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100% DA Neutralisation to Pre 01/11/2002 Retirees

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Rajesh Goyal 




This issue has been exploited by IBA and GoI for long and unions have utterly failed to convince any one of them that all bank pensioners  needs to be covered by 100% DA Neutrlisation.   Everybody knows Equality is among the main Fundamental Rights.   At we have been taking up this issue strongly from time to time to create awareness among the pensioners and exert pressure on unions, IBA, GoI and Courts for granting the senior bankers the right to equality.   It appears the corrupt politicians and CMDs / EDs (who are part of IBA) of the Banks have no concern for senior citizens and try to squeeze them by denying them them their right to have a decent pension.   On the other hand, Central Government, where we have top bureaucrats are able to manipulate rules so that they get decent pensions and time to time revisions also.



View of GoI / Finance Minister in September, 2011 :



A few weeks back, one of our readers,   Mr. Gajanan Chaudhari sent us an email, giving us the reply of the Finance Ministry on the issue of 100% DA neutralisation for bankers.  We quote below the same to give our readers some idea as to the attitude of Finance Ministry in this regard till that date :-



The Question and Answer given by Finance Ministry on 02/09/2011 was :

(a) whether the Government proposes to provide neutralization of Dearness Allowance hundred per cent to the pensioners of the Public Sector Banks retired prior to November, 2002;

(b) if so, the details thereof alongwith the time by which such neutralization of D.A. is likely to be provided such retired employees of the said banks; and

(c) if not, the reasons therefor ?



The Minister of State in the Ministry of Finance (Shri Namo Narain Meena)

(a): There is no proposal for neutralization of Dearness Relief to 100% to the pensioners of Public Sector Banks retired prior to November, 2002.

(b): Do not arise.

(c): Pension to Bank employees are paid in terms of the Provision of Bank Employees Pension Regulations framed/amended based on settlement / joint note, which do not provide 100% nuteralization of Dearness relief to those retired prior to November, 2002.




View of Madras High Court in a Judgement in 14th December, 2012 - Detailed Analasis


The above shows that till September, 2011, Finance Ministry was in no  mood to even payment of 100% DA neutralisation to bankers retired prior to November, 2002.    However, in last three months or so things have moved in the right direction only due to Court judgements and constant hammering by some of our senior bankers who inspite of old age and scarce resources have been fighting in Courts. 


On 14th December, 2012,  Madras High Court has given a landmark judgment  (Honourable Mr Justice K K Sasidharan) in a case wherein number of WP and other petitions were clubbed (a copy of the same can be downloaded from the link given below).    I could not write earlier as I suffered some burn injuries in the last week of December, 2012.    I discuss below some of the relevant paras of the judgement so that our affected readers can easily understand the same and can make the next strategy.  


While analysing the earlier judgements, HC has quoted "D S Nakara vs Union of India (1983) landmark judgement on number of such issues.   In that case SC has held that in case the claim is essentially a revision and not a new retiral benefit, the existing employees are all entitlted to the benefits.  Similarly, in case it was a new concept  or a new retiral benefit, those who have already retired could not claim the benefits of such new scheme.   SC has further said in this old case that "If the State considered it necessary to liberalise the pension scheme, we find no rational principle behind it for grating those benefits only to those who retired subsequent to that date simultaneously denying the same to those who retired prior to that date... If the liberalisation was considered necessary for augmenting social security in old age to government servants then those who, retired earlier cannot be worst off those those who retire later".


Inspite of such a SC judgment in 1983, Banks continued to deny 100% DA neutralisation to bankers and our Union leaders merely begged with IBA and GoI for granting the same.   I wonder whether such union leaders were aware of this SC judgement  of 1983.  If yes, why the issue was taken up in Courts and rather tried to settle in BPS.


Anyway, now in December, 2012. Madras HC, inter-alia, heavily depended on the above rational and gave judgement in favour of the petitioners and said "The All India Overall Working Class Consumer Price Index remain the same not only for the employees who have retired subqeuent to 8th BPS / Joint Note but also for others like the petitioners, who have retired before the cut off date in question.   The DA at 0.18% of the basic pension was introduced taking into account the All India Overall Working Class CPI.  The inflation and price increase are common to all the retired employes irrespective of the  date of retirement.  Therefore, the benefits of such redefinition of pay for the purpose of pension should be given to all the pensioners witout any distinction.."


The logical given by HC is very simple and I think can be easily understood by any person of sound mind and there is hardly any ambiuity.    I hope the officials and IBA and GoI will not make a prestige issue and go for appeal.  



Click Here to Downlod Full High Court of Madras Judgement for 100% DA Neuturalisation for all bank employeees





View of Supreme Court in a Verdit Delivered on 17th January, 2013 (also a news item in Hindu on 27th January 2012) - Detailed Analysis :


While IBA and GoI officials must have been trying to find loopholes in the above judgement to continue deny 100% DA neutralisation to bankers for last one month,  now another development has taken plac.   In a judgement announced on 17th January, 2013 Supreme Court in the case of Kallakkurichi Taluk Retired Official Association, Tamil Nadu etc. vs. State of Tamilndu and others  alongwith  Civil Appeal No 8853-8855 of 2012 (Madurai Corp Retired Officers Welfare Association vs State of Tamil Nadu,) has  Another point.

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In the above cases against Tamil Nadu govenrment,  several thousands of TN State Govt. Pensioners in this Case who retired prior to 01/06/1988 were being paid DA rates different from those Pensioners who retired on or after 01/06/1988.  This case is just  identical to case of bankers who have also being denied equal DA.. The latest Judgement is delivered by a Division Bench of Supreme Court clearly stating that the GO of State Govt. issued in 1988 is violation of Article 14 & 16 of the Indian Constitution. Further, the Hon'ble Judges have stated, "it could not discriminate between one set of Pensioners and another, while calculating the pension payable to them". 


In a email received from Mr S. Ramachandran has rightly said that "In the recent Supreme Court Judgement, it is really pathetic and regrettable that the TN State Govt. Petitioners have taken 23 years (Case was filed by them in 1989) to get the just and legal stamp (judgement) in their favour. It is needless to mention that it is a big question mark as to how many thousands of TN Govt. Pensioners would have outlived (?) to enjoy the fruits of this great Judgement in their life time".


SC in its judgement has held that in fixing pension, no differential treatment can be made among government employees who retired in different periods while taking into consideration their ‘dearness pay’, the Supreme Court has held.    In this ruling that will benefit thousands of employees, a Bench of Justices D.K. Jain (who has since taken over as Law Commission Chairman) and J.S. Khehar quashed an August 9, 1989 Tamil Nadu Government Order to the extent that it extended to employees who retired on or after June 1, 1988 a lower component of ‘dearness pay’ as against those who had retired prior to June 1, 1988, holding that the GO was violative of Articles 14 (equality before law) and 16 (equality in matters of public employment) of the Constitution.


The logical given by SC in its judgement is certainly appreciable and is equallyl applicable to bankers who have retired prior to November 2002.    I would like to quote here the relevant paras from SC so that readers too understand by it is necessary to have 100% DA neutralisation for everybody.   SC says : " The purpose of adding a component of dearness pay to wage for calculating pension is to offset the effect of inflation.   In our considered view, therefore, the instant classification made by the State Govenment in the impunged Government order dated *9.8.1989, placing employees who had retired after 1.6.1988 at a disadvantage, vis-a-vis the employees who retired prior thereto, by allowing them a lower component of 'dearness pay' is clearly arbitrary and discriminatory, and as such, is liable to be set aside, as violative of Articles 14 and 16 of the Constitution of India."


Click Here to Downlod Full Suprme Court Judgement Kallakkurichi Taluk Retired Official Association, Tamil Nadu etc. vs. State of Tamilnadu



Conclusion :


I have personally gone through the above two Court judgements in full.  With my law background, I am of the firm view that it does not leave any logical scope  for IBA and / or GoI to deny 100% DA neutralisation for bankers who have retired prior to 2002.     If it is done by IBA or GoI decides to go to SC based on some filmsy arguments, it will be merely to buy time and harass the bankers.    Union Leaders needs to step up pressure and ensure that these organisations release 100% DA neutralisation immediately, and if necessary GoI needs to be reminded of the National Litigation Policy.


The affected senior bankers needs to be ready for fight, send letters to Finance Minister, Prime Minister, President of India quoting above two Court judgment.   Meet union leaders of your respective banks and stress for the need for taking up the issue at bank and industry level.   In future be ready for demonstrations in all over India if their demands are still not accepted.    If some bankers can approach the above referred MP Mr Kapil Muni, he should be asked to ask another question in Parliament as to why Government is relecutant to honour the Court verdicts and harass senior citizens.



I wish Good Luck to all the bankers who are likely to get benefited from these Court judgements.  I am sure we will win.   We at will continue to spread awareness among the bankers.




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