Andhra Pradesh High Court - Amravati
Y.V.Raghava Rao, Guntur Dist 9 Others vs Emp Prov Fund Organization Of India, New ... on 22 July, 2024
APHC010405152015
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3333]
(Special Original Jurisdiction)
MONDAY ,THE TWENTY SECOND DAY OF JULY
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SMT JUSTICE V.SUJATHA
WRIT PETITION NO: 30608/2015
Between:
Y.v.raghava Rao, Guntur Dist & 9 Others and Others ...PETITIONER(S)
AND
Emp Prov Fund Organization Of India New Delhi 6 ...RESPONDENT(S)
Others and Others
Counsel for the Petitioner(S):
1. NUTHALAPATI KRISHNA MURTHY
Counsel for the Respondent(S):
1. T BALAJI(SC FOR EPFO)
2.
3. SOLOMON RAJU MANCHALAFOR (APSRTC)
WRIT PETITION NO: 34971/2015
Between:
P.mallikarjuna, ...PETITIONER
AND
The Regional Provident Fund Commissioner and ...RESPONDENT(S)
Others
Counsel for the Petitioner:
1. VENKAT REDDY KODUMURY
2
Counsel for the Respondent(S):
1. T BALAJI(SC FOR EPFO)
2. K VISWANATHAM (SC FOR APSRTC)
The Court made the following:
3
COMMON ORDER:
Both these petitions are filed claiming same relief by different petitioners, but the issue involved in these petitions is one and the same. Therefore, I am of the view that it is appropriate to decide both the petitions by common order taking Writ Petition No.30608 of 2015 as leading petition.
W.P.No.30608 of 2015 is filed under Article 226 of the Constitution of India seeking the following relief:-
"...to issue writ, order or direction more particularly one in the nature of WRIT OF MANDAMUS declaring the action of the Respondents No.1 to 5 in issuing proceedings dated 15.10.2014 informing about the rejection of higher pension option by the Respondents No.1 to 5 in issuing proceedings dated 15.10.2014 informing about the rejection of higher pension option by the Respondent No.2 and intending to refund the excess contribution amount to the Petitioners is illegal, arbitrary, violating of principles of natural justice and violation of Articles 14, 19(1) (g) and 21 of the Constitution of India and consequently direct the Respondents to continue the higher option scheme under Para No.113 of EPP 1995 and grant additional financial benefits to the Petitioners under the said Scheme and pass...".
2. All the petitioners herein have been working in various capacities in the 4th respondent corporation. While the matter being so, the employees of the 4th respondent corporation have opted for contribution towards Employees Pension Scheme on the salary exceeding Rs.6,500/- (Higher Pension Option) basing on the clarifications issued by the 3rd respondent on 13.04.2006. In the said clarification, it is stated that as per 11(3) of the Employees Pension Scheme, 1995, the employer and employee can exercise option to 4 contribute on salary exceeding the statutory wage ceiling on the following two occasions:
"i) Immediately on and from the date of commencement of the scheme i.e., 16.11.1995
ii) Immediately on and from the date of the salary exceeds the statutory ceiling (i.e. Rs.6,500/- P.M.)."
3. As per the said clarifications given by the 3rd respondent, the employees of the 4th respondent corporation who are having a pay of more than Rs.6,500/- have opted for the said higher scheme option from the year 2006 onwards, including the petitioners herein. Accordingly, since 2006, the higher pension option forms were submitted by all the petitioners herein to the respondents. While the matter being so, the 5th respondent has issued the impugned orders dated 15.10.2014 to all the Depot Managers and Regional Officers informing them that the Regional Provident Fund Commissioner, Employees Provident Fund Organization-respondent No.2 has rejected a batch of higher pension option forms submitted by the employees after the year 2006 on the following grounds:
"a) unless the option for contribution on Higher Wages is accepted by the competent authority in writing, the Member/Employer cannot contribute on wages over and above the prevalent wage ceiling (Rs.6,500) and claim pension on that wages,
b) all such higher pension options are deemed to be rejected in the light of provisions of the EPF & MP Act, 1952 and Schemes framed there under as illustrated in their Head Quarter Circular dated 20.06.2014,
c) in view of the above, the APSRTC is once again requested to claim refund of excess paid EPS contribution (i.e., over and above the wage ceiling) with details so as to refund the same with interest applicable from time to time for EPF members, to the APSRTC EPF Trust, as the same are treated as erroneous payments."5
4. After discussing the aforesaid rejection by the 2nd respondent, the Board of Trustees, APSRTC EPF Trust has decided that the EPS contribution in respect of the employees who made the higher pension options after the year 2006 is restricted to 8.33% on salary (pay+DA) upto Rs.15,000/- per month with effect from 01.09.2014. The impugned order further states that the excess contribution over the salary ceiling of Rs.6,500/- per month made towards the EPS contribution of the employees up to 31.08.2014 will be claimed from the RPFC for refund and the same will be credited to the PF accounts of the employees in the PF Trust. Challenging the aforesaid action of the respondent authorities, the present writ petition is filed.
5. When the writ petition came up for hearing on 21.09.2015, this Court has passed the following interim order:
"...There shall be interim stay of the order dated: 15.10.2014 passed by the fifth respondent and the second respondent is directed to receive the Employees' Pension Scheme contribution made by the fourth respondent."
6. The respondent Nos.4 to 7 have filed a counter affidavit enclosed with a vacate stay petition, wherein they have reiterated the list of events that took place till the issuance of the proceedings dated 15.10.2014 and requested to dismiss the writ petition.
7. Heard learned counsel for the petitioner, Mr. M. Solomon Raju, learned Standing Counsel for APSRTC and Sri. T. Balaji, learned Standing Counsel for Employees Provident Fund Organization of India.
8. During the course of arguments, learned counsel for the petitioners, while reiterating the facts narrated in the writ petition has raised several contentions. He further submits that 6 though the petitioners' authorities are deducting the amounts from the pay of the petitioners and crediting the same to respondent Nos.1 to 3 through respondent No.5 for all these years, the respondent Nos.1 to 3 ought not to have rejected the option forms availed by the petitioners by just stating that there is a financial burden on the Department. The said reason stated by the respondents is not sustainable and such a stand should not have been taken after lapse of so many years from the date of payment of the amounts i.e. from the year 2006. The action of the respondents has resulted in an irreparable loss to the petitioners herein and also other APSRTC employees. While concluding his arguments, learned counsel has requested this Court to direct the respondents to continue the higher option scheme under Paragraph No.11(3) of Employee's Pension Scheme, 1995 and grant additional financial benefits to the petitioners under the said scheme.
9. On the other hand, learned Standing Counsel appearing for the Employees Provident Fund Organization (EPFO), while denying the contention raised by learned counsel for the petitioners that the petitioners are entitled to be continued the higher option scheme under Paragraph No.11(3) of Employee's Pension Scheme, 1995 has referred to a judgment in R.C. Gupta and Ors. Vs. Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors1. He submits that in the aforesaid judgment, the Hon'ble Apex Court while dealing with the question of entitlement of members of the pension schemes, whose pensionable salary exceeded Rs.6,500/- per month, who exercise option in terms of the proviso under 1 (2018) 14 SCC 809 7 paragraph 11(3) of the Employee's Pension Scheme, 1995; held as under:
""7. Reading the proviso, we find that the reference to the date of commencement of the Scheme or the date on which the salary exceeds the ceiling limit are dates from which the option exercised are to be reckoned with for calculation of pensionable salary. The said dates are not cut-off dates to determine the eligibility of the employer employee to indicate their option under the proviso to Clause 11(3) of the Pension Scheme. A somewhat similar view that has been taken by this Court in a matter coming from the Kerala High Court, wherein the Special Leave Petition (C) No. 7074 of 2014 filed by the Regional Provident Fund Commissioner was rejected by this Court by order dated 31.3.2016. A beneficial Scheme, in our considered view, ought not to be allowed to be defeated by reference to a cut-off date, particularly, in a situation where (as in the present case) the employer had deposited 12% of the actual salary and not 12% of the ceiling limit of ' 5,000/- or ' 6,500/- per month, as the case may be.
8. XXX XXX XXX
9. We do not see how exercise of option under paragraph 26 of the Provident Fund Scheme can be construed to estop the employees from exercising a similar option under paragraph 11(3). If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, exercise of option under paragraph 26 of the Provident Scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under Clause 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the Pension Scheme unless the circumstances warranting such foreclosure are clearly indicated.
10. The above apart in a situation where the deposit of the employer's share at 12% has been on the actual salary and not the ceiling amount, we do not see how the Provident Fund Commissioner could have been aggrieved to file the L.P.A. before the Division Bench of the High Court. All that the Provident Fund Commissioner is required to do in the case is an adjustment of accounts which in turn would have benefited some of the employees. At best what the Provident Commissioner could do and which we permit him to do under the present order is to seek a return of all such amounts that the concerned employees may have taken or withdrawn from their Provident Fund Account before granting them the benefit of the proviso to Clause 11(3) of the Pension Scheme. Once such a return is made in whichever cases such return is due, consequential benefits in terms of this order will be granted to the said employees."8
10. He further submitted that, in compliance to the orders issued by the Hon'ble Apex Court in R.C. Gupta and Ors. Vs. Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors [referred supra], circulars dated 23.03.2017 and 31.05.2017 were issued by EPFO. As per the circular dated 31.05.2017, the 1st respondent herein has taken a stand that the employees of the exempted establishments are not eligible for the benefits contemplated in the Apex Court judgment in R.C. Gupta and Ors. Vs. Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors [referred supra]. Thereafter, batch of Writ petitions were filed before the Hon'ble Apex Court challenging certain amendment and modifications made by the Central Government in the Employees Pension Scheme 1995 and Appeals were also filed challenging the quashing of the circular issued by the Provident Fund Authorities, dated 31.05.2017, which precluded exempted establishment from the benefit of higher pension by challenging the judgment of the Kerala High Court passed in Sasikumar & Others vs. Union of India (UOI) [in Writ Petition(C) No.13120 of 2015], judgment of the Delhi High Court in Bhartiya Khadya Nigam Karamchari Sangh and Anr. vs. Union of India and Ors. [in Writ Petition (C) No.5678 of 2018], judgment of the Rajasthan High Court in Union of India and Others vs. Jale Singh and Others [in D.B. Special Appeal Writ No.436 of 2019]. Batch of contempt petitions were also filed, for implementation of the judgment of the Apex Court in R.C. Gupta and Ors. Vs. Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors. [referred supra].
11. Learned Standing Counsel has further submitted that when all the aforesaid matters were listed, the Hon'ble Apex Court, 9 while considering the amendment, validity of various provisions including the quashing of the circular from the Provident Fund Authorities, dated 31.05.2017 and also the issue of implementation of judgment of R.C. Gupta and Ors. Vs. Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors [referred supra], has passed a judgment in The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors.2 wherein it has held in paragraph No.44 as follows:
"44. We accordingly hold and direct:
(i) The provisions contained in the notification No. G.S.R. 609(E) :
MANU/LABR/0034/2014 dated 22nd August 2014 are legal and valid. So far as present members of the fund are concerned, we have read down certain provisions of the scheme as applicable in their cases and we shall give our findings and directions on these provisions in the subsequent sub-paragraphs.
(ii) Amendment to the pension scheme brought about by the notification No. G.S.R. 609(E) : MANU/LABR/0034/2014 dated 22nd August 2014 shall apply to the employees of the exempted establishments in the same manner as the employees of the regular establishments. Transfer of funds from the exempted establishments shall be in the manner as we have already directed.
(iii) The employees who had exercised option under the proviso to paragraph 11(3) of the 1995 scheme and continued to be in service as on 1st September 2014, will be guided by the amended provisions of paragraph 11(4) of the pension scheme.
(iv) The members of the scheme, who did not exercise option, as contemplated in the proviso to paragraph 11(3) of the pension scheme (as it was before the 2014 Amendment) would be entitled to exercise option under paragraph 11(4) of the post amendment scheme. Their right to exercise option before 1st September 2014 stands crystalised in the judgment of this Court in the case of R.C. Gupta (supra). The scheme as it stood before 1st September 2014 did not provide for any cutoff date and thus those members shall be entitled to exercise option in terms of paragraph 11(4) of the scheme, as it stands at present. Their exercise of option shall be in the nature of joint options covering pre-amended paragraph 11(3) as also the amended paragraph 11(4) of the pension scheme. There was uncertainty as regards validity of the post amendment scheme, which was quashed by the aforesaid judgments of the three High 2 AIR 2022 SC 5634 10 Courts. Thus, all the employees who did not exercise option but were entitled to do so but could not due to the interpretation on cut-off date by the authorities, ought to be given a further chance to exercise their option. Time to exercise option under paragraph 11(4) of the scheme, under these circumstances, shall stand extended by a further period of four months. We are giving this direction in exercise of our jurisdiction Under Article 142 of the Constitution of India. Rest of the requirements as per the amended provision shall be complied with.
(v) The employees who had retired prior to 1st September 2014 without exercising any option under paragraph 11(3) of the pre-amendment scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment.
(vi) The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 scheme shall be covered by the provisions of the paragraph 11(3) of the pension scheme as it stood prior to the amendment of 2014.
(vii) The requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceeds Rs. 15000/- per month as an additional contribution under the amended scheme is held to be ultra vires the provisions of the 1952 Act. But for the reasons already explained above, we suspend operation of this part of our order for a period of six months. We do so to enable the authorities to make adjustments in the scheme so that the additional contribution can be generated from some other legitimate source within the scope of the Act, which could include enhancing the rate of contribution of the employers. We are not speculating on what steps the authorities will take as it would be for the legislature or the framers of the scheme to make necessary amendment. For the aforesaid period of six months or till such time any amendment is made, whichever is earlier, the employees' contribution shall be as stop gap measure. The said sum shall be adjustable on the basis of alteration to the scheme that may be made.
(viii) We do not find any flaw in altering the basis for computation of pensionable salary.
(ix) We agree with the view taken by the Division Bench in the case of R.C. Gupta (supra) so far as interpretation of the proviso to paragraph 11(3) (preamendment) pension scheme is concerned. The fund authorities shall implement the directives contained in the said judgment within a period of eight weeks, subject to our directions contained earlier in this paragraph.
(x) The Contempt Petition (C) Nos. 1917-1918 of 2018 and Contempt Petition (C) Nos. 619-620 of 2019 in Civil Appeal Nos. 10013-10014 of 2016 are disposed of in the above terms."11
12. Learned Standing Counsel has further submitted that following the law laid down in the aforesaid judgment passed by Hon'ble Apex Court, a Hon'ble Bench of the Madras High Court has also disposed of a batch of cases in W.A.Nos.2621 of 2021 and batch. Hon'ble Madras High Court, in paragraph Nos.12 and 13 of the said judgment has held as under:
"12. The contentions raised herein by the counsels for the writ petitioners have already been raised before the Hon'ble Apex court by way of filing several Miscellaneous petitions by several associations and individual retired employees. The EPFO has also circulated the list of above Miscellaneous application seeking clarifications and modifications of the above Order of the Apex Court. Few Miscellaneous applications filed given below:
1. M.A. No.2162 of 2022 in W.P. No.874 of 2018 filed by the Association of Former Executives of Hindustan Aeronautics Ltd. (Hale) Vs. Employees Provident Fund Organization.
2. M.A. No.2191 of 2022 in W.P. No.233 of 2018 filed by M. Chokalingam Vs. Union of India Represented By The Secretary to Govt. Of India Ministry of Labour and Department of Employment.
3. M.A. No.122 of 2023 in W.P. No.778 of 2018 filed by the BHEL Superannuated Executive Forum (Delhi) Vs. Union of India.
4. M.A. No.241 of 2023 in W.P. No.1134 of 2018 filed by V.N. Sharma Vs. Employees Provident Fund Organization.
5. M.A. No.495 of 2023 in W.P. No.804 of 2018 filed by the SAIL Retired Employees Association Vs. Employees Provident Fund Organization.
6. M.A. No.1533 of 2023 in W.P. No.390 of 2019 filed by the POWERGRID Retired Employees Association Vs. UOI & Ors.
13. The Miscellaneous Applications prayed, seeking modifications and clarifications of the paragraph 44-V as to declare to the effect that the employees, who were retired prior to 01.09.2014 without exercising any option but whose provident fund contribution was on their actual salary (above the ceiling limit under paragraph 26(6) of the EPF, 1952) covered by the Apex Court judgment of the RC Gupta vs. EPFO and they are entitled to jointly exercise the option with their employees under paragraph 11(3) of the preceding paragraph IV. Hon'ble Apex Court after considering all those batches of Miscellaneous petitions has dismissed all in liminie."
13. He further submitted that the above batch of cases were disposed of in terms of the judgment of the Hon'ble Apex Court in The Employees Provident Fund Organisation and Ors.
12Vs. Sunil Kumar B. and Ors [referred supra] and has requested this Court to pass a similar direction, taking into consideration the law laid down in the judgment of the Hon'ble Apex Court in The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors [referred supra].
14. After hearing both sides and after perusing the various material provided by both the learned counsel for the petitioners and learned Standing Counsel for Employees Provident Fund Organization, this Court has come to a conclusion that the Hon'ble Apex Court The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors., after considering the reasons given by the EPFO for issuance of their circular dated 31.05.2017 and after detailed discussion, has issued guidelines to be followed by the EPFO regarding the grant of pension as per their actual salary paid by the employees as pension. It can also be seen that several miscellaneous petitions were filed before the Hon'ble Apex Court seeking clarifications and modifications of the judgment in Sunil Kumar case. However, the miscellaneous applications which were filed seeking modifications and clarifications of the paragraph 44 of the aforesaid judgment, as to declare to the effect that the employees, who were retired prior to 01.09.2014 without exercising any option but whose provident fund contribution was on their actual salary (above the ceiling limit under paragraph 26(6) of the EPF, 1952) covered by the Apex Court judgment of the RC Gupta vs. EPFO and they are entitled to jointly exercise the option with their employees under paragraph 11(3) of the preceding paragraph IV; were dismissed by the Hon'ble Apex Court.
15. Since various miscellaneous petitions filed before the Hon'ble Apex Court, as discussed above, are dismissed, this Court need not go into the very same issue again as raised by the 13 petitioners herein. Accordingly, after considering the submissions of both the counsel and also the judgment rendered by the Hon'ble Apex Court, even this Court is bound by the decision of the Hon'ble Apex Court in The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors. [referred supra], in the light of the law of the precedent.
16. In view of the above detailed order in W.P.No.30608 of 2015, the other writ petition i.e. W.P.No.34971 of 2015 is also liable to be disposed of.
17. Accordingly, both these writ petitions are disposed of in terms of directions issued under paragraph No.44 in the judgment of the Hon'ble Apex Court in The Employees Provident Fund Organisation and Ors. Vs. Sunil Kumar B. and Ors. There shall be no order as to costs.
Consequently, miscellaneous applications, pending, if any, shall also stand closed.
_____________________ JUSTICE V. SUJATHA Date: 22.07.2024 GSS.