Central Administrative Tribunal - Delhi
Lalit Goel vs National Co-Operative Development on 7 September, 2015
CENTRAL ADMINISTRATIVE TRIBUNAL PRINCIPAL BENCH OA-1086/2014 Order Reserved on 19.05.2015 Order Pronounced on: 07.09.2015 Honble Dr. K.B. Suresh, Member (J) Honble Mr. Sudhir Kumar, Member (A) 1. Lalit Goel, Deputy Director S/o Shri Ramesh Lal Goel, R/o TOPIC Training Centre-NCDC, Plot No. 89, Sector-18, Gurgaon (Haryana) 2. Malay Mandal, Deputy Director, S/o Shri Madan Mohan Mandal, National Cooperative Development Corporation, Regional Office Patna, Block-A, Second Floor, Mouryalok Complex, Dak Bunglow Road, Patna-800001. 3. Ms. Inderjeet Kaur, Assistant Director, D/o Shri Shamsher Singh, R/o 198/21, Roop Nagar, Street-1, Sonipat, Haryana-131001. 4. Vikas Tejasvi, Assistant Director, R/o Villa No.6, First Floor, Block-2, Charmwood Eros Garden, Faridabad (Haryana) 121009. -Applicants (By Advocate: Shri Ram Naresh Yadav) Versus 1. National Co-operative Development Corporation Through its Managing Director, Address at 4, Siri Institutional Area, Hauz Khas, New Delhi-110016. 2. Director (P&A), National Co-operative Development Corporation, 4, Siri Institutional Area, Hauz Khas, New Delhi-110016. 3. Department of Agriculture and Co-operation, Krishi Bhawan, New Delhi-110001. 4. Pension Fund Regulatory and Development Authority (PFDRA), 1st Floor, ICADR Building, Plot No.6, Vasant Kunj, Institutional Area, Phase-II, New Delhi-110070. -Respondents (By Advocate: Shri H.K. Gangwani, for R-1 to 3) Shri Rahul Ravindran, Presenting Officer For R-4) O R D E R Per Sudhir Kumar, Member (A):
The applicants of this case are before this Tribunal aggrieved by the Office Order dated 12.12.2011 (Annexure A-1 and the order dated 10.09.2012 (Annexure A-2) passed by the Respondent No.1 National Cooperative Development Corporation (NCDC, in short). Their case, in short, is that they should have been allowed to continue under the Contributory Provident Fund (CPF, in short) Scheme, along with Superannuation Benefits of NCDC, instead of the New Pension Scheme (NPS, in short) being made applicable in their case. They have accordingly joined together and prayed for the following reliefs, even though most of the pleadings of the case were based upon the case of applicant No.1 only:-
(i) That the Honble Tribunal may graciously be pleased to quash the impugned order dated 12.12.2011 and 10.09.2012 (Annexure A/1 and Annexure A/2) and pass an order/directions to the respondent No.1 to 3 to continue the case of applicants under CPF Scheme alongwith superannuation benefits of NCDC instead of New Pension Scheme.
(ii) Any other relief which the Honble Tribunal deem fit and proper may also be granted to the applicant alongwith the cost of litigation, in the interest of justice.
2. Through their OM dated 13.11.2003, placed at Annexure A-3 of the present OA, the Govt. of India, Ministry of Finance, Department of Expenditure, which has not been named as party respondent in the present OA, had issued instructions regarding applicability of NPS to the employees of Autonomous Bodies/PSUs under various Central Government Departments and Ministries. Much later, Respondent No.1, NCDC called applications for the post of Deputy Director (PB-3) in the areas of Food Processing, Legal, and Finance & Accounts through their advertisement published in the Employment News dated 28 March-03.04.2009, placed at Annexure A-4 of the OA. The applicant No.1 applied for the post of Deputy Director (Legal), and, consequent upon his selection, he was issued the letter of offer of appointment dated 29.06.2009 (Annexure A-5), offering him an appointment against the said post, subject to the terms and conditions (i to xii) of Para-1 of that offer letter. While no specific mention had been made about applicability of NPS in this offer letter, sub-para (xi) of Para-1 of the offer letter stated as follows:-
xi) Other conditions of service will be governed by the relevant rules, regulations and orders in force in the Corporation.
3. The applicants have submitted at Annexure A-6 the minutes of the 168th meeting of the Board of Management of NCDC, held on 19.01.2010, in which in respect of Item No.9 Para (e), it was mentioned that the existing scheme of superannuation benefits to the employees of the Corporation will be limited to the existing and retired employees of the Corporation, and that the new employees will be covered by the provisions of Pension Fund Regulatory and Development Authority (PFRDA, in short).
4. In compliance of this Board decision, file notings were moved within the NCDC, typed copies of which have been submitted by the applicants at Annexure A-7, through which it is seen that even though the PFRDA had insisted for NPS being made applicable to all persons who had joined NCDC after 01.01.2004 compulsorily, the Department of Agriculture & Cooperation (DAC, in short), Ministry of Agriculture, Respondent No.3, had agreed to the proposal as approved by the Board of NCDC, to extend NPS only to those who had joined NCDC on or after 01.01.2010, which NPS of NCDC would then be regulated through PFRDA.
5. From the minutes of the 175th meeting of the Board of Management of NCDC held on 19.10.2011, as produced by the applicants through Annexure A-9, it is seen from Para-5 of the minutes that 28 employees had joined NCDC between 01.01.2004 and 31.12.2009, and they were proposed to be continued to be covered by the existing CPF Scheme of the Corporation, and after their being declared eligible for coverage under the Superannuation Benefit Scheme earlier, they were sought to be shifted to the NPS. The proposal placed before the Board of Management of NCDC contained in Para-6 & 7 of this 175th Meeting was as follows:-
6. In view of the above, it is placed before the Board of Management for:
i. Continuing to cover all regular employees of NCDC who joined service on or before 31.12.2003 under CPF Scheme and enroll them as beneficiary members under Superannuation Benefit Scheme for employees of NCDC approved by Government of India vide its letter No.11017/1/2010-I&P dated 14.06.2010.
ii. Making New Pension Scheme applicable for all the regular employees of NCDC joining on or after 01.01.2004 who are presently covered under CPF Scheme, and to transfer the amount accumulated in the CPF account of these employee to the pension fund under the New Pension Scheme.
iii. Regular employees of NCDC who joined on or after 01.01.2004 but originally joined Government service on or before 31.12.2003 and got their PF balance transferred to NCDC will have the option to continue to be covered under CPF Scheme. They will however not be enrolled as beneficiary members under Superannuation Benefit Scheme.
iv. Making New Pension Scheme notified by Department of Economic Affairs, Ministry of Finance on 22.12.2003 and introduced vide D/O Expenditure OM No.1(7)(2)/2003 dated 07.01.2004, and as amended from time to time applicable in the NCDC.
v. Converting any recovery in the subsequent date after 01.01.2004, on account of short receipt/deductions of the employees and Corporations contribution, etc. shall form part of the pension fund, under the New Pension Scheme. The outstanding CPF advances recovered after 01.01.2004 to form part of the pension fund.
vi. Making recovery for new employees from the month following the month of joining the service in NCDC and allowing matching contribution from NCDC in Tier-I account.
vii. Allowing accumulations at the credit of subscribers to the New Pension Scheme for all the regular employees of NCDC to carry interest at the rate of paid by NCDC on CPF prior to its actual transfer to the NPS architecture.
viii. Allowing transfer of pension corpus to the PFRDA regulated NPS architecture and invested therein after PFRDA approval is received.
ix. Allowing investment of NPS contributions of subscribers in accordance with the investment guidelines of the Ministry of Finance for non-Government Provident Funds and Superannuation Funds if PFDA approval is not received within an year.
7. The proposal for introduction of New Pension Scheme for all employees joining NCDC after 31.12.2003 as detailed at para 6 is placed before the Board of Management for approval.
6. Thereafter, the PFRDA issued instructions through Annexure A-10 dated 29.11.2011 to Respondent No.2 of the present OA regarding implementation of NPS for the employees of NCDC, and for finalization of the modalities for transfer of accumulated NPS corpus in respect of the subscribers pertaining to the period w.e.f. 01.01.2004 onwards. 13 out of 28 employees so affected by these instructions, including the four applicants before us, represented against the same through their letter dated 22.08.2012 (Annexure A-11) requesting that NCDC may consider giving option to their employees who joined on or after 01.01.2004, and who were already members of the existing CPF Scheme, to either continue with the CPF Scheme, or to join NPS, as per their willingness, without any violation of principles of natural justice. However, the respondents have since turned down their request through the impugned Annexure A-2 dated 10.09.2012 by stating as follows:-
NATIONAL COOPERATIVE DELVELOPMENT CORPORATION (Personnel and Administrative Division) No.NCDC:9-1/2010-Admn. Dated 10.09.2012 Sub: New Pension Scheme This refers to joint representation made by 13 employees of the Corporation who joined NCDC between 01.01.2004 and 31.12.2009. In this connection, it is informed that the representation was considered by the competent authority and it was observed that in view of the instructions contained in the Office Memorandum No.1(13)EV/2001 dated 13.11.2003 and 15.03.2004 and OM No.1(2)/EV/2007 dated 30.06.2009 issued by the Department of Expenditure, Ministry of Finance, all employees who joined the service of the Corporation on or after 1.1.2004 are to be covered under New Pension Scheme. In view of this, the request for seeking option for continuation in the existing CPF Scheme or to join the NPS as per willingness of the employee has not been agreed to.
2. The concerned employees are informed that no further representations will be considered by the Corporation in the matter. They are also advised to submit their PRAN registration form within 5 days from the issue of this communication.
Sd/-
(M.K. Acharjee) Director (P&A).
(Emphasis supplied)
7. The applicants have assailed the above reply of the respondents, whereby though the employees of Respondent No.1-NCDC who had joined the services of the Corporation between 2004 and 2009 will cease to be the members of the CPF Scheme of NCDC, and have been made subject to retrospective application of the NPS Scheme w.e.f. 01.01.2004. The applicants are aggrieved that those employees among the 28 persons who had joined after 01.01.2004, and had subsequently resigned from the services, had been provided with CPF benefits in the meanwhile, while those who were continuing to serve the respondent-NCDC are being made to fall in line for adopting NPS membership, and have been asked to submit their NPS membership form, without asking for their choice/willingness.
8. In assailing the action of the respondents, the applicants have taken the ground that in the published advertisement issued for the recruitment, it was mentioned that the selectees will be covered under the CPF Scheme of Respondent No.1 NCDC, and they are now being deprived of joining that Scheme, subsequent to their joining service, through an arbitrary action on the part of the respondents, and against the principles of natural justice. They have taken the ground that Respondents No. 1 & 2 have never issued any Show Cause Notice for considering their case for joining NPS, which is illegal and arbitrary.
9. The applicants have taken the further ground that though the Central Government had vide Notification dated 22.12.2003 made NPS applicable to those employees who had joined the services on or after 01.01.2004, in their case, the Respondent No.1-NCDC had implemented the NPS retrospectively w.e.f. 01.01.2004, without having given them any option, or show cause notice in this regard, and by passing orders behind their back, which was in violation of principles of natural justice. It was submitted that because of this action of the respondents, the applicants are being made to suffer huge financial loss, which is against the settled principle of law that no such order, which has the effect of civil consequences visiting an employee, should be passed without giving him an opportunity of being heard.
10. The applicants have pointed out that a proposal had initially been approved at the 168th meeting of the Board of the Respondent No.1-NCDC that NPS will be implemented prospectively only, from 01.01.2010, and those employees who had joined before that date, and had been covered under the existing CPF Scheme, may be continued under the same, but later the respondents changed their stand, and revised the cut off date for the employees eligibility for Superannuation Benefit Scheme from 31.12.2009 to 31.12.2003, and had thus arbitrarily covered under NPS all those employees who had joined on or after 01.01.2004 retrospectively, while in the interregnum they had already been covered under the CPF Scheme of Respondent No.1-NCDC, which action is wrong, arbitrary, and against the principles of natural justice.
11. It was also submitted that there is a difference in the quantum of contributions as prescribed in the CPF Scheme, being 12% of basic pay+ Grade Pay + DA to be paid as employers share earlier, while NPS prescribed only 10% of basic pay + Grade Pay + DA being payable towards employers share. They had further taken the ground that even the form of NPS as given to them is so worded as if the employees are requesting to the Management for including them into the bracket of NPS, while in reality this decision has been unilaterally imposed by the management, in gross violation of the terms and conditions of their appointments to their posts. They had also submitted that Respondent No.4 PFDRA cannot be the authority to decide the cut-off date for implementation of NPS in NCDC, and hence this OA.
12. The applicants had also prayed for grant of Interim Relief to stay the operation of the impugned orders Annexure A-1 dated 12.12.2011, and Annexure A-2 dated 10.09.2012. However, the Interim Relief was denied by the Bench which had issued notice in the case on 03.04.2013, and the same was never granted to them.
13. Respondents No. 1 to 3 filed their counter reply on 24.10.2013. In this they had taken the stand that since the Respondent No.1-NCDC had been established under the NCDC Act, 1962, the method of appointment and the service conditions of its officers and other employees has to be regulated by its own service Regulations, as notified with the approval of the Central Government in the Gazette, and it is also required to comply with the directions and orders issued by the Central Government.
14. Explaining the factual position that the 168th Meeting of the Board had approved for adoption of the NPS in NCDC on or after 01.01.2010, it was submitted that, thereafter, it was Respondent No.4-PFRDA, which had, through their letter dated 07.03.2011, informed that in terms of the OM issued by the Ministry of Finance, Department of Expenditure dated 13.11.2003 and 15.03.2004, it was compulsory for NCDC also to cover under NPS all those employees who had joined the Corporation on or after 01.01.2004. As a result, even though in the meanwhile the approval of the Respondent No-3-DAC had already been obtained in respect of the previous proposal, a fresh approval of the Board of Management, to cover all those employees under NPS who had joined NCDC on or after 01.01.2004, was moved before the 175th Board Meeting held on 19.10.2011, and, thereafter, approved again by the Respondent No.3-DAC. Therefore, falling in line with the instructions of the Government, the NPS was made applicable to all those employees of NCDC who had joined the services of the Corporation on or after 01.01.2004, through Office Order dated 12.12.2011 (supra).
15. It was, thereafter, explained that representations were received from 28 employees, who had joined the services of the Corporation in the interregnum period, between 01.01.2004 and 31.12.2009, including the applicants and others, but since it was observed that NPS was not optional, but was mandatory in respect of those employees who had joined after 01.01.2004, the applicants were informed accordingly, through the impugned order dated 10.09.2012.
16. It was further admitted by the respondents in the counter reply that the applicants posts had been advertised before the adoption of NPS by the Board of NCDC, but since the appointment letter already contained the provision at Para-1(xi) (supra) in respect of other conditions of service, when the NPS was adopted as being mandatory in respect of those employees who had joined after 01.01.2004, the applicants were bound to come under the NPS. It was explained that the previous Resolution of 168th Board Meeting of NCDC was erroneous, and had been amended and replaced by the decision of the 175th Meeting of the Board of Management of NCDC, for the respondent-NCDC to comply with the instructions of PFRDA.
17. It was further submitted that only two employees recruited in NCDC, on 15.02.2006 and 15.05.2009, had resigned from the services of the NCDC, on 10.07.2012 and 29.01.2013 respectively, and their CPF balances with NCDC were merely passed on to the new organizations where they had joined. With this explanation, the Respondents No.1 to 3 submitted that no inequality has been perpetrated by them in the case of the applicants. It was further submitted that at least in respect of applicants No. 2 & 4 of the present OA, who had submitted their NPS Registration Forms, their relevant NPS Registration numbers have since been received, and that the remaining two applicants have also since submitted their Registration Form in May 2013. The Respondents No. 1 to 3 had denied that the OA as filed is maintainable in any form, and submitted that there was no need for issuing any Show Cause Notice to the applicants, as in their appointment letters itself, Clause-(xi) (supra) regarding the other conditions of service had already been included, and as and when the conditions of service undergo a change in respect of other employees of NCDC, the case of the applicants shall also have to be covered under the same. It was also submitted that it is wrong on the part of the applicants to state that they were not at all aware about the NPS Plan, as NCDC had organized a workshop on the NPS on 04.01.2012, where representatives of PFRDA had explained the NPS and its intricacies to the NCDC employees, and had informed them that it was mandatory, and that these employees had to be shifted from CPF to NPS mode. Any violation of principles of natural justice was denied, and any element of bias on the part of the respondents was also denied. It was, therefore, prayed that the OA, being devoid of any merits, may be dismissed with costs.
18. Even prior to this, the counter reply of Respondent No.4 PFRDA had been filed on 09.05.2013. In this it was submitted that the Respondent No.4 had been wrongly arrayed as a party respondent in the present proceedings, and the present OA is liable to be rejected on the preliminary ground of mis-joinder of parties, as PFRDA could not be a party to an alleged dispute between the applicants and their employer, Respondent No.1, while no relief has been sought for from Respondent No.4. The establishment of PFRDA vide Notification dated 10.10.2003, followed by another Notification dated 14.11.2008, was then explained, leading to the passing of the PFRDA Act, 2013 (Act No.23 of 2013), which had received the assent of the President and became a law on 18.09.2013. The Respondent No.4 had further explained in detail the modalities of operation of NPS, which we need not discuss here in detail. They had submitted that the Scheme envisages allotment to a subscriber of a unique Permanent Retirement Account Number (PRAN, in short) through which an employee can not only monitor the credits and contributions in his account, but also transfer the same number in case of change in employment from one organization covered under NPS to another. It was submitted that the NPS strives to provide an employee with a decent retirement income on attaining the age of 60 years, and ensures that such an employee would not suffer in penury during his old age. They had, therefore, prayed that the name of answering respondent/Respondent No.4 should be deleted from the array of parties, but that prayer had not been considered on merits, and had not been acceded to till the date of the final hearing of the case.
19. The applicants filed their rejoinder to the counter reply filed by Respondents No. 1 to 3 on 07.03.2014. They had denied the contention of the respondents that the NPS could have been made applicable to them at all, since the NCDC was not having GPF-cum-Pension Scheme, but only had a CPF Scheme in operation, while the Govt. of India Notification dated 13.11.2003 has specifically mentioned that new entrants on or after 01.01.2004 will be governed by the NPS, and not by the existing Pension Scheme in those organizations. It was, therefore, submitted that since NCDC was not having a Pension Scheme at all earlier, and since many PSUs are still being governed by the CPF Scheme, as they also did not have the GPF-cum-Pension Scheme existing in their organizations, therefore, it ought not to have been made mandatory for the Respondent No.1-NCDC also to adopt NPS. They had criticized the arbitrary change brought about by the Respondent No.1-NCDC in the cut-off date, and had cited the PFRDA reply in which it had been clearly stated that the PFRDA does not decide the cut-off date for implementation of NPS in respect of employees of any organization.
20. It was further submitted that a Group Superannuation Benefit Scheme had also been launched by Respondent No.1-NCDC, to give benefit to all those employees who had joined the services of the Corporation before 01.01.2010, but later NCDC had changed the eligibility date through a subsequent meeting of the Board of NCDC in an arbitrary manner. It was again contended that when in the advertisements of NCDC for recruitments between 01.01.2004 to 31.12.2009, it was clearly mentioned that the selected employees will be entitled for its CPF Scheme, the respondents could not have gone back on that, and made NPS applicable to the applicants, and to the other employees recruited during this period. It was, therefore, again prayed that the OA may be allowed, in terms of the prayers made therein, and that the impugned orders may be quashed.
21. In support of their contention, the applicants had produced the letter dated 31.12.2010 issued by the Respondent No.1-NCDC Employees Superannuation Benefit Scheme Trust to the Commissioner of Income-tax, ACIT/TDS/Circle-13(1), New Delhi, in which also the creation of a corpus in respect of superannuation liability had been discussed, by pointing out the following as the main parts of that Scheme:-
Re: Group Superannuation Scheme to be approved under Part B of the Fourth schedule to Income-tax Act, 1961.
We make this application in terms of Sub-rule (i) of Rule 4 of Part B of the Fourth Schedule of Income Tax Act, 1961, seeking approval of National Cooperative Development Corporation Employees Group Superannuation Scheme, established under an Superannuation Trust for making provisions of Superannuation benefits to the employees of National Cooperative Development Corporation.
The Trust Deed dated 30th day of December, 2010 is executed by the Trust and the Trustees appointed for the purpose of administration and the Scheme is effective since inception of the organization.
NCDC has received an approval from the Ministry of Agriculture, Department of Agriculture & Cooperation, Government of India, vide Ref. No.FN.11017/1/2010-I&P, Dated, 14th June 2010 to initiate the scheme as per the below mentioned rules.
We are attaching a copy of the said letter for your reference. We also attach herewith a certified copy of the Trust Deed and two copies of the Rules that regulate the working of the Scheme, the highlights are mentioned below for your perusal.
The employer meets the entire cost to secure the benefits by making initial contribution in respect of each member over the past years of his/her service. Employer contribution in respect of any Member shall not exceed 27% of the prescribed Salary of the Member during each year, less contribution to the Provident Fund.
NCDC will create a corpus fund with initial contribution of Rs.20 crore and thereafter deposit annual contribution amounting to 12% of basic pay + dearness allowance paid to the employees who joined the service of the Corporation before 01.01.2010, from 2010-11 to 2034-35, which is expected to generate a total corpus of around Rs.70 crore.
Superannuation benefits will be payable to employees only from interest earned on Corpus. The fund under management will remain intact and will not be utilized for disbursement.
NCDC will make superannuation payments to the Retired Employees directly from the interest credited by the life insurance company into the Superannuation Trust account.
Option of annuities will not be exercised by employees with SBI Life Insurance or any other insurance company.
22. The respondents R-1 to R-3 thereafter filed an additional affidavit on 23.07.2014. Through this, it was submitted that the NCDC had implemented the NPS scheme only in compliance of the instructions issued by the Department of Expenditure, Ministry of Finance OMs dated 13.11.2003 and 15.03.2004, through which the Government had decided to introduce the NPS by stating as follows:-
It has been further decided that new entrants in all autonomous bodies under various Central Ministries/Departments recruited on or after 1.1.2004 will also be governed by the new scheme not by the existing pension scheme of these organizations.
(Emphasis supplied)
23. It was further submitted that the NCDC did not have any pension Scheme whatsoever for its employees when the matter was first placed before the Board of Management in its 168th Meeting on 19.01.2010. The Board of Management of NCDC had that day approved the Superannuation Benefit Scheme for its employees for 20 years after their retirement on superannuation in respect of those who had joined the services of the NCDC on or before 31.12.2009, and it was decided that the employees who had joined NCDC on or after 01.01.2010 would be covered under the NPS. Thereafter they had given details of their correspondence with PFRDA, as already discussed above, which had led to the matter being placed once again before the 175th Meeting of the Board of Management, when the Board of Management had approved the proposal for introduction of NPS for all of its employees who had joined NCDC on or after 01.01.2004, which was then implemented in pursuance of the Boards approval through the Office Order dated 12.12.2011. It was submitted that NCDC had not arbitrarily changed the dates for implementation of NPS on its own, or under the instructions of the DAC, but had only abided with the instructions of the PFRDA, and the instructions of the Department of Expenditure, Ministry of Finance.
24. It was submitted that NCDC had no option but to seek the approval of the Board of Management to revise the date of implementation of NPS, and now the date of 01.01.2004, as per the NPS Guidelines, has become the prescribed date. In respect of averments of the applicants in their rejoinder that the NPS has not been implemented in PSUs like NTPC, BHEL, FCI etc., which are still governed by their CPF Schemes, it was submitted that those organizations are governed by the Guidelines issued by the Department of Public Enterprises from time to time, though they are under the administrative control of different Ministries/Departments. It was submitted that the responsibility for implementation of the Guidelines of Department of Public Enterprises rests with the concerned administrative Ministries/Departments, and since these Central Public Section Enterprises (CPSEs, in short) are following the Industrial scales of pay and related Dearness Allowances w.e.f. 01.01.2007, and provide for superannuation benefits to the employees of CPSEs upto 30% of their Industrial scale basic pay and DA, therefore, continuation of CPF Scheme in their cases has got no relevance whatsoever to the case of NCDC.
25. It was further submitted that all the individual employees of NCDC would now be governed either under the on-going CPF Scheme of NCDC, or under Tier-1 of the NPS. It was admitted that the deductions under CPF Scheme of NCDC are @ 12% of Basic Pay + Grade Pay + DA, while under the provisions of NPS, the deductions are to be made for each employee @ 10% of Basic Pay + Grade Pay + DA, but it was denied that the NCDC has any role in this. It was further submitted that the Superannuation Benefit Scheme as introduced by the NCDC is applicable only for the employees who were covered under its CPF Scheme, and since there is an in-built component of pension under the NPS system, the employees covered under the NPS have, therefore, not been covered under the Superannuation Benefit Scheme.
26. Applicant No.1 also thereafter filed an additional affidavit on 03.01.2015, in obedience of the order dated 27.11.2014 passed by this Tribunal, giving the details of dates of joining of each of the applicants.
27. Heard. The learned counsel of both sides argued along the pleadings on record, as have already been discussed in great detail above. Learned counsel for the respondents/R-1 to 3 also produced a copy of the PFRDA Act, 2013 (supra) in which Section-20 of the Act in Chapter VI explains the National Pension System, and Clause-1 of Section-20 of the said Act states as follows:-
20. (1) The contributory pension system notified by the Government of India in the Ministry of Finance vide notification number F. No. 5/7/2003-ECB&PR, dated the 22nd December, 2003, shall be deemed to be the National Pension System with effect from the 1st day of January, 2004, and such National Pension System may be amended from time to time by regulations.
28. Clauses-(2) & (3) of Section 20 of that Act then give details as to how the National Pension System is made operational, and the subsequent Sections deal with Central Record Keeping Agency, and the Point of presence, and the role of Pension funds etc. No argument much different from their pleadings already available on record was advanced by the counsel for both the sides. Therefore, we are not repeating those submissions once again.
29. After having considered all aspects of this case, we are quite amazed. This is a peculiar case of repeated non-application of mind on the part of the respondents. The Govt. of India had on 23.08.2003 approved the proposal to implement the budget announcement of 2003-2004 relating to introducing a new restructured defined contribution pension system, to be named NPS. Thereafter, through Govt. of India, Ministry of Finance, Notification dated 22.12.2003, published in the Gazette of India of the same date, it was directed as follows:-
G.I., M.F. Notfn. No. 5/7/2003-ECB & PR, dated 22-12-2003- published in the Gazette of India, Extraordinary, Part-1, Section 1, dated 22-12-2003 Introducing a new restructured defined contribution pension system for new entrants to Central Government Service-. The Government approved on 23rd August, 2003 the proposal to implement the budget announcement of 2003-04 relating to introducing a new restructured defined contribution pension system for new entrants to Central Government service, except to Armed Forces, in the first stage, replacing the existing system of defined benefit pension system.
(i) The system would be mandatory for all new recruits to the central Government service from 1-1-2004 (except the armed forces in the first stage). The monthly contribution would be 10 percent of the salary and DA to be paid by the employee and matched by the Central Government. However, there will be no contribution from the Government in respect of individuals who are not Government employees. The contributions and investment returns would be deposited in a non-withdrawable pension Tier-I account. The existing provisions of defined benefit pension and GPF would not be available to the new recruits in the Central Government service.
(ii to v) xxxxxxxxxx (Not reproduced here)
2. The effective for operationalization of the new pension system shall be from 1-1-2004.
(Emphasis supplied).
30. Thereafter through Govt. of India, Ministry of Finance letter dated 07.01.2004, read with OM dated 04.02.2004, salient features of New Pension Scheme were announced. Even in the clarification issued by the Ministry of Finance, Department of Expenditure dated 13.11.2003 produced by the applicants at Annexure A-3, it has been instructed as follows:-
No.1(13)EV/2001 Government of India, Ministry of Finance, Department of Expenditure New Delhi, the 13th November, 2013 OFFICE MEMORANDUM Subject: Applicability of New Pension Scheme to the employees of Autonomous Bodies/PSUs under various Ministries/Departments.
The undersigned is directed to say that the Government have decided to introduce a New Pension Scheme based on defined contributions for new entrants recruited in Central Government service on or after 1.1.2004. The existing pension scheme will not, therefore, be applicable to such employees.
2. A Resolution has already been issued vide letter No.5(7)/2003-ECB &PR, on 10th October, 2003 to operationlize the decision of the Government to introduce a new pension scheme based on defined contributions. An interim Pension Fund Regulatory And Development Authority (PFRDA) is also being constituted.
3. In line with this decision, it has been further decided that new entrants in all Autonomous Bodies under various Central Ministries/Departments recruited on or after 1.1.2004 will also be governed by the new scheme and not by the existing pension scheme in these organizations.
(Emphasis supplied)
31. It is, therefore, clear that the NPS had been introduced only in respect of those departments and Organizations/PSUs/Boards/Corporations which already had an existing system of defined benefit pension system, and was meant to replace that existing system. As was clarified in the Ministry of Finance OMs dated 13.11.2003 and 22.12.2003 (supra), this NPS for new entrants based on defined contribution was to be made applicable only to those recruited in Central Government service, or in the service of Organizations, PSUs, Boards and Corporations having an existing system of defined benefit pension system on or after 01.01.2004, whereafter the earlier existing pension scheme was not to be made applicable to such employees.
32. The role of Respondent No.4-PFRDA in managing the NPS based on defined contributions was, therefore, only in respect of the Government and those organizations where the NPS could replace an existing system of defined benefit pension system. PFRDA and the NPS can, therefore, have no role whatsoever, and no applicability whatsoever, to the organizations like NCDC, which did not, as on 31.12.2003, have an existing system of defined benefit pension system, which could have been replaced by the NPS. The NCDC only had a CPF Scheme, with no pension after retirement, and, therefore, the very basis or foundation of all the submissions made by the respondents R-1 to R-3, and by R-4 also before us, does not exist. Without the foundation, no superstructure could have been built, or imposed, upon NCDC.
33. However, in its wisdom, the Board of Management of NCDC had, six years later after the introduction of NPS, in its 168th Meeting held on 19.01.2010, introduced a Superannuation Benefit Scheme, to be extended for a minimum period of five years even to the already retired employees, and for a maximum period of 20 years to the employees retiring thereafter, for which a trust was to be constituted by the NCDC, and the trust fund was to be managed and administered by professional Fund Managers. The letter written by the Respondent-NCDC to the Commissioner of Income-tax, ACIT/TDS/Circle-13(1) regarding the Group Superannuation Scheme to be approved under Part B of the Fourth Schedule to Income-tax Act, 1961 dated 31.12.2010, already mentioned and portions reproduced above, has, therefore, to be read in that context. But even this did not introduce a defined benefit pension system in the very same sense and terms, as was required to have already existed earlier for the introduction of NPS under the Govt. of India, Ministry of Finance instructions dated 23.08.2003 (supra), 13.11.2003 (Annexure A-3) (supra) and dated 22.12.2003 (supra).
34. Therefore, it is crystal clear that there was no legal basis whatsoever for applying any of the above instructions of the Govt. of India regarding NPS to NCDC. Even the Board of Management of NCDC, when it met in its 175th Meeting on 19.10.2011, misdirected itself on the basis of wrong submissions in the Agenda Notes, which must have been made in respect of Item No.19 decided at Para-6 & 7, as already reproduced above. The arguments of Respondents No. 1 to 3 fly in the face of the Annexure R-4/1 filed by the Respondent No.4-PFDRA along with the counter reply, which is an Office Memorandum dated 15.03.2004 issued by the Ministry of Finance, Department of Expenditure, as that OM dated 15.03.2004 prescribed as follows:-
It is clarified that irrespective of any factor, the applicability of existing pension scheme or new pension scheme to the new entrants will be determined solely with reference to the date of their joining. Accordingly, all persons joining autonomous body/PSU under the administrative control of different Ministries/Departments on or after 01.01.2004 will compulsorily be covered by the new pension scheme with the GPF-cum-pension scheme being limited to employees who had joined before 1.1.2004. This will also hold good for all new entrants in the Central Government.
(Emphasis supplied).
35. It is, therefore, very clear from the contents of this OM also that this clarification also related only to those organizations which had a GPF-cum-pension scheme already applicable in respect of their employees, and not in respect of those organizations which had a CPF Scheme, without any pension being payable in their organizations.
36. Therefore, we find no merit in the contentions of the respondents R-1 to R-3, and of R-4 that Respondent-NCDC was in any manner duty bound to introduce the NPS w.e.f. 01.01.2004, as it did not at all have a GPF-cum-pension scheme applicable for its employees who had joined upto 31.12.2003. To that extent, the decision of the 175th Meeting of the Board of Directors of the NCDC as reproduced in para-5 above, was contrary to both the law and the facts.
37. There is one more aspect of this case. The conditions of service of an employee cannot be changed to his detriment after commencement of his employment, without at least issuing him Show Cause Notice, or putting him to notice as to why and how any of his conditions of service was required to be changed, and after giving him a proper hearing. The contribution to the CPF of NCDC being 12% of the Basic Pay++ earlier, and the contribution to NPS being only 10% of the Basic Pay++ now, it is clear that the contribution of the employer NCDC to be made towards the pension fund of the employees will get reduced by 2% of the Basic Pay++ if NPS is allowed to remain. This also is not permissible in the normal course. Thus, it is held that there is no requirement for introduction of NPS in the case of an organization like NCDC, which did not have the GPF-cum-pension scheme, but only had a CPF Scheme in operation till 31.12.2003.
38. Therefore, the OA is allowed, and the impugned orders dated 12.12.2011 and 10.09.2012 passed by the respondent-NCDC, are set aside, because the very instructions at Annexure A-3 dated 13.11.2003, on the strength of which the Annexures A-1 and A-2 had been issued, was not at all applicable to NCDC, as it did not have a GPF-cum-pension scheme in operation for its employees at the time of introduction of NPS. But there shall be no order as to costs.
(Sudhir Kumar) (Dr. K.B. Suresh) Member (A) Member (J) cc.