Cabinet DecisionsLegislation Updates

India has a rich tradition of trade and commerce. Our traders continue to make a strong contribution to India’s economic growth.

In a decision that will benefit the trading community, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi has approved a new scheme that offers pension coverage to the trading community. This is a part of the Prime Minister’s vision to provide a robust architecture of universal social security.

How the scheme works:

Under this scheme, all shopkeepers, retail traders and self-employed persons are assured a minimum monthly pension of Rs 3,000 month after attaining the age of 60 years.

All small shopkeepers and self-employed persons as well as the retail traders with GST turnover below Rs 1.5 crore and age between 18-40 years, can enroll for this scheme.  The scheme would benefit more than 3 crore small shopkeepers and traders.

The scheme is based on self-declaration as no documents are required except Aadhaar and bank account. Interested persons can enroll themselves through more than 3,25,000 Common Service Centres spread across the country.

The Government of India will make a matching contribution in the subscribers’ account.  For example, if a person with age of 29 years contributes Rs 100/- month, then the Central Government also contributes the equal amount as subsidy into subscriber’s pension account every month.

[Source: PIB]


Hot Off The PressNews

After hearing the submissions of the Counsels appearing for the petitioners for 19 days, the 5-judge bench of Dipak Misra, CJ and Dr. AK Sikri, AM Khanwilkar, Dr. DY Chandrachud and Ashok Bhushan, JJ began hearing the submissions of the Attorney General KK Venugopal on the 20th Day of the Aadhaar hearing.

Below are the highlights from the submissions of AG KK Venugopal on Day 20 of the Aadhaar hearing:

  • Various expert committees have examined Aadhaar, and other alternatives were also considered before Aadhaar was decided upon. Many countries have already implemented unique identity systems. Even World Bank approves of Aadhaar Scheme. (Cites “identifications for development” report of World Bank.)
  • CEO of Aadhaar has a PowerPoint presentation explaining all technical and security aspects of Aadhaar. He will be able to answer all questions related to Aadhaar.
  • CJI: We want to hear the legal contentions first, especially on Privacy and anonymity. We also want to hear about virtual mass surveillance.  In the name of security you can’t impose a stamping culture where everyone is stamped with an Aadhaar. Inspite of assurance of safety, your database is not entirely safe. I want the State to refute all these contentions made by the petitioners.
  • AG: After seeing the PowerPoint presentation, the State will be able to explain their legal contentions better. We also want to show a four minute video on security of Aadhaar. All doubts of duplication will be cleared through it.
  • Bench:  We will discuss if we want to see the PowerPoint presentation.
  • AG (continuing with his arguments):
    • Huge money has been saved by giving benefits and subsidies via Aadhaar. Gap between rich and poor will reduce with use of Aadhaar.
    • From 2009 to 2016 , Aadhaar was completely voluntary. But people still signed up for it. So question of coercion does not arise, at least until September 2016.
    • Article 21 encompasses right to employment, education, shelter etc. Aadhaar act is helping in achieve all these rights for the people.
  • Sikri, J: There’s a clash between right to life and right to privacy. People are getting excluded. There have been various affidavits filed proving the same.
  • AG: NGOs are filing these affidavits. Not a single person has come forward and said that they suffered due to Aadhaar.
  • Chandrachud, J: Economic and social guarantee is not antithesis to political guarantee. Can’t forgo of political liberty for the sake of economic and social justice. People died during Bengal famine due to lack of information. During the famine in Maharashtra in 1970s per capita income went lower than Sudan but people did not die because information was not cut off.
  • AG: Right of people to not die of hunger and have shelter prevails right to privacy.
  • Bhushan, J: All these rights do not trump right to privacy. They coexist.
  • AG: Nobody was coerced to get Aadhaar. It was voluntary between 2009-16.
  • Chandrachud, J: There were no safeguards during that time. It came only when the act was passed. People did not contemplate giving up their personal data for commercial purposes.
  • Sikri, J: People who enrolled that time (not for benefits or subsidies) say there was no informed consent that time.
  • AG: Aadhaar is facilitating Indian residents to get subsidies, benefits, scholarships etc. It’s an efficient, transparent delivery of services. It is in consonance with the directive principles of state policy. A handful of petitioners are challenging it.
  • AG: Aadhaar can help curb issues like money laundering, black money, etc.
  • Sikri, J: How is Employees pension scheme covered under Section 7? It is a person’s right to get pension.
  • AG: This was done to prevent fake Identity.
  • Chandrachud and Sikri, JJ: How does a pensioner who lives abroad with his children get pension since he will not be able to produce his Aadhaar card in person?
  • AG: Aadhaar is only required for residents. There must be some provision in the pension act to give pension to an NRI. Such a person will not be governed by Aadhaar act.
  • Chandrachud, J: Pension accounts are individual accounts. No question of impersonation. What if an old pensioner has dementia? His fingerprints might not work. He can’t keep running around banks for the purpose of authentication.
  • AG: There are exceptions for individuals whose fingerprints and Iris scans won’t work. For eg. People suffering from leprosy. Govt will not try to deprive someone of their rightful entitlement.
  • Chandrachud, J: Pension doesn’t come under “subsidies, benefits and services” under section 7. It is an entitlement.
  • AG: Pension is given out of the consolidated fund of India. Hence it’s covered.
  • Chandrachud, J:  We should acknowledge that there’s a problem of financial exclusion in our country. Cabinet secretary had agreed. To say that someone has not come to court therefore there’s no exclusion is wrong.
  • AG:
    • Mahatma Gandhi said that the world has enough for everyone’s needs but not everyone’s greed. Poverty is a huge problem and Aadhaar will be a step to solve it. There are 300 million poor people in India who deserve to live a life of dignity.  Please weigh the balance and see if these people want privacy or a life of dignity.
    • Aadhaar act also provides exceptions and backup authentication in various regulations during contingencies like power cut, Network connectivity, Biometrics not working etc.
    • Aadhaar’s results will show in a few years. We’ve already fixed problems like misappropriation, multiple identities. We are working towards making this project more effective.
    • Official identification is more than a convenience. It is a fundamental human right. It helps in economic development, participation in electoral process, and helps the govt in providing benefits to the people. It is a key enabler of other sustainable development goals.
    • Universal digital identity is becoming important around the world. The World Bank recently launched “identification for development” report.
  • Sikri, J: We agree that unique identification is important. But why not use a less intrusive means. Why is Aadhaar data stored in a centralized database over a long period of time? There’s a risk of metadata. Doctrine of proportionaliy is important here. In Singapore, people are supposed to have a unique identity. But that data is not stored with the government.
  • AG: Smart card was considered but it’ll not work in the Indian context. Duplication and aggregation of data is impossible with Aadhaar. Metadata is not stored by CIDR.
  • Chandrachud, J: But authentication records are stored.
  • AG: Let us give a power point presentation.
  • CJI: We’ll let you know.  We would like to have the presentation in word format.
  • Senior Advocate KV Vishwanathan (For petitioners): If there’s a presentation, then petitioners should be given a chance to cross examine.
  • Chandrachud, J: Questions can be given to the Bench.

To read the highlights from submissions of Senior Advocates Meenakshi Arora, Sajan Poovayya, CU SIngh, Sanjay Hegde and Counsel Jayna Kothari, click here.

To read the highlights from submissions of Senior Advocates KV Viswanathan and Anand Grover, click here.

To read the highlights from Senior Advocate Arvind Datar’s submissions, click here, here and here.

To read the highlights from Senior Advocate Gopal Subramanium’s submissions, click herehere and here.

To read the highlights from Senior Advocate Kapil Sibal’s arguments, click here, here and here.

Looking for the detailed submissions of Senior Advocate Shyam Divan? Read the highlights from Day 1Day 2, Day 3, Day 4 , Day 5, Day 6 and Day 7 of the hearing.


Case BriefsSupreme Court

Supreme Court: In the case where the widow of Lt. Hari Kant Jha, a freedom fighter who was accused and arrested in a criminal case emanating from freedom struggle movement of 9th August, 1942, sought pension under Swatantrata Sainik Samman Pension Scheme, 1980, the bench of Dipak Misra and R. Banumathi, JJ held that being an “absconder” is not synonymous to being “underground” and hence, the freedom fighter in the present case did not meet the eligibility criteria of either being an underground within the meaning of the Scheme for more than six months.

As per the Scheme, where primary evidence viz. records of the relevant period are not available, ‘Non-Availability of Record Certificate (NARC)’ from the concerned authority, in the form of secondary evidence becomes a pre-requisite for claiming “underground suffering”. The instructions require the State Government to issue NARC only after due verification from the concerned sources. The Scheme explicitly lays down that the claim of being “underground” can be proved either by documentary evidence by way of Court’s/Government’s orders proclaiming the applicant as an offender, announcing an award on his head, or for his arrest or ordering his detention; or, Certificates from veteran freedom fighters who had themselves undergone imprisonment for five years or more if the official records are not forthcoming due to their non-availability

The freedom fighter had remained absconding for a period of 2 years starting from 16.08.1942 to 14.10.1944. He was then arrested and discharged from the case on 25.01.1945. The appellant was, however, not able to produce the document supporting the claim of her husband being “undergound” for that period. In the case of appellant, Central Government stated that the appellant has not produced any acceptable record-based evidence duly verified by the State Government to establish the claimed ‘jail’ or ‘underground sufferings’ of Late Shri Hari Kant Jha. She has also not produced NARC from the competent authority as required and that thus, the eligibility criteria is not met. Also, the Central Government stated that the jail suffering of Shri Hari Kant Jha was only for thirteen days whereas the minimum jail suffering required to become eligible for pension is 6 months.

The Court held that the Swatantrata Sainik Samman Pension Scheme, 1980 is a document based Scheme and the documents required for eligibility for Samman Pension as mentioned in the Scheme are to be produced by the applicant in support of his claimed suffering, duly verified and recommended by the concerned State Government. Hence, due to the discrepancies and ambiguities relating to the documents and also due to non-production of NARC, benefit of the Scheme could not be extended to the appellant. [Jagdamba Devi v. Union of India, 2017 SCC OnLine SC 75, decided on 31.01.2017]


Case BriefsHigh Courts

Bombay High Court: Delivering its verdict in a case involving the denial of pension by the employers of Bank of Baroda to one of its employees who retired after years of unblemished service, the Bench comprising of Anoop V. Mohta and G.S. Kulkarni, JJ. held that denial of the right to pension of the employees can be made only in consideration with the facts and circumstances of the case and that such restrictions must pass the test of reasonableness, fairness and unarbitrariness.

In this case, the petitioner who retired after almost four decades of unblemished service in 2006 from a public sector bank, the respondent, which is covered under ‘State’ in accordance with Article 12 of the Constitution, sought to enforce the payment of the benefits pension and a loan scheme due to him, of which he had been deprived on grounds of the statutory time-limit expiring before he applied under the schemes. Since the notification itself had reached the petitioner after the stipulated date, and also because the right to receive pension is a right not a gratuitous payment, therefore, the petitioner claimed violation of his fundamental rights under Articles 14 and 21 of the Constitution of India.

The Court, on analysing the merits of the case held that the respondent arbitrarily disregarded the facts frustrating the whole purpose and object of the pension facility being made available to such retired employees The Court observed that the authorities must not be unmindful that pension is an entitlement of the employee for the past services rendered and not some charity. The Court further held that in light of the circumstances and facts of the case, this approach fails the test of reasonableness, fairness and non-arbitrariness and is violative of Articles 14 and 21 and shall therefore be rejected by the Court. [Ramesh Gajanan Nigudkar v. Bank of Baroda, 2016 SCC OnLine Bom 5287, decided on 18.08.2016]

Amendments to existing lawsLegislation Updates

The Central Government in exercise of the powers conferred by  6A read with section 7(1) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, makes Employees’ Pension (Second Amendment) Scheme, 2016 in order to amend the Employees’ Pension Scheme, 1995. The said Rules will come into force on the date of their publication in the Official Gazette, namely –

  1. In the Employees’ Pension Scheme, 1995 in paragraph 12, after sub-paragraph (7A), the following sub-paragraph shall be inserted, namely:-

“(7B) (a) A member who has attained the age of fifty-eight years and is otherwise eligible for pension under clause (a) of sub-paragraph (1) of this paragraph, if he so desires, may be allowed to defer the age of drawing pension later than fifty-eight years but not beyond sixty years of age.

(b) In such cases as is referred to in clause (a),-

(i) the amount of pension shall be increased at the rate of four per cent. for every completed year after the age of fifty-eight years which shall be restricted to the wage ceiling given under the proviso to sub-paragraph (2) of paragraph 3;

(ii) the member, at his or her option, may also be allowed to continue contributions under paragraph 3 to the Employees’ Pension Fund for the period for which the drawal of pension has been deferred, if the member is continuing in employment after the age of fifty-eight years, and the pensionable service and pensionable salary for the purpose of determination of pension under sub-paragraph (2) will be reckoned taking into account the period for which contributions were made after the age of fifty-eight years but not beyond the age of sixty years;

(iii) in the event of death of the member, who has opted for deferring the age of drawing pension under this sub-paragraph, after attaining the age of fifty-eight years and before the commencement of the pension so deferred, the family of the member will be entitled to pension under clause (c) of sub-paragraph (1) of paragraph 16 from the date following the date of death of the member

fifty-eight years, and the pensionable service and pensionable salary for the purpose of determination of pension under sub-paragraph (2) will be reckoned taking into account the period for which contributions were made after the age of fifty-eight years but not beyond the age of sixty years;

(iii) in the event of death of the member, who has opted for deferring the age of drawing pension under this sub-paragraph, after attaining the age of fifty-eight years and before the commencement of the pension so deferred, the family of the member will be entitled to pension under clause (c) of sub-paragraph (1) of paragraph 16 from the date following the date of death of the member as if the member monthly pension had commenced on the date of death of the member.”.

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