“PENSION -A CONTINUOUS CAUSE FOR ACTION”-HOW IT RELATES TO OUR SLPs

“PENSION -A CONTINUOUS CAUSE FOR ACTION”-HOW IT RELATES TO OUR SLPs

 The Supreme Court in its judgment delivered on 20/5/2022 in CA No 4100 of 2022, while partly allowing the Appeal of the petitioner to pay arrears of pension on revised pension from the date the petitioner completed 60 years of age, has made the following observations:

“However, as far as the pension is concerned, it is a continuous cause of action.    There is no justification   at all for denying the arrears   of   pension   as   if   they   would   have   been retired/superannuated at the age of 60 years.”

These observations have significant implications to LIC pensioners whose SLPs are pending adjudication in the Supreme Court.

ANOMALY IN DR FORMULA BEFORE 1/8/1997

First thing, the DR formulae prior to 1/8/1997 were anomalous for the simple reason that one the slab boundaries for the rate of DR for retirees were halved for the Basic Pension slabs for the two groups of retirees, while slab boundaries were double those of the in-service employees on the amount of Basic Pay. Considered from the pattern of DR notified as per para 3A of the LIC Pension Rules 1995 from 1/8/1997 and DR rates decided upon by LIC as per para 3B in subsequent wage revisions, the rate of DR on Basic Pension for retirees/pensioners and the rate of DA on Basic Pay for employees is same. Thus retaining the DR admissible before 1/8/1997- even with improvements as ordered by the Delhi High Court by its judgment dated 27/4/2017- at the rates as per Appendix IV has created discontinuity in the pension. As a matter of continuous cause for action, the DR formula for pre-August 1997 retirees on Basic Pension should be the same as the DA formula on Basic Pay, from the dates of retirement of the  concerned retirees. This cause for continuous action necessitates modifying the DR formula retrospectively and of course upgrading their basic pension w e f 1/8/1997 which again arises as a result of the need for addressing the cause for continuous action which I am discussing the following paragraphs.

In my opinion, the need for addressing the cause for continuous action for LIC pensioners through upgradation of pension springs from the following sources:

NON IMPLEMENTATION OF RULE 56

Firstly , it is an accepted fact by LIC  even  in a note placed before the LIC Board Meeting on 24/11/2001 that our Pension Rules notified by the Central Government on 28/6/1995 have been patterned on the Central Government Pension Rules of 1972 and Rule 56 is a clear  evidence thereof. On that date only the 4^th Central Pay Commission Recommendations had been implemented by the Central Government and upgradation of pension was not a practice existing then. When the 5^th Pay Commission Recommendations were implemented w e f 1/1/1996 by the Central Government, the upgradation of pension was introduced for the first time .Thereafter two more CPC recommendations have been implemented .What is important is ,even though  the CCS Pension Rules 1972 did not have a provision of upgradation of pension, the upgraded pension has been getting paid to Central Government pensioners on the basis of modified parity by issue of of Office Memoranda by the Central Government. More recently, on 20/12/2021, the Central Government has notified CCS Pension Rules 2021 repealing the CCS Pension Rules 1972 and Rule 66 of the newly notified Rules specifically provides for revision of pension  on implementation of CPC recommendations .Rule 56 requires that where there is no express provision on any matter in the LIC Pension Rules, the provisions for CCS Pension Rules 1972 will apply.Now with the application of Rule 56 and with the newly notified CCS Pension Rules 2021 replacing the repealed Rules, it is clear that  whatever principles  are followed for pension  benefits extended to  Central Government pensioners should also be followed for LIC Pensioners from every date of wage revision starting with 1/8/1997. The only way this discontinuity is removed is by providing for upgradation of pension with every wage revision.

RULE 35(1) -ONE-TIME UPDATION

Under Rule 35(1), the basic pension and additional pension was updated in respect of employees retired between 1/1/1986 and 31/7/1987 as per the formula given in Appendix-III.Having done such updating for a segment of pensioners , not adopting the same principle for updating of pension for those retired in various  inter- wage revision periods  has introduced discontinuity in our pension rules .The cause for continuous action here again arises which can only be taken by upgradation of pension with every wage revision.

DIFFERENT BASIC PENSIONS WITH DIFFERENT RATES OF DR

At the time of notification of LIC Pension Rules 1995, there were two groups of retirees with two sets of basic pensions (after updating under Rule 35(1)) and two sets of DR formulae. Now with  five quinquennial  wage revisions that have taken place from 1/8/1997 till 1/8/2017, there are now totally seven sets of  basic pensions  for similarly placed pensioners with seven sets of DR  rates and the situation created by these differential sets of basic pension and DRs based on the dates of retirement is highly discontinuous taking into account the fact that the later groups of retirees not only gain by merger of DA with existing basic pay but also benefit by the additional weightage provided after such merger which has created a huge disparity between retirees of various generations .Older the generation of the pensioner the highest is the  adverse degree of disparity. Here  the cause for continuous action can only be addressed through having one basic pension for all similarly placed pensioners of various periods of retirement and one rate of DR for all pensioners. Continuity in cause of action can therefore be ensured  only through upgradation of pension in every wage revision  as is done for Central Government employees with implementation of recommendations of every Central Pay Commission .

RULE  55B -SEPARATE CLASS WITHIN THE CLASS OF LIC PENSIONERS

This rule inserted in LIC Pension Rules 1995 on 13/8/2001 has created a separate class of pensioners ,viz, Chairman and MDs retired after 1/1/1996 who are privileged to be governed by CCS Pension Rules 1972( now repealed and substituted by  CCS Pension Rules 2021) in the matter of pension even though they are whole time officers of the Corporation , their salaries and pension are paid by LIC and their pension is also paid from the same Pension Fund from which all pensioners covered by  the same LIC Pension Rules 1995 are paid pension.

The discontinuity arises on account of this rule for the following reasons:

1.     Rule 56 is selectively being applied to the officers covered by the Rule leaving out the pensioners outside this rule.

2.     A cadre-based rule has been made for the top two cadres in top management, whereas, no other rule discriminates between cadres. The rules other than Rule 55B are common  for all employees from Executive Directors to Sweepers of the Corporation.

3.     Rule 55B requires relatively more additional contribution to the Pension Fund after every annual actuarial valuation of the Pension Fund than for other lower cadre retirees/pensioners.

This discontinuity can be removed only by providing similar treatment to other classes of pensioners, which again points to the inevitability of upgradation of pension with every wage revision.

From the above discussion, it is very clear that the LIC Pension Rules 1995 as they exist today have severe elements of discontinuity and provide a very credible and authentic cause for continuous action through upgradation of pension. All the petitioners need to brief their counsels to consider the above points and argue appropriately  before the Supreme Court Bench.

C H Mahadevan