Chattisgarh High Court
Hari Singh Kanwar vs Union Of India Through Secy on 16 June, 2009
Author: Dhirendra Mishra
Bench: Dhirendra Mishra
HIGH COURT OF CHATTISGARH AT BILASPUR
WRIT PETITION NO 07 of 2001
WRIT PETITION s NO 7090 of 2007
WRIT PETITION NO 1335 of 2005
R Mukhopadhyay, Legal Manager
M K Khastagir
Hari Singh Kanwar
...Petitioners
Versus
1 Union of India through Secy.
Ministry of Law, New Delhi.
2 Coal Mines Provident Fund
Commissioner
3 Regional Coal Mines Provident Fund
Commissioner
4 South Eastern Coalfields Limited
5 Commissioner, Coal Mines Provident
...Respondents
! Petitioner in Person In W P No 07 of 2001
Mr Gary Mukhopadhyay, For petitioner in W P s No 7090 of 07
Mr R Mukhopadhyay & Mr Gary Mukhopadhya For petitioner in W P No 1335 of 2005
^ Mr S K Beriwal, Advocate For respondent Union of India in all the petitions
Mr Alok Bakshi Advocate For respondent-Coal Mines appears on behalf of Mr A S Provident Fund in all the
Geharwar, Advocate petitions
Mr P S Koshy, Advocate For respondent SECL in W P No 07 of 2001 & WPs No 7090 of 07
Mr H B Agarwal, Sr Adv with For respondent SECL in Miss Rinki Tamrakar, Advocate W P No 1335 of 2005
HON MR DHIRENDRA MISHRA & HON MR R N CHANDRAKAR JJ
Dated: 16/06/2009
: Judgment
O R D E R
(Passed on 16th June, 2009) Dhirendra Mishra, J
1. These petitions are being disposed of by this common order, as the petitioners in these petitions have impugned the constitutional validity of Para-61 of the Coal Mines Provident Fund Scheme (for short `the Scheme') framed in exercise of the powers conferred by Section 3 of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 (for short `the Act, 1948').
2. For the purpose of this order, reference is made to the facts of W.P. No.07/2001 (R. Mukhopadhyay Vs. Union of India & ors).
3. Briefly stated, facts of the case are that the petitioners herein have been retired as Officers working under the South Eastern Coalfields Limited (for short `SECL'). Petitioners namely R. Mukhopadhya & M.K. Khastagir became members of the Coal Mines Provident Fund (for short `CMPF') after joining their services in the erstwhile Rewa Coalfields Limited & Chrimiri Colliery Company Limited respectively. Whereas, petitioner-Hari Singh Kanwar joined National Coal Development Corporation (for short `NCDC'), a Central Government undertaking, and became member of NCDC Provident Fund (for short `NCDCPF'). After nationalization of the Coal Mines in the year 1973, NCDC as well as erstwhile private sector companies came under the management of Coal Mines Authority Limited. Subsequently, coal industry was reorganized and Coal India Limited (for short `CIL'), a government company, was formed with its subsidiaries companies including SECL. The SECL and Central Coalfields Limited (for short `CCL') are also government companies registered under the Companies Act, 1956. After nationalization, NCDC got merged with CIL and Head-office of NCDC, Ranchi became the registered office of CCL. After formation of CCL, NCDCPF was renamed as Central Coalfields Limited Staff Provident Fund (for short `CCLSPF') and the rules applicable to the members of NCDCPF continued to be same as the members of CCLSPF.
As per Rule 15 (a) of the CCLSPF Rules, CCLSPF was a contributory provident fund. Contribution of each member was deducted from his salary and equal amount was contributed by the company to the fund. Both these amounts were deposited to the fund balance in the credit of the members. Similarly, CMPF is also a contributory fund. The employer is to contribute equal amount as the employee and both the amounts are to be deposited with CMPF through SECL every month.
Rule 19 (d) of CCLSPF Rules provides that interest payable on the balance of the fund of the member is to be calculated at the close of financial year in the manner prescribed for the General Provident Fund of the Government of India, whereas, interest is to be paid to the members of CMPF as per Para-61 of the Scheme.
After nationalization of the Coal Mines in the year 1973, all the employees of the coal mines came under the same employer i.e. CIL, however, service conditions for the employees including provident fund rules continued to remain separate. In exercise of powers conferred under Section 3 (E) of the Act, 1948, the Coalmines Family Pension Scheme, 1971 was superceded and a new pension scheme was framed as Coal Mines Family Pension Scheme, 1998. However, benefits of this scheme were not extended to the members of CCLSPF and members of Coalmines Authority Limited Staff Provident Fund.
The above exclusion caused resentment amongst the members of CCLSPF and in these circumstances the Board of Trustees of CCLSPF resolved to merge CCLSPF with CMPF so that the members of CCLSPF could also became eligible for pension and accordingly merger was effected vide gazette notification dated 8.10.2004. In consequence of the above merger all the amount in the credit of the members of CCLSPF was transferred to CMPF and accordingly, petitioner Hari Singh Kanwar also became eligible for pension subject to compliance of conditions imposed by subsequent gazette notification dated 13.2.2003. After petitioner- Hari Singh Kanwar became member of CMPF, he was paid interest annually in terms of Para-61 of the Scheme.
4. The common grievance of the petitioners in these petitions is that the members of CMPF are denied interest on their deposits towards provident fund from the date the same is deducted from their salary and equal amount is deposited by the SECL in their CMPF account.
5. Contention of learned counsel for the petitioners is that the contribution of CMPF amount of the petitioners is to be deposited every month and therefore, they should also be paid interest with effect from the date of deposit. Prior to merger of CCLSPF in CMPF, petitioner-Hari Singh Kunwar was paid interest in the manner of calculation of interest under the General Provident Fund, as per Rule 19 (d) of the CCLSPF Rules. Rule 11 (2) sub-para (iii) of GPF (Central Services) Rules clearly stipulates that interest shall be paid on all sums credited to the subscriber's account after last day of the preceding year from the date of deposit upto the end of the current year. The manner of calculation of interest under the Scheme is given in Para 61 (2) according to which no interest is to be paid to the employee for the monthly contribution from the date of deposit. Where opening balance of the employee is Nil in any particular financial year in that case he will not be entitled for any interest for the whole year though he has regularly deposited the monthly contribution towards provident fund. Under Para 61 (2) of the Scheme the employee suffers recurring loss of interest throughout his service career in this manner.
Petitioner-Hari Singh Kanwar was getting interest on his deposits from the date of deposit and interest was calculated in the manner prescribed in Rule 11 of GPF (CS) Rules. After the date of merger of CCLSPF and CMPF, he became entitled for CMPF only after depositing substantial amount with interest to the pension fund, however, the benefit which he was enjoying since joining coal industry was taken away after merger as per the Scheme. Calculation of interest under Para 61 (2) of the Scheme is illegal and arbitrary.
6. On the other hand learned counsel for respondents No.2 & 3 submitted that the Scheme has been framed by the Central Government to offer best possible return on provident fund contribution and its investment with maximum security on deposits, at the same time discharging the duties under the Scheme keeping the corpus dependable. Because of prudent investment by the CMPF organization, its subscribers are getting higher rate of interest than the GPF subscribers, as would be evident from the comparative table. The provisions of GPF & CMPF Act cannot be compared. The Scheme under CMPF Act has been framed as industry-specific, whereas, Employees Provident Fund Scheme, 1952 covers around 30 million employees who are paid interest on monthly running basis. The said scheme debars a subscriber to become its member whose monthly salary exceeds Rs.6500/- under Para 2 (f)(ii) of the E.P.F. Scheme, 1952. Whereas, there is no such bar and limitation under the Scheme. Apart from this, the members of the Scheme are getting benefit of 12% matching contribution from the employer. In absence of any ceiling of income, the Senior Executive of Coal Company is getting matching contribution of Rs.7,000/- to 8,000/- per month from their employer apart from the interest that would accrue on such contribution. Under the EPF Scheme, 1952 contribution for some employees is 10% of the gross wage while for others it is 12% of gross wage, whereas, the Scheme provides for 12% contribution across the board, irrespective of class of employees and their earnings.
It was further argued that W.P. No.6402/2002 (P.N. Chakrovorthy Vs. Union of India & others) and W.P. No.6431/02 (G.K. Mitra Vs. Union of India & others) were filed before the High Court of Madhya Pradesh seeking similar relief and the same were dismissed by the High Court on 26.2.2004. Special Leave Petition (Civil) No.10382/2004 was filed by the petitioner in W.P. No.6420/02 before the Hon'ble Supreme Court and the same was also dismissed in limine vide order dated 17.9.2004. (Annexures R-16 to R-18 in W.P. No.1335/05).
7. Similar arguments were advanced by learned counsel for the respondent-Union of India and respondent-SECL.
8. Mr. Gary Mukhopadhyay, learned counsel for the petitioners submits that the earlier petitions filed for similar relief were dismissed with an observation that "it is submitted by the learned counsel for the respondents that the Board of Trustees, after considering various aspects of the matter, have decided that interest should be calculated on the original balance at the end of the year. No authority has been produced before this Court by the petitioner to show that the Scheme is arbitrary and ultra-vires of the Act". S.L.P. has also been dismissed at the threshold without entering into the merits.
Relying upon the judgment in the matter of D.S. Nakara and others Vs. Union of India reported in AIR 1983 SC 130 it was argued that the absence of precedent cannot be a ground to dismiss a petition challenging constitutional validity of a scheme framed under the Act. Further relying upon the judgment of the Hon'ble Supreme Court in the matter of Kunhayammed & others Vs. State of Kerala & another reported in (2000) 6 SCC 359 it was argued that where a SLP is dismissed by a non-speaking order without assigning reasons for dismissing the SLP, it would neither attract the doctrine of merger so as to stand substituted in place of the order put in issue before it nor would it be a declaration of law by the Court under Article 141 of the Constitution for there is no law which has been declared.
9. We have heard learned counsel for the parties.
10. So far as the last argument advanced by learned counsel for the respondent- Coal Mines Provident Fund that a writ petition for similar relief has been dismissed by the High Court of Madhya Pradesh and S.L.P. against the order of dismissal has been further dismissed by the Hon'ble Supreme Court is concerned, after perusal of the order of dismissal passed by the High Court and subsequent dismissal by the Hon'ble Supreme Court, we find substance in the arguments of the petitioners that the petition has been dismissed only on the ground that no authority has been produced to show that the scheme is arbitrary and ultra-vires of the Act. Appeal against the above order has been dismissed at the threshold and it does not assign reasons for dismissing the special leave petition. Relying upon the judgments in the matters of D.S. Nakara (supra) & Kunhayammed (supra), we hold that dismissal of the earlier writ petition for similar relief finally by the Hon'ble Supreme Court will not make the instant petitions non- maintainable and we propose to decide the same on merits.
11. Before entering into the merits of the rival contentions, we propose to trace the history of the legislation under consideration. The Act, 1948 (Annexure R-1) was enacted with an object of making provisions for framing of provident fund scheme; family pension scheme; deposit linked insurance scheme and bonus scheme for the persons employed in the coal mines. In exercise of powers under Section 3 of the Act, 1948 a Coal Mines Provident Fund Scheme (Annexure R-2) was framed vide notification dated 11.12.1948. In further exercise of powers under Section 3 of the Act, 1948 a Coal Mines Family Pension Scheme, 1971 (Annexure R-3) was also framed. Coal Mines Deposit Linked Insurance Scheme, 1976 (Annexure R-4) was also framed in exercise of powers under Section 3 (G) of the Act, 1948. However, in further exercise of powers under Section 3 (E) of the Act, 1948 Coal Mines Pension Scheme, 1998 (CMPS) (Annexure R-5) was prepared in supercession of Coal Mines Family Pension Scheme, 1971. As already stated in foregoing paragraphs, the provisions of CMPS were not applicable to the members of CCLSPF. After the Board of Trustees of CCLSPF decided to merge CCLSPF with CMPF and after notification of the same, the CMPS Rules were applicable to the erstwhile employees of NCDC.
The Scheme is in force in whole of the country and the same is applicable to all the coal mines workers working under different subsidiaries companies of the CIL. Para-27 of the Scheme provides for rate of contribution towards provident fund by the employee and the employer. Para-29 provides for recovery of member's contribution from his salary. Para-37 cast a duty upon the employer to ask every member of the fund to declare particulars concerning himself and his nominee in Form-A for communication to the Commissioner. Contribution Cards are also issued under the Scheme to the members. Period of currency of contribution card is one year. Para-41 mandates that the employer shall on or before expiration of period of currency prepare a contribution card in respect of each member employee by him or a ledger in the Form-YY. Under Para-42 every employer is to submit to the Commissioner or such other officer subordinate to him, as may be authorized by him on his behalf, contribution cards. Para-42 (5) cast a duty on the employer to submit statement of contribution in Form-VV for currency period calculated on the basis of ledger in Form-YY. Para-50A provides for the manner in which remittance of CMPF amount is to be deposited to the current account of CMPF with the Imperial Bank. Para-54 provides that all the moneys belonging to the CMPF shall be either deposited in the Imperial Bank of India or any such other scheduled banks as may be approved by the Central Government from time to time, or invested in securities mentioned or referred to in Clauses (a) to (d) of Section 20 of the Indian Trust Act, 1882. Sub-para 2 of Para-54 requires that the Board shall prepare a classified summary of the asset of the funds as on 31st March of each year or on such other dates as the Central Government may specify. Para-61 of the Scheme deals with the manner in which the Commissioner shall credit the account of each member, interest in respect of period of currency of the cards expiring in such financial year. Para-61 (2) describes the manner in which interest is to be calculated. The interest for the period of currency of the card is to be credited with effect from the last day of the period on the opening balance at the credit of the member on the first day thereof.
12. The petitioners have impugned the above provision of computation of interest on the ground that by adopting the above manner of computation of interest, the petitioners are deprived of the interest for the amount deposited by them during currency of financial year. It was argued that after deducting the contribution towards provident fund from the salaries of the petitioners, the respondents are duty bound to pay interest from the date of deduction from the salary and deposit in the provident fund account. Denial of payment of interest from the date of deposit is infringement of their fundamental rights. Relying upon the judgment in the matter of Alok Shanker Pandey Vs. Union of India & others reported in (2007) 3 SCC 545 it was argued that interest is normal accretion on capital with passage of time. Provision regarding interest and its calculation for general provident fund is mentioned in Rule 11 of GPF (Central Services) Rules. From perusal of the same it would be evident that the interest is payable to the members of GPF from the date of deposit, however, Para-61 of the Scheme deprives the members of CMPF from interest from the date of deposit, which is per-se arbitrary and irrational and the same debars the petitioners of their legitimate claim.
13. We have already referred the development of law that has taken place since 1948. The above legislation is a beneficial legislation enacted for the benefits of coal mines employees. Initially, provisions were made only for generation of provident fund of the member employees under the Scheme. Subsequently, another scheme was framed for family pension after retirement of the employee. Family Pension Scheme was reframed in the year 1998 superceeding earlier scheme of 1971. Earlier 1998 Coal Mines Family Pension Scheme (CMPS) excluded such employees who are not the members of the CMPF Scheme. However, considering the resentment of NCDC employees, who were governed by CCLSPF, the Board of Trustees decided to merge CCLSPF into CMPF and thereafter benefit of family pension was also made available to other employees of coal industries who were not covered in the past. Before the merger of CCLSPF, members of CCLSPF were entitled for interest on the amount deposited by them towards provident fund in accordance with the manner in which the interest was computed under Rule 11 of GPF (CS) Rules. As per Rule 19 (d) of CCLSPF Rules the deficit in the revenue account in any year was to be met by a grant from the Corporation now Company. The members of CMPF are also entitled for family pension, benefit which was not available to the members of CCLSPF. The procedure of investment of accumulated provident fund has been detailed in Para 54 of the Scheme.
It is not a case where the petitioners are denied total interest on their deposits. The grievance of the petitioners is that the manner in which the interest is computed, as per Para-61 of the Scheme, deprives them from payment of interest from the date their contribution is deposited in the provident fund. Rate of interest deposited in provident fund account of the members, the manner in which provident fund so deposited is to be invested and the manner in which the interest is to be computed for payment to its members are the financial decisions that are to be taken by a responsible Government keeping in view the overall interest of the concerned employees. The Scheme has been framed in the exercise of powers under Section 3 (E) of the Act, 1948 by the Central Government. From various beneficial schemes framed by the Central Government from time to time in their exercise of powers under Section 3 (E) of the Act, it cannot be said that the Central Government is oblivious to the welfare of the coal mines employees. In these circumstances we are of the opinion that we cannot sit in judgment over the decision of the Central Government as appellate authority in exercise of powers under Article 226 of the Constitution of India.
14. So far as the challenge to constitutional validity of Para- 61 of the Scheme on the ground that the manner of computation of interest in GPF is beneficial to the employees as the interest is computed from the date of deposit, whereas, the employees under the CMPF scheme are deprived of the interest on the amount which is deposited during the currency of financial year is concerned, there are several distinguishing features under both the schemes, as already detailed in foregoing paragraphs. There is difference in the rate of interest payable to the employees who are members of GPF and CMPF. It is settled law that challenge to constitutional validity of the statute cannot be based on comparative study of provisions of the impugned statute with another statute on the same subject but derived from different source. When a statute is impugned under Article 14 of the Constitution of India, in that case the Court has to decide whether the statute is so arbitrary or unreasonable that it must be struck down.
15. In the matter of Union of India & others Vs. Dhanwanti Devi and others reported in (1996) 6 SCC 44, property of respondent-Owner was acquired under the Jammu & Kashmir Requisitioning & Acquisition of Immovable Properties Act, 1968 for public purpose vide notification under Section 7 of the Act. The Land Acquisition Officer awarded compensation to the land owner with 10% escalation on account of passage of time. Feeling dissatisfied therewith the claimant-land owner sought reference under Section 8 of the Act to the Arbitrator, who enhanced the compensation and also awarded 15% solatium and 4% interest per annum on the enhanced compensation. The appellants- Union of India & others questioned the same by filing an appeal in the High Court, however, the award of the Arbitrator was subsequently confirmed and the appeal was dismissed. Allowing the appeal and setting aside the award of solatium and interest on the compensation, the Hon'ble Supreme Court in Para-11 of the judgment held thus:-
"11. Taking the question of entitlement to interest as a first question, as vehemently argued by Shri Vaidyanathan, broadly speaking, the act of taking possession of immovable properties generally implies an agreement to pay interest on its consideration for deferred payment. In a court of equity, when the seller parts with possession of immovable property, the purchaser becomes its owner while the seller receives money as consideration in lieu of the property. The seller, therefore, is entitled to claim interest in place of his retaining possession of the property from the date the purchaser takes possession of the property till the date of payment. On this premise, claim for interest is sought against the State when it exercises its power of eminent domain and acquires the property of a citizen for public purpose. This principle was extended in equity to recompensate the owner for deprivation of his possession and enjoyment thereof in accordance with law. It was, therefore, held in equity that the owner is entitled to interest on the principal amount of award from the date of taking possession unless the statute under which the land was acquired expresses its contrary intention. It is on this premise that the right to receive interest takes the place of right to retain possession and its enjoyment. It is equally settled law that equity operates where statute does not occupy the field. Conversely, when the statute occupies the field the equity yields place to the statute."
16. In the instant matter we have already held that the Act, 1948 is a beneficial legislation enacted for the purposes of protecting interest of the employees of coal mines. Various beneficial schemes were framed subsequently from time to time keeping in view the interest of the employees. In the matter of State of Tamil Nadu and another Vs. Ananthi Ammal and others reported in AIR 1995 SC 2114 it was held that provisions of one statute cannot be declared ultra-vires by a process of comparative study of the provisions of another statute. It has been further held that when the statute is impugned under Article 14 of the Constitution what the court has to decide is whether the statute is so arbitrary or unreasonable that it must be struck down. At best, a statute upon a similar subject which derives its authority from another source can be referred to, if its provisions have been held to be reasonable or have stood the test of time, only for the purpose of indicating what may be said to be reasonable in the context.
17. On the basis of aforesaid discussion, we are of the opinion that the manner of computing interest under Para-61 of the Scheme cannot be termed to be so arbitrary and unreasonable so that the same may be termed to be violating the provisions of Article 14 of the Constitution of India.
18. In the result, the petitions have no substance, the same deserve to be dismissed and accordingly, the same are hereby dismissed. No orders as to costs.
JUDGE JUDGE