Employees Provident Fund Organisation vs T.V. Joseph on 22 September, 2014

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Kerala High Court

Employees Provident Fund Organisation vs T.V. Joseph on 22 September, 2014

The Employees Provident Fund Organisation, respondents 2 and 3 in W.P.(C) No.12999/2014 challenge the judgment of the learned single Judge. The petitioners in the writ petition are retired employees of the Kerala State Financial Enterprises Limited. They were covered under the Employees' Provident Funds and Miscellaneous Provisions Act 1952 and the Employees' Pension Scheme 1995. The petitioners were drawing salary above 6500/-. It is stated that they had exercised their option under Section 26(6) of the Act. 12% of the total salary of the writ petitioners were W.A.No.1502/14 2 being deducted towards Employees' contribution and the employer was remitting their contribution of 12% also to the Provident Fund. However, while remitting 8.33% of the contribution to the Pension Fund, the Provident Fund Organisation limited to 8.33% of a maximum of 6500/- .

2. The reliefs prayed for in the writ petition are the following:

"i) To issue a writ of mandamus and command respondents 2 & 3 or such other appropriate authorities under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employees Pension Scheme 1995 to grant the petitioners with such pecuniary benefits as per the Employees Pension Scheme (EPS) 1994 by computing the pensionary contribution on the basis of the actual pay received by the petitioners while in service of the 4th respondent and to complete necessary steps in that regard within a time frame stipulated by this Honourable Court.

ii) To issue a writ of mandamus and command respondents to revise and enhance the pension paid to the petitioners by permitting them to make contributions, wherever necessary, to the Employees Pension Scheme (EPS) 1995 on the basis of their actual salaries exceeding the alleged limit of W.A.No.1502/14 3 Rs.6500/- per month.

iii) To pass any other and such other orders as this Honourable Court deem fit to pass in the nature and circumstance of the case.

iv) To award the cost of this proceedings."

3. The learned single Judge relying on the binding precedents allowed the writ petition and issued appropriate directions.

4. The learned counsel for the appellants submitted that the Provident Fund Organisation has filed S.L.P. No.16867/2013 before the Hon'ble Supreme Court challenging the judgment in W.A. No.1137/2012 for deciding the similar issue and that S.L.P. is pending.

5. In a similar case, namely, W.A.No.1419/2013, we held as follows:

"3. Para 11(3) of the Pension Scheme of 1995 was amended with effect from 16.3.1996. For the sake of convenience, para 11(3) is extracted below:

"11. Determination of pensionable salary.-- (1)....

(2) .......

W.A.No.1502/14 4

(3) The maximum pensionable salary shall be limited to rupees six thousand and five hundred/Rs.6,500 per month:

Provided that if at the option of the employer and employee, contribution paid on salary exceeding rupees six thousand and five hundred/Rs.6,500 per month from the date of commencement of this Scheme or from the date salary exceeds rupees six thousand and five hundred/Rs.6,500 whichever is later, and 8.33 per cent share of the employers thereof is remitted into the Pension Fund, pensionable salary shall be based on such higher salary."

It is to be noted that in sub-para (3) of paragraph 11, the maximum pensionable salary was at 5,000/- and it was enhanced to 6,500/- as per the amendment which came into force with effect from 1.6.2001.

4. The Provident Fund Organisation took the view that the benefit of the proviso to para 11(3) of the Pension Scheme of 1995 would be applicable only till 1.12.2004. The Provident Fund Organisation in some cases took a contrary view and invited the employees to contribute to the employees' provident fund even after the cut off date so as to enable them to claim the benefit of the proviso to para 11(3) of the Pension Scheme of 1995. The view taken by the Provident Fund Organisation that the cut off date of 1.12.2004 will apply was negatived in the judgment of this Court in W.A.No.1502/14 5 W.P.(C) Nos.6643 and 9929 of 2007 (Ext.P3). Ext.P3 judgment was confirmed by the Division Bench in W.A.No.1137 of 2012 (Ext.P4). The judgment of the Division Bench was relied on in several other cases. In W.P.(C) No.19881 of 2013, in the case of a retired employee and who was drawing above 6,500/-, another learned Single Judge of this Court held that the employee was entitled to exercise option even beyond the cut off date prescribed by the Provident Fund Organisation. It was also held in all the judgments referred to above that the cut off date prescribed (1.12.2004) was without jurisdiction. It was also held that the proviso to para 11(3) of the Pension Scheme of 1995 is intended to be operative retrospectively from the date of commencement of the Scheme and, therefore, employees are entitled to the benefit of the proviso if they are able to make good the arrears of contribution. It was also noticed in the judgment of the learned Single Judge in W.P.(C) Nos.6643 and 9929 of 2007 that the Provident Fund Organisation was not able to produce any document justifying fixing of a cut off date and that the EPF Act, Employees' Provident Fund Scheme and the Pension Scheme do not contain any provision enabling the Provident Fund Organisation to fix a cut off date for the purpose of availing the benefit of the proviso to para 11(3) of the Pension Scheme of 1995.

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5. It is stated in the Writ Appeal that challenging the judgment in W.A.No.1137 of 2012, the Provident Fund Organisation has filed S.L.P.No.16867 of 2013 before the Honourable Supreme Court.

6. In the present case, the learned Single Judge relied on the judgment of the Division Bench in W.A.No.1137 of 2012 and granted the reliefs in favour of the petitioner. (However, it is seen that in the operative portion of the judgment instead of the third respondent, it is mentioned as fourth respondent.)

7. The employees are liable to contribute 12% of their salary to the Employees' Provident Fund Account. The employer is also liable to contribute such 12%. Out of such contribution, 8.33% of the salary shall be transferred to the Employees' Pension Fund Scheme Account.

If an employee had exercised the option within the cut off date as prescribed by the Provident Fund Organisation, such an employee cannot be denied pension taking into account the benefit resulting from the contribution in respect of the salary above 6,500/-. Persons like the petitioner were denied the benefit of the welfare legislation on technical grounds. The learned Single Judge as well as the Division Bench held that the view taken by the Provident Fund Organisation was not justifiable. In other Writ Petitions also, similar view was taken. However, it is W.A.No.1502/14 7 submitted that the judgment of the Division Bench is under challenge before the Supreme Court. That by itself need not deter this Court from disposing of the several other similar matters pending before this Court. It would be sufficient if the interest of the Provident Fund Organisation is protected. It is agreed by the learned counsel appearing for the writ petitioner that in case the Supreme Court takes a contrary view, the writ petitioner is prepared to disgorge all the benefits which he enjoyed as per the direction issued by the learned Single Judge in the Writ Petition which is under challenge in this Writ Appeal. Based on the decision of the Supreme Court, the Employees' Provident Fund Organisation would be entitled to get the accounts reworked and the pension recomputed and, for that purpose, we hold that it would be sufficient for the Employees' Provident Fund Organisation to file a memo in this Writ Appeal. In such an eventuality, the Writ Appeal will be posted for further orders. By adopting such a course, the interests of the writ petitioner and that of the Employees' Provident Fund Organisation would be protected. In the peculiar facts and circumstances of the case, we grant four months' time to the appellant to comply with the directions issued by the learned Single Judge.

The Writ Appeal is disposed of as above.

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In view of the judgment in W.A.No.1419/2014, the present writ appeal is also disposed of on the same terms.

K.T. SANKARAN, JUDGE.

P.D. RAJAN, JUDGE.

acd W.A.No.1502/14 9

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