Point of Law: Pension scheme – Bifurcation of State - merely because bifurcating the composite State of Andhra Pradesh into the new State of Telangana and the residuary State of Andhra Pradesh from that date, the said date could not have been adopted for denying the petitioners the benefit of increased annuity/pension.

ORDER:

M.S.Ramachandra Rao, J.

The petitioners were employees of A.P. State Police Housing Corporation Limited, which had been constituted in the Composite State of Andhra Pradesh. The 1st petitioner had retired from service as Assistant General Manager on 31.07.2013 and the 2nd petitioner had retired from service as a Senior Accountant on 28.02.2014.

The background facts

2. According to the petitioners, a Group Superannuation Scheme for 182 regular employees of the above Corporation was approved by it’s Board of Directors in a meeting held on 14.12.2012. As per a Resolution passed in the said Board meeting, 90% share of the employer and 10% share of the employees, amounting to Rs.18.71 Crores was paid to the Life Insurance Corporation of India Ltd (5th respondent) as a single payment for creation of Corpus Fund so as to enable the beneficiaries to get retirement annuity benefit/pension @ 40% of the last basic pay drawn on the date of their superannuation.

3. A Trust Deed was executed on 18.01.2013 by the A.P. State Police Housing Corporation Limited, and five persons for establishment of an irrevocable Trust by name ‘A.P. State Police Housing Corporation Ltd Employees Group Superannuation Scheme Trust’. This Trust was created to set up the contributory superannuation/annuity scheme called ‘A.P. State Police Housing Corporation Employees Superannuation Scheme’ for providing pension benefits; that the trustees shall enter into a scheme of insurance with the 5th respondent, for which premiums payable would be provided by contributions to be made by the said Corporation.

4. The Scheme came into effect on 1.1.2013 and contemplated that the Corporation would make contributions to the trustees as provided in the Rules and the trustees would utilize the same for paying premium to the 5th respondent and the 5th respondent would provide a Master Policy.

5. A Circular dt.25.02.2013 was issued to the employees of the said Corporation informing about the formation of the ‘A.P. State Police Housing Corporation Superannuation Scheme Trust’ as per the decision taken by the Board of Directors in the meeting held on 14.12.2012, and asking each employee to give consent letter for joining the Scheme as a beneficiary by paying 10% share by way of recovery from his salary. As per the said circular, employees who have rendered a minimum of 20 years of permanent service would be eligible to be covered by the Scheme.

6. The 5th respondent also issued Master Policy No.GSCAB517091 on 30.08.2013 after receiving proposal from the trustees of the above Trust for a Group Superannuation Policy for providing pension benefits after receiving Rs.18,37,70,093/- being the incremental investment of Group Superannuation Fund.

7. Under the terms of this policy, all permanent employees, who are aged not less than 18 years and not more than 58 years, were made eligible to receive benefits, and as soon as a member or beneficiary becomes entitled to receive the benefits under the Scheme, the 4th respondent would send the relevant particulars through the Trustees to the 5th respondent and the Corporation would then pay to the grantees appropriate benefits.

8. After the petitioners retired from service, the 5th respondent fixed their pension benefits as per the pay scales which were existing on the respective dates of their retirement as advised by the Trustees.

9. There was also bifurcation of the Composite State of Andhra Pradesh into the new State of Telangana and the Residuary State of Andhra Pradesh w.e.f. 02.06.2014 under the A.P. Reorganization Act, 2014 (for short ‘the Act’).

10. Post bifurcation of the State, the State of Telangana incorporated the Telangana State Police Housing Corporation Limited (respondent No.1) and also constituted the Telangana State Police Housing Corporation Limited Employees Group Superannuation Scheme Trust (Respondent No.3).

11. The A.P. State Police Housing Corporation Limited and the A.P. State Police Housing Corporation Limited Employees Group