With short payment of 40% IR,the road ahead

Dear All LIC Pensioners Friends,

In the light of the erroneous calculation & payment of 40 % IR by LIC, there is  need for an appropriate legal response that LIC’s action warrants both at the Supreme Court and at Delhi H C.

At Delhi HC, an opportunity is available to original petitioners and the fresh petitioner/s to file a response to the affidavit that has to be filed by LIC on the 40% IR paid by them in ‘compliance’ with the Supreme  Court order dated 31/3/2016.

Concurrently, an opportunity is also available at the Supreme Court for filing a contempt petition against LIC. 

Understandably there is a general reluctance on the part of pensioners at large to support the idea of filing a contempt petition on the fear that it may delay the case at Delhi. But we must also remember that the stakes are high for the following reasons:

·        The eligible pensioners retired between 1/1/1986 and 31/7/1992(31/3/1993) have received an IR of hardly 13% of the entitled amount;

·        The eligible pensioners retired between 1/8/1992(1/4/1993) and 31/7/1997 have received an IR of hardly 31%( in the case of the Class III employee  with basic pension 3442 and retired on 30/9/1994,the amount received is 12%, (as lower the basic pension, the lower the percentage of amount paid to entitled amount);

·        The pensioners in the first category with basic pension of less than 1250 and those in the second category with less than 2399 would have got single digit amounts as for more than 212 months they would have got negative differences.

·        Family pensioners would have also got at the most single digit amounts thanks to rounding off of revised Basic family pension to higher rupee.

In the light of the above the case managers have to decide upon the legal strategy for response to LIC’s action on this issue.

I attach a note prepared by me on ‘How   LIC is wrong on IR calculations’.

Greetings.

C H Mahadevan 
 ‘How   LIC is wrong on IR calculations’

 What Para 27 of the Supreme Court Order dated 31/3/2016 states
“Keeping in view the totality of facts and circumstances of the case, it is hereby directed that the Corporation     shall pay 40% as per Para 3A  of the Appendix to each of the employees within six weeks and shall file an     affidavit before the High Court of Delhi to the said effect……….”.
What Para 3A of Appendix IV   states
3(A) In case of employees who have retired or died on or after the 1st day of August 1997, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.23 per cent of the Basic Pension;
What items (b) & (c) of Annexure to letter dated 13/4/2016 by ED (P) to ED (IT) state:
(b) For the purpose, the basic pension /family pension  payable shall be revised  by merging the Dearness Relief payable as on 1/8/1997, and,
 (c) On the pension so upgraded, Dearness Relief of 0.23% of basic pension is to be calculated for every 4 point rise or fall of AICPI from 1740 points.
Why the method of calculation as per (b) & (c) is incorrect?