Case: V.M. Gadre (Dead) By Lrs Vs. Shri M.G. Diwan

may have been given to fixation of pension whereas in another the benefit may have been given to house rent or maximum medical expenses. This becomes clear if we examine cases under the Industrial Disputes Act where questions of fixation of service conditions on region-cum- industry basis are attempted. While exercising jurisdiction under Article 32 read with Article 142 it would not be permissible for the Court to substitute all the existing service conditions by a totally new set of service conditions. That would tantamount to re-writing the service conditions and consequentially the retiral benefits as well for all those who had retired long back and are in receipt of pension under the extant rules. Realising this difficulty the relief was confined to the first two demands only and that too in modified form. The learned counsel for the LIC submitted that if the Court on humanitarian grounds proposes a reasonable hike in the pensionary benefits without raising an excessive fiscal burden, it will have no objection to grant the same.11. We must, therefore, confine ourselves to the first two reliefs. Actually the relief for fixation of the minimum pension at Rs. 375/- p.m. has in fact been satisfied by the interim order of this Court. Counsel for LIC did not contended for its reduction. However, counel for the petitioners contented for increase in the minimum in view of the passage of time since the filing of this petition. During the course of the hearing of this petition at the behest of the Court, several alternatives were worked out by the LIC and presented to the Court. These may be reproduced as under :- "Scheme A:The Pension Fund will be dissolved and the corpus of the Fund will be applied for issuing individual annuity policies to the pensioners. On doing so all the pensioners will be allowed an increase of 10% in the pension and the minimum pension will be increased to Rs. 500/- per month. The pension presently being paid and the annuity payable on giving 10% rise to a few of the pensioners are as follows :- Pension being paid as per the Interim order dated 7.5.1991, Annuity on revision (Rs.) (Rs.) 375 500 444 500 512 563 605 666 703 773 803 887 898 988 933 1026 1133 1246 1202.50 1323Scheme B:The Pension Fund will be dissolved and the corpus of the Fund will be applied for issuing individual annuity policies to the pensioners. Every pensioner will be given a minimum annuity of Rs. 500/- per month. Further, the pension will be increased every year at 2.5% per annum. The pension presently being paid and the annuity payable to a few of the pensioners for the next 10 years will be as follows: Pension being paid as per the Interim Order dated 7.5.1991 Annuity payable on revision + + + + Aug 94 Aug 95 Aug 96 Aug 97 Aug 98 375 500 513 526 539 552 444 500 513 526 539 552 512 525 538 551 565 579 605 620 636 652 668 685 703 721 739 757 776 795 806 826 847 868 890 912 898 920 943 967 991 1016 933 956 980 1005 1030 1056 1133 1161 1190 1220 1251 1282 1202.50 1233 1264 1296 1328 1361Pension being paid as per the Interim Order dated 7.5.1991 Annuity payable on revision + + + + Aug 99 Aug 2000 Aug 01 Aug 02 Aug 03 375 566 580 595 610 625 444 566 580 595 610 625 512 593 608 623 639 655 605 702 720 738 756 775 703 815 835 856 877 899 806 935 958 982 1007 1032 898 1041 1067 1094 1121 1149 933 1082 1109 1137 1165 1194 1133 1314 1347 1381 1415 1450 1202.50 1395 1430 1466 1503 1541Scheme C: If the corpus of the Fund on dissolution of the Oriental Pension Fund is taken to be Rs. 2 crores and if an increase of 10% per annum in the annuity is to be provided, the minimum pension amount that would be possible is Rs. 575/- p.m. and the pension payment to a few of the pensioners for the next 5 years would be as follows:-Individual Annuity policies will be issued to provide for the payment as above." 12. We have carefully considered the three schemes worked out at our behest. It was emphasised on behalf of the LIC that any increase in pension will throw a corresponding financial burden on the establishment. It was further urged that in law the pensioners are not entitled to any increase but the LIC has always adopted a humanitarian approach in such cases and has, therefore, even in the past granted reasonable increases in pension. Therefore, counsel for the LIC contended that increase, if any, must take into consideration the financial burden that may fall on the LIC. However, counsel for the pensioners submitted that the pensioners having served the establishment faithfully during their service can legitmately expect a reasonable sum by way of pension which would help them to survive in these days of high inflation. The pensioners when they subscribed to the pension plan could not have imagined the fall in the rupee value and could not have visualised the high cost of living and, therefore, where the establishment can bear the burden, the Court should not deny to them a reasonable increase in pension.13. Taking in view the above submissions we are of the opinion that Scheme `A gives only a marginal benefit to the pensioners at the levels below the minimum. Scheme `B is an improved version of Scheme `A and offers an annual increase but having regard to the age factor of the pensioners the progression in regard to annual increments is rather slow and limited. We are, therefore, inclined to accept Scheme `C since we are accepting it as a one-time final measure. We find that this scheme is more beneficial and would also provide a measure of satisfaction in view of the annual increments.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. It is further the case of the LIC that in order to pay a minimum pension of Rs. 375/- p.m. it will require an amount of Rs. 8,35,000/- at the initial stage to be followed by further subventions to maintain the viability of the Fund and if payment has to be made at that rate from 1.1.1986 the Fund will have to be augmented by a sum of Rs. 26,00,000/- to meet its liability upto 30.4.1991 and with the added liability of dearness allowance or relief on pension for the said period the additional liability will be a further Rs. 11,90,00,000/-, a financial burden which LIC can ill-afford to meet. If the reliefs claimed by the Oriental pensioners is conceded under different heads the total liability is expected to rise to Rs. 24,20,86,642/-. Such a huge financial burden cannot be borne by the LIC yet the LIC has provided subvention to the tune of Rs. 1,43,00,000/- from 1965 to 1985. The LICs contributions to the Fund thus work out to be 22.5% as against the maximum 10% interest paid on Provident Fund Deposits. The Oriental pensioners are thus better placed and hence the demand by the LIC employees to be brought on par with the Pension-Plan.10. Several reliefs have been claimed in paragraph 55 of the writ petition. The first two reliefs need be noticed. The first is to step up the pension to a minimum of Rs. 375/- p.m. and the second is to grant dearness allowance/relief linked with the cost index number in January and July every year as is admissible to pensioners of the Central Government or the State Bank of India with effect from 1.1.1973. There is the demand for refund of the 5% contribution recovered from 1954 and to discontinue the deduction made at rate of 6.38% from the pension payable under the Scheme. Next it is prayed that a Family Pension Scheme and Medical Reimbursement Scheme be introduced and the fixation of the pension amount be revised on the basis of the one calculated on the average pay of ten months. It is obvious from the above reliefs claimed in this case that the pensioners desire to give a complete go-by to the extant pension-plan and replace it by a totally new scheme. These demands made in a petition under Article 32 of the Constitution totally overlook the fact the Court cannot substitute a totally new pension-plan in place of an existing one as each service and each institution has its own service conditions and merely because in another service the pension-plan is better it cannot be adopted and substituted in a different service. In any service a pension plan is only one component of the basket of service conditions for that service and it cannot be viewed in isolation and where comparison is permissible all the conditions have to be compared because in one service weightage may have been given to fixation of pension whereas in another the benefit may have been given to house rent or maximum medical expenses.This becomes clear if we examine cases under the Industrial Disputes Act where questions of fixation of service conditions ony basis areattempted. While exercising jurisdiction under Article 32 read with Article 142 it would not be permissible for the Court to substitute all the existing service conditions by a totally new set of service conditions. That would tantamount to re-writing the service conditions and consequentially the retiral benefits as well for all those who had retired long back and are in receipt of pension under the extant rules. Realising this difficulty the relief was confined to the first two demands only and that too in modified form. The learned counsel for the LIC submitted that if the Court on humanitarian grounds proposes a reasonable hike in the pensionary benefits without raising an excessive fiscal burden, it will have no objection to grant the same.11. We must, therefore, confine ourselves to the first two reliefs. Actually the relief for fixation of the minimum pension at Rs. 375/- p.m. has in fact been satisfied by the interim order of this Court. Counsel for LIC did not contended for its reduction. However, counel for the petitioners contented for increase in the minimum in view of the passage of time since the filing of this petition. During the course of the hearing of this petition at the behest of the Court, several alternatives were worked out by the LIC and presented to the Court.We have carefully considered the three schemes worked out at our behest. It was emphasised on behalf of the LIC that any increase in pension will throw a corresponding financial burden on the establishment. It was further urged that in law the pensioners are not entitled to any increase but the LIC has always adopted a humanitarian approach in such cases and has, therefore, even in the past granted reasonable increases in pension. Therefore, counsel for the LIC contended that increase, if any, must take into consideration the financial burden that may fall on the LIC. However, counsel for the pensioners submitted that the pensioners having served the establishment faithfully during their service can legitmately expect a reasonable sum by way of pension which would help them to survive in these days of high inflation. The pensioners when they subscribed to the pension plan could not have imagined the fall in the rupee value and could not have visualised the high cost of living and, therefore, where the establishment can bear the burden, the Court should not deny to them a reasonable increase in pension.13. Taking in view the above submissions we are of the opinion that Scheme `A gives only a marginal benefit to the pensioners at the levels below the minimum. Scheme `B is an improved version of Scheme `A and offers an annual increase but having regard to the age factor of the pensioners the progression in regard to annual increments is rather slow and limited. We are, therefore, inclined to accept Scheme `C since we are accepting it as a one-time final measure. We find that this scheme is more beneficial and would also provide a measure of satisfaction in view of the annual increments.