KERALA v. LIFE INSURANCE CORPORATION OF INDIA

Judgment

1. Appellants/petitioners had retired from the service of Life Insurance Corporation of India (hereinafter called ‘LIC’ for shot) as Class -I officers on 31.10.1992 and 31.08.1992.

2. Government of India issued a notification Ext.P1 dated 18.07.1996 by exercising the powers under Section 48 of the Life Insurance Corporation Act under the head Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions of Service) Amendment Rules, 1985, whereby the terms and conditions of the service of the officers of LIC of India effective from 01.08.1992 was revised on certain terms and conditions. On promulgation of the amended Rules, Chairman issued the instructions that the said Rules would be made applicable from 01.08.1992 with a condition that no arrears shall be payable on account of differences in pay in the existing scale of pay and revised scale of pay after fixation of period from 01.08.1992 to

31.03.1993. Concededly, the appellants/petitioners as stated WA NO. 417 OF 2020 3 above, could not exercise the option as was required to be done in terms of Clause of 2 of Ext.P1 which shall be extracted in the later part of our judgment as they had, by that time ie., after 01.08.1992 superannuated. Realising such piquant situation, jurisdiction under Article 226 of this Court was invoked by claiming following reliefs: (i) Declare that the Petitioners who are Class I Officers of the LIC of India, retired between the period from

01.08.1992 to 31.03.1993 are entitled to all the benefits of pay revision brought into effect from 01- 08-1992 and all consequential benefits. (ii) Issue a writ of mandamus or any other appropriate writ, order or direction directing the Respondents 1 to 3 herein to grant the benefits of pay revision to the Petitioners who are retired Class I Officers with all consequential benefits, treating the revision of pay to have come into effect from 01.08.1992 to all the Class I Officers; (iii) Grant such other reliefs as this Hon'ble Court may be pleased to grant in the facts and circumstances of the case.”

3. It is also averred that association of Class I officers had submitted a representation for inurement of benefits to the employees who had retired after 01.08.1992 but before

01.04.1993. WA NO. 417 OF 2020 4

4. While dealing with the aforementioned claim, reliance was also laid to the Division Bench judgment of the High court of Rajasthan rendered in D.B. Special Appeal (Writ) No.1492/2012 Ext.P3 whereby identical relief has been granted to the similarly situated persons. LIC countered the aforementioned argument in the counter affidavit and averred that the judgment would not be considered in rem but in personam for, similarly situated person had staked their claim with regard to the gratuity on the basis of the amendment in the Rules ibid which was denied by the Single Bench of this Court vide Ext.R1(c) and upheld by the Division Bench vide Ext.R1(d). Reliance was also laid to the proviso to the Rules Ext.P1 that no arrears for the period from

01.08.1992 to 31.03.1993 was payable to the officials. Objection of delay and laches was also raised. Learned Single Bench negated the argument of the petitioner vis-a-vis the

applicability of the judgment of the Rajasthan High Court by applying the ratio decidendi culled out by the Single Bench and upheld by the Division Bench Exts.R1(c) and R1(d) dismissed the writ petition. It is in that background, present WA NO. 417 OF 2020 5 intra court appeal has been preferred.

5. Sri.K.T.Shyam Kumar, learned counsel appearing on behalf of the appellants/petitioners submitted that even if the proviso envisages non payment of arrears, a plain and simple perusal of Clause 2 Ext.P1 notification amending the Rules would definitely protect the interest of Class-I officers who could not exercise the option as the Rules promulgated on 18.07.1996, came into effect with effect from 01.08.1992. Concededly, both petitioners, as noticed above, had retired during the interregnum period ie., between 01.08.1992 to

01.04.1993 and the case is thus squarely covered by the dictum laid down by the Division Bench of Rajasthan High Court and SLP preferred against has also been dismissed. The facts and circumstances in respect of the judgments rendered in Exts.R1(c) and R1(d) pertaining to gratuity which was, by amendment made applicable with effect from 01.08.1994 but not with regard to claim qua revision of pay, thus there is an abdication.

6. On the other hand, learned counsel representing the LIC supported the findings of the Single Bench, relied WA NO. 417 OF 2020 6 upon the findings rendered in Exts.R1(c) and R1(d) and buttressed his argument by submitting that in the absence of any challenge to Ext.P2 instructions, appellants/petitioners cannot stake the claim with regard to revision of pay. It is in that background, the judgment rendered by the Rajasthan High Court has to be read in personam instead in rem. No evidence has been placed on record to show that the appellants/petitioners at any point of time exercised their option in accordance with the provisions contained in Exts.P1 and P2. Appellants/Petitioners did not raise their claim till 2017 perhaps on the premise that upto 2013 when the judgment of Rajasthan High Court came to be pronounced, for, before that there is already a judgment of this Court upheld by the Division Bench Ext.R1(c) and Ext.R1(d) and urged this Court for dismissal of the writ appeal.

7. We have heard the learned counsel for the parties and appraised the paper book.

8. For appreciating the arguments of the learned counsel representing the respective parties, it would be appropriate to extract relevant Rules and Regulations WA NO. 417 OF 2020 7 amended and being genesis for adjudication of the appeal. Life Insurance Corporation of India Class 1 Officers (Revision of Terms & Conditions of Service)(Amendment) Rules, 1996: (TO BE PUBLISHED IN THE GAZETTE OF INDIA IN PART II - SECTION 3 – SUB SECTION (1) – EXTRAORDINARY) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS INSURANCE DIVISION New Delhi, the 18.7.1996. NOTIFICATION LIFE INSURANCE CORPORATION OF INDIA CLASS 1 OFFICERS (REVISION OF TERMS & CONDITIONS OF SERVICE)(AMENDMENT) RULES, 1996 -------------------------------------------------------------------- .S.R. …….In exercise of the powers conferred by Section 48 of the Life Insurance Corporation Act, 1956 (31 of 1956), the Central Government hereby makes the following rules to further amend the Life Insurance Corporation of India Class 1 Officers (Revision of Terms and Conditions of Service) Rules, 1985, namely:-

1. Short title, commencement and application: (1) These rules may be called the Life Insurance Corporation of India Class 1 Officers (Revision of Terms and Conditions of Service) (Amendment) Rules, 1996. (2) Save as otherwise provided hereinafter, the provisions of these rules shall be deemed to have come into force on the 1st day of August, 1992: WA NO. 417 OF 2020 8 Provided that where any Class 1 Officer gives a notice in writing to the Corporation, within thirty days of the publication of these rules in the Official Gazette, expressing his option to be governed by the provisions of any of these rules from a date not earlier than the date on which the said rule comes into force. Then the Corporation may by order permit such officer to be governed by the said rule with effect from the said date: Provided further that no such option may be exercised by a Class I Officer in respect of rule 9A of these rules: Provided also that no arrears for the period prior to the date so chosen shall be payable to such officer.

2. In the Life Insurance Corporation of India Class I Officers (Revision of Terms and Conditions of Services) Rules, 1985 (hereinafter referred to as the “said rules”), for rule 4, the following rule shall be substituted – namely:- “4. Scales of pay of Class I Officers: The scales of pay of Class I officers shall as under:- (1) (1) Zonal Managers/Chiefs Departments at Central Office. (a) Ordinary Scales: Rs.11450-300-12650 (b) Selection scale: Rs.12650-300- 13250-350-13600- 400-14000 (II) Chief Engineers/ Chief Architects Notes (1) Officers in Selection Scale posted in – charge of a Department at the Central office will be designated as Executive Directors. Xxxx Provided that no arrears for the period from the 1st day of WA NO. 417 OF 2020 9 August, 1992 to the 31st day of March, 1993 shall be payable to the officer.”

9. The aforementioned amendment in the Rules was ratified vide Ext.P2 with following conditions: “Notwithstanding anything mentioned in this clause or in clause 4 of these instructions, no arrears shall be payable on account of the difference in pay in the existing scale of pay and revised scale of pay after fixation for the period from the Ist day of August, 1992 to the 31st day of March, 1993.” Thus for all intends and purposes both Exts.P1 and P2 contained a clause of non payment of arrears on account of pay revision.

10. On identical situation noticing Exts.P1 and P2 and the staff regulation Rules, Division Bench of Rajasthan High Court held as under: In so far as first prayer in writ petition is concerned, learned Single Judge in impugned judgment has referred to and reproduced clause 2 of said notification dated 18.07.1996, which extended benefit of revised pay scale to employees with effect from 01.08.1992. We reproduce that part of Clause 2 of the Notification, which reads as under:- “Save as otherwise provided hereinafter, the provisions of these rules shall be deemed to have come into force on the 01st day of August, 1992: Provided that where any Class I officer gives a notice in WA NO. 417 OF 2020 10 writing to the Corporation, within thirty days of the publication of these rules in the official Gazette, expressing his option to be governed by the provisions of any of these rules from a date not earlier than the date on which the said rule comes into force, then the Corporation may be order/permit such officer to be governed by the said rule with effect from the said date: Provided further that no such option may be exercised by a Class I officer in respect of rule 9A of these rules: Provided also that no arrears for the period prior to the date so chosen shall be payable to such officer. Aforesaid clause of notification dated 18.07.1996 clearly indicates that the provisions of said Rules came into effect from

01.08.1992, the date on which respondent Mahesh Chand Jain was very much in service. However, an option was given to Class I officers to give a notice in writing within thirty days of the publication of the said Rules expressing there willingness to be governed by the provisions of any clause of these rules from the date not earlier than the date on which the said rule comes into force. This means that a given officer could opt to be governed by the benefit of pay scales from the date later than 01st August, 1992. If what the appellant is contending is accepted, this would mean that even a Class I officer, who could not otherwise exercise the option because he stood retired when the said notification was issued, then he would not get benefit of revision of pay with effect from 01.08.1992 on which date the revised pay scale rules came into force, even though he was physically in service on that day. There is no exception made in the Rules that such benefit would not be admissible to those Class I officers who were actually in service between the date the aforesaid Rules came into force i.e.

01.081.992 and the date of issuance of notification dated

18.07.1996. Their retirement in between was a fortuitous WA NO. 417 OF 2020 11 circumstance. Non-grant of such similar benefit to him, would be wholly discriminatory because his co-employees who have yet not retired and continued in service, shall be granted benefit of revision of pay even for the period such retired employees like the respondent, were actually working with them. Contention that pension has to be computed as per Rule 35 of the Rules of 1995 on the basis of last pay actually drawn during the period of ten months preceding the date of retirement and not on the basis of notional pay, is noted to be rejected only because once adoption of revision of pay scale rules is made with effect from 01.08.1992, the respondent became entitled to benefit of revised pay scale. It would then be taken to be his actual pay and not the notional pay because he was actually working during that period and all his co- employees were also paid the enhanced revised pay. Action of the appellant LIC in refusing such benefit to the respondent only because he has retired between the aforesaid two dates, indeed was wholly arbitrary and discriminatory. Rule 35 of the Rules of 1995 does not create any bar for treating the revised pay pursuant to enforcement of revision of pay scale rules from anterior date if the date on which such rules are made effective, the employee was actually in service. The Supreme Court in Union of India and Another Vs. SPS Vains (Retd.) and Others (2008) 9 SCC 125, in identical circumstances held the action of the Union of India in treating such officers who retired as Major General prior to 01.01.1996 and those who retired after

01.01.1996 dissimilarly by making them payment of different amount of pension, arbitrary, unreasonable and discriminatory, and held that it would otherwise cause violence to the provisions of Article 14 of the Constitution of India. In our considered view, if what is contended by the appellant is upheld, that would amount to treating equals unequally and WA NO. 417 OF 2020 12 would be discriminatory being violative of Article 14 of the Constitution. We do not therefore find any infirmity in the judgment of learned Single Judge. The appeal being devoid of merit is hereby dismissed. Consequent upon dismissal of special appeal, stay application, filed therewith, does not survive and same is also dismissed.”

11. In fact, on perusal of the Rule, it is evident that there is no exception made in the Rules that the benefit would not be admissible to Class-1 officers who had been actually in service between the date the aforesaid Rules came into force,

01.08.1992 and the date of issuance of notification dated

18.07.1996, for the reason that their retirement was during the interregnum period. In our considered view non grant such similar benefit would not only be discriminatory but arbitrary for the reason that the co-employees who had yet not retired exercising the option have been granted the benefits.

12. No doubt the aforementioned notification envisages non grant of the arrears. Appellants/petitioners have also not put up any claim qua arrears but would definitely be given the benefit of notional fixation of pay on account of revision. Thus we set aside the order of learned Single Bench and issue WA NO. 417 OF 2020 13 directions to grant the benefit not only to the appellants/petitioners, but all other similarly situated persons in order to prevent multifariousness of litigation, notionally fix the pay and grant consequential benefit towards the pension. Writ appeal stands allowed. Sd/ AMIT RAWAL JUDGE Sd/- C.S. SUDHA JUDGE