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LIC of India v. Krishna Murari Lal Asthana and Anr. Etc.

Civil Appeal · Neutral citation not assigned (Civil Appeal Nos. 8959-8962 of 2013)Decided 31 Mar 2016
Civil Appeal Nos. 8959-8962 of 2013
Justice Dipak Misra · Justice R. Banumathi

Background

This order does not decide the main case. LIC pensioners claimed dearness relief under the LIC of India (Employees) Pension Rules, 1995. The Rajasthan High Court had given effect to a 2001 Board resolution of the Corporation that purported to upgrade dearness relief for pre-1997 retirees. LIC appealed, and the matter was heard with three other tagged appeals.

Decision Breakdown

This is not a final decision on the main case. The Court held that the 2001 Board resolution could not have legal effect unless it was first framed as a rule under Section 48 of the LIC Act, 1956. It set aside the High Court orders and transferred the writ petitions to the Delhi High Court, to be decided afresh together with a constitutional challenge to Para 3A of the Appendix to the Pension Rules and the claims of post-1997 retirees. It said it had expressed no opinion on the merits beyond that one point. As an interim measure, it directed LIC to pay 40% of the disputed dearness relief amount to each employee within six weeks, including similarly situated persons.

Lesson Learnt

There is no final ruling yet on how much dearness relief LIC pensioners are entitled to; the Delhi High Court was directed to decide it by the end of August 2016. A Board resolution cannot by itself create a legal entitlement unless it is made into a rule.

Official source (sci.gov.in)View Judgment (PDF)

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