Kerala High Court
T.Radhakrishnan vs Union Of India on 18 February, 2020
Author: V Raja Vijayaraghavan
Bench: V Raja Vijayaraghavan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V
TUESDAY, THE 18TH DAY OF FEBRUARY 2020 / 29TH MAGHA, 1941
WP(C).No.26944 OF 2019(P)
PETITIONER :
T.RADHAKRISHNAN,
S/O. LATE THANKAPPAN ASARI, NEERCHALIL HOUSE,
MANATHUPADOM ROAD, UNICHIRA, ERNAKULAM-682 033,
(P.F.NO.KR/2729/175)(PPO NO.KR/ KCH/ 00083431)
BY ADV. SRI.M.P.PRAKASH
RESPONDENTS :
1 UNION OF INDIA
REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR AND
EMPLOYMENT, DEPARTMENT OF EMPLOYMENT,
NEW DELHI-110 001.
2 BOARD OF TRUSTEES OF EMPLOYEES PROVIDENT FUND
ORGANISATION, REPRESENTED BY THE CENTRAL PROVIDENT
COMMISSIONER, BHAVISYA NIDHI BHAVAN, 14,
BHIKAJI CAMA PALACE, NEW DELHI-110 066.
3 REGIONAL PROVIDENT FUND COMMISSIONER,
EPF ORGANISATION, SUB REGIONAL OFFICE, BHAVISHYANIDHI
BHAVAN, KALOOR, COCHIN-682 017.
4 ERNAKULAM REGIONAL CO-OPERATIVE MILK PRODUCERS UNION
LTD., NO.E-150 (D),REPRESENTED BY ITS MANAGING
DIRECTOR, HEAD OFFICE, EDAPPALLY,
COCHIN-682 024.
R1 BY ADV. SRI.K.SUDHINKUMAR
R3 BY ADV. SRI.S.PRASANTH
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
18.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No.26944 OF 2019(P) 2
JUDGMENT
The 4th respondent is an establishment covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The petitioner herein was an employee and he had retired from service on 30.11.2013 on attaining superannuation. The petitioner was covered under the Contributory Provident Fund. In terms of para 26(6) of the Provident Fund Scheme, 1952, the employee as well as the employer had exercised joint option and contributions were paid on his actual salary.
2. According to the petitioner, Section 6A of the Act was introduced for creating a pension scheme to the employees and the Employees' Pension Scheme, 1995 was framed. The maximum pensionable salary was initially fixed at Rs.5,000/- which was later enhanced to Rs.6,500/-and such sums from the employer's contribution under Section 6 not exceeding 8.33% of the basic wages, Dearness Allowance and retaining allowance were to be the corpus of the Pension Fund. Subsequently, a proviso was added to Clause 11(3) of the Employees' Pension Scheme, 1995 with effect from 16.03.1996 granting WP(C).No.26944 OF 2019(P) 3 an option to the employer and the employee to contribute amounts towards the Pension Fund at the rate of 8.33% of the actual salary, where the salary exceeded Rs.6,500/- per mensem. Thereupon, most of the employees, who were drawing salaries in excess of the prescribed limit, opted to pay contributions on the basis of the actual salary paid by them. However, the requests made by some of the employees were rejected on the ground that the option to pay higher contribution was not exercised on or before 01.12.2004, which date was fixed as the cut off date. This was challenged before this Court by certain employees by filing W.P.(C) Nos.6643 and 9929 of 2007. A learned Single Judge of this Court, by judgment dated 04.11.2011, in W.P.(C) No.6643 of 2007 and connected cases, held that the proviso which was added with effect from 16.03.1996 was retrospective and is operative from the date of commencement of the scheme which was on 16.11.1995. It was further held that the cut off date fixed by the organization as 01.12.2004 is clearly without jurisdiction. It was also held that, if a joint application is filed by the employee as well as the employer at any time, the benefits of the proviso to Clause 11(3) of the Employees' Pension Scheme cannot be denied to the employees. The operative part of the order is extracted below for easy reference. WP(C).No.26944 OF 2019(P) 4
In the above circumstances, I allow these writ petitions quashing the orders impugned in these two writ petitions. It is declared that the fixation of cut off date of 1.12.2004 is without jurisdiction and despite the fact that the petitioners have filed the applications for benefit under the proviso to clause 11(3), after the cut off date so fixed, the petitioners are entitled to avail of the benefit under the proviso to clause 11(3) of the Employees' Pension Scheme. As such I declare that the benefits was rightly given to the petitioners. Consequently, the arrears of contributions payable by the petitioners for availing of the benefit of the said proviso shall again to be transferred from the Provident Fund account of the petitioners to the Employers' Pension Fund account of the petitioners. Orders in this regard shall be passed, as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment.
3. The said judgment was taken in appeal by the Union of India as well as the EPF Organisation. A Division Bench of this Court by judgment dated 5.3.2013 in W.A. No.568 of 2012 dismissed the appeals. Though the judgment of the Division Bench was challenged before the Hon'ble Supreme Court, by Ext.P4 order in S.L.P. No.7074 of 2014 which is dated 31.03.2016, those appeals were dismissed, finding that there was no valid ground for interference.
4. According to the petitioner, in R.C. Gupta & Others. v. WP(C).No.26944 OF 2019(P) 5 Regional Provident Fund Commissioner Employees Provident Fund Organization & Others1 [Civil Appeal Nos.10013-10014 of 2016 (arising out of SLP(C) Nos.33032-33030 of 2015] the Hon'ble Supreme Court had occasion to consider the question as to whether the employees would be entitled to the benefit of deposit of 8.33% of their actual salary in the pension fund irrespective of the ceiling limit. The Hon'ble Supreme Court has held thus in the report.
10. We do not see how exercise of option under paragraph 26 of the Provident Fund Scheme can be construed to estop the employees from exercising a similar option under paragraph 11(3). If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, exercise of option under paragraph 26 of the Provident Scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under Clause 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the Pension Scheme unless the circumstances warranting such foreclosure are clearly indicated.
11. The above part in a situation where the deposit of the employer's share at 12% has been on the actual salary and not the ceiling amount, we do not see how the Provident Fund Commissioner could have been aggrieved to file the LPA before the Division Bench of the High Court. All that 1 [2018 (14) SCC 809] WP(C).No.26944 OF 2019(P) 6 the Provident Fund Commissioner is required to do in the case is an adjustment of accounts which in turn would have benefited some of the employees. At best what the Provident Commissioner could do and which we permit him to do under the present order is to seek a return of all such amounts that the concerned employees may have taken or withdrawn from their Provident Fund Account before granting them the benefit of the proviso to Clause 11(3) of the Pension Scheme. Once such a return is made in whichever cases such return is due, consequential benefits in terms of this order will be granted to the said employees.
12. Consequently and in light of the above, we allow these appeals and set aside the order of the Division Bench of the High Court.
5. Later, EPF Scheme was amended by GSR 609(E) dated 22.8.2014 w.e.f 1.9.2014 omitting proviso to para 11 (3) of the Scheme which provides for the exercise of the option. The maximum pensionable salary was altered to mean the average monthly pay drawn for a span of 60 months preceding the date of exit from the membership of the pension fund and the maximum pensionable salary was fixed at Rs.15000/- per mensem. Aggrieved by the changes brought to the Act and the Scheme, the validity of the amendments were challenged before this Court by several of the employees.
WP(C).No.26944 OF 2019(P) 7
6. A Division Bench of this Court in Sasikumar P v Union of India and others2 held that the impugned amendments are arbitrary, ultra vires the EPF Act and are unsustainable and allowed the writ petition and the following orders were issued.
For the foregoing reasons, the petitioners are entitled to succeed. The writ petitions are all allowed as follows:
i) The Employee's Pension (Amendment) Scheme, 2014 brought into force by Notification No. GSR. 609(E) dated 22/08/2014 evidenced by Ext.P8 in W.P.(C) No. 13120 of 2015 is set aside;
ii) All consequential orders and proceedings issued by the Provident Fund authorities / respondents on the basis of the impugned amendments shall also stand set aside.
iii) The various proceedings issued by the Employees Provident Fund Organization declining to grant opportunities to the petitioners to exercise a joint option along with other employees to remit contributions to the Employees Pension Scheme on the basis of the actual salaries drawn by them are set aside.
iv) The employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date.
v) There will be no order as to costs.
2 ( I.L.R. 2019 (1) ILR 614) WP(C).No.26944 OF 2019(P) 8
7. Though the EPF organisation challenged the judgment before the Hon'ble Supreme Court, the SLP was dismissed by order dated 1.4.2019 in S.L.P.(Civil) No. 9610 of 2019.
8. According to the petitioner, in view of the concluded judgments, the petitioner herein is also entitled to enjoy the benefits under the proviso to clause 11(3) of the Pension Scheme based on its contribution made to the Provident Fund Scheme on his gross pay exceeding the ceiling limit.
9. He has therefore approached this Court seeking the following reliefs:
i) To declare that the petitioner is entitled to enjoy the benefits under the proviso to Clause 11(3) of the Employees Pension Scheme, 1995 based on his contribution made to the Employees Provident Fund Scheme on his gross pay exceeding the salary ceiling limit and also to declare that the action of the respondents in not permitting the petitioner to enjoy the benefits under the proviso to Clause 11(3) of the Employees Pension Scheme is illegal and unconstitutional;
ii) To issue a writ of mandamus or any other appropriate writ, direction or order commanding the respondents to permit the petitioner to enjoy the higher pensionary WP(C).No.26944 OF 2019(P) 9 benefits permissible under the Employees Pension Scheme, by readjusting the contributions already made towards Employees Provident Fund and Employees Pension Scheme based on the actual salary, also to allow the petitioner to refund notionally the amounts withdrawn and to disburse arrears of enhanced pension with in a time frame that may be fixed by this Hon'ble Court;
iii) To issue a writ of mandamus or any other appropriate writ, direction or order commanding the respondents to extend the benefits Ext.P2 to P5 judgments to the petitioner with in time frame that may be fixed by this Hon'ble Court;
10. The respondents have filed a statement, wherein it is stated that the petitioner having ceased to be a member of the Employees Pension Scheme on attaining superannuation even prior to 1.09.2014, he could not have been affected by the notification which was quashed by this Court by the judgment rendered by this Court in Sasikumar (supra). It is further contended that a challenge has been raised before the Hon'ble Supreme Court against the Judgment by the Union of India and the same is pending consideration. It is further contended that the petitioner having ceased to be an employee cannot now come forward and seek to exercise the option under Clause 11(3) of the Scheme. It is further contended that the contributions to the Pension Scheme can only WP(C).No.26944 OF 2019(P) 10 be by the employer and the employee cannot be permitted to make contributions to the scheme.
11. I have considered the submissions advanced. From Ext.P6 affidavit filed by the Assistant Provident Fund Commissioner, it is apparent that pursuant to the judgment of the Hon'ble Supreme Court in R.C.Gupta, a Circular dated 23.3.2017 vide No.Pension-1/12/33/EPS Amendment/96/Vol.II, as per which the members of the Employees' Pension Scheme 1995, who had contributed on higher wages exceeding the statutory wage ceiling of Rs.6500/- in the Provident Fund were allowed to divert 8.33% of the salary exceeding the said ceiling to the Pension Fund with up-to-date interest as declared under the Scheme to get the benefit of pension on higher salary on receipt of joint option of employer and employee. The petitioner is therefore entitled to the benefits of Ext.P1 judgment as well the judgment in R.C.Gupta (supra) and therefore, he cannot be denied of his rights to enjoy the benefits under the proviso to Clause 11(3) of the Employees' Pension Scheme.
In the result, this Writ Petition will stand allowed. It is declared that the petitioner is entitled to avail of the benefit under the proviso to clause 11(3) of the Employees' Pension Scheme, 1995 based on his WP(C).No.26944 OF 2019(P) 11 contribution made to the Employees' Provident Fund on his gross pay exceeding the salary ceiling limit. The respondents shall permit the petitioner to avail higher pensionary benefits by applying the principles laid down by this Court in Ext.P1 judgment and in tune with the directions in R.C.Gupta (supra). The petitioner may be asked to return of all such amounts that the petitioner may have taken or withdrawn from his Provident Fund account before granting him of the benefit of the provisio of the Pension Scheme. Once such return is made, consequential benefits shall follow.
The entire exercise shall be completed within a period of six months from the date of receipt of a copy of this judgment.
Sd/-
RAJA VIJAYARAGHAVAN V JUDGE NS WP(C).No.26944 OF 2019(P) 12 APPENDIX PETITIONER(S) EXHIBITS:
EXHIBIT P1 A TRUE COPY OF THE JUDGMENT DATED
04.11.2011 IN W.P(C) NO.9929/2007
EXHIBIT P2 A TRUE COPY OF THE JUDGMENT DATED
24.02.2012 IN W.P.(C) NO.7878/2011
EXHIBIT P3 A TRUE COPY OF THE JUDGMENT DATED
05.03.2013 IN W.A.NO.568/2012
EXHIBIT P4 A TRUE COPY OF THE ORDER DATED
31.03.2016 OF THE HON'BLE SUPREME COURT
EXHIBIT P5 A TRUE COPY OF THE ORDER DATED
04.10.2016 OF THE HON'BLE SUPREME COURT
EXHIBIT P6 A TRUE COPY OF THE AFFIDAVIT FILED BY
THE 3RD RESPONDENT IN W.P(C)
NO.39822/2016
EXHIBIT P7 A TRUE COPY OF THE REPRESENTATION DATED
01.04.2017 OF THE PETITIONER
EXHIBIT P8 A TRUE COPY OF THE LETTER DATED
27.09.2017 OF THE 4TH RESPONDENT
TOGETHER WITH JOINT OPTION
WP(C).No.26944 OF 2019(P) 13