LexV.M. GADRE versus M.G. DIWAN
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
B
V.M. GADRE
v.
M.G. DIWAN
MARCH 15, 1996
[A.M. AHMADI, 0., N.P. SINGH AND S.P. BHARUCHA, JJ.]
Life Insurance Corporation Act 1956-Ss. 8(1), 8(3) r/w Pension Fund
Rules, Rules JO, 11 and 24-Life Insurance Corporation (LIC) taking over
management of Pension Fund of employees of Oriental Government Security
C Life Assurance Company upon nationalisation--Periodic increase in pension
amounts stopped since 1984-Supreme Court by interim orders directing min-
imum pension of Rs. 375--Petitioners claiming revision of pension consistent
with increased cost of livin~Held, as a one-time. final measure Scheme 'C'
worked out by LIC under which minimum pension worked out to Rs. 575
D accepted-Constitution of India, Articles 14, 38 and 39.
Constitution of India-Article 32 r/w 142--Writ Petition by erstwhile
employees of nationalised insurance company claiming revision of pen-
sion-Held, while exercising jurisdiction under Article 32 read with 142 it
would not be pennissible for Court to substitute a totally new pension plan
E in place of an existing one-l'ractice and Procedure.
F
The petitioners were erstwhile employees of the Oriental Govern·
ment Security Life Assurance Company ('Company'). Under s.8(1) of the
Life Insurance Corporation Act, 1956 ('Act') the Pension Fund created by
the Company came to be vested in the Life Insurance Corporation of India
(LIC). Under s. 8(3) LIC created a trust named the LIC (Oriental) Pension
Fund and made Rules and Regulations for its management.
While there was no increase in the dearness allowance component,
the pension was revised by LIC in 1980 and 1984. Thereafter there was no
G further revision,
The petitioners numbering 669, of which all but two or three had
retired, in a writ petition filed in the Supreme Court in 1988, sought
directions to LIC to step up the pension to a minimum of Rs. 375 p.m. and
to grant dearness allowance/relief as admissible to pensioners of the
H Central Government or the State Bank of India with effect from 1.1.1973.
480
+
t
I
V.M. GADREv. M.G. DIWAN [AHMADI, CJ.]
481
LIC contended that the petitioners were on a better footing than those A
covered by the Provident Fund Scheme. The Pension Fund was contractual
in nature and had to be strictly governed by the Rules framed for the
-<.
_.,.
purpose;
By an interim order made in May, 1991 this Court directed the
minimum pension to be raised to Rs. 375. During the hearing, at the B
request of the Court, LIC presented three alternative schemes ('A', 'B' and
'C') of revision of pension. Under Scheme 'C' the minimum and maximum
pension amounts would be revised to Rs. 575 and 2131 respectively over a
·•
period of five years.
Partly allowing the Writ Petition, this Conrt
HELD : 1. Scheme 'C' is accepted as a one-time final measure. This
scheme is more beneficial and would also provide a measure of satisfaction
in view of the annual increments. [490-B]
c
D
2. 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 conseqentially the
retiral benefits as well for all those who had retired long back and are in
receipt of pension under the extant rules. [486-H, 487-A]
E
CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 127 of
1988.
"'·
(Under Article 32 of the Constitution of India.)
Ms. Indira Jaisingh, P.H. Parekh for the Petitioners.
R.P. Kapur (NP) for the Respondents.
Barish N. Salve, Kailash Vahdaw, (R.B. Misra) for Ms. A. Sub-
F
hashini for the Respondents.
G
· 'I'
The following Jndgment of the Court was delivered by
AHMADI, CJI. By ihis petition brought under Article 32 of the
Constitution of India by and on behalf of the retired and in-service
employees of Life Insurance Corporation of India ('LIC' for short) who H
482
SUPREME COURT REPORTS
[1996] 3 S.C.R.
A were employee of the erstwhile Oriental Government Security Life As-
surance Company, Limited, (hereinafter called 'the Company"), certain
.,
reliefs in regard to the upward revision of pension and dearness allowance
or dearness relief payable thereon and other reliefs related thereto are
sought. The brief facts which are relevant for our purpose are as follows :
B
The erstwhile Company had sometime in the Year 1908 established
a Pension Fund for the Oriental emplExcerpt shown. Read the full judgment & AI analysis in Lexace.