Delhi High Court - Orders
Jugal Kishore Julka & Ors vs Union Of India & Ors on 6 September, 2022
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~9 to 11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 11433/2019
JUGAL KISHORE JULKA & ORS ..... Petitioners
versus
UNION OF INDIA & ORS ..... Respondents
With
W.P.(C) 11438/2019 & W.P.(C) 11554/2019.
For Petitioners: Mr. Bharat Bhushan, Mr. Y.P. Sikri, Mr. Shekhar
Malhotra and Mr. Rahul Khanna, Advocates.
For Respondents: Mr. Amit Kumar Singh, Mr. K. Enatoli,
Ms. Chubalemla Chang and Mr. Prang Newmai,
Advocates for R-4 in Items 9 & 10 and R-3 in Item
11.
Mr. Rajesh Kr. Gautam, Mr. Anant Gautam,
Mr. Nipun Sharma, Mr. Sachin Singh, Mr. Vidhur
Ahluwalia and Mr. Anant Vikram Singh,
Advocates for R-4 in Item 11 and R- 3 in Item 10.
Mr. Sarfaraz Khan, Advocate in Item 10.
Mr. Vivek Goyal, Advocate for UOI in Items 10 &
11.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 06.09.2022
1. Petitioners, who are retired employees of various banks, are aggrieved by the rate of premiums fixed for health insurance scheme, which they say are higher in comparison to what is being charged from serving officers/ Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 1 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 employees, as part of an optional health insurance scheme offered by their respective banks, in terms of communications/directions issued by the Ministry of Finance ["MoF"] and Indian Banks' Association ["IBA"].
2. Although pleadings remain incomplete, yet, considering the nature of reliefs sought, Court has heard counsel for the parties, and with their consent, the matters are being take up for disposal today itself.
3. Since grievances raised in the petitions are similar, a common order is being passed. The facts in W.P.(C) 11433/2019 are being noted for the sake of convenience:
3.1. MoF vide letter dated 24th February, 2012 [hereinafter "MoF's 2012 Letter"] directed IBA to inform concerned banks of its decisions relating to, inter alia, revision of maximum ceiling for 'staff welfare funds' allocated by each bank, cash payments to employees, and group insurance policies for serving and retired employees.
3.2. A memorandum of settlement, i.e., 10th Bi-partite Settlement, dated 25th May, 2015 [hereinafter "10th Bi-partite Settlement"] was entered into between IBA and employees/workmen of the banks, pursuant to which, the erstwhile scheme of reimbursement of hospitalisation expenses was substituted by a Medical Insurance Scheme [hereinafter "the Scheme"]. 3.3. Vide circular dated 29th June 2015, IBA issued directions to its member-banks, which were parties to 10th Bi-partite Settlement, for implementation of the Scheme.
3.4. IBA also issued a circular dated 01st October, 2015 [hereinafter "IBA's October 2015 Circular"] for additional directions towards, inter Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 2 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 alia, extending the Scheme to retirees as per 10th Bi-Partite Settlement, to make the Mediclaim Policy operational by 01st November, 2015. 3.5 In light of the foregoing, the actions of the Respondents-Banks, increasing the premium amount to be paid by Petitioners for renewal of insurance scheme, for the term from 1st November, 2019 to 31st October, 2020, through the following circulars [hereinafter, "Impugned Circulars"], is being challenged:
(i) Circular dated 26th September 2019 issued by Canara Bank [Respondent No. 3 in W.P. (C) 11433/2019];
(ii) Circular dated 26th September 2019 issued by UCO Bank [Respondent No. 3 in W.P. (C) 11438/2019], and
(iii) Circular dated 27th September, 2019 issued by Punjab National Bank [Respondent No. 4 in W.P. (C) 11554/2019].
4. Vide order dated 29th November, 2019, an amendment of the afore- noted petitions was allowed in respect to same relief being sought qua the relevant Impugned Circular in each petition, and, for convenience, the amended prayers in W.P.(C) 11433/2019 are reproduced below:
"1. Declare that the circular bearing number 494/2019 dated 26.09.2019, ANNEXURE-A1, issued by the Respondent Bank, is bad qua the insurance premium fixed for retirees;
2. Direct the Respondents to revisit the premiums fixed for the retirees and bring it at par with that of in service employees/officers and do away all other discriminatory provisions;
3. Direct the Respondent Banks to bear the premiums of retirees instead of charging it from the retirees;
4. Direct the Respondent Union of India to revisit the issue of GST and consider to waive it altogether in case of health insurance;"
5. Prayer (4) qua direction to the Respondent to consider waiver of GST is not sustainable. No provision is shown to demonstrate that the levy is Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 3 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 contrary to law or can be waiver on any account. In absence of any statutory provision, Petitioners cannot seek waiver as a matter of right. Prayer (4) is thus rejected.
6. As regards prayers (1), (2) and (3), Mr. Bharat Bhushan, counsel for Petitioners, urges the following:
6.1. In accordance with MoF's 2012 Letter, banks should be directed to bear the Petitioners' premiums from staff welfare funds, instead of charging it to Petitioners.
6.2. At the time of initiation of insurance scheme, post the 10th Bi-partite Settlement, retirees were induced to opt for the insurance scheme as it carried the same premium for them, as for serving employees, and was also lesser than other medical insurance schemes. 6.3. In the advertisement issued for the insurance scheme, domiciliary benefits were included in the benefits being extended to retirees.
However, subsequently, vide circular dated 31st August, 2016, separate charges were notified to avail domiciliary treatment benefits for retirees only, and not for serving employees - which is discriminatory in nature.
6.4. IBA's October 2015 Circular directed that Mediclaim Policy in respect of retirees shall be issued on similar terms and conditions as applicable to serving employees. Yet, for retirees, only the spouse is covered, whereas the spouses, dependent children, parents/ parent-in- law are covered for serving employees. It follows that the parents of currently-serving employees of the banks, who would be as old as the retired employees are now, are covered in the insurance scheme for Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 4 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 employees by paying premiums significantly lesser than that of the Petitioners, and thus, there is no reason for such benefit not be extended to the retirees.
6.5. Further, the premium for insurance schemes fixed for retirees under the impugned circulars is significantly higher than those charged to serving employees - which is discriminatory under Article 14 of Constitution of India and violative of the terms of the 10th Bi-partite Settlement.
7. Per contra, Counsel for Respondents, put forward the following submissions:
7.1. Considering that Insurance scheme is provided on an annual basis, and three years have now passed since the year in question 2019-20, the relief sought in the petitions has been rendered infructuous. 7.2. It is pointed out that the reimbursement of hospital expenses was to be in terms of the insurance scheme in Schedule IV of the 10th Bi-partite Settlement [hereinafter "Schedule IV"] as per which:
7.2.1. In terms of eligibility, the scheme would be applicable to officers/ employees on retirement/ superannuation/ resignation, and even existing retired officers/employees and dependent spouse, subject to payment of stipulated premium. 7.2.2. The relevant bank was to decide the contribution in case of retirement post the introduction of the scheme, and of existing retirees who opt to avail the benefits of the scheme. 7.3. Vide Joint Note dated 25th May, 2015 [hereinafter "2015 Joint Note"], the medical benefits and hospitalisation expenses available Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 5 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 under the said regulations were to be as per Annexure IV (of the 2015 Joint Note), wherein, the terms of eligibility and contribution mirror those under Schedule IV of 10th Bi-partite Settlement, as detailed above.
7.4. Insurance scheme made available to Petitioners post retirement/ resignation/ superannuation was always optional and not compulsory. 7.5. Demand for full reimbursement of expenses, along with domiciliary hospitalisation and domiciliary treatment was discussed between parties in formulating the terms of the insurance scheme under 10th Bi-Partite Settlement/ 2015 Joint Note.
7.6. MoF's 2012 Letter only provides that banks may consider the option of group insurance policy for both serving and retired employees, as opposed to direct payment of benefit from staff welfare fund, and hence, no right arises from the same.
7.7. Reliance on IBA's October 2015 Circular to claim parity between retirees and serving employees is misplaced; neither 10th Bi-partite Settlement nor 2015 Joint Note grant such parity.
7.8. by way of the impugned circulars, insurance scheme for year 2019-20 was to be extended to retirees, which would be subject to payment of the stated premium by the retirees themselves.
Analysis:
8. Court has heard the parties at length. At the very outset, it is noted that the relief sought in prayer (1) relates to renewal of the insurance scheme for the term 1st November, 2019 to 31st October, 2020, and thus, does not survive on the present day.Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 6 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32
9. The remaining prayers also cannot be entertained. Retirement benefits emanate purely from the applicable service conditions of the job the Petitioners have retired from. On a pointed query by the Court, Mr. Bhushan states that Petitioners are not similarly placed since some of them are receiving pension, some have received benefits under voluntary retirement scheme, while others have superannuated.
10. The post-retirement benefits are being granted as per the applicable rules and regulations framed by Respondent-Banks. It is noted that service conditions of Nationalized Banks are governed by:- (i) Sastry Award dated 26th March, 1953 as finally modified and enacted; (ii) Award of National Industrial Tribunal presided over by Mr. Justice K T Desai dated 13th June, 1962 inter alia modifying the Sastry Award; and bi-partite settlements signed between workmen unions and IBA, under the Industrial Disputes Act, 1947 which have amended the said awards; and (iii) Officers' Service Regulation, 1979 [hereinafter "1979 Regulations"] framed under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, amended from time to time, based on Joint Notes signed between various officers' associations and IBA.
11. During the course of arguments, it has been brought to the notice of the Court, that 10th Bi-Partite Settlement is one such bi-partite settlement entered into between 43 banks (including Respondent-Banks) represented by IBA and various workmen's associations, regarding various terms and conditions of their service. The said settlement was reached upon Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 7 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 submission of a charter of demands dated 30th October, 2012 to IBA in respect of revision of wages and other service conditions. Further, vide 2015 Joint Note, an agreement was reached between the IBA and various officers' associations qua salary revision and other issues concerning service conditions. Therein, IBA agreed to make a recommendation to Government of India to approve amendments and issue appropriate guidelines for modification of service conditions per the Joint Note (including Annexures) as agreed by the officers' associations. Qua the dispute in hand, relevant extract of 10th Bi-partite Settlement in relation to the insurance scheme in question, is reproduced below:
"In substitution of Clause 20 of the Bipartite Settlement dated 27th April, 2010 the reimbursement of hospital expenses shall be as per the Medical Insurance Scheme detailed in Schedule IV to this settlement."
12. From the above extract, the relevant portion of reimbursement policy as per the medical insurance scheme detailed in Schedule IV of 10th Bi- partite Settlement is as follows:
"...All the existing permanent officers/employees of the Banks which are parties to this settlement shall be covered by this Scheme from the date of introduction/implementation of this Scheme. All New Officers/employees shall be covered from the date of joining as per their appointment in the bank.
Till the new scheme is made effective and gets implemented, the existing provisions as per Bipartite Settlement/Joint Note dated 27.4.2010 will continue to operate.
The new scheme as applicable to the officers/employees in service would be continued beyond their retirement/superannuation/resignation, etc. subject to payment of stipulated premium by them.
The new Scheme would also cover the existing retired officers/employees of the Banks and dependent spouse subject to payment of stipulated premium by them"
"CONTRIBUTION: The officers/employees shall not be required to share the cost of such benefits under the new scheme. However, in the case of officers/employees retiring from the Banks after the scheme is introduced and those who are already retired from the services of the banks and who opt to avail the benefits of the scheme, the amount of contribution by such persons shall be decided at the Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 8 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 respective Bank level."
[Emphasis Supplied]
13. It is clear from the above extracts of 10th Bi-partite Settlement, which is also mirrored in Annexure IV of the 2015 Joint Note, that benefits of insurance scheme would only extend to retirees' subject to payment of stipulated premium, and further, contribution for the same would be decided by the respective banks. Thus, a clear mandate was provided to the banks for setting the contribution amount for their respective insurance scheme, and benefits thereunder would be available to retirees only on payment of premium as stipulated. No specific premium or contribution amount is drawn from the afore-said extract.
14. The Court has also perused the relevant portion of the MoF's 2012 Letter, as relied upon by Petitioner, relevant portion whereof is reproduced as under:
"Banks may consider the option of Group Insurance Policies for both serving and retired employees instead of direct payment of benefit from the Fund."
[Emphasis Supplied]
15. The use of the word 'may' in the above extract makes it clear that the option of a group insurance policy for both serving and retired employees was available to the banks, which was merely advisory and not directory in nature, aimed at member-banks to consider in place of direct payment of benefit from staff welfare funds.
16. Next, Petitioner has further placed reliance on IBA's October 2015 Circular, the relevant extract therein, is reproduced as under:
"3. In this connection, we advise that a separate Mediclaim Policy in respect of retirees will be, issued on similar terms, and conditions as is applicable to serving employees, once the data is provided by the Banks to United India Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 9 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 Insurance Co, Ltd, through their authorized broker M/s K.M Dastur Reinsurance Brokers and Insurance Premium is remitted to the Insurance Co. The Insurance Premium for retirees is also same as is for serving Employees which is as under
Category Insurance Cover (Rs) Amount of Premium Officers (Retirees) 4 Lacs 6573 + Ser Tax Workmen (Retirees) 3 Lacs 4930 + Ser Tax Sub-Staff (Retirees) 3 Lacs 4930 + Ser Tax"
17. From the above, it is evident that this communication too was merely advisory in nature, in respect of the terms and conditions of the insurance scheme for retirees and serving employees.
18. In the opinion of the Court, the MoF's 2012 Letter and IBA's October 2015 Circular only contained advisories for group insurance policies and the Mediclaim Policy with respect to the retirees. No other grounds have been demonstrated to evidence that premiums discussed in IBA's October 2015 Circular (which, interestingly, relates to 2015), could not have been subsequently increased.
19. In this vein, the Court also notes that insurance scheme renewal is on a year-to-year basis. It follows that insurance companies would be at liberty to set the premiums and the terms and conditions, for each subsequent year, in accordance with law. In addition, the retirees being of old age would ordinarily be at greater medical risk than serving employees. Thus, the ground of insurance premiums for Petitioners being higher than that of serving employees, in the opinion of the Court, holds no merit insofar as the challenge to the terms of the impugned circulars is concerned. Further, the insurance scheme in question was optional in nature, which entails that Petitioners were not compelled to avail of the same, and may opt for any Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 10 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32 other suitable medical insurance scheme. For the afore-mentioned reasons, the Court does not find any merit in prayers (2) and (3) in the present petition as well.
20. In view of the above, the present petitions are dismissed, along with pending application(s).
SANJEEV NARULA, J SEPTEMBER 6, 2022/nk (corrected and released on 23rd September, 2022) Signature Not Verified Digitally Signed W.P.(C) 11433/2019 & connected matters Page 11 of 11 By:SAPNA SETHI Signing Date:23.09.2022 19:45:32