LIC OF INDIA AND OTHERS versus KRISHNA MURARI LAL ASTHANA AND ANOTHER ETC.

LIC OF INDIA AND OTHERS versus KRISHNA MURARI LAL ASTHANA AND ANOTHER ETC.

The Supreme Court held that a resolution of the LIC Board cannot confer any benefit unless it is converted into a rule as provided under Section 48 of the LIC Act, 1956, which requires the rule to be tabled before Parliament. High Courts erred in granting pensionary benefits and dearness relief on the basis of the Board’s resolution alone, and could not have done so solely due to the counsel’s concession. Orders of the High Courts of Rajasthan, Delhi and Punjab & Haryana were set aside; constitutional validity of Para 3A of the Appendix to the Rules is to be decided by the Delhi High Court.

Parties
Appellants: LIC of India and Others; Respondents: Krishna Murari Lal Asthana and Another etc.
Jurisdiction
India
Judgment Date
31 March 2016
Procedural Posture
Civil Appeal / Supreme Court Appellate Disposition
Outcome
Appeals disposed of; orders of High Courts set aside; writ petitions transferred for determination of constitutional validity.
Legal Topics
Pensionary Benefits, Statutory Rule Making, Constitutional Validity, Dearness Relief, Interim Relief
Pension Law Constitutional Law Administrative Law Pensionary Benefits Statutory Rule Making Constitutional Validity Dearness Relief Interim Relief

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Parties

LIC of India and Others

Appellants

Krishna Murari Lal Asthana and Another etc.

Respondents

Procedural Posture

Civil Appeal / Supreme Court Appellate Disposition

Legal Issues

  1. 1 Whether benefits under Board resolution can be granted absent a statutory rule as per Section 48 of LIC Act, 1956
  2. 2 Whether different criteria for dearness relief based on cut-off date violates constitutional principles
  3. 3 Constitutional validity of Para 3A, Appendix IV of LIC (Employees) Pension Rules, 1995

Ratio Decidendi

The Supreme Court held that a resolution of the LIC Board cannot confer any benefit unless it is converted into a rule as provided under Section 48 of the LIC Act, 1956, which requires the rule to be tabled before Parliament. High Courts erred in granting pensionary benefits and dearness relief on the basis of the Board’s resolution alone, and could not have done so solely due to the counsel’s concession. Orders of the High Courts of Rajasthan, Delhi and Punjab & Haryana were set aside; constitutional validity of Para 3A of the Appendix to the Rules is to be decided by the Delhi High Court.

Court Disposition

Appeals disposed of; orders of High Courts set aside; writ petitions transferred for determination of constitutional validity.

Orders

  • Corporation directed to pay 40% as per Para 3A of Appendix to each employee within six weeks and file affidavit before Delhi High Court.
  • Corporation at liberty to withdraw deposited amounts for payment to retired employees; payment subject to final outcome of writ petitions.