Patna High Court
Sudhir Kumar vs The Union Of India on 19 December, 2024
Author: Harish Kumar
Bench: Harish Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.20195 of 2019
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1. Sudhir Kumar Son of Late Kamla Prasad Resident of Village-Makhnia
Kuan, P.S.-Pirbahore, District-Patna.
2. Birendra Kumar Singh Son of Late Surya Nath Singh Resident of Village-
Bankmais Colony, Police Station-Patrakar Nagar, Kankarbagh, District-
Patna.
... ... Petitioner/s
Versus
1. The Union of India through Secretary Ministry Labour and Employment,
Government of India, Shramashakti Bhaban, Rafi Marg, New Delhi-110001.
2. The Chairman, Central Board Yrustee, in rust Provident Fund Organization
Ministry Organization, Government of India, New Delhi.
3. The Central Provident Fund, Employees Provident Fund Organization,
Central Office, 14 Bikha Jee K.M. Place, New Delhi.
4. Regional Provident Fund Commissioner, Patna Employees Provident Fund
Organization R. Block Road no6, Patna Bihar.
5. The BIhar State Food and Supplies Corporation through Managing Director,
Khadya Bhaban, Daroga Rai Path, Patna, District-Patna.
6. THe Managing Director BIHar State Food and Supplies Corporation Ltd.
Khadya Bhaban, Daroga Rai Path, Patna Bihar.
7. The Chief of Finance of Bihar BIhar State Food and Supplies Corporation
Ltd. Khadya Bhaban, Daroga Rai Path, Patna Bihar.
... ... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Nirmal Kumar, Advocate
For the UOI : Dr. Anjani Pd. Singh, CGC
For the EPF : Mr. Prashant Sinha, Advocate
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CORAM: HONOURABLE MR. JUSTICE HARISH KUMAR
CAV JUDGMENT
Date : 19-12-2024
This Court has heard Mr. Nirmal Kumar, learned
Advocate for the petitioners, Mr. Prashant Sinha, learned
Advocate for the Employees Provident Fund Organization, Mr.
Sanjay Prasad, learned Advocate for the Bihar State Food and
Civil Supplies Corporation Ltd. and the learned Advocate for
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the Union of India.
2. The petitioners are the retired employees of Bihar
State Food and Civil Supplies Corporation Ltd., have invoked
the jurisdiction of this Court under Article 226 of the
Constitution of India seeking a direction upon the respondents,
especially the respondent Employees Provident Fund
Organization for fixation of their pension on higher pensionable
salary in terms of the judgment of the Hon'ble Supreme Court
in the case of R.C. Gupta & Ors. Vs. The Regional Provident
Fund Commissioner, Employees Provident Fund
Organization & Ors., (2018) 14 SCC 809 [(Civil Appeal No.
(s) 10013-10014 of 2016)].
3. It is the case of the petitioners that they duly
appointed as Assistant Accountants on the sanctioned and vacant
post of the Bihar State Food and Civil Supplies Corporation Ltd.
(Headquarter), Patna (hereinafter referred to as 'the
Corporation'). Subsequently, on being found eligible, the
petitioners were promoted to the post of Accountant and after
serving so many years, they superannuated form the services of
the Corporation. Upon their superannuation, the petitioners have
been allowed admitted dues. However, despite the fact that the
petitioners had been contributing excess amount to the
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Employees Provident Fund Organization (hereinafter referred to
as 'the EPFO') since 1997 for getting higher pension and
similarly the employer had also been depositing the equivalent
subscription from time to time, the pension of the petitioners
was fixed at Rs.2458/- on the basis salary of Rs.6500/- in a most
arbitrary manner. The petitioners stated that at the time of
superannuation, the basic pay of the petitioner was Rs.13,500/-
along with Dearness allowances of Rs.5535/-. Meaning thereby,
the petitioners were getting Rs.19,035/- at the time of
superannuation in the Corporation, but the respondent EPFO
ignoring this fact fixed the pensionable salary @ Rs.6500/- in a
most arbitrary manner.
4. Mr. Nirmal Kumar, learned Advocate for the
petitioners contended that it is well settled principle of law and
as has been decided by the Hon'ble Supreme Court that the
pension is fixed on the basis of last pay scale with D.A., which
was being withdrawn by the employee at the time of
superannuation. On 22.02.2008 itself, the Corporation has
furnished Form No. 2 to the Assistant Commissioner, Provident
Fund for payment of pension in terms of Circular of the
Corporation stating therein that the Corporation has already
taken a decision to allow the pension on higher wages. The
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aforesaid fact clearly suggests that the Corporation had never
objected, if the petitioners shall be allowed pension on the full
wages. The petitioners being retired employees of the
Corporation, they have already submitted Form 10D-19 and
3AR through Corporation to EPFO. The matter has also been
taken to the Managing Director of the Corporation, who after
considering the request of the employees informed to the
Provident Fund Commissioner vide letter dated 23.06.2009, as
contained in Memo No.5210 that the contribution of the
employee and the employer share are being deducted on higher
wages, but despite the aforesaid fact the pension of the
petitioners under the Scheme 1995 could not be fixed on the
higher salary/wages of the petitioners.
5. In the aforesaid premise, the General Secretary of
the Employees had also preferred C.W.J.C. No. 7822 of 2010
for extending the monthly pension to the employees of the
Corporation on the basis of the proportionate contribution
deducted from their salary even exceeding salary of Rs.6500/-.
It was also prayed that the benefits of Employees Scheme, 1995
should extend up to the age of 60 years. The said writ petition
came to be disposed of on 10.02.2012 with a direction that if the
Corporation has not provided the relevant papers, it should
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provide the same forthwith. In case, the Employees Provident
Fund Organization wants any further papers, should write to the
Corporation. The Learned Court finally directed the respondent
nos. 1 to 5 to decide the issue and take a final decision. Despite
the aforenoted direction, when no final decision has been taken,
the petitioner of the said case preferred M.J.C. No. 4495 of
2012, which Contempt Petition has also been disposed of on
06.03.2013
with observation that the respondents would
consider not accepting contribution in excess than what is
statutorily provided, if it is not willing to deposit matching
amount.
6. Learned Advocate for the petitioners further
referring to the amended provision of Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952 (hereinafter
referred to as ‘the Act, 1952’) has contended that by virtue of
amended Sub-Section 6A, as also Clause 11 of the Employees
Pension Scheme, 1995, dealing with determination of
pensionable salary, which subsequently enhanced to Rs.6500/-
per month and further provided the employees to opt for
contribution of salary exceeding Rs.5000/- or Rs.6500/-.
Referring to the judgment of the Hon’ble Supreme Court passed
in R.C.Gupta case (supra) it is contended that the issue has
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already been set at rest, which also governs the case of the
petitioners.
7. Admittedly, the employer and employees have
contributed in excess to the ceiling limit of Rs.6500/-, which
was duly accepted by the EPFO and, as such in view of the
mandate of the Hon’ble Supreme Court in the case of R.C.
Gupta (supra), as also the circulars issued by the EPFO, the
respondent authorities are obligated to revise the pension of the
petitioners and other similarly situated employees on the basis
of higher wages by removing the salary limit of Rs.6500/-, is the
contention of learned Advocate for the petitioner.
8. While opposing the prayer of the petitioners, a
detailed counter affidavit as well as supplementary counter
affidavits have been filed on behalf of the EPFO. It is primarily
contended that the petitioners are retired employees of the
Corporation, which was admittedly an exempted establishment
under Section 17 of the EPF & MP Act, 1952 since January,
1987 to 31.03.2004 and as such, during the period of exemption,
the Corporation had constituted a Board of Trustees through
which contribution of the employees and employer were
deposited. During the period of exemption, the statutory limit
for depositing the contribution was Rs.5000/-, which later on
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enhanced to Rs.6500/- in the year 2001. Seemingly, during the
period of exemption of the Establishment, the Employees
Pension Scheme, 1995 came into effect with effect from
16.11.1995. It is further contended that when the exemption was
withdrawn, the Board of Directors of the Corporation resolved
to give the employer’s consent under the Employees Pension
Scheme, 1995 in its meeting dated 22.07.2006.
9. Mr. Prashant Sinha, learned Advocate for the EPFO
thus submitted that this consent was only limited to the
Employees Pension Scheme, 1995, hence it cannot be accepted
as a valid option. Nonetheless, the Employees Pension Scheme,
1995 (hereinafter referred to as ‘the EPS, 1995) is a subsidiary
scheme of the Employees Provident Fund Scheme, 1952
(hereinafter referred to as ‘the EPF Scheme, 1952’). As par
Paragraph 26(6) of EPF Scheme, 1952, the employer and the
employee were required to make a joint request before the
Provident Fund Commissioner, who has been vested with a
discretion to allow such employee to contribute above the
statutory limit of Rs.6500/-. In the case in hand, there is no such
joint request under Paragraph 26(6). It is further contended that
Resolution of the Board of Directors of the Corporation is also
in teeth of the proviso of Paragraph 11(3) of the EPS, 1995,
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which stipulates that the pensionable salary shall be treated to be
higher than the statutory limit of Rs.6500/- only when if at the
option of the employer and employee, contribution paid on
salary exceeding Rs.6500/- per month from the date of
commencement of this scheme or from the date salary exceeds
Rs.6500/-, whichever is later; and 8.33% share of the employees
thereof is remitted into pension fund. In view of the facts
aforenoted, the petitioners cannot claim pension on the salary
beyond the statutory limit.
10. Mr. Prahsant Sinha, learned Advocate for the
EPFO further contended that the Hon’ble Supreme Court in the
case of R.C. Gupta (supra), particularly, in para. 8 and 9 has
made it very clear that exercise of option under paragraph 26(6)
of the EPF Scheme, 1952 is inevitable and necessary precursor
to exercise option under paragraph 11(3) of the EPS, 1995, since
there is no option to contribute on actual wages in the Provident
fund in terms of paragraph 26(6) of the EPF Scheme, 1952, the
petitioners cannot claim pension on higher wages. The employer
consent to contribute on actual wages in the EPS, 1995 given in
the year 2006, apart from being invalid act on account of non-
extending of any option; this consent has also been withdrawn
in the year 2012, in the meeting of the Board of Directors dated
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17.07.2012, pursuant to objection raised by the Accountant
General, Bihar.
11. It is further urged before this Court that the case of
the Corporation was adjudicated by this Court in the case of
Ram Nandan Prasad Vs. The Union of India & Ors., 2014
(3) PLJR 98, wherein the learned Court having considered all
the relevant facts, held that the employees of the Corporation
are entitled to get the benefit of pensionable salary restricted to
the statutory limit. The learned Court while noted the fact that
the Corporation resolved to give consent to contribute on higher
wages under the EPS, 1995 on 22.07.2006, but the employer
and the employees did not submit any joint request before the
competent authority to contribute on higher wages, held that the
excess contribution shall be treated as erroneous contribution
and the pension shall be limited to the pensionable salary of the
statutory ceiling.
12. It has also been apprised to this Court that during
the period 2000 to 2014, many cases were filed in various
Forums, including this Courts, praying for payment of pension
on higher wages by allowing to contribute on higher wages
under the Pension Scheme. On being aggrieved by the order
passed by this Court, the EPFO preferred appeal before the
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Hon’ble Supreme Court, which came to be dismissed. After
disposal of the SLPs., various writ petitions were filed and
orders were passed to allow option to contribute on higher
wages retrospectively. Two SLPs were filed by the Employees
of M/s Himachal Pradesh Tourism Development Corporation
against the decisions of the learned Division Bench of the
Hon’ble High Court of Himachal Pradesh disallowing the option
for contributing to pension fund on higher wages, which came
to be disposed of vide order dated 04.10.2016 (R.C.Gupta &
Ors Vs. Regional Provident Fund Commissioner, Employees
Provident Fund Organization & Ors.).
13. Referring to the judgments rendered by the
Hon’ble Supreme Court in the case of R.C. Gupta (supra) on
which reliance has been placed by the learned Advocate for the
petitioners, it is contended that the Hon’ble Supreme Court
ruled that exercise of option under paragraph 26(6) is a
necessary precursor to the exercise of option under Clause
11(3). The judgment passed by the Hon’ble Supreme Court was
placed before the Pension and EDLI Implementation Committee
for ensuring compliance of the order and after detailed
discussion, the Committee recommended to place the matter
before the Central Board of Trustees, who made it clear that the
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order of the Hon’ble Supreme Court is not applicable upon the
exempted establishment. Finally the matter has travelled to the
larger Bench of the Hon’ble Supreme Court in the case of
Employees Provident Fund Organization & Ors. Vs. Sunil
Kumar B. & Ors.; 2023 (1) PLJR 104 (SC) wherein it has
been held that the employees, who have already retired prior to
01.09.2014 without exercising any option have already exited
from the membership and therefore they are not entitled for the
benefit of the larger Bench judgment. It is the admitted position
that the petitioners had retired prior to 01.09.2014 without
exercising any option under para.26(6) of the EPF Scheme,
1952 or paragraph 11(3) of the EPS, 1995 and, as such, they are
not entitled for the relief, as prayed for, is the contention of
learned Advocate for the EPFO.
14. Having heard the learned Advocate for the
respective parties and after perusing the materials available on
record as well as the relevant prescriptions of the Act and the
Rule, this Court before parting with the present case, deems it
proper to highlight the provisions, which are necessary for
proper adjudication of the matter.
15. Initially under the Employees’ Provident Funds
and Miscellaneous Provisions Act, 1952, there was no provision
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for any pension under the Act, 1952. For the first time, in the
year 1971, the family pension scheme was introduced. The Act,
1952 was amended vide amended Act, 1996 whereby the earlier
Section 6A and 6B were substituted by a new Sections 6A,
which provides for Employees Pension Scheme. Section 6A(2)
(a) of the EPF and MP Act, 1952 provides that 8.33% from the
Employer’s contribution under Section 6 is to be paid to the
Pension fund. Proviso to Paragraph 26-A(2) of the EPF Scheme,
1952 further provides that the contribution payable by the
Employer and the Employee shall be limited to the amount
payable on monthly pay of Rs.6500/-, which was further
enhanced to Rs.15,000/- from September, 2014. Paragraph
26(6) of the Employees Provident Fund Scheme, 1952 provides
that an officer below the rank of an Assistant Provident Fund
Commissioner may allow the Employer and the employees to
contribute more than the statutory wage ceiling of Rs.6500/-, if
a joint request is submitted by the Employer and the Employees.
Paragraph 3(1) of the Employees Pension Scheme, 1995
provides for 8.33% of the employees contribution to be remitted
to the pension fund, whereas paragraph 3(2) provides that the
Central Government shall also contribute at the rate of 1.16% of
the pay of the member into the Employees’ Pension Scheme.
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Further paragraph 11(3) and its proviso provided that the
maximum pensionable salary shall be limited to Rs.6500/- per
month provided at the option of the Employer and the
Employee, contribution paid of salary exceeding Rs.6500/- per
month from the date of commencement of this scheme or from
the date of salary exceeds Rs.6500/-. Moreover, the aforesaid
paragraph has later on amended on 01.09.2014 and the
maximum pensionable salary is limited to Rs.15,000/- per
month.
16. The amended paragraph 11(4) and its proviso
further made it clear that the members, who are contributing on
salary exceeding Rs.6500/- per month will have to exercise
fresh option by the Employer and the Employees to continue to
contribute on salary exceeding Rs.15,000/- per month and the
pensionable salary for the existing members, who prefer such
option based on higher salary. Such option has to be exercised
within a period of six months from 01.09.2014. The Regional
Provident Fund Commissioner has been empowered to extend
the period to exercise such option for a further period not
exceeding for six months on sufficient cause being shown by the
members. If no option is exercised by the members within such
period, it shall be deemed that the member has not opted for
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contribution over the wage ceiling and contribution to the
pension fund made over the wage ceiling in respect of the
member shall be diverted to the provident fund account.
17. It is worth noticing here the 1 st proviso to
paragraph 11(4) of the EPS Scheme, 1952, which requires the
members to contribute at the rate of 1.16% on salary exceeding
Rs.15,000/- as an additional contribution has been declared ultra
vires by the larger Bench of the Hon’ble Supreme Court in the
case of Sunil Kumar B (supra).
18. In the premise of the aforenoted relevant
Prescriptions, Act and the Rules/Schemes, now this Court comes
to the facts of this case. Admittedly the corporation was
exempted establishment and had been managing its own
Provident Fund Trust since 1987 to 31.03.2014. During the
period aforenoted, the petitioners and their Employer did not
exercise any option to contribute on actual wages in the
provident fund under paragraph 26(6) of EPF Scheme, 1952.
Even, later on, the employer and the employee have not opted to
contribute on actual wages in the provident fund under
Paragraph 26(6) of the EPS Scheme, 1952. So far the contention
of the petitioners that in the meeting of the Board of Directors of
the Corporation vide Item no.119.16 dated 22.07.2006 resolved
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to grant consent to contribute on actual wages under the
Employees Pension Scheme, 1995, the same does not come to
any succor to the petitioners firstly on account of the fact that it
was not an option to contribute on actual wages in the provident
fund scheme and secondly even if any decision was taken by the
Board of Directors, the same was withdrawn on 17.07.2012,
when the Accountant General raised an objection to such
decision.
19. It is also worth noticing that petitioner nos. 1 and
2, on attaining the age of 58 years stood exited from the
Employees Pension Scheme, 1995 in terms of Paragraph 6(a) of
the Employees Pension Scheme, 1995.
20. This Court also finds that the identical issue has
come up for consideration before this Court in the case of Ram
Nandan Prasad Vs. The Union of India & Ors.; 2014 (3)
PLJR 98. The petitioners in the said case have also prayed for
higher pensionable salary in terms of proviso to paragraph 11 of
the Employees Pension Scheme, 1995.
21. The petitioners were employees of the Corporation
where the Employees Pension Scheme, 1995 had been
implemented. The petitioners made their distribution towards
the aforesaid scheme. In course of time, the petitioners started
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receiving salary excess to Rs.6500/- per months and the
Corporation had been contributing the prescribed amount of
salary exceeding Rs.6500/- per month into pension fund but the
petitioners were denied their pension on higher salary. The
Managing Director of the Corporation raised protest against the
act of the respondents. Similar protest has also been made
through the Union of the Employees of the Corporation.
However, their requests were turned down by the EPFO. The
learned coordinate Bench of this Court having taken note of
admitted position that the Corporation was exempted
establishment since January, 1987 to 31.03.2004 and, therefore,
it is apparent that between the aforesaid period contributions of
the employer or employee were deposited before the Board of
Trustee. Moreover, the statutory limit for depositing the
contribution was only up to Rs.5000/-, which was later on
enhanced up to Rs.6500/- in the year 2001. The Court further
finds that there is nothing on record to show that between the
aforesaid period, the Corporation gave its consent to deposit
contribution above the said statutory limit. On being found that
no option was given by the establishment as well as the
concerned employee nor any comment was given by the
Provident Fund Commissioner, thus, the learned Court opined
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that according to the guidelines excess distribution shall be
treated as erroneous distribution and the petitioners shall only be
entitled to get the benefit of pensionable salary restricted to the
limited the ceiling and thus dismissed the writ petition.
22. Since the similar issue has been agitated before
this Court, which has already been answered by the learned Co-
ordinate Bench of this Court, it would be prudent to quote para.
14 to 17 of the judgment in the case of Ram Nandan Prasad
(supra) hereinbelow:
“14. In the present case, it has
specifically been averred at paragraph 4 to the
counter affidavit that the concerned Corporation
did not submit its return for several years despite
of several reminders sent by the Provident Fund
Commissioner and therefore, it can not be said
that at the time of deduction and deposit, the
Provident Fund Commissioner did not raise any
objection. Furthermore, I find that Accountant
General, Bihar, Patna has also raised objection
before the Bihar State Food and Civil Supplies
Corporation Limited regarding making
contributions beyond the statutory limit and in the
light of the above stated objection, Board of
Directors of the concerned Corporation took a
decision in its meeting held on 17.7.2012 to
ensure the compliance of the direction of AG,
Bihar, Patna.
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15. Annexure- F series to the counter
affidavit reveals that the Employees’ Provident
Fund Organization issued guidelines to Regional
Provident Fund Commissioner’s office as well as
sub-regional Offices and according to the
aforesaid guidelines, in the cases where no option
was given and consequently no permission was
given but contribution on higher salary was
deposited by the Establishment/employees on their
own, such excess contribution will be considered
as erroneous contribution and the pensionable
salary will be restricted to the statutory ceiling
existing from time to time.
16. In the present case, admittedly, no
option was given by Establishment as well as the
concerned employees nor any acceptance was
given by the Provident Fund Commissioner and
therefore, in my view, according to the aforesaid
guidelines, excess contribution shall be treated as
erroneous contribution and the petitioners shall
only be entitled to get benefit of pensionable
salary restricted to the statutory ceiling.
17. No doubt, the Employees’ Pension
Scheme, 1995 is a beneficiary legislation but the
aforesaid scheme is subsidiary scheme of the
Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952 and when the statutory limit
for making contribution has specifically been
made in the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952, in my view,
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be stretched by the court. So far as proviso of para
11(3) of the Employees’ Pension Scheme, 1995 is
concerned, the said proviso only describes the
modality of calculation of pensionable salary and
the aforesaid proviso is applicable only when the
contribution beyond the statutory limit is made in
accordance with the rules. In the present case, the
contribution beyond the statutory limit has not
been made in accordance with rule as there was
no valid option and acceptance for making
contribution beyond the statutory limit. Therefore,
proviso of para 11(3) of the Employees’ Pension
Scheme, 1995 is not applicable in this case.”
23. Now coming to the judgment of the Hon’ble
Supreme Court in the case of R.C. Gupta (supra) wherein the
Hon’ble Supreme Court has considered the claim of the
employees of M/s Himachal Pradesh Tourism Development
Corporation, who at the point of their retirement exercised
option in paragraph 11 of the Employees Provident Fund
Scheme for transfer of higher contribution to their pension fund
account before their retirement so that they can get enhanced
pension benefits. The Hon’ble Supreme Court having
considered the submissions advanced on behalf of the parties
and taking note of Clause 11(3) of the Pension Scheme as well
as paragraph 26(6) of the Employees Provident Fund Scheme
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held in paragraph nos. 7, 9 and 10 as follows:
“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 Special Leave
Petition (C) No.7074 of 2014 filed by the
Regional Provident Fund Commissioner
was rejected by this Court by order dated
31.03.2016. 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 Rs.5,000/- or Rs.6,500/-
per month, as the case may be.
9. We do not see how exercise of
option under Para 26 of the Provident
Fund Scheme can be construed to estop the
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under Para 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 Para 26 of the
Provident Scheme is inevitable. Exercise of
the option under Para 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 benefitted 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 employees concerned
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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.”
24. On perusal of the aforenoted judgment, with
utmost humility, this court is of the opinion that the prescription
to the retired employees to exercise such option was not ad
infinitum even after ceasing to be the members of the pension
fund, as the Hon’ble Supreme Court specifically ruled that
exercise of such option under paragraph 26(6) of the EPF
Scheme was 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. The Hon’ble
Supreme Court mandated in clear terms that exercise of the
option under paragraph 26(6) of the EPF Scheme is a necessary
precursor to the exercise of option under Clause 11(3) of the
Pension Scheme.
25. Moreover, in the case of R.C. Gupta joint option
was exercised during the service period of the petitioner therein
and the order to divert the contribution to the pension scheme
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was made by the Hon’ble Supreme Court considering the fact
that the petitioner had retired during the continuation of the
case.
26. Since inception, the matter relating to the
Employees Pension Fund Scheme were litigated in various Fora
and Courts, finally the Hon’ble Supreme Court in the case of the
Employees Provident Fund Organization & Ors. Vs. Sunil
Kumar B., vide its order dated 24.08.2021 referred the matter
to the larger Bench to answer the question as to whether the
decision in the case of R.C. Gupta (supra) would be governing
the principle on the basis of which the case could be disposed
of. The Larger Bench of Hon’ble Supreme Court has in its
penultimate paragraph held as follows:
“44. We accordingly hold and direct:
(i) The provisions contained in the
notification no. G.S.R. 609(E) 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
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scheme brought about by the notification no.
G.S.R. 609(E) 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 cut-off date and thus those
members shall be entitled to exercise option
in terms of paragraph 11(4) of the scheme, as
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it stands at present. Their exercise of option
shall be in the nature of joint options
covering preamended 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 Courts. Thus, all
the employees who did not exercise option
but were entitled to do so but could not due
to the interpretation on cutoff 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 preamendment scheme have already
exited from the membership thereof. They
would not be entitled to the benefit of this
judgment.
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(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.
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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.19171918 of 2018 and Contempt
Petition (C) Nos. 619620 of 2019 in Civil
Appeal Nos. 1001310014 of 2016 are
disposed of in the above terms.
Emphasis supplied
27. From the reading of the aforenoted rulings and the
mandate of the Hon’ble Supreme Court, it would be axiomatic
that the employees, who had retired prior to 01.09.2014 without
exercising any option under paragraph 11(3) of the pre-
amedment scheme have already exited from the membership
thereof. They would not be entitled to the benefits of this
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judgment.
28. Admittedly in the case in hand, the petitioners
have already superannuated after attaining the age of
superannuation way back in the year 2007-2008 itself without
exercising the joint option under paragraph 26(6) of the
Employees Provident Fund Scheme, 1952, which is ruled to be
necessary precursor to exercise option under proviso to Clause
11(3) of the Pension Scheme. No such step had ever been taken
by the petitioners along with the Management of the
Corporation, as such the decision of the Board of Directors of
the Corporation to contribute of higher wages held to be not a
valid option; similarly any correspondence in this regard by the
Employees Provident Fund Organization, Head Office has also
got no applicability upon the case of the petitioners.
29. In view of the aforesaid facts, circumstances and
the position obtaining in law, this Court does not find any merit
in the present writ petition and, accordingly, the same stands
dismissed.
30. However, in the interest of justice, it would be
appropriate to observe that in case any excess contribution has
either been realized by the Corporation and deposited to the
EPFO from the wages/salary of the petitioners, the same shall
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be immediately refunded to the petitioners preferably within a
period of eight weeks from the date of receipt/production of a
copy of this order along with the statutory interest at the rate of
6% per annum.
(Harish Kumar, J)
uday/-
AFR/NAFR NAFR CAV DATE 17.09.2024 Uploading Date 21.12.2024 Transmission Date NA