Our Pension case in SC

The tweaking of the DR formula by the Delhi HC in its judgment dated 27/4/2017  was arbitrary and went against a standard formula adopted  both in case of LIC and Banks after each wage revision taking into  account the changes in the AICPI at which the DA was merged with Basic Pay while effecting five yearly wage revisions.What is surprising is that the faulty judgment was not contested by LIC which conveniently left it to the six petitioners to file SLPs.LIC also implemented the DHC judgment faultily in that the DR rate for para 1 retirees drawing over 2130 upto 3850 was fixed at 0.23% only instead of 0.29% ,perhaps taking advantage of some typographical error in the judgment at one place, even though it was made clear at another para.( Of course even the maximum for EDs was 3500 and only MDs & Chairmen retired prior to 1/1/1996 would have been drawing basic pension above 3500 upto 4000). LIC also did not take steps till date to amend the Pension Rules to incorporate the changes ordered by DHC which it did not challenge. Perhaps the faulty judgment of DHC suited LIC to avoid getting itself weakened in the matter of upgradation by challenging the DHC judgment.

All the grounds of Pension being a right, a deferred compensation for past services, property under Article 300A etc are quite valid.But what is required to be stressed before the SC by our counsel is that right to pension is inseparable from right to upgradation of pension.That is where applicability of Rule 56  needs to be argued for together with the discrimination caused by Rule 55 B providing benefit of upgradation to Chairmen & MDs retired after 1/1/1996 through the route of application of Rule 56 selectively to the exclusion of lower cadres thereby attracting the ratio of the D S Nakara case judgment.

According to me , the most serious aspect of unconstitutionality in LIC Pension Rules 1995 is the existence of two classes of pensioners under the same Pension Rules, viz, that covered by Rule 55 B and the other covered by other Rules with disparate benefits.

Rule 35(1) is of course  proof of one time upgradation in basic pension restricted to employees retired between 1/1/1986 and 31/7/1987.Its being one time for one segment of retirees might have been justified upto 31/12/1995, but with the 5th Central Pay Commission Recommendations being implemented with provisions for upgradation of pension, it is untenable to deny upgradationof pension to all eligible, especially in the context of Rule 56 & Rule 55 B.

These are the grounds on which our case has to be argued in the Supreme Court.

C H Mahadevan 

On Thu, 29 Sept 2022, 20:58 Seetha And Kishore, <rbkseetha@yahoo.com> wrote:

----- Forwarded Message -----

From: Ramamoorthy G <grama1937@hotmail.com>

To: RB Kishore LIC <rbkseetha@yahoo.com>; rbkseetha <rbkseetha@gmail.com>

Sent: Thursday, September 29, 2022 at 07:45:33 PM GMT+5:30

Subject: Our Pension case in SC

Respected Sir,

 I wish to reiterate the following points :

The  100% Neutralisation of DR rate of 0.23% per slab was for the Pay Scales linked to CPI 1740 points with effect from 1-8-1997 wherein the Government liberalised the DR formula from abolishing the Tapering method to Uniform rate method adding Para 3A to Appendix IV of Pension Rules 1995.

 While delivering the judgement on 27-4-2017, the DHC wanted to apply this liberalised DR formula to those pensioners who were retired prior to 1-8-1997 also , by retaining the Tapering formula to certain extent of Basic pension,  stating that they were also given 100% DR Neutrilisstion. Here I wish to state,  for the pension prevailing at the time of formulating Pension Rules 1995, linked to CPI 1148 points, the 100% Neutrilisstion  was at the Rate of 0.67% upto Basic pension of 1250 only and above that,  Tapering formula was applied.  Here we should note that 0,67% was 100% DR for the pension linked to 600 points whereas 0.23% , also 100% DR Neutrilisstion, applied to the Basic pensions linked to 1740 points of CPI. Therefore it is not justified to apply this 0.23% to those pensioners whose pension was linked to 1148 points.

 If the Court wants to apply the 100% DR formula without upgrading the Basic pensions to those who retired prior to 1-8-1997,  then they should allow 0.67% , which was 100% Neutrilisstion at 600 points uniformly without Tapering formula.

The SC, in many cases observed, that any liberalisation under the same Pension Rules should be extended to all. 

In a recent judgement the Court observed thus: 

 " Pension Rules Must Be Interpreted In Favour Of Employee when More Than One Interpretation Is Possible : Supreme Court"

I humbly note that our LS G Chairman elaborately discussed all these points in his speech at OB,/EC Meeting held on 17 and 18th August 2022 at Ahmedabad.

The Government is controlling our Service Rules under which our Pension Rules 1995 were notified.

Similar Pension Rules were also notified for RBI and Bank pensioners. Inrespect of RBI pensioners, they have allowed upgradation to some extent. But for others they are silent.  In this connection it will be worthwhile to note the observations of the Courts in Pension cases : 

1.  In matters of pension, there has to be a holistic approach and not constricted interpretation of certain provisions. ( Kerala High court)

2. The petitioners rely on Regulation 35(1), as amended on 18.05.2002, to contend that their basic pension is bound to be updated in consonance with the increase in the pay band. Reliance is also placed on Regulation 56 which provides that, in case of doubt as regards application of the Regulations, corresponding provisions of the Central Civil Service Rules, 1972 or Central Civil Services (Commutation of Pension) Rules, 1981, applicable

3. Reference is made to the decisions of the Apex Court to contend that pension is no longer a bounty to be disbursed according to the whims of the employer and has acquired the status of property under Article 300A of the Constitution of India.

4.  In D.S.Nakara (supra), after detailed consideration of this aspect, the Apex Court held as under;
"31. From the discussion three things emerge: (i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rules which are statutory in character because they are enacted in exercise of powers conferred by the proviso to Article 309 and clause (5) of Article 148 of the Constitution; (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare

5.  the modern notions of social justice and social security, concept of pension underwent a radical change and it is now well- settled that pension is a right and payment of it does not depend upon the discretion of the employer, nor can it be denied at the sweet will or fancy of the employer.

6.  Pension, is a life long benefit. Denial of pension is a continuing wrong. This Court cannot also be oblivious to the difficulties of a retired employee 

We hope that our Sr Advocate would place all relevant points before the SC when our Case is taken up.

 Submitted with respects, 

G Ramamoorthy.

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