In Para 105 of the Delhi High Court judgment dated 27/4/ 2017, while dealing with our contention of discrimination through Rule 55 B of LIC Pension Rules, 1995, the Bench has observed as follows:
"105. Lastly, we will deal with the contention of the retired employees/associations that the pension scheme is discriminatory as
the Corporation is extending benefit of periodical revalorization of pension to Managing Director and Chairman under Rule 55B, who also receive payment from the pension fund. As per Rule 55B, notwithstanding anything contained in the pension rules, an employeeappointed as Managing Director under Section 20 of the Act, who was in service on or after 1st January, 1996, the pensionary benefit shall be calculated in accordance with the provisions of Central Civil Service (Pension) Rules, 1972, Central Civil Services (Commutation of Pension) Rules, 1981 and in accordance with the instructions issued by the Central Government thereunder from time to time. 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".
We need to refute this contention by judging Rule 55B on the twin test of a classification not violating Article 14 of the Constitution.The first test is that the classification is done based on intelligible differentia and the second test is that the clarification should have a nexus to the object to be achieved.
As for the first test, in my opinion, the following reasons prove that classification of these top two cadre officers for a discriminatory treatment providing them benefits not avalable to other lower cadre employees does not satisfy this test:
1.The two top cadre officers are whole time officers of the Corporation similar to other lower level employees and having exercised the option for pension are also covered by the same LIC(Employees) Pension Rules 1995.
2.For the above reason they are paid pension from the same Pension Fund by LIC and not by the Central Government.
3.The Contribution by the Corporation to the Pension Fund for this category of Officers is also on the same scale as that of all the pension optees not coming under Rule 55 B.
4.However, additional contribution to the Pension Fund based on actuarial valuation for these two cadres is made also including the quantum required for meeting the additional liability arising out of the need for payment of upgraded pension based on CPC Recommendations once in ten years.
With all these types of discrimination prevailing, the criterion cannot be based on intellegible differentia when there is no differentiation for these officers in the act of their being covered by LIC Pension Rules 1995.
Now let us come to the second test of the classification having a nexus ( rational relationship) to the object of the classification .
1.It has been stated by LIC and Union of India 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.
But this is only a matter of expediency as the appointing authority for both the cadres is the Central Government unlike for for lower level cadre employees where the appointing authorities were from within the Corporation.When the requirement of approval of the Appointment Committee of the Cabinet was prevailing even before the notification of the Pension Rules, it defies logic as to why the Chairman & MDs retired between 1/1/1986 and 31/12/1995 who had opted for pension were not brought under the Rule 55 B.
Also the anomaly could very well have been rectified by applying the definition of 'pay' under Rule 2(o)(iv) by notionally adding the Dearness Allowance calculated upto Index number 1148 in the All India Consumer Price Index for Industrial Workers in the series 1960=100 and applying DR rate as per Appendix IV of LIC Pension Rules 1995 .This rule was in existence till 13/8/2001 when it was deleted .Rule 2(o)(iv) was applied for all retirees upto the cadre of Executive Directors and below in respect of period of retirement from 1/8/1987 to 31/7/1992( in case of Class III & IV employees) or upto 31/3/1993(in case of Class I & II Officers) till the scales of pay were revised by the wage revision notification issued in July 1996 effective from 1/8/1992, when the revised pension was fixed based on revised salary.
Thus it cannot be said that there was a rational nexus with the object to be achieved by this classification. [
The inference therefore is that the classification of pensioners through Rule 55 B fails the twin test for not being treated as violation of Article 14 of the Constitution .
One thing more that emerges from this is that the reason cited for notifying Rule 55 B is for the anomaly confined to the top two cadre officers with a cut off date 1/1/1996, while there were similarly placed top two cadre officers who also retired between 1/1/1986 & 31/12/1995 whose salary & DR would have been calculated at 608 index points.
2.Besides, the object sought to be achieved by this classification has defeated the object of Rule 56, which , instead of having to be implemented for all pensionable employees, is being implemented selectively for only the top two cadre officers covered by Rule 55 B.
In a way , if Rule 56 had been implemented for all pensioners,there would have been no need for insertion of Rule 55 B in the LIC Pension Rules 1995 as the intended benefits under the Rule would have automatically flowed to the top two cadres of Officers.
Our Senior Counsel need to argue strongly on the above points before the SC Bench on 7/12/2022.
An Article By Shri.C H Mahadevan
( Former Exicutive Director LIC)
No comments:
Post a Comment