Case: Pensioners' Assn.,Ex-Assam Oil.Offic&amp;Ors Vs. Union Of India

2. The Assam Oil Company Ltd. as well as the Burmah Oil Company Limited were nationalised and taken over by the Government of India by virtue of the Burmah Oil Company (Acquisition of Shares of Oil India Ltd. and of the undertakings in India of Assam Oil Company Limited and the Burmah Oil Co. (India Trading Ltd.) Act, 1981 (hereinafter to be referred to as the Act). As per provisions of Section 5 of the Act, with effect from the appointed date, namely, 14.10.1981 the right, title and interest of the said companies in relation to their undertakings in India were to be transferred and vested in the Central Government. Under(1) of Section 6 of the Act, the undertakings of the companies would be deemed to include all assets, rights, powers, books of accounts, records etc. including the borrowings, liabilities including the liability for the payment of taxes, if any, and for the payment of any pension and other pensionary benefits to the persons employed in relation to its undertakings in India etc. By virtue of Section 9 of the Act the undertakings vested in the Central Government, instead of continuing to be so, could later be vested in one or more government companies. There is no dispute about the fact that the Assam Oil Company Limited after having been taken over the vesting in the Central Government, later vested in the Indian Oil Corporation Limited (Assam Oil Division) vide Notification dated 13.10.1981. All the employees of the specified company employed immediately before the appointed date became officers and the employees of the Central Government/successor government company.(1) of Section 11 relevant for the purposes reads as underme officer or other employee of a specified company who was, immediately before the appointed day, employed by that company in connection with its undertaking in India, and everyofficer or other employee of a specified company who was, immediately before the appointed day, temporarily holding any assignment outside India shall, on the appointed day, become an officer or other employee, as the case may be, of the Central Government or the concerned Government company (hereinafter referred to as the successor Government company) in which the right, little and interest of the specified company in relation to its undertakings in India have vested under this Act and shall holding office or service under the Central Government or the successor Government company, as the rights to pension, gratuity and other matters as would have been admissible to him if there had been no such vesting and all continue to do so unless and until his employment under the Central Government or the successor Government company is duly terminated or until his remuneration and conditions of service are duly altered by the Central Government or the successor Government company.(2) XXX XXX(3) XXX XXX(4) XXX XXX"We find that in regard to those employees who were in receipt of pension or other pensionary benefits immediately before the appointed date, a provision has been made under Section 12 of the Act, which reads as under:"12.(1) Where a provident, superannuation, welfare or other fund has been established by a specified company for the benefit of the persons employed by it in connection with its undertakings in India, or for the benefit of such persons and persons employed by Oil India, the money relatable to thewhose services are transferred by or under this Act to the Central Government or the successor Government Company, or as the case may be, continued with Oil India, orb) who are in receipt of pension or other pensionary benefits immediately before the appointed day.Shall, out of the moneys standing, on that day, to the credit of such provident, superannuation, welfare or other fund, stand transferred to and vested in, the Central Government or the successor Government Company, or Oil India, as the case may be, free from any trust that may have been continued by the specified company in respect thereof.2) The moneys which stand transferred, under(1) to the Central Government or the successor government company or Oil India shall be dealt with by the Central Government or that company, or Oil India, as the case may be, in such manner as may be prescribed.3) The successor Government company or Oil India, as the case may be, shall, as soon as may be after the appointed day, constitute, in respect of the moneys and other assets which are transferred to, and vested in, it under this section, one or more trusts have objects as similar to the objects of the existing trust as in the circumstances may be practicable; so, however, that the rights and interest of the beneficiaries of the trust referred to in(1) are not, in any way, prejudiced or diminished.4) Where all the moneys and other assets belonging to an existing trust are transferred to, and vested in the Central Government, or the successor Government company or Oil India under this section, the trustees of such trust shall, as from the date of such vesting, stand discharged from the trust except as respects things done or omitted to be done before the date of such vesting."

Court's reasoning:
The respondents submit that the Indian Oil Corporation (AOD) Staff Pension Funds Scheme, 1983 was not meant for the retires who had retired earlier as employees of the Assam Oil Company Ltd., viz. those who had never become the employees of the Indian Oil Corporation. Therefore, they were not the beneficiaries of the Scheme of 1963. The Annuity based benefit as in vogue prior to the taking over of the company, under the scheme of 1973, it continues and the petitioners are entitled to pensionary banefits based on annuity purchased on their behalf. It is further sought to be impressed that it was a kind of an arrangement between those employees in whose names annuities were purchased and the LIC. There was no pensionary fund or any other monies for the benefit of the retired employees covered under the Scheme of 1973. Thus the employees who had already retired before the appointed day could have no link with the successor company which had taken over after the retirement of the petitioners. In so far the employees who were in service of the Assam Oil Company Ltd. on the appointed day of taking over, a new Scheme was promulgated for them in the year 1983 creating a trust for the pensionary benefit of such employees. The retirees ofday are neither covered not have any concern with the scheme of 1983 and that being the position there is no occasion for them to take any benefit of the revision of pension inreading of the above provision makes it clear that the Central Government or the successor company cannot claim to have totally snapped all its connections with the retired employees of the oil companies on the company being taken over, as it would be clear from the later part of Section 6(1) that the liabilities of the Central Government or the successor company would include all borrowings, liability of payment of taxes if any, and for the payment of any pension and other pensionary benefits to the persons employed in relation to its undertakings in India namely, the specified company i.e. the Assam Oil Company Limited. Thus, the liability of pension or pensionary benefits of the employees of the specified companies (Assam Oil Company Limited) cannot be said off in the manner tried to be done and canvassed by the respondents before us. The liabilities in relation to pension and pensionary benefits of the employees of the specified companies (Assam Oil Company Limited) are also very much taken over by the Central Government, or the successor company. We have already quoted Section 12 of the Act. To lay emphasis on(3) of Section 12 we would like to highlight that the Central Government or successor company after the appointed day shall constitute one or more trusts respect of the monies and other assets which are transferred or vested in government of the successor company having objects similar to the existing trust without prejudice to the existing rights of the beneficiaries of the trust.It is, therefore, clear from the scheme of 1973 that it has been framed by the then employers for the pensionary benefits of its employees. All details about entitlement,mode and manner of payment and different claims in different circumstances are all provided for in the rules framed under the Scheme. Pension could be reduced or stopped in terms of the scheme. In Certain eventualities the amount could even be forfeited to the fund. The manner in which the pension is to be calculated is also detailed in the rules. Therefore, to say that the pensionary benefit was an arrangement between the employee and the LIC, may not be correct. The erstwhile employer, namely the Assam Oil Company Ltd., did not act merely as a mediator in facilitating purchase of annuity for the employees. The scheme provided the manner in which the pensionary fund was to be raised and the manner in which it was to be disbursed and paid as pension. It provided all other details by which the objective to provide pensionary benefits to its employees was sought to be achieved. By no means it can be said that it was a matter exclusively between the employee and the LIC and nothing beyondis thus clear from what has been quoted above that the Pension Scheme 1983, has been framed and promulgated in pursuance of(3) of Section 12 of the Act and it is in respect of employees who were working and taken over as employees of the successor company with effect from the appointed day as well as those who were in receipt of pension or other pensionary benefits. It further mentions that the existing fund stood transferred and vested in Corporation with effect from 14th October, 1981 free from any trust constituted by the Assam Oil Company Limited in respect thereof. The fund as existed on the appointed day stood transferred and vested in the Central Government/successor company. We have already seen that the fund which was existing on that date, as constituted under the Scheme of 1973 was for the pensionary benefits of employees in service or retired before 14.10.1981. As per requirement of law under Section 12(3) of the Act, the objects of the 1983 Scheme are similar to the objects of the existing fund namely, the fund o 1973. The pension fund 1983 has been made effective from 14.10.1981. The fund then existing as constituted by the Assam Oil Company Limited stood transferred and vested in the successor company on the own showing of the respondents. It is totally incorrect to say that there existed no fund for pensionary benefits of the petitioners viz. retired employees of the Assam Oil Company Limited or that it did not vest in the successor company. The Trust Deed of 1983 does not talk of any partial transfer and vesting of the existing fund. further examination of the scheme shows that the working of the staff pension Fund Rules of Indian Oil Corporation Limited (AOD) is similar to the scheme of 1973 and the rules framed thereunder. The term transferred employee has been defined under rule 2(i) providing that the word transferred employee means an employee of the Assam Oil Company Limited who was on or before the appointed day a member of the existing fund and in respect of whom the money is lying to the credit in existing fund stood transferred or vested in the Corporation under Section 12(1) of the Act. The petitioners were undoubtedly the members of the existing fund namely, the fund created under the Scheme of 1973 for pensionary benefits of the employees of the company and which fund was existing on the appointed day. Therefore, under the definition of transferred employee the pensioners receiving pensionary benefit from the existing fund as on 14.10.1981 shall also be treated as transferred employees for the purposes of the Scheme of 1983 and further in the definition of the term member an employee of the Corporation includes a transferred employee. A perusal of the further details of the working of the Scheme of 1983 also shows that it functions in the same manner as did the 1973 Scheme i.e. by purchasing annuity from the LIC. Almost all the conditions are similar to that of the earlier scheme. The petitioners who have been the pensioner members of the 1973 Scheme on the appointed day cannot be deprived of the pensionary benefits of the corporation being very much the members of the scheme of 1983. That being the position the benefit of revised pension scheme of 1995 could not be denied tois not the case of the respondents that the petitioners are to be deprived of the benefit of the new formula in view of anydate excluding them or due to financial constraints of the like reasons. On the other hand, the case of the respondents is that the petitioners had no concern whatsoever with the successor company since they had retired prior to the appointed date; there was no pension fund for them nor the successor company had to do anything with their pensionary benefits since it was a case where annuities were purchased in their name from the LIC, therefore, it was a matter between the petitioners and the LIC. In view of the provisions of law which have been discussed in the earlier part of the judgment as well as factual position, the stand taken by the respondents is not sustainable. The petitioners were beneficiaries of the 1973 pension scheme and had also become the members of the 1983 scheme which made them entitled for the benefit of formula for revision of pension made effective from 1995.