Research › Search › Judgment

Andhra High Court · body

2005 DIGILAW 565 (AP)

K. Laxmibai v. Provident Fund Commissioner, A. P.

2005-06-29

RAMESH RANGANATHAN

body2005
RAMESH RANGANATHAN, J. ( 1 ) A poor widow, knocks the door of this court seeking pension underthe Employees family Pension Scheme, 1971 (for brevity the Scheme ). ( 2 ) CONSIDERING her plight, I enquired from sri R. N. Reddy, learned Standing Counsel, whether he could impress upon his clients to consider her case sympathetically and provide family pension to the hapless widow, who approached this Court 12 years ago, and who, now, must be around 65 years of age. On instructions from the Respondent authorities, Sri R. N. Reddy informed this court that, there are several such cases which are pending with the Provident Fund department, and indulgence shown in one case, contrary to statutory provisions, would result in a large number of similar claims being made. This necessitated the writ petition being heard on merits. ( 3 ) THE facts, relevant for the purpose of this writ petition, are that the petitioner s husband Sri K. Manikyam was an employee of Ajam Zahi Mills, Warangal for over 30 years and was covered under the provisions of the Employees Provident Fund Act. He fell ill and availed medical facilities, for which he was covered under the provisions of the employees State Insurance Act. He suffered employment injury on 14-1-1987, and was on leave from 14-1-1987 to 13-8-1987 and again from 1 -2-1987 to 11-2-1987. This leave was duly sanctioned to him. He resumed duty on 12-2-1987, but unfortunately collapsed at the work place at 9. 30 a. m. , on the same day and on being rushed to the hospital, was pronounced dead. The petitioner made an application to the second respondent, for grant of family pension in view of the long standing service put in by her late husband, which was rejected on the ground that there was an earlier break of more than one year in the reckonable service of the petitioner s late husband from 8-11-1985 to 30-12-1986. The petitioner s representation to the Central Provident Fund commissioner, New Delhi, was referred to the second respondent, and ultimately, the second respondent vide letter dated 23-5-1990, informed the head office as well as the petitioner that in view of the break in reckonable service of the petitioner s husband from November, 1985 to December, 1986, and also during January and February, 1987, the petitioner s request for payment of family pension could not be acceded to. ( 4 ) IT is not in dispute that the petitioner s husband was continuously absent from service without wages from 8-11-1985 to 30-12-1986 and that her request for grant of family pension was rejected by the second respondent only on the ground that the petitioner s husband was continuously absent without wages for more than one year during the period 8-11-1985 to 30-12-1986. ( 5 ) THE question which therefore arises for consideration is as to whether absence of an employee continuously for more than one year without wages disentitles his widow from seeking family pension and, if so, the manner in which the one year period is to be reckoned? ( 5 ) THE question which therefore arises for consideration is as to whether absence of an employee continuously for more than one year without wages disentitles his widow from seeking family pension and, if so, the manner in which the one year period is to be reckoned? ( 6 ) IN this regard, reference may be made to paragraph 2 (f) of the Employees Family pension Scheme, 1971, which, at the relevant time, read thus: reckonable service means service rendered by a member of the Family pension Fund in respect of which contributions are payable under the scheme [and includes any period of service in respect of which no wages are drawn by such member on account of temporary closure of the establishment, strike, lock-out or leave without pay, or for any other reason, of a similar nature or otherwise, and in respect of which contributions (both the member s and employee s shares) are payable by diversion from his Provident fund Account as provided in sub- paragraph (2-A) of paragraph 9 of this scheme [land also includes any period of service in tespectof which wages are drawn but no contributions are payable in terms of sub-paragraph (4) of paragraph 9 and which shall be deemed to have been paid for purposes of paragraph 28,31 and 32 of this Scheme]: provided that nq period of service, in respect of which no wages are drawn by a member, - (i) after the name of the member has been struck off from the rolls of the employer of the member; or (ii) which is in excess of one year; or (iii) after there ceases to be any amount in the Fund or in the provident fund of an exempted establishment, as the case may be, lying to the credit of the member concerned, shall be treated as reckonable service;] paragraphs 6 and 9 (2-A) of the Scheme, read thus: para 6: Retention of membership:- A member of the Family Pension Fund shall continue to be a member of the family Pension Fund till he attains the age of 60 years or till he retires or quits the service and withdraws or becomes entitled to withdraw the benefits to which he is entitled under this Scheme or dies during the period of reckonable service, whichever is the earliest: [provided that where there has been a break in the membership of the Family pension Fund on account of closure of an establishment, strike, lock-out, leave without pay, retrenchment, resignation, termination, discharge or for any other such reason and the period of such break between two spells of reckonable service either under the same establishment or under different establishments covered under the Act does not exceed one year, such member, if he has not withdrawn the benefit to which he is entitled under this scheme and his provident fund accumulations under the Employees provident Funds Scheme, 1952, or the provident Fund Scheme of an exempted establishment, as the case may be, shall continue to be a member of the family Pension Fund: provided further thatsuch breaks during which no contributions to the Family pension Fund are payable shall be excluded from the total reckonable service. ] [explanation.- Under this paragraph the age of 60 shall be determined with reference to the date of birth where, however, the exact date of birth is not given by the member, the age shall be determined in the following manner: (1) where the year of birth is given but not the exact date, 1st July shall be treated as the date of birth; (2) where the year and month of birth are given, the 16th of the month shall be treated as the date of birth; and (3) where only the age is indicated the member shall be assumed to have completed that age on the date of the medical certificate accompanying Form 2 and where no medical certificate is attached to form 2, on the date of filing Form 2. ] para 9 (2-A): The Commissioner or in the case of an exempted establishment the authority incharge of the provident fund of that establishment, on being satisfied that there is a period of service without wages which is to be treated as reckonable service, under sub- paragraph (f) of Paragraph 2 of this scheme, shall remit to the Family pension Fund, from and out of the amounts contributed respectively by the employer and employee and lying to the member s credit together with interest thereon, in the Fund or in the provident fund of the exempted establishment, as the case may be, an amount equal to the contributions payable at the rates specified in sub- paragraph (1) by the employer and the employee for the said period and the central Government shall also contribute for the said period an amount equal to the contributions payable at the rates specified in sub- paragraph (2 ). ] it is clear from proviso (ii) to Para 2 (f) of the scheme that when the period of service, in respect of which no wages were drawn by a member, exceeds one year it shall not be treated as reckonable service. Under Para 6, a member of the Family Pension Fund shall continue to be a memberthereof till he attains the age of 60 years or till he retires or quits the service or dies during the period of reckonable service whichever is earliest. . . . . . . Under Para 6, a member of the Family Pension Fund shall continue to be a memberthereof till he attains the age of 60 years or till he retires or quits the service or dies during the period of reckonable service whichever is earliest. . . . . . . (emphasis supplied) ( 7 ) WHILE there is no dispute that the petitioner s husband died before he attained the age of 60 years, the question which arises for consideration is as to whether his death was during the period of reckonable service and as to whether the period of service in which he did not draw wages as a member i. e. , from 8-11-1985 to 30-12-1986 could be treated as reckonable service? ( 8 ) SRI V. Hariharan, learned Counsel for the petitioner, contends that if a calendar year i. e. , from 1 st January to 31 st December is taken as the one year period under proviso (ii) to Para 2 (f), then the petitioner s husband was not absent in excess of one year inasmuch as even for the year 1986, he was absent only till 30-12-1986 and had worked for one day on 31-12-1986. He contends that even if a financial year is taken as the period of one year i. e. from the first of april of a year till the 31st March of the succeeding year, even then the petitioner cannot be said to have been absent for more than one year i. e. , in both the financial years of 1985. and 1986. It is his case that the interpretation placed by the respondents on proviso (ii) to para 2 (f) of the scheme, and the mode and manner adopted by them in determining reckonable service as per para 2 (f) of the scheme is erroneous. ( 9 ) SRI R. N. Reddy, learned Standing counsel for the respondents submits that the period of one year as prescribed in proviso (ii) to Para 2 (f) of the scheme has necessarily to mean a continuous period of 12 months commencing from the first day 6f absence of the employee till he again rejoins duty, provided, of course, that during this period he was not entitled for payment of wages. He submits that during this period of 12 months, the employee does not make any contribution to the fund. He submits that during this period of 12 months, the employee does not make any contribution to the fund. Sri R. N. Reddy further contends that if this period of absence of 12 continuous months is taken as the basis, and since the petitioner s husband did not work for a period of more than 12 months and was not paid wages during the said period from 8-11-1985 to 30-12-1986, the period of continuous absence, in respect of which no wages were drawn by him, is in excess of one year and this period exceeding one year cannot be treated as reckonable service in view of proviso (ii) to Para 2 (f) of the Scheme. Learned counsel fairly submits that proviso (ii) to Para 2 (f) was omitted with effect from 1 -4-1988 which unfortunately does not enure to the petitioner s benefit since her husband s continuous absence of more than one year from 8-11-1985 to 30-12-1986 was prior thereto. While sympathizing with the petitioner s plight, Sri R. N. Reddy submits that in the absence of fulfillment of the requirements of "reckonable service" under para 2 (f), the deceased employee (petitioner s husband) ceases to rota in membership of the fund under Para" 6 of the employees Family Pension Scheme, 1971, and as a result his family is not entitiled for pension under the Scheme. ( 10 ) WHILE the contentions of sri V. Hariharan the learned Counsel for the petitioner, that either a calendar year or a financial year has to be taken as the basis for computing the period of one year, are no doubt attractive, considering the provisions of the Scheme, on reading the various provisions thereof harmoniously and taking into consideration the purpose for which such a provision has been made, this contention cannot be accepted. Para3of the Employees family Pension Scheme relates to membership of the Family Pension Fund, para 4 relates to option for joining the Scheme and thereunder only employees who are members of the Provident Fund are entitled to exercise option to join the Family Pension scheme. Para 9 relates to Family Pension fund and under Sub-Para (1) thereof, from out of the contributions payable by the employer and employee each month to the provident Fund, a part of the contribution is required to be remitted to the Employees family Pension Scheme. Para 9 relates to Family Pension fund and under Sub-Para (1) thereof, from out of the contributions payable by the employer and employee each month to the provident Fund, a part of the contribution is required to be remitted to the Employees family Pension Scheme. Under Para 9 (2) the Central Government also contributes to the scheme at the rate prescribed. During the period of continuous absence from service without wages for a period of one year, there is no contribution either from the employee or the employer towards the Family Pension fund. While a shorter period of non- contribution to the Pension Fund has been permitted to be condoned, a period of one year when no contribution is made to the family Pension Fund disentitles the member s family to the benefit of Family pension underthe Scheme. This prescription, while placing a limit on the power of authorities to condone the break in contribution, also acts as a deterrent, thereby ensuring that payment of contributions to the Family pension Fund are not avoided altogether. If, as contended by Sri V. Hariharan, learned counsel for the petitioner, a calendar year were to be taken as the basis, and if for instance in the two calendar years of 1985 and 1986, an employee is present on the 31 st of December in each of these years and is absent on all the remaining 364 days, he would still be stated not to have been absent for one year despite the fact that except for one day he was absent for the remaining period of two years. The contention that a financial year has to be taken as the basis is also devoid of merit. Financial years are normally taken as the basis only in fiscal statutes or in accounting systems. Neither the provisions of the Employees Provident fund Act nor the provisions of the Employees family Pension Scheme enable such an interpretation being placed. As such the period of one year prescribed in proviso (ii) of para-2 (f) of the Employees Family Pension scheme can neither be said to be a calendar year nor a financial year. Neither the provisions of the Employees Provident fund Act nor the provisions of the Employees family Pension Scheme enable such an interpretation being placed. As such the period of one year prescribed in proviso (ii) of para-2 (f) of the Employees Family Pension scheme can neither be said to be a calendar year nor a financial year. ( 11 ) I find considerable force in the submission of the learned Standing Counsel that the period of one year is the period of 12 continuous months commencing from the first day of absence of an employee till the date on which he resumes duty. While the manner in which the period of one year, prescribed in proviso (ii) to Para 2 (f) is to be determined, is not laid down, on a reasonable and harmonious construction thereof and on considering the purpose for which it has been made, it has to be held that the period starting from the initial date of absence till the day the employee joins duty i. e. , any continuous period of absence of 12 months or 365/366 days would be the period of one year under proviso (ii) to Para 2 (f) of the employees Family Pension Scheme, 1971. Taking this as the basis, since the petitioner s husband was absent from duty and did not receive wages during the period of more than one year from 8-11 -1985 till 30-12-1986, his case falls squarely within proviso (ii) to para 2 (f) of the scheme, and as such, the petitioner is not entitled for payment of family pension. ( 12 ) SRI V. Hariharan, learned Counsel for the petitioner places reliance on a judgment of the Karnataka High Court in ratnamma v. Regional Provident Fund Commissioner" wherein it was held that, Social beneficial legislations must be construed so as to benefit the class of people for whose benefit they are made, so as to make them serve the object intended to be achieved and in this context, the term reckonable service takes within its fold the period of lay off also inasmuch as reckonable service includes any period of service in respect of which no wages were drawn by a member on account of temporary closure of the establishment, strike lock-out or leave without pay, or for any other reason, of similar nature or otherwise. ( 13 ) IT may be noticed that in the judgment of the Karnataka High Court, proviso (ii) to para 2 (f) of the scheme, (which relates to the period of service in respect of which no wages were drawn by a member in excess of one year), did not arise for consideration. The aforesaid judgment of the Karnataka high Court has, therefore, no application to the facts of the present case. ( 14 ) SRI V. Hariharan, learned counsel for the petitioner, further submits that para 9 (2-A) of the Scheme confers a discretion on the first respondent to condone the absence and since the case of the petitioner deserves sympathy, the first respondent ought to be directed to exercise his discretion under Para 9 (2-A), condone the absence and make available the benefits of family pension to her. While I am in total agreement that the petitioner s case deserves sympathetic consideration, I am unable to accept the contention that Para 9 (2-A) confers power on the first respondent to condone the period of continuous absence of more than one year without wages. The pre-requisite for exercise of powers under Para 9 (2-A) is the satisfaction being arrived at by the commissioner that there is a period of service without wages which is to be treated as reckonable service under Para 2 (f) of the scheme. Since proviso (ii) to Para 2 (f) specifically provides that no period of service, in respect of which no wages are drawn by a member which is in excess of one year, shall be treated as reckonable service, the commissioner is disentitled, in such cases, from arriving at the satisfaction which is a pre-requisite for exercise of power under para 9 (2-A) of the Scheme. The discretion conferred on the Commissioner under para 9 (2-A) is not available in cases where the period of continuous absence without wages of a member is in excess of one year. ( 15 ) "hard CASES MAKE BAD LAW" is a phrase used to indicate judicial decisions which, to meet a case of hardship to a party, are not entirely consonant with the true principles of Law. While the petitioner s plight deserves sympathy, no relief can however be granted contrary to law. ( 15 ) "hard CASES MAKE BAD LAW" is a phrase used to indicate judicial decisions which, to meet a case of hardship to a party, are not entirely consonant with the true principles of Law. While the petitioner s plight deserves sympathy, no relief can however be granted contrary to law. ( 16 ) UNFORTUNATE, though it may be, the interpretation placed by the respondent authorities on proviso (ii) to Para 2 (f), Para 6 and Para 9 (2-A) of the Scheme, in my view, is valid and denial of pension is only because the petitioner is not entitled for the said benefit under the Employees Family Pension scheme, 1971. ( 17 ) THE writ petition is, accordingly dismissed. There shall, however, be no order as to costs.