WP. (C) No. 3774 of200S & CM No. 7265 of 2008

1. The husband of the Petitioner was an employee of the Indian Airlines and was working there as an Assistant Manager (S&P) till the date of his retirement on 31st July, 1995. In the year 1994, Indian Airlines proposed the creation of a pension scheme for its employees known as Indian Airlines Employees Self Contributory Superannuation Pension Scheme ("Scheme"). Under the Scheme it was proposed that all full-time employees who become members of the scheme would contribute a percentage of their salary to be deducted every month and credited to the fund under the Scheme. Each member had to contribute for a certain period and for those who did not have sufficient number of years of service left for the superannuation, an amount was calculated based on the total number of years in deficit. The member was required to make payment of the entire sum so calculated either in lump sum or pay the said amount in monthly in-stalments along with interest on the total sum due.

2. A Deed of Trust was entered into between the Indian Airlines and the Trustees of the Scheme (Respondent No.2 herein). The Deed of Trust contained Rules which stipulated that the retiring employee would get pension equivalent to 40% of the last month's salary consisting of basic pay, dearness allowance, additional pay, interim relief and personal pay, if any.

3. In order to give effect to the Scheme, an agreement was entered into with the Life Insurance Corporation of India ("LIC"), Respondent No.1, which issued a master policy stipulating certain terms and conditions. In terms of the said agreement with the LIC, the amount was to be calculated on superannuation of the employee. An annuity was to be purchased from the LIC so as to ensure payment by the LIC of a fixed monthly sum to the retired employee. On his demise the payment of annuity amount was to be made to his nominee/legal representative.

4. The Petitioner.s husband applied for enrolment as a member of the Scheme and was accepted as its member. He complied with the requirements of the Scheme. He deposited a pay order dated 3rd July, 2000 in the sum of Rs. 1,21,687/- and later a further sum of Rs. 20,000/- as the contribution on his part. His last drawn salary was Rs. 8,543/-. Accordingly, he was to receive Rs. 3,417/- per month as pension. The total corpus benefit (pension amount) was Rs. 3,41,700/- and the commutation amount was Rs. 1,13,900/- being 1/3rd of the corpus.

5. The Petitioner's husband exercised Option No.1 according to which he was to receive a pension amount of Rs. 2,278/ - per month for life and upon his death, the corpus was to be returned to his nominee together with the commutation, amount. The husband of the Petitioner appointed her as his beneficiary/nominee under Rule 20 of the Scheme. It is stated that the Petitioners husband started drawing a pension of Rs. 2,278/ - per month under the Annuity No. 24582 and Policy No. 311242.

6. Unfortunately, the Petitioner.s husband expired on 21st October, 2004. The Petitioner wrote to the LIC on 24th November, 2004 informing it of her husband's death. She also returned to the LIC the cheques issued in the name of her husband. She requested that the amount be paid to her as the nominee. However, LIC did not respond to the Petitioner's letter dated 24th November, 2004. A reminder was sent on 15th June, 2005. On 8th August, 2005, LIC wrote to the respondent No.2 Trust requesting that Form N and the discharge receipt enclosed with the letter should be got signed by the petitioner as a beneficiary. On receiving the said letter dated 8th August, 2005, the petitioner wrote to respondent No.2 on 16th August, 2005 asking it to send the requisite papers to respondent No.1.

7. Respondent No.2 sent a letter on 14th January, 2008 to the petitioner in which it was stated that the Trust suffered a shortfall of Rs. 19.46 crores due to the benefit extended to the early retirees as compared to their contribution. Consequ