2(o)(iv) of 14/5/1999 was finally deleted by the further amendment notified on 13/8/2001 in which notification Rule 55 B covering Chairman and MDs retiring after 1/1/1996 was inserted providing them the benefit of pension payable under CCS Pension Rules 1972.As a result of insertion of Rule 55B, Rule 2(o)(iv) became finally infructuous and got rightly deleted with effect from 1/1/1996.
Jaipur Bench of Rajasthan High Court relied upon the definition of 'pay' which was not in fact applicable as per the third Pension Amendment Notification dated 14/5/1999. Notification dated 14/5/1999, amending the definition of pay, was not brought to the notice of the Court by any party, which resulted in this faulty judgment. The judgment would not stand the legal scrutiny if challenged in appeal and pleaded properly in the Apex Court.
There are several other legal infirmities committed by LIC, which have not been properly expounded by the advocate of LIC. But those are case- specific and would not provide legal ground for securing a favourable verdict in appeal.
Before sending this post, I have thought very carefully on the points mentioned above and also discussed the matter repeatedly in depth with Mr M P Agnihotri who is a legally acquainted person and who is steering the legal case under one of the SLPs before the Supreme Court .
Suffice it to say that pensioners should not be taken in by the hype created by the dismissal of LIC's appeal to the Jaipur Division Bench of the RHC. Pensioners should not get into a false sense of hope. This is not a case like that of Mr M C Jain where the judgment was sustainable on legal grounds up to the highest Court.
C H Mahadevan
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