Constitutionality of LIC India (Employees) Pension Amendment Rules & General Scheme upheld by Delhi High Court
The Division Bench of Justice Amit Bansal & Justice Rajiv Sahai Endlaw has recently upheld the constitutional validity of Life Insurance Corporation of India (Employees) Pension (Amendment) Rules, 2019 and the General Insurance (Employees) Pension (Amendment) Scheme, 2019.
The Bench in the present matter was dealing with 82 petitioners filed by ex employees of different Public Sector Insurance Companies (“PSICs”), who challenged the vires of Life Insurance Corporation of India (Employees) Pension (Amendment) Rules, 2019 and the General Insurance (Employees) Pension (Amendment) Scheme, 2019 for being discriminatory in nature and violative of Article 14 of the Constitution of India in as much as they excluded the persons such as the petitioners who had resigned/left the services of their respective PSICs before coming into force of such amendments.
The petitioners sought directions to extend mutatis mutandis, the option of pension to the petitioners in the same manner as it was offered to other leftover employees of the PSICs, who had retired or taken voluntary retirement or had expired, before coming into force of the said amendment.
The petitioners joined the services of different PSICs on various dates between 1977 and 1991. While they were the Central Government introduced an index-linked Pension Scheme, vide Life Insurance Corporation of India (Employees) Pension Rules, 1995 and General Insurance (Employees) Pension Scheme, 1995 (“Pension Rules/Scheme”) for the employees of the PSICs in addition to the existing Contributory Provident Fund (“CPF”).
The said Pension Rules/Scheme was not mandatory and the employees had an option to either opt for the said Pension Rules/Scheme or continue with CPF. The petitioners did not opt for Pension Rules/Scheme and continued with CPF. For the employees who opted for the said Pension Rules/Scheme, there was also an option for voluntary retirement, which was not otherwise there for other categories of employees. Employees joining the PSICs after 28th June, 1995 were automatically covered under the above Pension Rules/Scheme. Vide amendment dated 16th February, 1996, sub-Clause 2A was added to Clause 19 of the Life Insurance Corporation of India (Staff) Rules, 1960 to introduce the concept of voluntary retirement for the CPF Optees as well. However, the newly inserted sub-Clause provided for completion of 55 years of age for the CPF Optees to seek voluntary retirement, whereas for the Pension Optees, the requirement was qualifying service of 20 years for opting for voluntary retirement. Similar amendment was also brought in respect of PSICs providing general insurance.
On 22nd April, 1997, the CPF Optees who joined services on or before 28th June, 1995 were given an option to opt for the Pension Rules/Scheme. However, the same was not opted by the petitioners. The Respondent No 1 promulgated/notified the amendments in the official gazette, which have been challenged in the present writ petition.
The petitioner’s in their plea averred that “Final Pension Option” that was introduced in terms of the aforesaid amendments was extended to serving, retired (including those having taken voluntary retirement) and the families of the deceased employees, but not extended to employees who resigned/left/discontinued the services, which included the petitioners.
The Court observed that the exclusion could not be termed as discriminatory or arbitrary or violative of Article 14 of the Constitution by any stretch of imagination. The Court further observed that the two categories of employees constituted separate classes and there was an intelligible differentia that prevailed between them.
“The employees such as the petitioners presumably left the employment of PSICs and sought employment elsewhere. They cannot have the best of both the worlds, on one hand, earning salary or other remuneration on account of employment/other engagement after they left the services of PSICs, and on the other hand, seek advantage of beneficial schemes introduced by the PSICs after they had left the employment of PSICs. The PSICs were fully justified in extending the benefit of the pension scheme only to the specified categories of employees as determined by them. As per their own case, if the Petitioners had stayed on with the PSICs till the age of 55, they would have been entitled to the benefit of “voluntary retirement” and in that case would have been eligible for the benefits under the amendments.”, the Bench categorically remarked.
Reliance was placed on the Apex Court judgement in Senior Divisional Manager, Life Insurance Corporation of India Limited & Ors. Vs. Shree Lal Meena (2019) 4 SCC 479 in which the Court observed that, “(i) under the Service Rules of the PSICs, resignation entails forfeiture of entire past service and consequently, would not qualify for pensionary benefits; (ii) resignation and other terms such as termination/determination of service or leaving or discontinuing service, amount to unilateral act on the part of the employee of not continuing with his/her service with the employer, followed by acceptance of terms by the said employer; (iii) even if the Pension Rules were applicable to an employee, who sought to resign, the entire past service of the employee would be forfeited and who would not qualify for pensionary benefits; (iv) when the Legislature in its wisdom brings beneficial provisions such as the Pension Regulations from a particular date and on particular terms and conditions, aspects which have been excluded cannot be included in it by implication; and, (v) accordingly, the Pension Scheme could not be extended to employees who were specifically excluded by the legislation from its ambit.”
Thereafter, the Bench while dismissing the petition remarked that the said category of employees was squarely excluded from the ambit of the amendments and it was the specific intent of the Legislature not to extend the benefit of Pension Rules/Scheme to such categories of employees. The excluded categories, such as the Petitioners constituted a separate class based on an intelligible differentia. The said exclusion could not be said to be discriminatory or arbitrary or violative of Article 14 in any manner.
Case Title: Subhashini Rajan And Ors. V. Union Of India And Ors| W.P.(C) 4271/2021