Delhi High Court Stays Decision Restoring Self-Contributory Superannuation Benefit Scheme For IOCL Employees
The Delhi High Court has stayed a single bench decision which restored a self-contributory superannuation benefit scheme (“SBF-1”) that had been initiated by employees of the India Oil Corporation Limited (IOCL) in 1987 for their retirement in the form of a Trust.
While doing so, the division bench of Justices Navin Chawla and Renu Bhatnagar also directed IOCL to calculate and place before it the differential of pension that would be payable to the employees in terms of the Impugned Judgment, including the arrears.
Solicitor General Tushar Mehta representing IOCL argued that Presidential directives mandate that a PSU can be part of 'defined contribution scheme' and not 'defined benefit scheme'.
It was argued that since IOCL could not be part of SABF-1 which is a 'defined benefit scheme', the status of “approved superannuation fund” would cease as well as the exemptions under the Income Tax Act, 1967.
Such Presidential directive was not challenged, nor was set aside and therefore, the Single Bench wrongly interpreted the Presidential directive by directing IOCL to contribute to the 'defined benefit fund', Mehta argued.
It was further contended that the obligation of IOCL was to contribute a token amount of Rs. 100 per year to sustain the nature of the fund as “approved superannuation fund” and to deduct the direct and indirect contribution of employees and deposit the same with the Trust account. Any further contribution was discretionary and not mandatory, Mehta submitted.
Senior Advocate Meenakshi Arora on the other hand, appearing for the Retired Officers Welfare Society argued that SBF-1 was terminated by IOCL vide Circular dated 19.04.2011, retrospectively. The net effect of the impugned Circular was that while those employees who retired prior to 01.01.2007 were granted full pension at 40% of last salary if they had 32 years of service or in case of lesser service at a proportionate rate.
However, in cases like those of the Petitioners, who retired post the cut-off date, their salaries as also reckonable service period was frozen as on 31.12.2006, resulting in drastic reduction of pension due to reduced service and last drawn salary.
After hearing both the parties, the Court granted stay.
Case Title: Indian Oil Corporation Limited & Anr. vs. Retired Officers Welfare Society & Ors.
Case no.: LPA No. 363 of 2025
Advocates for IOCL: Shri. Tushar Mehta, Solicitor General of India with Mr. Amit Meharia, Ms. Tannishtha Singh and Mr. Sambhav, Advocates
Advocates for Retired Officers Welfare Society: Ms. Meenakshi Arora, Senior Advocate with Mr. Udayaditya Banerjee, Ms. Parul Shukla, Ms. Kritika Bhardwaj, Mr. Saday Mondol, Ms. Shubhangi Pandey, Advocate
Advocate for R1 – R5: Ms. S. Jaanani, Sr Adv. with Mr. Firasat Ali Siddiqui, Mr. Shashank Sharma, Mr. Amresh Anand, Advocates.
Advocate for CGSC: Mr. Mukul Singh, Advocate
Advocate for UOI: Mr. Aryan Dhaka, Advocate.