International Labor Day is a matter of pity for us, the long suffering ex-employees of L.I.C of India

                                                       Shocking but true!

             
                   L.I.C of India betrays its resigning employees’ Good Faith!

It repudiates Arrears’ payment and difference in Retirement dues to its resigning employees.

   
      The Life Insurance Corporation of India, the number one life insurer in the whole world, has not paid arrears of wage payments and arrears of difference payable under Statutory retirement benefits like Provident Fund and Gratuity, due to its resigning employees; since the 1^st of August 1997, as revealed by answers to my RTI application. Revision of the wage bill in the Corporation is done after a period of every five years, but the notification is invariably delayed and the arrears are always paid after a gap of three years after they are actually due.

      The Board of Directors of LIC of India has taken the decision to repudiate the arrears and sent it to the Finance Ministry for approval, though it is a purely administrative decision and not a policy decision. Only policy decisions involving public interest need to be referred to the Finance Ministry. The decision of the Finance Ministry also needs to be analyzed as to why it approved the Corporation’s decisions without due consideration of their legality and Court Judgments on the issue.

     The Corporation has adopted a strategy of depriving its voluntarily resigning employees, that is those who are retiring before twenty years of service, of their legitimate dues by simply resorting to announcement of the notification after inclusion of a clause in a Gazette notified by the Finance Ministry of India, that such employees will not be eligible for payment of arrears. This effectively means that even if a resigning employee has been in service, that is, on roll of the Corporation on the date from which the arrears were effective, he/she will not be eligible to get arrears’ payment. This is illegal as wages are rights of an employee, according to our Indian Constitution and Labor Laws.

For instance, I had resigned after 18.5 years of service on 2^nd July 2010 and the notification for payment of arrears due from 1^st August 2007 was announced on 11th October, 2010. Legally, I was entitled to the arrears of difference in my wages from 1^st August 2007 to 2^nd July 2010 but it was denied on the basis of this Gazette and subsequent Circular’s notification by the Corporation.

     Similarly, the Provident Fund and Gratuity being Statutory retirement benefits, their difference will also have to be paid as per the revised, enhanced wages. All the allowances, perks, etc. would also have to be calculated accordingly and the difference would have to be paid to that resigning employee.

The Corporation wrongly differentiates between the two classes of voluntarily resigning employees as those who have completed 20 years of service and those who have resigned before completing 20 years of service. The first class is entitled to the Wage Revision Arrears’ Payments and the second class isn’t entitled to it! Since the wage revisions were announced for all the employees of the Corporation, as a class, the Corporation should not deny the benefits to the resigning employees.

Besides, the Minutes of the Corporation’s Board Meeting with points regarding recommendations made to the Finance Ministry, for repudiation of arrears and retirement benefits; have not been given to me as they are not available with the Corporation! There is also no rationale on record; of this decision by the Corporation, as revealed by the replies received from the Corporation, in response to the RTI Application made by me; to L.I.C of India.

 The Corporation has also replied that the Central Government takes this decision to repudiate arrears’ payments and hence it has repudiated arrears’ and other allied retirement benefits. 

In fact, it is the Managing Board of Directors of L.I.C of India, which takes this decision. The Central Government of course, dutifully and unquestioningly ratifies it! 

So what if the Supreme Court has declared the Clause of Repudiation to be ultra vires (unconstitutional)! Some institutions are seemingly above the laws of this land.

A symbiotic relationship between the Corporation and Government  - always at play and display! No marks for guessing why!

LIC of India has 115 Divisional Offices, 8 Zonal Offices, 9 Audit Centres, MDC and Central Office, as per the RTI replies. The total number of resigning employees whose arrears have been repudiated, since 1997 will be in thousands, and the total repudiated amount since 1997 will surely amount to crores of rupees.

The Corporation has refused to answer my RTI queries for details regarding the names, addresses, phone numbers and number of employees who have been denied the arrears payments and difference in retirement and other benefits due to them, as also the actual amount repudiated. The Central Office has given a list of 40 resigning employees, for 2010; and given an affidavit dated 4^th April, 2014, that no other information apart from that given to me in response to my RTI queries, is on its records.

     Interestingly, it refuses to part with this vital information on the grounds that it does not have this information in a centralized form in its Central Office. This is not true as all the information is sent by all the subsidiary offices of the Corporation to its Central Corporate Office in Mumbai regularly on a monthly basis. The Corporation’s Central Office compiles, consolidates and prepares the Final Trial Balance, Balance sheet and other Accounting Statements on a monthly, quarterly and yearly basis and annually presents the same in the Parliament as it is a Public Sector Organization.

     The Central Office server in its I.T. Department has the entire record of all the employees, (in the form of ‘Employee Masters’) of the Corporation and the details of all the resigning employees of the Corporation are updated as and when they retire from service.

     The Corporation has a highly organized and computerized set-up and all its records are computerized, hence it is hard to believe that it cannot reply to those queries in my RTI Application which pertain to information about such employees who have been short-changed by it; and the mind-boggling amounts involved.

     The amounts repudiated haven’t even been accounted for, by the LIC of India in its books of accounts. Had these arrears payments been made, the Income-tax against these payments would have been sent to the Income-Tax Department. Thus this action of LIC of India has even led to a revenue loss to the Central Government exchequer. The Balance Sheet of LIC of India, a reputed Public Sector organization, will also not reflect the correct picture of its financial status.

      Interestingly, the Gazette notifications G.S.R. 824 (E), 825 (E), 826 (E), 2470 (E), issued by the Ministry of Finance, dated 8^th October, 2010; contain a point in their Explanatory Memorandum stating: “It is certified that no employee of the Life Insurance Corporation of India is likely to be affected adversely by the notification being given retrospective effect.”

     Besides, the Supreme Court has already passed a judgment asking the Corporation to pay such arrears to retired employees, in its 2007 judgment. Thus, wasn’t the Corporation guilty of Contempt of Court, if it still persisted in referring to the Finance Ministry for approval, subsequent Gazette notification with the same clause 3 1) b) regarding repudiation of arrears (send proviso of Para 3 of the Notification dated 21^st December 2005 is struck sown being ultra vires to the extent it deprives the petitioner and other similarly situated persons to get the benefit of revised pay scale with effect from 1^st August 2002 after applying the principle of severability. Supreme Court's decision- Petitioner VS GIC) and then issuing an official Circular dated 11^th October, 2010?

     The evasive and lackadaisical response of the Corporation shows that it lacks transparency in its dealings, its records are not maintained properly; it does not follow standard accounting procedures and fair HR practices.

     The Corporation is a trustee of trillions of public money. To its credit, it has been regularly making Claim payments to the beneficiaries of its insurance policies, and has the lowest ratio of claims repudiated, in the whole world. Why can’t it play fair with its resigning employees and pay them their dues, gracefully? Is it too much to ask for?

     Hence I request all those employees who have resigned from the Public Sector Insurance companies (LIC, GICs and LICHFL) and not been paid arrears and other retirement benefits and allied dues, to come forward, send their names, phone numbers, e-mail ids, addresses and employment particulars (in these companies), etc. to me; so that we can collectively fight for justice.  You may post your comments and details online on this blog.

     I had also started a thread of discussion - 'LIC of India repudiates wage arrears' payment'; on the website www.lawyersclubindia.com/Labour and Service law/Service. You may also post your feedback there.

***********************************************************************************

                                                                             Mrs. Priya Ramesh Swaminathan

SC directs WB government to pay Gratuity Arrears with Interest

 Source: Internet: https://www.scconline.com/blog/post/2026/02/06/dearness-allowance-supreme-court-da-right/

Some Extracts:

Dearness Allowance is a Right, Not a Bounty; State cannot cite financial crunch to deny it: Supreme Court “The least that is expected of a State in a democracy is that it honours its obligations and commitments, arising from a legislation or judicial decisions, for such obligations are not discretionary in any way, shape or form.” 

Published on February 6, 2026 By Prachi Bhardwaj ...

Supreme Court: In a significant ruling on the rights of government employees, the Supreme Court has held that Dearness Allowance (DA) is a statutory and enforceable right, and not a discretionary benefit that a State can withhold citing financial constraints. The Bench of Sanjay Karol* and Prashant Kumar Mishra, JJ., made it clear that once Dearness Allowance becomes payable under the governing rules, the State is legally bound to release it, observing that denial of such dues directly impacts employees’ right to life and livelihood under Article 21 of the Constitution....

The Court emphasised that DA is not a bounty but a mechanism to protect employees from erosion of wages due to inflation. It explained that DA is not intended to provide complete neutralisation of price rise for all employees, except in the case of the lowest paid categories. “Its purpose is to offer partial compensation for increased living costs through a variable and flexible mechanism, usually linked to a cost-of-living index. This explains why DA is commonly structured on a sliding scale, rising alongside prices.” It further explained that since DA is directly linked to the loss of real wages caused by inflation, imposing a uniform rate across such disparate regions would defeat its very purpose. It would confer undue benefit on employees in lower-cost centres while seriously disadvantaging those employed in high-cost metropolitan areas....

Financial Constraint Not a Legal Defence to Deny DA 

While examining whether the State could deny payment of DA on the ground of financial burden, the Supreme Court firmly rejected the plea of paucity of funds as a defence against enforcement of a crystallised legal right. The State had argued that granting DA as claimed would impose a massive financial liability and adversely affect its fiscal stability. The Court found this submission legally untenable once the right itself stood recognised and held that “Constitutional duties cannot be evaded on the ground of paucity of funds.” The Court observed that: “Once a legal right has been established… irrespective of whether it pertains to salary, pension, gratuity or other statutory benefits, it is not within the realm of permissible actions for the State to refuse payment of the same on account of financial inability/paucity of funds.” It was, further, explained that once a legally enforceable right has been established, the defence of the State so as to its financial ability or rather inability has to be kept at bay. The only question that remains thereafter is, how such a right has to be enforced, and considering the nature of the right, at what rate i.e. in accordance with AICPI....

State Must Act as a Model Employer

In a strong observation on governance, the Court reminded the State of its constitutional responsibility: “The least that is expected of a State in a democracy is that it honours its obligations and commitments, arising from a legislation or judicial decisions, for such obligations are not discretionary in any way, shape or form.”...

The Court strongly observed that, “State must set an example for other employers in the country by behaving as a ‘model employer’. Such a position should not be difficult to attain given all the advantages that it has. Its power lies in the volume of employment, its sovereign/constitutional authority to tax, ability to borrow and manage public finances. In embodying the ‘model employer’ the State not only fulfils its obligation but also instils and maintains public confidence in the rule of law, governance and administration of justice. Leading by example, fulfilling its financial duties in times of fiscal strain, gives it the moral authority to wield the sword of law against private entities, should they not do so.”...

Supreme Court’s Directions on Payment of DA Arrears 

The Supreme Court upheld the employees’ entitlement to Dearness Allowance and ruled that the State cannot deny or indefinitely withhold DA once it is payable under the governing rules or resolutions. The plea of financial incapacity was rejected as insufficient in law. Hence, the Court directed the State to release the arrears for the time 2008-2019. 

Retired Employees Also Covered 

The Court clarified that employees who retired during the pendency of the litigation will also be entitled to the DA benefits under the judgment. 

High-Level Committee to Oversee DA Payments 

While recognising both the huge financial burden on the State and the employees’ right to receive their lawful dues, the Supreme Court chose a balanced, structured approach for implementation of its directions on DA. Instead of ordering an immediate lump-sum payout, the Court constituted a high-powered monitoring Committee to ensure phased and accountable compliance....

End of Extracts

***************************************

To, 

The Government of India and L.I.C of India

Wage Revisions are essentially based on the fact that wages have to keep pace with rising inflation. 

We must also get our Wage Revision Arrears along with Difference in Statutory Retirement Benefits like Provident Fund and Gratuity, as well as other perks arising due to wage revision, as we were on the Salary Rolls of the Corporation then. Even the SC has given its judgment in 2007 in this regard. But the Corporation 'conveniently' chooses to ignore it during every Charter for Wage Revision, indulging in "Willful Contempt of Court".

As L.I.C of India is a government owned enterprise, the Government of India is duty-bound to pay all our above-mentioned dues along with Compound Interest from the date on which Wage Revision was announced till the actual date of payment.

Quote from the SC judgment in the above-cited case: "Leading by example, fulfilling its financial duties in times of fiscal strain, gives it the moral authority to wield the sword of law against private entities, should they not do so.”...

Interestingly L.I.C of India is awash with funds but thoroughly lacking in ethics, conscience, will-power and responsibility towards all of us. 

Wake up LIC! Pay up ASAP. Before you divest your stake in the Corporation, or else the new stake-holders/share-holders/owners will have to pay up to clear the Balance Sheet and Books of Accounts!

We are only requesting for immediate payment of our legally rightful dues and not charity! 

We have all been waiting for nearly three decades!

Awaiting an immediate and positive response at least this year! 

Thanks.

Long-suffering, resigning, ex-employees of L.I.C of India