Skip to content


Life Insurance Corporation of India vs.krishna Murari Lal Asthana & Ors - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
AppellantLife Insurance Corporation of India
RespondentKrishna Murari Lal Asthana & Ors
Excerpt:
.....to the retired employees. appendix 4 to the 1995 rules, reads as under: “dearness relief on basic pension shall be as under: (1) in the case of employees who retired on or after the 1st day of january, 1986, but before the 1st day of november, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as that case may be of every 4 points over 600 points in the quarterly average of the all india average consumer price index, for industrial workers in the series 1960 = 100. such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below: scale pension per month of basic (1) the rate of dearness relief as a percentage of basic pension (2) w.p. (c) no.9440/2016 & connected matters page 5 of 18 (i) upto.....
Judgment:

IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on :

17. h October, 2016 Date of decision:

11. h November, 2016 $~ * + W.P.(C) 9440/2016 LIFE INSURANCE CORPORATION OF INDIA ........ Petitioner

Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. versus KRISHNA MURARI LAL ASTHANA & ORS ..... Respondent Through Mr. Kumar Gaurav, Advocate. W.P.(C) 9441/2016 KRISHNA MURARI LAL ASTHANA & ORS Through Mr. Kumar Gaurav, Advocate. ........ Petitioner

versus LIFE INSURANCE CORPORATION OF INDIA & ANR ..... Respondent Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. W.P.(C) 9442/2016 LIFE INSURANCE CORPORATION OF INDIA & ORS..Petitioner Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. W.P. (C) No.9440/2016 & Connected matters Page 1 of 18 KRISHNA MURARI LAL ASTHANA & ANR versus Through Mr. Kumar Gaurav, Advocate. ..... Respondent W.P.(C) 184/2007 FEDERATION OF RETIRED LIC CLASS I OFFICER........ Petitioner

Through versus UOI & ORS. ..... Respondent Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. Ms. Abha Malhotra, Advocate for UOI. W.P.(C) 3983/2016 MADAN LAL GANDHI AND ORS Through Ms. Renuka Sahu, Advocate. ........ Petitioner

versus UNION OF INDIA AND ORS ..... Respondent Through Ms. Abha Malhotra, Advocate for UOI. Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. W.P.(C) 3984/2016 KRISHNA MURARI LAL ASTHANA Through Mr. Kumar Gaurav, Advocate. ........ Petitioner

versus W.P. (C) No.9440/2016 & Connected matters Page 2 of 18 UNION OF INDIA AND ORS ..... Respondent Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. W.P.(C) 4894/2016 RETIRED LIC CLASS I OFFICERS ASSOCIATION HYDERABAD Through Mr. Gourab Banerji, Sr. Advocate with Mr. Saurav Agrawal, Mr. Ashish Tiwari and Mr. M. Sreenivas Murthy, Advocates. ........ Petitioner

versus LIFE INSURANCE CORPORATION OF INDIA AND ANR ..... Respondent Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. Mr. Vivek Goyal, Advocate for UOI. W.P.(C) 5868/2016 ALL INDIA INSURANCE PENSIONERS ASSOCIATION AND ORS ........ Petitioner

Through Mr. Nag Mohan Dass, Sr. Advocate with Mr. Som Dutt Sharma, Advocate. versus UNION OF INDIA AND ORS ..... Respondent Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. Mr. Dev P. Bhardwaj, CGSC. W.P. (C) No.9440/2016 & Connected matters Page 3 of 18 W.P.(C) 5903/2016 ALL INDIA RETIRED INSURANCE EMPLOYEES FEDERATION ........ Petitioner

Through Mr. Nidhesh Gupta, Sr. Advocate with Mr. R.K. Singh and Mr. B.N. Dubey, Advocates. LIFE INSURANCE CORPORATION OF INDIA & ANR versus ... Respondent Through Mr. Tushar Mehta, ASG with Mr. Dayan Krishnan, Sr. Advocate, Mr. Ashok Panigrahi and Mr. Surajit Bhaduri, Advocates. Mr. Bhagvan Swarup Shukla, CGSC. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MS. JUSTICE SUNITA GUPTA SANJIV KHANNA, J.

1. This order will decide the controversy relating to compliance of the interim directions given by the Supreme Court in paragraph 27 of their judgment and order dated 31st March, 2016 passed in Civil Appeal Nos.8959-8962/2013 titled LIC of India & Ors. Vs. Krishna Murari Lal Asthana & Anr. and other connected appeals. By the subsequent order dated 31st August, 2016, the Supreme Court had observed that if there be any dispute with regard to the quantum i.e. the quantum payable in terms of paragraph 27 of their order dated 31st March, 2016, it would be addressed by the High Court.

2. For deciding the present controversy, i.e. whether or not there W.P. (C) No.9440/2016 & Connected matters Page 4 of 18 has been compliance of the interim directions of payment given in paragraph 27 of the order dated 31st March, 2016 passed by the Supreme Court, we are only required to notice limited facts.

3. The petitioner before us in W.P. (C) Nos. 9440 and 9442 of 2016 is the Life Insurance Corporation of India, and in the remaining petitions are the retired employees or associations of retired employees of the Life Insurance Corporation of India („Corporation‟ for short), who is the main contesting respondent along with the Union of India.

4. In exercise of power conferred by Section 48 of the Life Insurance Corporation Act, 1956, the Central Government has framed the Life Insurance Corporation of India (Employees‟) Pension Rules 1995 („1995 Rules‟ for short). Rule 37 of the 1995 Rules relates to Dearness Relief, payable to the retired employees. Appendix 4 to the 1995 Rules, reads as under: “Dearness relief on basic pension shall be as under: (1) In the case of employees who retired on or after the 1st day of January, 1986, but before the 1st day of November, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as that case may be of every 4 points over 600 points in the quarterly average of the All India Average Consumer Price Index, for Industrial Workers in the series 1960 = 100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below: Scale pension per month of basic (1) The rate of dearness relief as a percentage of basic pension (2) W.P. (C) No.9440/2016 & Connected matters Page 5 of 18 (i) upto Rs.1250/- (ii) Rs.1251/- to Rs.2,000/- (iii) Rs.2001/- to Rs.2130/- (iv) aboveRs.2130/- in of excess 0.67 per cent 0.67 per cent of Rs.1250 plus 0.55 per cent of basic pension of Rs.1250/

67 per cent of Rs.1250/- plus 0.55 per cent of the difference between Rs.2000/- and Rs.1250/- plus 0.33 per cent of basic pension in excess of Rs.2000/

67 per cent of Rs.1250/- plus 0.55 per cent of the difference between Rs.2000/- and Rs.1250/- plus 0.33 per difference cent between Rs.2130/- and Rs.2000/- plus 0.17 per cent of basic pension in excess of Rs.2130/- the (2) In the case of employees who retire on or after the 1st day of November, 1993, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 1148 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960 = 100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below: Scale pension per month of basic (1) The rate of dearness relief as a percentage of basic pension (2) (i) upto Rs.2400/- (ii) Rs.2401 to Rs.3850/

35 per cent 0.35 per cent of Rs.2,400/- plus 0.29 per cent of basic W.P. (C) No.9440/2016 & Connected matters Page 6 of 18 (iii) Rs.3,851 to Rs.4,100/- in of excess pension Rs.2,400/

35 per cent of Rs.2,400/- plus 0.29 per cent of the difference between Rs.3,850 and Rs.2,400/- plus 0.17 per Page 8 8 cent of basic pension of Rs.3,850/- excess in (iv) above Rs.4,100/

35 per cent of Rs.2,400/- plus 0.29 per cent of the difference between Rs.3,850 and Rs.2,400/- plus 0.17 per cent difference between Rs.4,100/- and Rs.3,850/- plus 0.09 per cent of basic pension in excess of Rs.4,100/- the of (3) Notwithstanding anything contained in Para (1) and Para (2), in respect of employees belonging to Class- III and Class-IV, who have retired on or after the 1st day of August, 1992 and in respect of Officers belonging to Class-I and Class-II, retired on or after 1st day of April, 1993, dearness relief shall be payable or be recoverable as may be determined from time to time. 3(A) In case of employees who have retired or died on or after the 1st day of August 1997, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.23 per cent of the Basic Pension; 3(B) In case of any wage revision in future the rate of W.P. (C) No.9440/2016 & Connected matters Page 7 of 18 dearness relief payable to an employee shall be determined by the Corporation corresponding to the index to which the case is linked. (The Corporation has determined that in case of employees who have retired or died on or after the 1st day of August 2002, the dearness relief shall be payable for every rise or to be recoverable for every fall, as the case may be, of every 4 points over 2328 points in the quarterly Average Consumer Price Index for Industrial Workers in the series of 1960 = 100 Such increase or decrease in dearness relief for every said 4 points shall be at the rate of 0.18 per cent of the Basic Pension). (4) Dearness relief shall be payable for the half year commencing from the 1st day of February and ending with 31st day of July on the quarterly average of the index figures published for the months of October, November and December of the previous year and for the half year commencing from the 1st day of August and ending with the 31st day of January on the quarterly average of the index figures published for the months of April, May and June of the same year. (5) In the case of family pension, invalid pension and compassionate allowance, dearness relief shall be payable in accordance with the rates mentioned above. (6) Dearness relief will be allowed on full basic pension even after commutation. (7) Dearness relief is not payable on additional pension.” 5. Appendix IV relating to Dearness Relief divides the retired employees into three different categories. Clause 1 of appendix IV relates to employees, who had retired on or after 1st January, W.P. (C) No.9440/2016 & Connected matters Page 8 of 18 1986, but before 1st November, 1993. For these retirees Dearness Relief is payable/recoverable on the basis of increase/decrease 4 points over/under 600 points in the quarterly average of the All India Average Consumer Price Index series 1960, which is taken as the base year equal to hundred. The graded table given in paragraph 1 is used for computing the Dearness Relief.

6. Paragraph 2 of Appendix IV deals with employees who had retired on or after the first day of November, 1993 and the said retired employees are entitled to benefit Dearness Relief for every 4 points over 1148 points in the quarterly average of All India Average Consumer Price Index Series 1960. The increase is to be computed as per the scale / table mentioned therein.

7. Paragraph 3A, which is the clause of relevance pertaining to the present controversy, relates to employees who had retired on or after 1st August, 1997. These employees are to be paid Dearness Relief for every rise of 4 points over 1740 points in the quarterly Average Consumer Price Index for Industrial Workers 1960 series = 100. Increase or reduction of Dearness Relief for every 4 points is calculated at the rate of 0.23% of the basic pension. Clause 3A does not, unlike clauses 1 or 2, refer to a table or chart setting a scaled formula for payment of Dearness Relief.

8. The current controversy and dispute arose after the Board of Directors of the Corporation had passed the resolution dated 24th November, 2001 for up-gradation of basic pension to All W.P. (C) No.9440/2016 & Connected matters Page 9 of 18 India Consumer Price Index of 1740 points, and simultaneously grant 100% Dearness Allowance neutralization, for the retirees prior to 1st August, 1997. The said resolution was forwarded to the Joint Secretary (Insurance and Banking) of the Government of India, seeking amendment to the 1995 Rules. However, nothing happened thereafter and the amendment was not made.

9. Aggrieved by the non-action, Writ Petition Nos.6676/1998 and 654/2007 were filed before the Rajasthan High Court. On the basis of concessions made, directions were issued for implementation of the Board resolution dated 24th November, 2001. It was observed that the Corporation cannot provide different criteria for grant of Dearness Allowance based upon the cut off date i.e. 31st July, 1997. Two intra court appeals bearing Civil Special Appeal (W) Nos.493 and 494/2010 were filed and were disposed of by the order dated 21st January, 2011, which was made the subject matter of challenge before the Supreme Court in Civil Appeal Nos.6995/2013 and 9223/2013. The Supreme Court after referring to the Life Insurance Corporation Act, 1956, held that benefit could not have been granted on the basis of a mere resolution by the Board, for an amendment to the rule was mandated and as per Section 48 of the Act the amended Rule had to be tabled before Parliament. Having held so, the Supreme Court noticed the second facet of the controversy relating to the challenge to the legality of paragraph 3A of the Appendix restrictively applicable to some employees who had retired on or after 1st W.P. (C) No.9440/2016 & Connected matters Page 10 of 18 day of August, 1997 and not to employees who had retired earlier in point of time. The Supreme Court referred to the contention of the parties and noticed that the High Court of Delhi had disposed of the Writ petition No.184/2007, which was challenged before the Supreme Court in Civil Appeal No.9223/2013 on the basis of the judgment of the Rajasthan High Court, without adverting to the challenge to the constitutional validity of paragraph 3A of the Appendix IV. Orders had also been passed by the Punjab and Haryana High Court. As challenge to the constitutional validity of paragraph 3A of the Appendix IV had not been examined and addressed, the Supreme Court has directed as under: “23. Regard being had to the piquant situation, we are inclined to set aside the orders passed by the High Courts of Rajasthan, Delhi and Punjab & Haryana at Chandigarh and transfer the writ petitions from the High Courts of Rajasthan and Punjab & Haryana to the High Court of Delhi, which will decide the constitutional validity of Para 3A of the Appendix to the Rules, as argued by Mr. Panchu, the respondents, and also deal with the cases of the persons, who have retired after the cut-off date, consider the contentions raised by Mr. Gupta, learned senior counsel and the other contentions to be raised. However, we may clarify that we have not expressed any opinion on the merits of the case, except that the resolution could not become operative unless it was conferred the status of a rule as provided under Section 48 of the Act.” learned senior counsel appearing for 10. Earlier on 7th May, 2015, the Supreme Court while hearing the W.P. (C) No.9440/2016 & Connected matters Page 11 of 18 aforesaid appeals had passed the following interim order: “As an ad-interim measure, it is directed that the petitioner-Corporation shall release 20% of the amount as per the impugned judgments pertaining to the High Court, in favour of the respondent-employees within six weeks hence, subject to final result in the appeals. If any amount, that has been deposited before the High Court pursuant to the order passed by this Court, 20% of the same shall be released in favour of the Life Insurance Corporation of India, so that it can pay to the concerned employees. In case, where the amount has not been deposited, needless to emphasize, the Corporation shall pay and question of any kind of withdrawal from court does not arise. Needless to say, the payment in continuum shall be considered when the appeals are taken up for hearing.” The controversy had arisen before the Supreme Court whether the respondent Corporation had paid 20% of the amount as directed. This facet of the controversy was noticed in paragraph 25 and following observations and directions were made in paragraph 25 to 27: “25. A grievance has been raised by the learned counsel for the respondents that the Corporation has really not paid the twenty percent of the amount. The same is seriously refuted by learned Additional Solicitor General on the count that they have deposited the amount as per Para 3A of the Appendix, but not given the benefit of pay revisions, as claimed by the certain respondents- employees.

26. We have been appraised at the Bar that the respondents had harboured hope when the resolution was passed. Their hope, as the learned counsel for the W.P. (C) No.9440/2016 & Connected matters Page 12 of 18 respondents would submit, was not unfounded, inasmuch as the revisions in pension were earlier made by issue of certain circulars issued by the Chairman in exercise of power conferred under Rule 55 of the 1995 Rules. Whether the hope was reasonable or not need not be commented upon, but the fact remains that certain respondents are septuagenarians and they have to fight another round of litigation in the High Court. We feel the pain while remanding the matter, but we have no option as the pleadings are not adequate as it should have been while assailing a constitutional validity of a provision. It is well settled in law that he who assails the constitutional validity of a statutory provision or a rule, has to specially assert the grounds for such challenge. [See State of Uttar Pradesh v. Kartar Singh AIR1964SC1135 State of Andhra Pradesh and another v. K. Jayaraman and others (1974) 2 SCC738 Union of India v. E.I.D. Parry (India) Ltd. (2000) 2 SCC223, State of Haryana v. State of Punjab & another(2004) 12 SCC673. The purpose of saying all this is as the learned counsel for the respondents would agonizingly contend that the amount of pension the respondents are getting is a paltry sum and it is difficult to sustain in the present day. That apart, the Corporation should have been gracious enough to recognize the services rendered by them and the Union of India should have come with an affirmative response when the resolution was passed by the Corporation. We have already adjudicated the said facet, but as we are remanding the matter to the High Court on a different count. In such a situation, we are of the convinced opinion that the respondents should get certain amount as an interim measure. We had already directed by the order dated 7th May, 2015 that the Corporation shall pay 20% amount to the individual employees. Mr. Kaul, learned Additional Solicitor General would submit that the Corporation has already deposited the entire amount without the pay Rajasthan and Punjab & Haryana at Chandigarh are of revision before the High Courts W.P. (C) No.9440/2016 & Connected matters Page 13 of 18 concerned regard being had to the order of this Court. As far as the High Court of Delhi is concerned, employees have been paid 20%, as directed by this Court. The said fact is disputed by learned counsel for the respondents after obtaining instructions. The said aspect shall not detain us, for what we are going to direct in praesenti. in view the totality of 27. Keeping facts and circumstances of the case, it is hereby directed that the Corporation shall pay 40% as per Para 3A of the Appendix to each of the employees within six weeks and shall file an affidavit before the High Court of Delhi to the said effect. The Corporation is at liberty to withdraw the amount deposited in the Courts so that it can pay the employees who have retired. Needless to emphasize, the aforesaid payment shall be subject to final results in the writ petitions.” A reading of the paragraph 26 would show that the respondent Corporation had stated that they had deposited the amount i.e. 20% of the amount, as per paragraph 3A of Appendix IV of the Rules. It was also clarified by the Corporation that in terms of paragraph 3A, the Corporation had not given any benefit of pay revisions or up-gradation. The Supreme Court noticed that the retired employees included septuagenarians and they were receiving a paltry sum as pension and thereby were finding it difficult to sustain themselves. Recording that the Corporation had been earlier directed to pay 20% of the amount vide interim order dated 7th May, 2015, the Supreme Court noticed the lis and dispute, whether the payment was correctly quantified. The retired employees had contested the computation and the resultant deposit. The Supreme Court observed that this aspect W.P. (C) No.9440/2016 & Connected matters Page 14 of 18 would not detain them for the directions they were issuing in praesenti, i.e. paragraph 27.

11. Paragraph 27 of the said order directs that the Corporation shall pay 40% to each employee within six weeks and an affidavit to the said effect would be filed before the Delhi High Court. The Supreme Court in view of the conflicting stand on the question, whether there was compliance of the order dated 7th May, 2015 which had directed 20% payment in terms thereof, thought it appropriate to direct the Corporation to pay 40% of the amount due as per paragraph 3A of Appendix IV of the 1995 Rules. This was an interim mandate and direction. Noticeably paragraph 25 of the same order records the stand of the Additional Solicitor General on behalf of the Corporation that they had already deposited 20% as per paragraph 3A of the Appendix. In other words, we are of the opinion that the Supreme Court had directed doubling of the said amount i.e. instead of 20%, the interim payment would be at the enhanced amount, being 40% of the amount payable as per paragraph 3A of the Appendix.

12. We have already reproduced the paragraph 3A of the Appendix IV and interpreted the same. The said paragraph states that for every 4 points over 1740 points in the Quarterly Average Consumer Price Index, Dearness Allowance will be increased @ 0.23% of the basic pension. This clause is applicable to employees, who have retired or died on or after 1st August, 1997. The Index of 1740 mentioned in paragraph 3A is the W.P. (C) No.9440/2016 & Connected matters Page 15 of 18 Quarterly Average Consumer Price Index, 1960 as on 31st July, 1997.

13. The respondent Corporation in their compliance affidavit has stated as under: “10. Thus, the interim relief is the difference of pension and dearness relief calculated as per the said Board Resolution. The Board Resolution approved the proposal contained in the Board Note and the proposal contained in the Board Note is as follows: It is suggested that the following updation formula to upgrade the basic pension/ family pension in respect of employees who have retired between 1.1.1986 to 31.07.1997 may be adopted: (a) The basic pension / family pension payable in relation to AICPI600points or 1148 points, as the case may be, shall be upgraded by merging the Dearness Relief payable upto AICPI1740points; and on the pension so upgraded, Dearness Relief of 0.23% of basic pension shall be paid or become recoverable for every 4 point rise or fall of AICPI from 1740 points.” (b) In other words, the respondent Corporation to compute the basic pension as on 31st July, 1997 has taken the figure of the basic pension payable plus the Dearness Relief accrued thereon up to 31st July, 1997 under Clauses 1 and 2. After 1st August, 1997 Dearness Relief has been computed @ 0.23% for every 4 point raise as per paragraph 3A. This is, according to us, the correct manner to compute and implement the interim order and W.P. (C) No.9440/2016 & Connected matters Page 16 of 18 directions of the Supreme Court. Another way to implement the order of the Supreme Court was to follow the scale of 0.23% for every 4 point increase in the Price Index from the date of retirement of the employee, i.e. to change the computation table mentioned in paragraphs 1 and 2 from the date of retirement so as to compute the Dearness Relief under paragraph 3A. This computation it is pointed out and accepted would be detrimental to the retired employees for they would have received in actual terms, a lower amount than the amount paid in the method applied and followed by the Corporation.

14. Out of 17963 employees who had retired prior to 1st August, 1998, relief in the form of enhanced pension has been paid to 15922 retired employees. However, 2441 retired employees have not got any relief. The total amount disbursed to the retired employees is Rs.29.35 crores.

15. Counsel for the retired employees and association have pleaded that basic pension itself should have been re-worked and increased by 40% and this was the purport of the direction of the Supreme Court. The said contention is not correct and this is not the direction given. During the course of hearing, counsel for the retired employees‟ associations accepted and admitted that they had not worked out the total quantum of increase in pension, payable on increase in Dearness Relief only, without any increase in the basic pension. This is probably the reason why the petitioners are now contending that the quantum of relief granted in monetary terms is merely W.P. (C) No.9440/2016 & Connected matters Page 17 of 18 Rs.46,000/- (approximately) per retired employee.

16. Paragraph 3A of the Appendix IV deals only with Dearness Relief and not the basic pension. We do not find any direction of the Supreme Court that the basic pension should be enhanced and increased by 40%. This being the position the contention of the retired employees and the associations has to be rejected.

17. In view of the aforesaid discussion, we hold that the respondent Corporation has complied with the interim order passed by the Supreme Court.-.sd- SANJIV KHANNA (JUDGE) -sd- SUNITA GUPTA (JUDGE) NOVEMBER11 2016 ssn W.P. (C) No.9440/2016 & Connected matters Page 18 of 18


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //