NOW GK VISWANATHAN RAISES A QUERY AND FLASH THE REPLY COMES FROM SRI C.H.MAHADEVAN ED.(RETD)

On Thursday, August 1, 2019, GK VISWANATHAM <viswam1953@gmail.com> wrote:

Namaste Sir. Very correctly interpreted the provisions of Para 3 A and 3B ( a general permission to LIC to fix DR on the basis of CPI and revision of wages for employees in service, incidentally applicable to employees retiring between effective date of revision and actual date of implementation of revision). 

 Therefore, the thrust on the part of counsels should be that arrears of DR as IR paid at the behest of Court by LIC is correct and as a natural corollary, becomes a fit case for post 1997 retirees also, successively every five years thereafter. But insofar as Rules, self supporting the Upgradation should LIC decide or be directed to, by the SC, it may fall within the ambit of Rule 5(2) and 13(B), if not in so many words, specific.

Bye Sir,

G K VISWANATHAM

REPLY BY SRI C.H.MAHADEVAN RETD.ED.

Rule 5(3) & Rule 13(b) become relevant only when the financial viability of upgradation of upgradation is raised.These Rules are applicable to the Very foundation of the LIC Pension Scheme 1995.If financial affordability is relevant,then at a later date,

God forbid,LIC gets into financial crunch like Air India or BSNL/MTNL,they may put forth an argument for reduction in pension or abolition of the Scheme.The purpose of creation of the separate Trust is therefore to insulate the pensioners from such risks by creating a separate Fund and providing for annual Actuarial Valuations so that the Fund is kept adequate for meeting the legal liability towards payment of pension to eligible employees of the Corporation.

Rule 13(b) provides as follows:

“13 (b) the trust shall, subject to the availability of additional sums in the Fund, to be provided by the Corporation as required under rule 5 (3) purchase additional annuities as and when it becomes necessary to revise upwards the benefits payable in accordance with these rules;”

This rule means that even if additional sums are not available in the Fund for payment of upwardly revised benefits payable ,such additional sums have to be provided by the Corporation in terms of Rule 5(3).LIC  may take the stand because of the words, “in accordance with these rules” that these rules do not provide for upgradation of pension.

So the basic question to be addressed in our case before the Supreme Court is whether,LIC is legally and constitutionally liable to pay upgraded pension to pensioners in tandem with increase in salary with every wage revision.On the face of it LIC takes the stand that the Pension Rules do not provide for upgradation of pension.Our stand as petitioners before the Supreme Court is that while Rule 56 makes it incumbent on LIC to apply CCS Pension Rules 1972 to pensioners which has been selectively applied  only to Chairmen and Managing Directors retired after 1/1/1996 by inserting Rule 55 B.Thus not implementing Rule 56 to LIC Pensioners and extending the benefits of CCS Pension Rules only to a small section of employees violates article 14 & 21 of the Corporation because two separate classes of pensioners have been created based on a cut off date of 1/1/1996 which attracts the ratio of the judgment under the D S Nakara case.Here we further need to observe besides the cut off having been created based on date of retirement,cut off has also been created based on cadre without any rationale and object  for such differential criteria on an intelligible justification.

So once it is established that LIC is legally and constitutionally obliged to grant upgradation of pension,”these rules” will carry amendment to that effect.

We need to argue forcibly on the above points before the Supreme Court.

Kind regards.

C H Mahadevan