The Employees Provident Fund ... vs The Kerala State Co-Operative ... on 27 June, 2012

[Cites 10, Cited by 4]

Kerala High Court

The Employees Provident Fund ... vs The Kerala State Co-Operative ... on 27 June, 2012

All the above connected Review Petitions arose out of two common judgments passed by the Division Bench of this Court, in Writ Appeal No. 1019 of 2012 and connected cases and in Writ Appeal No. 767 of 2012 and connected cases, dated 27-06-2012 and 13-07-2012, respectively. The Employees Provident Fund Organization, who is respondent in all the Writ Appeals is seeking review of the judgments to the extent it permitted the employees of the District Co-operative Banks and the State Co-operative Banks to exercise options for transferring their membership from the Employees Provident Fund Scheme, 1952 and from the Employees Pension Scheme, 1995; and also to the extent of the direction issued to the EPF Commissioner to transfer the funds on RP.992/2012 & conn. cases 2 the basis of such applications. The Review Petitions are filed mainly pointing out that the provisions contained in the Employees Pension Scheme, 1995 does not provide any right of option to the individual employees and the exemptions/exclusions provided under the EPF Act or under the Pension Scheme enables only an establishment to opt for any other Scheme. It is contended that, while rendering the judgments sought to be reviewed, the liberty for exercising options by individual employees were permitted without considering the relevant provisions of law and that the directions contained therein will become repugnant/contrary to the statutory provisions governing the issue involved.

2. Preliminary objections were raised from the side of the respondent employees, who are petitioners in the Writ Petitions, against maintainability of the Review Petitions. It is contended that, even if the court has taken a decision which is contrary to the legal provisions, it will amount only to an error in the judgment which can be challenged in appeal and it is not a matter for review. Referring to the grounds available under Order XLVII Rule 1 of C.P.C. it is contended that, an error of law RP.992/2012 & conn. cases 3 is not a ground for review. In other words the contention is that, if a party to the lis cannot bring the relevant provisions to the notice of the court at the time of rendering the judgment, it is not entitled to raise a contention that such party was prevented from bringing the provisions of law to the notice of the Court, despite due diligence exercised. Hence it is contended that the first limb of grounds enumerated under Order XLVII Rule 1 cannot be invoked based on the contention that the decision is contrary to law. It is also contended that, even if the decision is contrary to the provisions of law, it cannot be said that there is any error apparent on the face on record.

3. Learned Sr. Counsel Smt. V.P. Seemanthini, appearing for the contesting respondents had placed reliance on a decision of the Hon'ble Supreme Court in Kamalesh Verma v. Mayavati and Others (AIR 2013 SC 3301). It is held therein that review proceedings are not by way of appeal and have to be strictly confined to the scope and ambit of Order XLVII Rule 1 of C.P.C. In the review jurisdiction, the mere disagreement with the view of the judgment cannot be a ground for invoking the same. As long as the point is already dealt with and answered, the RP.992/2012 & conn. cases 4 parties are not entitled to challenge the impugned judgment under the guise of an alternative view possible. The principles governing the jurisdiction of review enunciated under the decision in Union of India v. Sandur Manganese, Iron and Ores Limited (AIR 2013 SCW 2905) was also pressed into service, in support of the above contention. Senior Counsel has also placed reliance on another decision of the apex court in Haridas Das v. Smt. Usha Rani Banik and Others (AIR 2006 SC 1634). It is held therein that, the power of review may be exercised on discovery of a new and important matter of evidence which, after exercise of due diligence, was not within the knowledge of the person seeking review or could not be produced by him at the time when the order was made. It may be exercised where some mistake or error apparent on the face of the records was found and it may also be exercised on any analogous grounds. But it may not be exercised on the ground that the decision was made erroneous on merits. That would be the province of a court of appeal. The power of review is not to be confused with the appellate power, which may enable an appellate court to correct all manner of errors committed by the RP.992/2012 & conn. cases 5 Subordinate Court.

4. In the case at hand, contention of the review petitioner is that, while passing the impugned observations and while reserving liberty to individual employees for exercising option, the court had omitted to take note of relevant provisions governing the issue. Hence it is contended that the relevant portion of the judgment, which is impugned in the review petitions, happened to be passed on a mistake on the part of the court and it amounts to a misconception of law by the court, which had resulted in serious miscarriage of justice. Therefore, learned Senior Counsel appearing for the review petitioners, Sri. Sugunapalan contended that, the misconception of law on the part of the court is a sufficient reason upon which an application for review was insisted and it will perfectly fall under the category of "sufficient reason" contemplated under Order XLVII Rule 1 of CPC. In this regard, reliance was placed on a decision of the hon'ble apex court in Board of Control For Cricket in India v. Netaji Cricket Club and Others (AIR 2005 SC 592). It is held therein that the words "sufficient reason" in Order XLVII Rule 1 of the Code is wide enough to include a misconception of RP.992/2012 & conn. cases 6 fact or law by a court or even by an Advocate. An application for review may be necessitated by way of invoking the doctrine of 'actus curiae neminem gravabit', which means "an act of the court shall prejudice no man". The Hon'ble Supreme Court in the judgment cited above found that the "dictionary meaning of the word 'review' is "the act of looking over something again with a view to correction or improvement". It cannot be denied that the review is the creation of statute. Referring to an earlier judgment in Patel Narshi Thakershi and Others v. Shri Pradyuman Singhji Arjunsinghji (AIR 1970 SC 1273) it is observed in the above said judgment that, the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implications. The review is also not an appeal in disguise. It cannot be denied that justice is a virtue which transcends all barriers and rules or procedures or technicalities of law cannot stand in the way of administration of justice. Law has to bend before justice. If the Court finds that the error pointed out in the review petition was under a mistake and the earlier judgment would not have been passed but for the erroneous assumption which in fact did not exists, and its RP.992/2012 & conn. cases 7 perpetration shall result in a miscarriage of justice, nothing would preclude the court from rectifying the error.

5. In view of the fact that there occurred misconception of statutory provisions governing the issue, we are of the opinion that there exist "sufficient reason" as contemplated under Order XLVII Rule 1 C.P.C., and the question on maintainability of the Review Petition need to be held on the affirmative.

6. Batch of the above writ appeals arose from writ petitions filed mainly by the employees organisations and by individual employees of the District Co-operative Banks and the State Co- operative Banks within the State, which are regulated by provisions of the Kerala Co-operative Societies Act and the Rules and the Schemes framed thereunder. The State Government, by virtue of section 80A of the Kerala Co-operative Societies Act 1969 (hereinafter referred as the KSA Act) authorised the Government to introduce a 'self financing pension scheme' for establishment of a pension fund for payment of pension to the employees of the Co-operative Societies. Based on power conferred in this regard the State Government had formulated the 'State Co-operative Bank and the District Co-operative Bank RP.992/2012 & conn. cases 8 Employees Pension Scheme 2005'. On the advent of the said scheme, the establishments of those Banks remained registered under provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred as the EPF Act). Their employees were enrolled in the Employees Provident Fund Scheme, 1952 as well as in the Employees Pension Scheme, 1995. Therefore, for the purpose of implementation of the pension scheme introduced by the State Government, it became necessary to get exemption/exclusion from provisions of the EPF Act. Eventhough steps were initiated in this regard under section 17 of the EPF Act, the same was not consented by the EPF Organisation. On the other hand, the authorities of the EPF Organisation had issued an order, dated 26.5.2009, purportedly under section 16(1)(b) of the EPF Act, excluding the Banks in question from the purview of the Act and from the purview of the welfare schemes made thereunder. The State Government had also issued an order dated 30.6.2009 approving the exclusion and ordering that the State Co-operative Banks as well as the District Co-operative Banks will stand excluded from the purview of the EPF Act, under section 16(1) RP.992/2012 & conn. cases 9

(b). Some of the employees organisations, individual employees as well as retired employees have challenged the above said orders in the writ petitions, mainly contending that the pension scheme under the EPF Act is more beneficial and that the employees as well as the retired employees cannot be compelled to join the 'Self Financing Pension Scheme' introduced by the State Government. A learned judge of this court while disposing a batch of writ petitions found that, the authority of the EPF Organisation which issued the order of exclusion had no jurisdiction under section 16(1)(b); and therefore the order of exclusion passed by the EPF authority as well as the consequential order passed by the State Government cannot be sustained legally. Consequently, those orders were quashed . It was observed that, once the Provident Fund Commissioner finds that the exemption sought for under section 17 (1C) is not allowable, he should have stopped there; because he has no jurisdiction to grant exclusion under section 16(1)(b) of the EPF Act. It was observed that, at best the State Government can grant exemption from the Scheme under section 17(1C) of the EPF Act, on application made to it. It was further observed that, RP.992/2012 & conn. cases 10 such applications need to be routed through the EPF Commissioner, as per clause 39 of the Employees Pension Scheme 1995. In the said judgment liberty of the establishments concerned for moving such application seeking for exemption under section 17 (1C), was kept reserved.

7. The Pension Board constituted under the 'Self Financing Pension Scheme' formulated by the State Government went up in appeal against the above said judgment of the Single Judge. Those writ appeals were disposed of through the judgments which are sought to be reviewed herein. While disposing the writ appeals the Division Bench observed that, it is not necessary to decide the issue as to which among the schemes is more favourable to the employees. It was observed that, it would be safe to leave such question to the decision of the employees, as to which among the Employees Pension Scheme 1995 or the Self Financing Pension Scheme of the State Government is more beneficial to them. Crux of the issue considered by the Division Bench is that, whether there is any mandatory legal requirement under the KCS Act or under the EPF Act to terminate the existing membership of the employees in the Employees Pension RP.992/2012 & conn. cases 11 Scheme, 1995 and to transfer the funds to the Self Financing Pension Scheme, with respect to the retired and working employees who are members of the 1952 scheme. Referring to the proviso introduced to section 61(1) of the KCS Act and also to the provisions of the Rule 58 of the Kerala Co-operative Societies Rules, this court noticed that, after establishment of the Self Financing Pension Scheme the provisions of EPF Act do not apply to the establishments, which are required to establish a Provident Fund by itself, so as to enable the operation of the Self Financing Pension Scheme. But at the same time, this court noticed that the proviso to Rule 58(1) as well as Sub Rule (4) of Rule 58 and found that, neither the State Government nor the Board administering the Self Financing Scheme cannot compel transfer of the funds of individual employees, who are members of the Employees Provident Fund Scheme, 1952 and Employees Pension Scheme, 1995, without their consent. But after arriving at such a finding, the Division Bench in the judgment impugned herein observed as follows:-

RP.992/2012 & conn. cases         12

               "Since    both  the  appellant  as  well  as

Employees Provident Fund Organisation and the Pension Fund operate for the benefit of the employees, we feel those who wish to opt to transfer the membership from the Employees Provident Fund Scheme 1952 and the Employees Pension Scheme, 1995 can apply for the same and in such cases the EPF Commissioner should transfer the funds. In other words, transfer of fund from EPF scheme 1952 and Employees Pension Scheme 1995 of any retired or continuing member should be made only with his/her consent. It is for the appellant to fix a time limit for exercising the option for retired employees and for serving employees and in all such cases fund will be transferred to the appellant Board from the Employees Provident Fund and Pension Schemes. "

8. The Employees Provident Fund Organisation is seeking review of the above quoted observations, by raising a contention that exemption/exclusion cannot be granted to individual employees of a registered establishment. Rather, the contention is that, the exemption or exclusion contemplated under section 17(1C) or under section 16(1)(b) can be granted only to an establishment. On behalf of the employee's organisations and the individual employees, who were petitioners in the writ petitions , it is vehemently contended that, their membership in the Employees Pension Scheme 1995 are not liable to be terminated or that they cannot be compelled to join the Self Financing RP.992/2012 & conn. cases 13 Pension Scheme. Referring to various provisions in the EPF Act and in the schemes formulated thereunder it is contended that, such transfer can be made only on the basis of consent of the individual employee concerned. In this regard much emphasis was placed on provisions contained in Section 17C of the EPF Act 1952 as well as in Paragraph 13 of the Employees Pension Scheme 1995. It is also pointed out that, with respect to retired employees benefits available to them or any of their service conditions could not be altered unilaterally, after their retirement, in any manner prejudicial to them. Various legal precedents settled on this point were also pointed out during the argument.

9. Evidently, findings contained in the judgments of the Division Bench that the employees/retired employees cannot be compelled to join the Self Financing Pension Scheme, unless the establishments are excluded/exempted from provisions of the Employees Provident Fund Act and the Schemes made thereunder, stands unchallenged. Therefore, contention of the review petitioners that the permission granted by the Division Bench to individual employees to apply for transfer of the membership is based on a misconception of law, has got basis RP.992/2012 & conn. cases 14 and relevance. The provisions do not enable any individual employee or retired employee to seek transfer of the fund, without there being any exclusion or exemption of the establishment. Therefore such liberty cannot be permitted by this court. Needless to observe that, such liberty provided under the impugned judgment will run contrary to provisions of law which is relevant on the issue. Of course, as observed in the impugned judgment, nothing will prevent any employee or retired employee to join the Self Financing Pension Scheme and to have availed benefits from both the schemes. But, at any rate, an exclusion or exemption from provisions of the Employees Provident Fund Act and the Schemes made thereunder, with respect to any individual employees who were already registered, can only be granted under due process of law, as contemplated in section 16 (1)(b) or 17C. As long as any valid exemption/exclusion is not obtained, operation of the provisions of the EPF Act and the Pension Schemes formulated thereunder will survive.

10. It is brought to our notice that the State Government as well as the appellant Board have filed various special leave petitions before the hon'ble Supreme Court challenging the RP.992/2012 & conn. cases 15 judgments of the Division Bench. An order passed by the hon'ble Supreme Court dated 15.7.2014 is placed for our perusal. It is clear that the hon'ble Supreme Court, had clarified that the granting of leave in those SLPs will not be a hurdle for the High Court to decide the applications for review filed by the Employees Provident Fund Organisations (EPF). This court was requested to dispose of the applications for review within two months on its merits. Further, liberty of the parties to assail the order if any passed in the review was also reserved. It is on the basis of the above directions that the Review Petitions are considered.

11. In view of the findings rendered in the forgoing paragraphs, we are of the considered opinion that the directions contained in the judgment of the Division Bench of this court, to the extent it permitted individual employees to opt for transfer of membership from the Employees Provident Fund Scheme, 1952 and from the Employees Pension Scheme, 1995, will run contrary to the statutory provisions. The Review Petitions are allowed to the extent of modifying the judgments in that respect. It is clarified that the transfer of such funds can be made only on the basis of order of exemption/exclusion if any obtained either under RP.992/2012 & conn. cases 16 section 17(1C) or 16(1)(b) of the EPF Act 1952, after undergoing requisite legal formalities, including obtainment of consent from the employees, if required.

C.K.ABDUL REHIM, JUDGE B. SUDHEENDRA KUMAR,JUDGE Pmn/

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