LexAIR INDIA EMPLOYEES SELF CONTRIBUTORY SUPERANNUATION PENSION SCHEME versus KURIAKOSE V. CHERIAN AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
AIR INDIA EMPLOYEES SELF CONTRIBUTORY SUPERANNUATION A PENSION SCHEME v. KURIAKOSE V. CHERIAN AND ORS. OCTOBER 3, 2005 B [Y.K. SABHARWALAND TARUN CHATTERJEE, JJ.] Service Law: Air India Employees Seif-Contributory Superannuation Pension Scheme; C. Amendment affecting rights of the retired employees-Whether can have retrospective application-Held, No-Rights of the employees to receive the annuity and quantum of the annuity get crystallized at the time of purchase of the annuity. The dispute in these matters basically between the appellant and the serving employees of Air India on one hand and retired employees on the other is about the interpretation of Air India Employees Self-Contributory Superannuation Pension Scheme (hereinafter referred to as 'Scheme'). D The main object of the Scheme is to provide to the members on E retirement a fixed amount per month. The amount is to be calculated according to the Scheme on superannuation of an employee and annuity is required to be purchased from Life Insurance Corporation oflndia (Liq so as to ensure payment by LIC of a fixed monthly sum to the retired employee and on his demise the payment of the annuity amount to his legal representatives. F According to the appellants, the existing employees, the Scheme was defective inasmuch as large amounts were given to the retiring employees without having regard to the contributions made by them towards the Scheme and resultantly the old employees by making smaller contributions received disproportionately larger amount of benefits. No fund woµId have been available with the Scheme for giving pension to the employees retiring after 2005 G despite they having contributed large amount to the fund under the Scheme, thus, requiring corrective action. Under these circumstances, the Scheme was amended with effect from 3rd April, 2002. The amendment requires the pensioners to make payment of additional contribution towards annuities 867 fl -. 868 SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R. A purchased from LIC. The amendment provided that the amount of the pension shall be corresponding to the contribution made by the respective retired employees and not on the basis of 40 per cent of the last drawn salary of the employees. In support of these appeals, three contentions have been urged: (1) depletion of the fund amount if not checked would result in the retirees after the year 2005 not getting any pension. Therefore, there was the B requirement to make the impugned amendments; (2) the trustees in terms of Deed and the Rules have unrestricted power to amend the Scheme so as to apply amendment to also those who stand retired; and (3) the Scheme is not amenable to the writ jurisdiction. The appellants are neither an instrumentality or agency of the State nor other authority contemplated by C Article 12 of the Constitution. The validity of the aforesaid amendment of the Scheme was challenged by the retired employees in writ petition filed under Article 226 of the Constitution oflndia before the High Court mainly on the ground that rights in their favour crystallized on purchase of annuities at the time of their D superannuation and the same cannot be subjected to any alteration or amendment The contention urged before the High Court was that the trustees could only effect amendment to the Scheme for future benefits of existing employees and had no right to effect any amendment which adversely affects vested rights of the pensioners in regard to the pension payable to them as E per the amended Scheme. The plea was that their pension as per the amended Scheme would be considerably reduced. It was contended that on retirement the ex-employees sever all their relations with the Scheme, which does not envisage making of any additional contribution, by members after superannuation. The LIC having accepted annuity and having made monthly payments to retired employees cannot refund to the trust any amount or reduce F monthly payment to the detriment of the pensioners. The High Court by the impugned judgment held that the iIPpugned amendment to the Trust Deed to the extent it applies in future is legal and valid but the amendment cannot apply to the employees who have retired before the date of amendment and such employees shall continue to receive G pensionary benefits as before, namely, the benefits which existed at the time of amendment Dismissing the appeals, the Court H H
Excerpt shown. Read the full judgment & AI analysis in Lexace.