24.7.2018

Ecircular No.DK/22                        12-05-2018

  

Friends ,

After a flurry of e-circulars, in quick succession, going up to no DK 21, covering the report on matters in SC leading up to further date fixed for Hearing on 24-7-2018, there seems to have been a lull on the communication front. Yes, I have been travelling, for one, and for another I have been busy grappling with some persistent medical issues in the family.

I have so far attended 4 Annual General Body Meetings of 4 Association Units covering Thiruvananthapuram, Chennai, Ernakulam and Thrissur in that order. I found members very eager to see the end of our SC litigation and get some good results. Instead of just telling them on matters at the logistical, and periphery levels, regarding dates for Hearing , their constant postponement, briefing of our Counsels etc., I felt,  I should let our members know about the kind of issues that are being handled in the  case in SC.      I thought  they should have their own assessments on possible outcome based on such information. So I took them through  the major aspects of objections raised in the Counter Affidavit of LIC, to our SLP, filed in the SC.   

Some of the important objections raised by LIC in their Counter relate to:

1. No express provision in the Pension Rules re: Revision of Pension, and that as per the existing Rules, once, at Retirement, if the Basic Pension is worked out, it stays static for life. Since this practice is uniformly followed in respect of all retirees, it does not violate Article 14.

Our stand on these :  No express provision being there in Pension Rules, for Revision of Pension, does not mean it cannot be done; there is no express provision in Staff Regulations, as one enters the Service of LIC, that there would be Salary Revisions, and yet with relentless regularity of every 5 years, Revision of salary, is being carried out. And Rule 56 of Pension Rules (quoted later in this circular), does provide the way out for Revision in Pensions. As for uniform (bad) treatment, to all people retiring, by making the Basic Pension static,  does not make it fair or just, and it does attract Art 14 in terms of discrimination  between past and present Retirees.

Interestingly, the Terms of reference for the 7th Pay Commission expressly asked the C P C to examine the" structure of Pensions including Revision of Pension". The very same Central Govt is now apparently denying this principle to us. In the C P C Report (Pages 392-396) it draws the historical background of the earlier Pay Commissions too, favouring some form of Revision of Pension to keep "parity".  "The commission took the view that the process of bridging the gap in pension of past pensioners ............. needed to be continued so as to achieve complete parity over a period of time".

The gap in pensions of past retirees,  as against the current ones,  comes up because, in one stream, viz., the in-service employees, keep getting 5 yearly revisions in salary, whereas, in the other stream, of those that are already retired, keep going, on a fixed Basic pension. This brings up a glaring anomaly of a Chairman or MD of LIC, who retired 25 years back, getting a pension which is much lower than a retiring Assistant, in current times! This anomaly has given rise to discrimination of a serious kind that would offend Art 14 and Art 21 (Right to life)  of the constitution. Courts generally rely on aspects that attract constitutional guarantees and therefore this matter could be projected to get justice.

2. The other objection of LIC in its counter relates to comparison with Central Govt Pension:

i). They say there is no statutory provision  which provides  that the Pensions of Central Govt. and LIC are to be treated similarly;

ii). Central Govt Pensions are on a 'pay as you go' principle and their pensions are paid out of the Consolidated Fund of India, whereas, ours in LIC, is a Funded scheme;

iii). LIC is an organization based on commercial lines, whereas it is not so for the Central Govt.

Our reply to the first objection is that there is a Rule 56 in our Pension rules, which emphatically provides,   " where matters relating to Pension and Benefits in respect of which no express provision has been made in these rules, shall be governed by the corresponding provisions contained in the Central Services (Pension) rules 1972, or the Central Services (commutation of Pension rules 1981) applicable for Central Govt employees"

This Rule 56 means, (a) where no express provision is there, it need not be interpreted as a static and unchanging position, and  (b) that comparison  to Central Govt  Pension Scheme is very much part of statutory  provision.

As for the second point on Funds, the Pension Rules states, "The Corporation shall be a contributor to the Fund and shall ensure that sufficient sums are placed in it to enable the Trustees to make due payments to Beneficiaries under these Rules."

Regarding the point that LIC is in the nature of a commercial Organization which Central Govt is not, our response is that BSNL and DVC (Damodar Valley  Corporation) are also in the nature of Commercial Organizations, and are yet under the Pension Scheme of the Central Govt.

Quite interestingly LIC itself gives us the point that comparison with Central Govt Pension Scheme is very much in order, through its Board Resolution of 2001, which , till now, remains unresponded by Central Govt, to LIC : ..."there was need to upgrade the Pension, due to periodic Revisions in the case of Central Govt employees, as incorporated in the central Civil Services Pension Rules, on the basis of which the LIC of India Pension Rules have been drafted."

Can the LIC now disown their own reasoning just as a matter of expediency?

The matter regarding anomaly in D R for pre-97 Retirees, The Delhi High Court judgment itself agrees that it is discriminatory and it offends Art 14. The only shortage is that they have NOT clearly ruled that Rule 3A of Appendix IV of Pension Rules is constitutionally not valid and it should be struck down. Further the DHC judgment has compounded the issue by prescribing their own Rates of Neutralization of DR for pre 97 retirees, which, because of their faulty perception, does not amount to 100%, and hence the disparity continues. This point is also raised in our Reply to SC, and we hope, that the shortage will be corrected, as in principle, they are in agreement that the differential DR rates based on periods of Retirement is discriminatory.

While we do have our good reasons to believe that we have a strong case, Courts have their own ways of weighing matters, and one can't predict results with any great accuracy. It also depends on how the Counsels of all 6 Petitioners (even if not jointly but severally) put up their points in the SC.  Subject to these aspects, we really trust that our matters will get the changes prayed for. And it has to be also remembered that the Hearing on the 24th of July is for Admission of our SLP, and the hope is that the arguments at admission stage itself, will lead to a Final decision.

Hoping for the best and wishing all of you the very best.   

D.Krishnan.                                                                                                                                              General  Secretary

PS:

While  concluding  this  writing,  we  understand  that UOI,  like  “Rip Van Winkle”, silent  for  a  long  spell,  have  started  filing  the  counter  to  SLP, repeating  the   parrot  like  story and  resisting  even  the  DR  issue.  This  may  need  our  further  attention