LIC OF INDIA AND OTHERS versus KRISHNA MURARI LAL ASTHANA AND ANOTHER ETC.
[2016] 1 S.C.R. 837, Supreme Court of India, 2016
Outcome: Disposed off
Segment: Ratio
[2016] 1 S.C.R. 837 
LIC OF INDIA AND OTHERS 
v. 
KRISHNA MURARI LAL ASTHANA AND ANOTHER ETC. 
(Civil Appeal Nos.8959-8962 of2013) 
MARCH31,2016 
[DIPAK MISRA AND R. BANUMATHI, JJ.) 
Life Insurance Corporation Act 1956 - ss. 21, 48 - Life 
Insurance Corporation of India (Employees) Pension Rules, 1995 
- r. 37, 55, Appendix IV para 3A - Pensionary benefits - Resolution 
passed by the Board to the effect for Amendment to LIC of India 
(Employees) Pension Rules, 1995-Upgrading of Basic Pension in 
respect of retirees prior to 01.08.1997 - Corporation sought 
amendment to the 1995 Rules - Non-execution of the Resolution by 
the Corporation - Writ petitions - Single Judge and Division Bench 
of the High Court on the basis of the concession given by the counsel 
for the Union of India, directed the Corporation to take a decision 
for implementation of the resolution passed by the Bar.Yd and the 
Corporation cannot provide different criteria for grant of dearness 
allowance to the existing pensioners based on cut-off date i.e. 
31. 7.1997 - On appeal, held: In the absence of a Rule, no benefit 
can be granted on the basis of the resolution passed by the 
Corporation - High Court could not have held to the contrary on 
the basis of the concession given by the counsel for the Union bf 
India - Resolution could not become operative unless it was 
conferred the status of a rule as provided u/s. 48 - Orders passed 
by the High Courts of Rajasthan, Delhi and Punjab & Haryana set 
aside
and the writ petitions transferred from the High Courts of 
Rajasthan and Punjab & Haryana to the High Court of Delhi, which 
would decide the constitutional validity of Para 3A of the Appendix 
to the Rules - Corporation to pay 40% as per Para 3A of the 
Appendix to each of the employees. 
Disposing of the appeals, the Court 
HELD: 1.1 Rule 55 of the Life Insurance Corporation of 
India (Employees) Pension Rules, 1995 does not confer power 
on the Chairman of the Corporation to issue any instructions that 
can travel beyond the rules. In terms of Rule 55, he has been 
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SUPREME COURT REPORTS 
(2016] I S.C.R. 
authorized to issue instructions which are necessary and 
expedient for the implementation of the rule• The Board had 
passed the resolution. The Board can pass ~ 1·lsolution and the 
Chairman can be the head of the Board, b.~t it does not authorize 
the Board to take a decision with regard to certain matters which 
are within the domain of the rule making authority. On a perusal 
of Section 48, it is clear as crystal that conferment of benefit, 
either pension or anything ancillary thereto has to be conferred 
by the rules and the rule as prescribed under Section 48 of the 
Act is to be tabled before the Parliament. In the absence of a 
rule, no benefit can be granted on the basis of the resolution 
passed by the Corporation. This being the legal position, the High 
Court could not have held to the contrary on the basis of the 
concession given by the counsel for the Uuiou of India. [Para 15] 
[851-D-F) 
1.2 There are two categories of employees, namely, the 
employees who have retired prior to the cut-off date i.e. 1st 
August, 1997, as a consequence of which they are not getting the 
benefit of dearness relief, and the employees who have retired 
after the said date but are not extended the benefit of dearness 
relief despite subsequent pay revisions. The quantum of pension 
is affected. [Para 22] [853-G-H] 
1.3 Regard being had to the piquant situation, the orders 
passed by the High Courts of
Rajasthan, Delhi and Punjab & 
Haryana at Chandigarh are set aside and the writ petitions are 
transferred 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, 
and also deal with the cases of the persons, who have retired 
after the cut-off date. However, it is clarified that no opinion is 
expressed on the merits of the case, except that the resolution 
could not beco'!le operative unless it was conferred the status of 
a rule as provided under Section 48 of the Act. [Para 23] [854-A-
C] 
1.4 The pleadings are not adequate as it should have been 
while assailing a constitutional validity of a provision as such the 
matter is remanded back. It is well settled in law that he who 
assails the constitutional validity of a statutory provision or a rule,
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
839 
has to specially assert the grounds for such challenge. The 
respondents would contend that the amouut of pension the 
respondents are gettiug is a paltry sum and it is difficult to sustain 
in the preseut day. That apart, the Corporation should have been 
gracious enough to recognize the services rendered by them and 
the Uniou of Iudia should have come with an affirmative response 
when the resolution was passed by the Corporation. The said 
facet has already been adjudicated but the matter is remanded to 
the High Court on a different count. In such a situation, the 
respondents should get certain amount as an interim measure. 
The Corporation is directed by the order dated 7th May, 2015 to 
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pay 20% amount to the individual employees. It is submitted · C 
that the Corporation has already deposited the entire amount 
without the pay revision before the High Courts of Rajasthan 
and Punjab & Haryana at Chandigarh, 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. [Para 
26) [855-C-G) 
1.5 Keeping in view the totality of facts and circumstances 
of the case, the Corporation is directed to pay 40% as per Para 
3A of the Appendix to each of the employees within six weeks 
and to 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. The said payment shall be subject to final results in 
the writ petitions. [Para 27) [855-H; 856-A-B] 
1.6 It is a case where the end does not bring the finality. It 
does not require Solomon's wisdom to state that an interim order 
is an interim order and does not have any impact at the time of 
final verdict especially in such a situation and, therefore, it is 
directed that it shall be applicable to the similarly placed persons. 
/l_'ara 2~1 [856-C] 
State of Uttar Pradesh v. Kartar Singh AIR 1964 SC 
1135:1964 SCR 679; State of Andhra Pradesh and 
another v. K Jayaraman and others (1974) 2 SCC 738; 
Union of India v. E.l.D. Parry (India) Ltd. 2000 (1) 
SCR 537 : (2000) 2 SCC 223; State of Haiyana v. State 
of Punjab & another 2004 (2) Suppl. SCR 849: (2004) 
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SUPREME COURT REPORTS 
[2016] I S.C.R. 
12 SCC 673; Union of India " Hira Lal (1996) 10 SCC 
574; B.S. Baiwa v.State of Puniab 1996 (i'' Suppl. SCR 
451: (1998) 2 SCC 523; Vimaleshwar ;1,,1guppa Shet " 
Noor Ahmed Shariff 2011 (6) SCR 392:(2011) 12 SCC 
658; State of Rajasthan v. Surendra Mohnot 2014 (6 ) 
SCR 191:(2014) 14 SCC 77; D.S. Nakara 1~ Union of 
India and others AIR 1983 SC 130:1983 (2) SCR 
165:(1983) 1 SCC 305; All India J?eserve Bank retired 
Officers Association v. Union of India 1991 (3) Suppl. 
SCR 256 : (1992) Suppl 1 SCC 664; V. Kasturi v. 
Managing Director, State Bank of India and another 
1998 (2) Suppl. SCR 269:(1998) 8 SCC 30; Union of 
India and Another " SPS Vains (Retd.) and others 2008 
(13) SCR 257 : (2008) 9 SCC 125; K.J.S. Buttar v. 
Union (Jf India and another 2011 (4) SCR 136:(2011) 
11 SCC 429; Kal/akkurichi Taluk Retired Officials 
Association, Tamil Nadu and others v. State of Tamil 
Nadu 2013 (4) SCR 883 : (2013) 2 SCC 772 - referred 
to. 
Case Law Reference 
(1996) 10 sec 574 
referred to. 
Para 13 
1996 (6) Suppl. SCR 451 
referred to. 
Para 13 
2(!11 (6 ) SCR 392 
referred to. 
Para 13 
2014 ((i) SCR 191 
referred to. 
Para 13 
1983 (Z) SCR 165 
referred to. 
Para 17 
1991 (3) Suppl. SCR 256 
referred to. 
Para 17 
1998 (2) Suppl. SCR 269 
referred to. 
Para 17 
2008 (13) SCR 257 
referred to. 
Para 19 
2011 (4) SCR136 
referred to. 
Para 19 
2013 ('\) SCR 883 
referred to. 
Para 21 
1964 SCR 679 
referred
to. 
Para 26 
(1974) 2 sec 738 
referred to. 
Para 26 
2000 en SCR 537 
referred to. 
Para 26 
2004 (2) Suppl. SCR 849 
referred to. 
Para 26 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 
8959-8962 of2013
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
From the Judgment and Order dated 21.01.201 I of the High Court 
of Judicature for Rajasthan, Jaipur Bench at Jaipur in Special Appeal 
No. 493 and 494 of2010 and Special Appeal No. 494 of2010 and D. B. 
Civil Review Petition No. 86 of2011 in D. B. Special Appeal (W) No. 
494 of2010 and D. B. Civil Review Petition No. 87 of2011 in D. B. 
Civil Special Appeal (W) No. 493. 
WITH 
C. A. NOS. 6995, 9223 AND 9409-9410 OF 2013 
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Neeraj Kishan Kaul, ASG, Vibha Datta Makhija, Ashok Panigrahi, 
Surajit Bhaduri, Santosh Kumar, 0. M. Swarup V. Partiban, T.V.S. 
Raghavendra Sreyas, (A.C.), Gayatri Gulati Sreyas, Rekha Pandey, c 
Sushma Manchanda, Disha Verisj, Akash Jindal, B. Krishna Prasad for 
the Appellants. 
Nidesh Gupta, Shree Ram Panchu, R. K. Singh, Kumar Gaurav, 
B. N. Dubey, Rameshwar Prasad Goyal, Raj iv K. Garg, G. N. Sridharan, 
V. K. Josh, T. L. Garg, Nahiketa Joshi, Sudhakar Joshi, Sucheta Joshi, 
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Ritwiz Rishabh, Sushma Suri, Jay Savla, Renuka Sahu, Abhinav Sharma, 
Dr. Kai.lash Chand, R. K. Singh, B. N. Dubey, Robin Khokhar, P. Dayal, 
Sajith. P. for the Respondents. 
The Judgment of the Court was delivered by 
DIPAK MISRA, J. 
I. Pension though, by the judicial 
pronouncements, has been treated as not a bounty yet the controversy 
relating to the said claim and denial thereof has been a matter of frequent 
cavil between the employer and the employee in numerous situations. 
And that is why this Court has been
required to deal with and render 
judgments pertaining to pension and interpretation of the rules or policies 
or schemes relating thereto. 
2. The present set of appeals fresco a picture which is not a 
happy one. It appears that the appellant, the Life Insurance Corporation 
oflndia (for short' 'the Corporation') at one point of time was enthusiastic 
to confer certain benefits on the respondent-employees, may be Without 
appreciating the legal nuances but its action irrefragably instilled a 
concrete hope in thousands of employees. 
3. The Corporation is controlled by the Life Insurance Corporation 
Act, 1956 (for brevity, 'the Act'). Section 21 of the Act which provides 
that the Corporation to be guided by the directions of the Central 
Government reads as follows:-
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"21. Corporation to be guided by the directions of Central 
Government. - In the discharge of its functions under this Act, 
the Corporation shall be guided by such directions in matters of 
policy involving public interest as the Central Government may 
give to it in writing; and if any question arises whether a direction 
relates to a matter of policy involving public interest, the decision 
of the Central Government thereon shall be final." 
4. Section 48 of the Act which is pertinent for the present purpose 
empowers the authorities to make rules. Section 48 (I) and (3) to which 
our attention has been invited read as follows:-
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"48. Power to make rules.- (I) The Central Government may, 
by notification in the Official Gazette make rules to carry out the 
purposes of this Act. 
(2) In particular, and without prejudice to the generality of the 
foregoing power, such rules may provide for all or any of the 
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following matters, namely:-
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( a) the term of office and the conditions of service of members; 
(aa) the instruments which may be issued and the amount of 
working capital under sub-section (2) of section 5;. 
(b) the manner in which the moneys and other assets belonging to 
any such fund as is referred to in Section 8 shall be apportioned 
between the trustees of the fund and the Corporation; 
(c) the services which the chief agent should have rendered for 
the purpose of the proviso to section 12;
(cc) the terms and conditions of service of the employees of the 
Corporation, including those who became employees of the 
Corporation on the appointed day under this Act; 
fil the jurisdiction of the Tribunals constituted under section 17; 
W the manner in which, and the persons to whom, any 
compensation under this Act may be paid; 
ill the time within which any matter which may be referred to a 
Tribunal for decision under this Act may be so referrecl_; 
(g) the manner in which and the conditions subject to which 
investments may be made by the Corporation;
LIC OF !NOIA v. KRISHNA MURARI LAL ASTHANA 
843 
fDIPAK MISRA, J.l 
(hl the manner in which an Employees and Agents Relations 
A 
Committee may be constituted for each zonal office; 
ill the form in which the report giving an account of the activities 
of the Corporation shall be prepared; 
ill the conditions subject to which the Corporation may appoint 
employees; 
(kl_ the fees payable under this.Act and the manner in which they 
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are to be collected; 
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ill any other matter which has to be or may be prescribed. 
2(A){B)(C) 
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(3) Every rule made by the Central Government under this Act 
shall be laid, as so-on as m11y be after it is made, before each 
House of Parliament while it is in session, for a total period of 
thirty days which may be comprised in one session or in two or 
more successive sessions, and if, before the expiry of the session 
immediately following the session or the successive sessions 
aforesaid, both Houses agree in making any modification in the 
rule shall thereafter have effect only in such modified form or be 
of no effect, as the case may be; so, however, that any such 
modification or annulment shall be without prejudice to the validity 
of anything previously done under that rule." 
5. In exercise of the powers conferred by Section 48 of the Act, 
the Central Government has framed a set of rules, namely, Life Insurance 
Corporation oflndia (Employees) Pension Rules, 1995 (for short, 'the 
1995 Rules'). Rule 37 of the 1995
Rules refers to "dearness relief', 
which is extracted herein below:-
''Dearness Relief - ( l) Dearness relief shall be granted on 
basic pension or family pension or invalid pension or on 
compassionate allowance in accordance with the rates specified 
in appendix IV. 
(2) Dearness relief shall be allowed on full basic pension even 
after commutation." 
6. Appendix IV of the 1995 Rules, which is the principal plinth of 
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quarrel, is as follows:-
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"Dearness relief on basic pension shall be as under: ( 1) In 
the case of employees who retired on or after the l" day of January, 
1986, but before the l" day ofNovember, 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: 
Seale of basic pension per 
The rate of dearness relief as a 
month 
percentage of basic pension 
(1) 
(2) 
(i) upto Rs.1250/-
0.67 per ceni 
(ii) Rs.1251/- to Rs.2,000/-
0.67 per cent of Rs.1250 plus 
0.55 per cent of basic pension in 
excess of Rs.1250/-
(iii) Rs.2001/- to Rs.2130/-
0.67 per cent of Rs. I 250/- plus 
0.5 5 per cent of the difference 
between 
Rs.2000/-
and 
Rs. I 250/- plus 0.33 per cent of 
basic pension 
in 
excess of 
Rs.2000/-
(iv) aboveRs.2 I 30/-
0.67 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 
the 
difference 
between 
Rs.2130/- and Rs.2000/- plus 
0.17 per cent of basic pension in 
excess of Rs.2 130/-
(2) In the case of employees who retire on or after the l" 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 
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1960 - 100. Such increase or decrease in dearness relief for
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
845 
fDIPAK MISRA, J.l 
every said four points shall be calculated in the manner given 
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below: 
Scale of basic pension 
The rate of dearness relief as a 
per month 
percentage of basic pension 
(1) 
(2) 
(i) upto Rs.2400/-
0.35 per cent 
· (ii) Rs2401 to Rs.3850/- 0.35 per cent of Rs.2,400/- plus 
0.29 per cent of basic pension 
in excess ofRs.2,400/-
(iii) 
Rs.3,851 
to 0.35 per cent of Rs.2,400/- plus 
Rs.4, 100/-
0.29 per cent of the difference 
between 
Rs.3.850 
and 
Rs.2.400/- plus 0.17 per cent of 
basic pension in excess of 
Rs.3,850/-
(iv) above Rs.4,100/-
0.35 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 of 
the 
difference 
between 
Rs.4,100/- and Rs.3,850/- plus 
0.09 per cent of basic pension 
in excess ofRs.4.100/-
(3) Notwithstanding anything contained in Para (I) and Para (2), 
in respect of employees belonging to Class-lll and'Class-IV, who 
have retired on or after the l" day of August, 1992 and in respect 
of Officers belonging to Class-I and Class-II, retired on or after 
l" 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 l" 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 
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- 100 Such increase or decrease in dearness relief for every said 
4 points shall be at the rate of0.23 per cent of the Basic Pension; 
@3(B) 
In case of any wage revision in future the rate of 
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 ]" 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 
pains 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 of0.18 per cent of the Basic 
Pension). 
( 4) Dearness re Fief shall be payable for the half year commencing 
from the I" day of February and.ending with 31" 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 I" day of August and 
ending with the 31" day of January on the quarterly average of 
the index figu~es published for the months of April, May and June 
of the same y•~ar. 
(5) In the case of family pension, invalid pension and compassionate 
allowance, dearness relief shall be payable in
accordance with 
the rates meintioned above. 
(6) Dearness relief will be allowed on full basic pension even 
after commutation. 
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(7) Dearness relief is not payable on additional pension." 
Be it stated, para 3A to the Appendix IV was incorporated on 
22"' June, 2000, and was published in the Official Gazette. 
7. As the afore-quoted appendix would show, the Corporation has 
divided its employees for the purpose of dearness relief into three 
categories regard being had to the date of retirement. When situation 
remained thus, certain representations were submitted to the Corporation. 
The said representations were considered and Minutes were drawn up 
by the authorities of the Board. 
..
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
[DIPAK MISRA, J.] 
8. Mr. Nidhesh Gupta, learned senior counsel appearing for the 
respondents in Civil Appeal Nos.8959-8962 of2013, would impress upon 
this Court that the Minutes are absolutely material to understand the 
controversy and, accordingly, he has laid immense stress on them. For 
the sake of completeness, we think it apposite to reproduce the relevant 
part of the said Minutes. It is as follows:-
"An index linked Pension Scheme in I ieu of Corporation's 
Contribution to Provident Fund (CCPF) was introduced in the 
Corporation vide Central Government Notification dated 
28.06.1995. The Scheme provides for payment of pensionary 
benefits with effect from 01.11.1993. The employees of the 
Corporation, who retired between 0 l. l l .1986 to 31.10.1993, are 
also covered under the scheme for pensionary benefits. 
2. At the time of notification of the Pension Rules, the scales of 
pay and allowances of the employees of the Corporation were 
linked to All India Consumer Price Index (AICPI) 800 points. 
After the notification of the Pension Rules, the pay scales and 
allowances of the employees of the Corporation have been revised 
on two occasions - first in the year 1996 by linking it to AICPI 
1148 Points and again in the year2000 by linking ittoAICPI 1740 
Points. The revision in the year 1996 was made effective 
retrospectively from 01.08.1992 and the revision in the year 2000 
was made effective retrospectively from
01.08.1997. Consequent 
upon the revision of pay scales;ibe .l'insion Rules were suitably 
amended to give effect to paymentOf pension commutation value 
and family pension as per the re;ised scales of pay and. allowances. 
However, the Dearness Relief on pension is being paid to different 
generations of pensioners (depending upon their date of retirement) 
on a graded structure upto 31.07.1997 as per the rates given in 
Appendix-IV of the Pension Rules governing the rates ofDel!mess 
Relief is given in Annexure-1 to this note. 
3. It may be observed from the rates of Dearness Relief as given 
in Annexure-1, that there are three di!ferent rates pr~scribed for 
different groups of pensioners depending upon their ~te of 
retirellltmt. .·Due to the different rates of Dearness Relief to 
differentgroups of pensioners, the real value of pension, which is 
being .eroded over a period of time is not being protected besides 
causing administrative inconvenience. It has thus become 
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necessary to rationalize the Dearness Relief structure and provide 
a suitable updation formula to upgrade the basic pension to the 
employees of the Corporation who have retired prior to 01.08.1997. 
It may be mentioned that such a provision to upgrade the pension 
due to periodic revision in case of Central Government employees 
is incorporated in the Central Civil Services (Pension) Rules, on 
the basis of which the LIC of India (Employees) Pension Rules 
have been drafted. 
4. In view what has been stated in Para 3 above, it is suggested 
that the following updation formula to upgrade the basic pension/ 
family pension in respect of employees who have retired between 
Ol .Ol.1986to 31.07.1997 maybe adopted. 
a. The basic pension/family pension payable in relation to AICPI 
600 points or 1148 points, as the case may be, shall be upgraded 
by merging the Dearness Relief payable upto AICPI 1740 points, 
and 
b. On the pension so upgraded, Dearness Relief of0.23% of basic 
pension shall be paid or become recoverable for every 4 point rise 
or fall of AICPI from 1740 points. 
It is suggested that the above amendment shall be made from the 
date of its notification in the official gazette and no arrears on 
account of Pension/FamilyPension/Commutation Value or 
Dearness Relief shall be payable. The one time financial 
implication of the above proposal has been actuarially determined 
to be Rs.51.37 Crore."
9. On the basis of the said Minutes, a resolution was passed by 
the Board on 24'' November, 200 I. As the entire case hinges and rests 
on the resolution, it is extracted below:-
"Amendmentto LIC oflndia (Employees) Pension Rules, 1955-
UPGRADING OF Basic Pension to AI CPI 1740 Points and 100% 
DA neutralization thereon in respect of Retirees prior to 
01.08.1997: 
Executive Director (Personnel), introducing the subject mentioned 
that there were three different rates for different groups pensioners 
at present depending upon their dates ofretirement, which causes 
considerable administrative inconvenience. Chairman pointed out 
that he has since received a communication for Dr. S. Ram 
Khanna, Board Member, which refers to his meeting with the 
Retirees Federation and requests for examining the proposals as
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
[DIPAK MISRA, J.l 
per Board Note in line with the demands made by the Federation 
viz. Giving effect to the proposals by 01.11.1993 and upgradation 
by giving weightage of 11.25% as in the case of in service 
employees. Chairman pointed out that these have been considered 
before placing the matter to the Board and it was felt that the 
same would increase the financial burden very substantially and 
may be unaffordable for the Corporation. Chairman pointed out 
that the implications of the proposal made have been actually 
determined at Rs.S 1.37 crore and the annual outlay would be in 
the region of 5 to 6 crore. After some discussion, the Board 
approved the proposal and suggested that it should be implemented 
prospectively after obtaining Government approval." 
10. After the resolution was passed, the Executive Director of 
the Corporation wrote to the Joint Secretary (Insurance & Banking) on 
31" December, 2001, seeking amendment to the 1995 Rules. Nothing 
has been brought on record by the Corporation as to what ensued on the 
said communication. Be that as it may. The respondents being grieved 
by the non-execution of the resolution passed by the Corporation, 
preferred two writ petitions being S.B. Civil Writ Petition No.6676 of 
1998 and S.B. Civil Writ Petition No.654 of2007 before the High Court 
ofRajasthan at Jaipur. 
11. The learned Single Judge, after hearing the learned counsel 
for the parties though as a matter
of fact came to hold ·that no approval 
had been given by the Union oflndia, and the matter was pending before 
the Union oflndia; yet taking into consideration the concession given by 
the learned counsel for the Union oflndia, directed as follows:-
"The Respondent Corporation is directed to take a decision for 
implementation of the resolution dated 24.11.2001 passed by the 
Board. The respondent Corporation cannot provide different 
criteria for grant of dearness allowance to the eidsting pensioners 
based on cut-off date i.e. 31. 7 .1997. The benefit arising out of 
the directions above would, however, be considered by the 
respondent Corporation so that every retired employee may get 
the same benefit. Costs made easy." 
12. The Corporation being grieved by the decision of the learned 
Single Judge preferred two intra-court appeals D.B. Civil Special Appeal 
(W) Nos.493 and 494 of2010. The Division Bench posed the question 
whether the resolution passed by the Corporation required approval of 
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the Central Government, referred to Section 21 of the Act, reproduced a 
paragraph from the order of the learned Single Judge and came to hold 
as follows:-
"The learned counsel for UC Mr. Mahendra Singh contended, 
taking us through the provisions of the Act and the Rules under 
Section 48 and 49, that the rules with regard to the conditions of 
service of the employees could only be framed by the Central 
Government and could be implemented only after being notified 
in the official gazette. 
We are of the view that whatever grievance with regard to the 
implementation of the Board's resolution dated 24.11.2001 is 
concerned, the same can be raised by the Union oflndia who has 
chosen not to file any appeal in the matter and this can easily be 
considered as an approval of the said resolution of the Board 
dated 24.11.2001 which was allegedly pending for nine years. 
The Board of LIC, who is the appellant before us against the 
judgment of the learned Single Judge, had itself taken a decision 
to remove the disparities and the discrimination with regard to the 
payment of Dearness Allowance and pension to the retired 
employees under its resolution of the Board dt.24.11.2001, which 
was in public interest. It could not and should not have filed the 
present appeal against the judgment of the learned Single Judge 
as the learned Single Judge has provided an umbrella to the 
appellant for the implementation
of the decision of the Board 
dt.24.11.2001 on the categorical statement made by the learned 
counsel appearing on behalf of the Union oflndia and not assailed 
in appeal by the Union of India." 
13. It is submitted by Mr. Neeraj Kishan Kaul, learned Additional 
Solicitor General appearing for the appellant-Corporation that, the learned 
Single Judge as well as the Division Bench, has committed illegality in 
deciding an issue of law on the basis of concession given by the learned 
counsel for the Union oflndia, for a concession by counsel on a question 
oflaw, does not bind the Corporation and, in any case, it cannot form the 
foundation of a decision. (See Union of India v. Hira Lal', B.S. Bajwa 
v. State of Punjab', Vimaleshwar Nagappa Shel v. Noor Ahmed 
Shariff', State of Rajasthan v. Surendra Mo/mot'.) 
1 (1996) 10 sec 574 
2 (1998) 2 sec 523 
' <2011) 12 sec 658 
' <2014) 14 sec 77
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
851 
fDIPAK MISRA, J.] 
14. The thrust of the matter is whether the approval of the Union 
A 
oflndia is necessary. Mr. Gupta, learned senior counsel appearing for 
the respondents has drawn our attention to Rule 55 of the 1995 Rules, 
which reads as under:-
"55. Power to issue instructions - The Chairman of the 
Corporation may from time to time issue instructions as may be 
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considered necessary or expedient for the implementation of these 
rules." 
Relying on the same, it is urged by Mr. Gupta that with regard to 
pay revision, the Chairman ofthe Corporation has been issuing circulars 
from time to time and the same is being followed by the Corporation and c 
hence, the interpretation placed on Sections 21 and 48 of the Act by the 
Corporation is absolutely uncalled for and totally unjustifiable. 
15. On scanning ofanatomy of Rule 55 of the 1995 Rules, we are 
absolutely clear that it does not confer power on the Chairman of the 
Corporation to issue any instructions that can travel beyond the rules. In 
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terms of Rule 55, he has been authorized to issue instructions which are 
necessary and expedient for the implementation of the rules. The Board 
had passed the resolution. The Board can pass a resolution and the 
Chairman can be the head of the Board, but it does not authorize the 
Board to take a decision with regard to certain matters which are within 
the domain of the rule making authority. On a perusal of Section 48,
it is 
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clear as crystal that conferment of benefit, either pension or anything 
ancillary thereto has to be conferred by the rules and the rule as prescribed 
under Section 48 of the Act is to be tabled before the Parliament. In the 
absence of a rule, in our considered opinion, no benefit can be granted 
on the basis of the resolution passed by the Corporation. This being the 
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legal position, the High Court could not have held to the contrary on the 
basis of the concession given by the counsel for the Union of India. 
"'-
16. Having stated so, in all possibility, we would have proceeded 
to record the conclusion but, a significant one, the controversy of this 
\lture does not see the sunset with such immediacy. 
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17. Mr. Shree Ram Pancho, learned senior counsel appearing for 
the respondents in Civil Appeal No.9223 of 2013, has submitted that 
certain petitioners had preferred writ petition No.184 of2007 in the High 
Court of Delhi, assailing the constitutional validity of Para 3A of the 
Appendix to the Rules contending, inter alia, that the said Para is violative 
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of Article 14 of the Constitution in view of the decisions rendered by this 
court in D.S. Nakara v. Union of India and otflers-', All India Reserve 
Bank retired Officers Association v. Union of India6 and V. Kasturi 
v. Managing Director, State Bank of India and anotfler', but the 
High Court has not adverted to the said facets and disposed of the writ 
petitions, placing reliance on the decision rendered by the High Court of 
Rajasthan. We are of the considered opinion that when the issue of 
constitutional validity of Para 3A to the Appendix was raised, the same 
deserved to be addressed by the High tourt. 
18. Mr. Gupta, learned senior counsel appearing for the 
respondents, endeavoured hard to impress upon us to deal with the same, 
but as we find certain facts are to be adverted to and the pleadings are 
not adequate, we think it seemly to restrain from the same. 
19. At this juncture, we may usefully note another facet of the 
submission advanced by Mr. Gupta. The learned senior counsel would 
urge that there are certain employees who have retired after the cut-off 
date stipulated in Para 3A of the Appendix, but they are not being given 
the requisite dearness relief based on subsequent pay revisions. To 
bolster his submission, he has placed reliance on Union of India and 
Another v. SPS Vains (Retd.) and otflers8, K.J.S. Huttar v. Union of 
India and anotfler9 and V. Kasturi (supra). Mr. Gupta
would submit 
that there is a distinction between challenge to the constitutional validity 
ofa provision and the interpretation of the provision and its applicability. 
For the aforesaid purpose, he has referred to us paragraph 16 of the 
SPS Vains (Retd.) and otflers (supra), which reads as under:-
"The case of the respondents, however, was that in view of the 
Constitution Bench decision of this Court in D.S. Nakara v. Union 
of India, the fixation of a cut-off date as a result of which equals 
were treated as unequals, was wholly arbitrary and had been rightly 
interfered with by the High Court. One of the questions posed in 
the aforesaid decision was whether a class of pensioners could 
be divided for the purpose of entitlement and payment of pension 
into those who retired by a certain date and those who retir~d 
thereafter. The question was answered by the Constitution Bench 
'AIR 1983SC130=(1983) 1 SCC305 
' < 1992) Suppl 1 sec 664 
1 <1998) 8 sec 30 
• <2008) 9 sec 12s 
'(2011) 11sec429
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
853 
[DIPAK MISRA, J.l 
holding that such division being both arbitrary and unprincipled 
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the classification did not stand the test of Article 14." 
20. Pyramiding the submission further in that direction, he has 
also laid emphasis on paragraphs 8 to l 0 and 26 to 28 and 31 of K.J.S. 
Buttar (supra). 
21. It is urged by Mr. Gupta that once the employees are covered 
under Para 3A, being retirees after the cut-off date, the benefit cannot 
remain static but has to change with the pay revisions regard being had 
to the price index, for otherwise the provision does not spring to life and, 
eventually, paves the path of arbitrariness. He has heavily relied on 
paragraphs 34, 35 and 39 of Kallakkuricl1i Taluk Retired Officials 
Association, Tamil Nadu and others v. State of Tamil Nadu10 apart 
from other paragraphs. We may hasten to add that we have referred to 
this aspect in extenso as Mr. Gupta would submit that non-conferment 
of the benefit of the dearness relief keeping in view the subsequent pay 
revisions of the similarly situated employees leads to disastrous effect 
and in a way allows room for absurdity. Learned senior counsel has 
given an example to highlight as to how the absurd situation can creep 
in. It is urged by him that if an Executive Director stood retired sometime 
in 1997, he would get approximately Rs.7,000/- towards pensicm, whereas 
a person working in Class III, if he retires subsequently would get
approximately double of the said amount. 
22. We have already stated that the High Court of Delhi has 
really not adverted to as regards the constitutional validity of Para 3A of 
the Appendix. As far as the other delineations or deliberatio'ns are 
concerned, the High Court of Punjab & Haryana at Chandigarh has also 
not independently dealt with the controversy, but followed the decision 
rendered by the Rajasthan High Court. We have already adverted to 
the reasoning of the High Court of Rajasthan inasmuch as it has referred 
to the scheme of the Act, recorded the concession of the counsel for the 
Union oflndia and proceeded to apply the inherent principle enshrined 
in Article 14 of the Constitution, though constitutional validity was not 
challenged. Be it stated, there are two categories of employees, namely, 
the employe·es who have retired prior to the cut-off date i.e. l" August, 
1997, as a consequence of which they are not getting the benefit of 
dearness relief, and the employees who have retired after the said date 
but are not extended the benefit of dearness relief despite subsequent 
pay revisions. Needless to say, the quantum of pension is affected. 
'° (2013) 2 sec 112 
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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, leamed senior counsel 
appearing for 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. 
24. We had indicated at an earlier stage that though the controversy 
relating to pension should be put to an end to in quite promptitude, yet for 
some reason or other, it does not so happen. When the present batch of 
appeals were argued, this Court on 7"' May, 2015, as an interim measure, 
had directed as follows:-
" 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 oflndia, 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." 
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
I 
LIC OF INDIA v. KRISHNA MURARI LAL ASTHANA 
855 
fDIPAK MISRA, J.l 
harboured hope when the resolution was passed. Their hope, as the 
learned counsel for the 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 haveto 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 ofa provision. It is well settled in 
law that he who assails the constit.utional 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", State of Andfira Pradesh 
and another v. K. Jayaraman and others", Union of India v. E.LD. 
Parry (India) Ltd.", State ofHaryana v. State of Punjab & another"]. 
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
oflndia 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 7"' 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 revision before the High Courts ofRajasthan and Punjab 
& Haryana at Chandigarh are 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. 
27. Keeping in view the totality of facts and circumstances of the 
case, it is hereby directed that the Corporation shall pay 40% as per 
11 AIR 1964 SC 1135 
12 <I 974) 2 sec 738 
" <2000) 2 sec 223 
" (2004) 12 sec 673 
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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. 
28. It is a case where we are constrained to speak that the end 
does not bring the finality. We say so as Mr. Kaul, learned Additional 
Solicitor General would contend that the parties to the litigation shall 
only get the benefit and not the similarly placed persons in view of the 
interim order passed by this Court on 07.05.2015. It does not require 
Solomon's wisdom to state that an interim order is an interim order and 
does not have any impact at the time of final verdict especially in such a 
situation and, therefore, we direct that it shall be applicable to the similarly 
placed persons. 
29. As we are transferring the cases to Delhi High Court, the 
Registry of the High Courts of Punjab & Haryana and Rajasthan shall 
send the papers to the High Court of Delhi within three weeks hence. 
The learned Chief Justice of the High Court of Delhi is requested to 
constitute a Bench within four weeks from today. We grant liberty to 
the writ petitioners to file requisite amendments, if so advised. Counter 
affidavit to the same shall be
filed by the contesting parties within three 
weeks from the date of filing the amendments. The High Court is 
requested to dispose of the writ petitions by the end of August, 2016. 
We ingeminate that we have not expressed any opinion with regard to 
any of the aspects of the matter, except what we have finally concluded, 
namely, that the resolution could not have been given effect to without 
framing a rule by the Central Government. Till the matter is decided by 
the High Court of Delhi, no other High Court shall proceed with the 
similar matters, as it is desirable that a singular judgment is passed so 
that the validity of the same can be adjudged. 
30. The appeals are disposed of accordingly. There shall be no 
order as to costs. 
Nidhi Jain 
Appeals disposed of.