THE INHERENT CONTRADICTION IN THE DELHI HIGH COURT JUDGMENT DATED 27/4/2017 IN REGARD TO RULE 55 B

 Further to my earlier s on the subject, Mr D Krishnan  has  pointed out a glaring error in para 5  of my write up where it was written ' before 1/1/1996' instead of 'after 1/1/1996'.I have since corrected the error and I am attaching  the corrected  write up.

Kindly ignore the previous copies of the write up  and take this as the final post.

Sorry for the mess up.

C H Mahadevan

THE INHERENT CONTRADICTION IN THE DELHI HIGH COURT JUDGMENT DATED 27/4/2017 IN REGARD TO RULE 55 B

In the Delhi High Court judgment dated 27/4/2017, the Bench rejected our contention of discriminatory treatment meted out to employees retired in the cadres lower than Managing Directors who were provided more liberalised treatment as per Rule 55 B of the LIC Pension Rules 1995 notified on 13/8/2001.

The remarks of the Bench in page 86-87 of the judgment read as follows:

“105.

………………..   The explanation of the Corporation and the Union of India is that appointments to the posts of Chairman and Managing Director are made by the Central Government under Sections 4 and 20 of the Act. These posts require approval of the Appointment Committee of the Cabinet and draw pay as per the scale of pay applicable to the Central Government employees. This was the position even prior to introduction of the Pension Rules. Chairman and Managing Director of the Corporation by notification dated 3rd July, 1996, were made eligible for pension, though their salary and dearness relief were calculated on 608 index points whereas pension rules had provided for calculation of dearness relief at 1148 index points. Thus, there was an anomaly. The Central Government considered the issue and decided that there should be uniformity of terms and conditions of appointment approved by the Appointment Committee of the Cabinet in the insurance industry including retirement package.

106. In view of the explanation given, we do not think that the contention of the retired employees/associations should be accepted as a ground or reason to apply the notifications issued by the Central Government under the pension rules applicable to the Central Government employees………….”.

There is an inherent contradiction in the justification made by the Corporation and accepted by the Bench for the discrimination for the following reasons.

As per Rule 55 B, the Chairman and Managing Directors of the Corporation retired after 1/1/1996 were made entitled to receive their pensionary benefits as per CCS Pension Rules 1972(now repealed by CCS Pension Rules 2021) and CCS Commutation of Pension Rules 1981. This has resulted in discrimination of two kinds. First, all the LIC  employees retired after 1/1/1996  have not  been made entitled  for  this preferential treatment  even though Rule 56 required similar treatment to be provided for all employees , considering that Central Government employees were also not provided the benefit of revision of pension on implementation of Central Pay Commission Recommendations  as on  28/6/1995, the date on which LIC Pension Rules 1995 were notified  until 1/1/1996 from which date the 5 th CPC Recommendations took effect. Thus, providing benefits as applicable to CCS Pensioners from 1/1/1996 to only the top two cadres w e f 1/1/1996 was clearly discriminatory as the Chairman (now Chief Executive) and Managing Directors are whole time officers of the Corporation receiving salary from the Corporation without any reimbursement by the Central Government and pension out of the same Pension Fund set up under a Trust for all employees of the Corporation under LIC Pension Rules by the Corporation.

Secondly, the justification made by the Corporation and accepted by the Bench is that these two top posts require approval of the Appointment Committee of the Cabinet and draw pay as per the scale of pay applicable to the Central Government employees. The Bench has further observed that this was the position even prior to introduction of the Pension Rules. When such is the case, there is no justifiable ground for excluding Chairmen and Managing Directors retired prior to 1/1/1996 from providing the benefits of Rule 55 B. Late M/s R Narayanan, N K Shinkar G Diwan,K P Narasimhan and N N Jambusaria were all the Chairmen  who occupied  the top  post before 1/1/1996 and all of them are no more. M/s C R Thakore.  G.Chidambar and S P Subedar  were the Managing Directors retired before 1/1/1996 who are also no more.  These deceased retired officers in the top two cadres have also been deprived of the benefits due to them legitimately and constitutionally.

All this goes to show that Rule 55 B is unconstitutional as it is in conflict with Rule 56 of LIC Pension Rules 1995 which required CCS Pension Rules 1972(and logically CCS Pension Rules 2021 now) and CCS Commutation of Pension Rules 1981 to apply to all employees irrespective of the cadres occupied by them w e f 1/1/1996 the date from which the Recommendations of 5 th CPC were implemented by the Central Government. The only way to make Rule 55B constitutional is to bring all employees governed by LIC Pension Rules 1995 under its purview.  The unconstitutionality of Rule 55B cannot be rectified by merely extending the benefits to the above deceased officers as all deceased and surviving retirees covered by LIC Pension Rules 1995 cannot be excluded except by violating Article 14 and 21 of the Constitution in that process.

The above points provide a strong ground for upgradation of pension which should be forcefully argued by our Senior Counsel in the Supreme Court on the next date of hearing. I am sure the petitioners under the various SLPs must have included the above points in their SLPs, Rejoinders and/or Synopses submitted to the Apex Court.

C H Mahadevan