Jugal Kishore Julka & Ors vs. Union Of INDIA & Ors

Held

The Court rejected the prayer for waiver of GST, stating that no statutory provision was shown to demonstrate that the levy was contrary to law or could be waived. Regarding the challenge to the premiums, the Court held that the 10th Bi-partite Settlement, specifically Schedule IV and the 2015 Joint Note, clearly mandated that insurance benefits for retirees were subject to the payment of stipulated premiums, with the contribution amount to be decided by the respective banks. The MoF's 2012 Letter, using the word 'may', was merely advisory, and the IBA's October 2015 Circular, which related to 2015, also contained advisories. The Court noted that insurance premiums are set annually and insurance companies can revise them. Furthermore, the Court reasoned that retirees, being of older age, generally face greater medical risks than serving employees, thus justifying potentially higher premiums. The Court also highlighted that the insurance scheme was optional, meaning retirees were not compelled to join and could seek other insurance. Consequently, the Court found no merit in the petitioners' claims regarding discriminatory premiums and the banks bearing the costs. The petitions were dismissed.

Facts

Petitioners, retired bank employees, challenged the increased health insurance premiums for the term November 1, 2019, to October 31, 2020, as stipulated in circulars issued by Canara Bank, UCO Bank, and Punjab National Bank. They contended that these premiums were higher than those charged to serving employees under an optional health insurance scheme. The scheme was implemented following the 10th Bi-partite Settlement, which replaced the earlier reimbursement of hospitalization expenses. The Ministry of Finance (MoF) and Indian Banks' Association (IBA) had issued communications regarding staff welfare funds and group insurance policies for serving and retired employees. The petitioners sought a declaration that the impugned circulars were discriminatory, a direction to bring retiree premiums at par with serving employees, and for the banks to bear the premiums. They also sought a direction to waive GST on health insurance.

Key Issues

1. Whether the circulars issued by the respondent banks fixing higher insurance premiums for retirees compared to serving employees are discriminatory and violative of Article 14 of the Constitution of India and the terms of the 10th Bi-partite Settlement? (Question of law and mixed fact and law, turning on Article 14 of the Constitution of India and the 10th Bi-partite Settlement). 2. Whether the respondent banks should bear the premiums for retirees from staff welfare funds, as directed by the MoF's 2012 Letter? (Question of law, turning on the interpretation of MoF's 2012 Letter). 3. Whether GST on health insurance should be waived? (Question of law). Petitioner's arguments: The premiums for retirees are discriminatory, violating Article 14 and the 10th Bi-partite Settlement. The MoF's 2012 Letter directed banks to consider bearing premiums from staff welfare funds. Domiciliary benefits were initially included for retirees but later charged separately, which is discriminatory. Serving employees' parents are covered, while retirees' parents are not, despite similar age profiles. IBA's October 2015 Circular indicated similar terms and conditions for retirees and serving employees, with the same premium. Respondent's arguments: The relief sought is infructuous as three years have passed since the policy year in question. The 10th Bi-partite Settlement and its Annexure IV clearly state that retirees' benefits are subject to payment of stipulated premiums, and the contribution amount is to be decided by respective banks. The MoF's 2012 Letter used the word 'may', making it advisory. Insurance companies are at liberty to set premiums annually, and retirees, being older, pose a greater medical risk. The scheme is optional.