Sprinklings of Responses & Suggestions after SC Order dt 31/3/2016

Shri Sitendraji has given interpretation from the direction of SC in LIC matter. You may kindly read positives given by him.

Parab LR

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Dear Shri Parab,

Thanks for your mail.I think judgement is correct in various aspects and the real issue being fought so far was something else.

I have rapidly gone through this judgement. It is more about  non conferment of the benefit of the dearness relief keeping in view the subsequent pay revisions of the similarly situated employees only.The real issue of  testing the constitutional validity of Para 3A of the Appendix to the Rules contending, inter alia, that the whether the said Para is violative of Article 14 of the Constitution in view of the decisions rendered by this court in D.S. Nakara v. Union of India would be decided by Delhi High Court.

The judgement by Shri Dipak Misra and Smt R. Bhanumathi is ,inter alia 

,"Regard being had to the piquant situation, we are inclined to set aside the orders passed by the High Courts of Rajasthan, Delhi and Punjab & Haryana at Chandigarh and transfer the writ petitions from the High Courts of Rajasthan and Punjab & Haryana to the High Court of Delhi, which will decide the constitutional validity of Para 3A of the Appendix to the Rules, as argued by Mr. Panchu "  learned senior counsel appearing for the respondents, and also deal with the cases of the persons, who have retired after the cut-off date, consider the contentions raised by Mr. Gupta, learned senior counsel and the other contentions to be raised. However, we may clarify that we have not expressed any opinion on the merits of the case, except that the resolution could not become operative unless it was conferred the status of a rule as provided under Section 48 of the Act. 24. 

SC says  "We have already stated that the High Court of Delhi has really not adverted to as regards the constitutional validity of Para 3A of the Appendix. As far as the other delineations or deliberations are concerned, the High Court of Punjab & Haryana at Chandigarh has also not independently dealt with the controversy, but followed the decision rendered by the Rajasthan High Court". 

CONSTITUTIONAL VALIDITY OF Para 3A of the Appendix to the Rules (LIC) in the light of D.S.NAKARA vs UNION OF INDIA YET TO BE EXAMINED

Mr. Shree Ram Panchu, learned senior counsel appearing for the respondents in Civil Appeal No.9223 of 2013, has submitted that certain petitioners had preferred writ petition No.184 of 2007 in the High Court of Delhi, assailing the constitutional validity of Para 3A of the Appendix to the Rules contending, inter alia, that the said Para is violative of Article 14 of the Constitution in view of the decisions rendered by this court in D.S. Nakara v. Union of India and others , All India Reserve Bank retired Officers Association v. Union of India and V. Kasturi v. Managing Director, State Bank of India and another , but the High Court has not adverted to the said facets and disposed of the writ petitions, placing reliance on the decision rendered by the High Court of Rajasthan. We are of the considered opinion that when the issue of constitutional validity of Para 3A to the Appendix was raised, the same deserved to be addressed by the High Court.

REAL ISSUE UNDER CONSIDERATION APPEARS TO BE "provide a suitable updation formula to upgrade the basic pension to the employees of the Corporation who have retired prior to 01.08.1997".

SC has made many beneficial comments like;

  a) Pension though, by the judicial pronouncements, has been treated as not a bounty yet the controversy relating to  the said claim and denial thereof has been a matter of frequent cavil between the employer and the employee in numerous situations.

 b) The Dearness Relief on pension is being paid to different generations of pensioners (depending upon their date of retirement) on a graded structure

c) ---Due to the different rates of Dearness Relief to different groups of pensioners, the real value of pension, which is being eroded over a period of time is not being protected besides causing administrative inconvenience. It has thus become necessary to rationalize the Dearness Relief structure and provide a suitable updation formula to upgrade the basic pension to the employees of the Corporation who have retired prior to 01.08.1997. It may be mentioned that such a provision to upgrade the pension due Page 12 12 to periodic revision in case of Central Government employees is incorporated in the Central Civil Services (Pension) Rules, on the basis of which the LIC of India (Employees) Pension Rules have been drafted.

d)   In view what has been stated in Para 3 above, it is suggested that the following updation formula to upgrade the basic pension/family pension in respect of employees who have retired between 01.01.1986 to 31.07.1997 may be adopted.

The basic pension/family pension payable in relation to AICPI 600 points or 1148 points, as the case may be, shall be upgraded by merging the Dearness Relief payable upto AICPI 1740 points, and b. On the pension so upgraded, Dearness Relief of 0.23% of basic pension shall be paid or become recoverable for every 4 point rise or fall of AICPI from 1740 points.

NOTE--- Our pay scales in RBI were revised at CPI 600 and 1148 just like in LIC. But subsquntly there scales were revised at CPI 1740 and ours at 1684.

SC laments--- If an Executive Director stood retired sometime in 1997, he would get approximately Rs.7,000/- towards pension, whereas a person working in Class III, if he retires subsequently would get approximately double of the said amount. 

LIC HAS TO GO TO PARLIAMENT

The Board can pass a resolution and the Chairman can be the head of the Board, but it does not authorize the Board to take a decision with regard to certain matters which are within the domain of the Page 18 18 rule making authority. On a perusal of Section 48, it is clear as crystal that conferment of benefit, either pension or anything ancillary thereto has to be conferred by the rules and the rule as prescribed under Section 48 of the Act is to be tabled before the Parliament. 

Mr. Shree Ram Panchu, learned senior counsel appearing for the respondents in Civil Appeal No.9223 of 2013, has submitted that certain petitioners had preferred writ petition No.184 of 2007 in the High Court of Delhi, assailing the constitutional validity of Para 3A of the Appendix to the Rules contending, inter alia, that the said Para is violative of Article 14 of the Constitution in view of the decisions rendered by this court in D.S. Nakara v. Union of India and others5 , All India Reserve Bank retired Officers Association v. Union of India and V. Kasturi v. Managing Director, State Bank of India and another , but the High Court has not adverted to the said facets and disposed of the writ petitions, placing reliance on the decision rendered by the High Court of Rajasthan. We are of the considered opinion that when the issue of constitutional validity of Para 3A to the Appendix was raised, the same deserved to be addressed by the High Court.

We may hasten to add that we have referred to this aspect in extenso as Mr. Gupta would submit that non conferment of the benefit of the dearness relief keeping in view the subsequent pay revisions of the similarly situated employees leads to disastrous effect and in a way allows room for absurdity. Learned senior counsel has given an example to highlight as to how the absurd situation can creep in. It is urged by him that if an Executive Director stood retired sometime in 1997, he would get approximately Rs.7,000/- towards pension, whereas a person working in Class III, if he retires subsequently would get approximately double of the said amount.

I would suggest that the entire case may be studied by you and our legal experts.

SC has spoken about inequitous pension by citing the case of ED,LIC.

It throws some hopeful signals but LIC has to go to PARLIAMENT to give pensionary benefits.

I think the lawyers were not top class.Had they hired Harish Salve etc, things would have been different.

------Sitendraji

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