- (1.) These two writ petitions involve common issues, thus are being heard and decided by this order.
(2.) The petitioners are those who retired from the service of Life Insurance Corporation of India (for short 'the LIC of India'). First ground raised by the petitioners and common in both the writ petitions is regarding discrimination in grant of pensionary benefits. It is stated that on 28.6.1995, LIC of India (Employees) Pension Rules, 1995 (for short 'the Pension Rules') were notified. THE Pension Rules were made applicable to the employees, who were in service of the respondent Corporation on or after 1.1.1986, on their exercising options to be governed by the Pension Rules and refunding the contribution of provident fund with interest. For those employees, who retired after 28.6.1995, the Pension Rules were made compulsory. Chapter - IV of the Pension Rules provides rates of pension. Rule 35(2) of the Pension Rules provides that if an employee, has completed qualifying service of not less than 33 years, then his pension would be 50% of the average emoluments. THE grievance of the petitioners is in regard to the grant of dearness allowance, inasmuch as, dearness allowance benefit has been attached on the basic pension and not on the basic pay. To clarify the above, it is submitted that benefit of dearness allowance after revision of the pay scale in the year 1996 was provided as under:- "Dearness formula" Basic Pay Rate of DA for every 4 points i) Upto Rs.4800 0.35% of pay ii) Rs.4801 to 7700 0.25% of 4800 plus 0.29% of pay in excess of Rs.4800 iii) Rs.7701 to 8200 0.35% of 4800 plus 0.29% of difference between Rs.7700 and Rs.4800 plus 0.17% of pay in excess of Rs.7700 iv) Rs.8201 and above 0.35% of Rs.4800 plus 0.29% of difference between Rs.7700 and Rs.4800 plus 0.17% of difference between Rs.8200 and Rs.7700 plus 0.09% of basic pay in excess of Rs.8200 Aforesaid formula was available till Pension Rules came in the year 1995. Under the Pension Rules, the benefit of dearness allowance was provided in the following manner:- Scale of Back pension per month Rate of dearness relief as a percentage of basic pension Upto Rs.2400 0.35% ii) Rs.2401 to 3850 0.35% of Rs.2400 plus 0.29% of basic pension in excess of Rs.2400 iii) Rs.3851 to 4100 0.35% of Rs.2400 plus 0.29% of the difference between Rs.3850 and Rs.2400 plus 0.17% of basic pension in excess of Rs.3850 iv) Above Rs.4100 0.35% of Rs.2400 plus 0.29% of difference between Rs.3850 and Rs.2400 plus 0.17% of the difference between Rs.4100 and Rs.3850 plus 0.09% of basic pension in excess of Rs.4100 In view of the aforesaid, benefit of dearness allowance at the first step being 0.35% remains upto basic pension of Rs.2400/- only whereas aforesaid percentage of dearness allowance is allowed on the basic pay upto Rs.4800/-. To understand the aforesaid difference, a comparative chart was submitted by the petitioners, which is quoted hereunder:- "Comparative Chart" Pay upto Rate of DA/DR Pension 1 Upto 4800 0.35% of pay Upto 2400 1 From 4801 to 7700 0.29% of pay From 2401 to 3850 From 7701 to 8200 0.17% of pay From 3851 to 4100 1 Above 8200 0.09% of pay Above 4100 Perusal of the aforesaid Chart shows that increase in the DA/DR was less for the pensioners because the benefit of DA/DR was reduced to the extent of 50% on proportion basis from the basic pay as an employee having qualifying pensionable service of 33 years or more gets 50% of. the pay as pension. Learned counsel for petitioners prayed that slab of dearness allowance should be kept the same as is payable to the employees. In other words, it should not be reduced proportionately to the basic pension. Thus, first grievance of the petitioners is in regard to reduction of benefit of dearness allowance.
(3.) The other issue raised in S.B. Civil Writ Petition No.6676/1998 - Krishna Murari Lal Asthana vs. Union of India and Others pertains to non-grant of benefit of stagnation increment. Learned counsel for petitioners, advancing the arguments for first issue, submitted that non-grant of due benefit of dearness allowance to the retired employees is not only arbitrary but discriminatory in nature. After filing of the writ petition by Krishna Murari Lal Asthana, the LIC itself passed a resolution in its meeting held on 24.11.2001. On realizing the mistake, the LIC decided to sort out the issue by proper remedy, but finally left it to the discretion of the Union of India to take a final decision. If the resolution dated 24.11.2001 is implemented, then grievance of the petitioners can come to an end. This is more so when the LIC is an independent body constituted under the Act of Parliament and is controlled by its Board. The Central Government cannot sit on the decision taken by the Board within the framework of the Rules. However, in the present matter, despite the Board's resolution, petitioners have not been given relief for the reason that Government of India has not taken any decision on the aforesaid resolution dated 24.11.2001. Referring to the provisions of Section 21 of the LIC Act, it was submitted that only in regard to the matter of policy involving public interest, the Central Government may issue guidelines. Thus, aforesaid provision does not bar for implementation of the resolution passed by the Board as it is not otherwise contrary to the public interest. This is more so when the pensioners who retired after 31.7.1997 are getting the benefit of dearness allowance on the basic pay and not on the basic pension, thus pensioners have been divided in two categories in a discriminatory manner. Even the cut off date fixed becomes arbitrary between the two categories of pensioners more so when benefit of dearness allowance was not a new benefit. Thus, any change in the benefit of pension has to be made without a cut off date. The legal position in that regard is quite clear. In view of the catena of judgments of the Hon'ble Apex Court, if there is a change in the benefit of existing pensioners, change has to be made effective to all without a cut off date inasmuch as cut off date in such cases are held to be arbitrary. In a case where pension is allowed for the first time, then a cut off date can be provided. My attention was drawn towards the judgment of the Hon'ble Apex Court in the case of V. Kasturi vs. State Bank of India, 1999 AIR(SC) 81 wherein aforesaid issue has been dealt with. Same view has been expressed by the Hon'ble Apex Court in the case of Union of India vs. Dr. Vijayappurapu Subhayamma, 2000 AIR(SC) 3113 and was even reiterated in the case of Subrata Sen vs. Union of India, 2001 8 SCC 71. In reference to aforesaid judgments, it was urged that there can be no difference in the benefit of dearness allowance to the employees retired before 31.7.1997 and those retired after the aforesaid date. In reference to Section 21 of the LIC Act, it is submitted that a formal approval of the Government of India was not required to the Board's decision dated 24.11.2001. A reference of the judgment in the case of UGC Class-I Officers Association vs. University Grants Commissioner,2000 7 SLR 17 was made apart from the judgment of the Hon'ble Apex Court in the case of HEC Voluntary Retd. Employees Welfare Society vs. Heavy Engg. Corporation, 2006 3 SCC 708. Therein it was held that a body created under the Act or even the Government agency need not to seek approval of every decision taken by its Board for day-to-day functioning of the Company. In reference to aforesaid, it is submitted that when the Board of Directors have already taken a decision on 24.11.2001, then there is no need of its sanction by the Central Government.;