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2011 DIGILAW 2412 (MAD)

Shamshad v. Regional Provident Fund Commissioner-II, Vellore

2011-04-27

K.CHANDRU

body2011
Judgment :- 1. In this writ petition, the petitioner challenges an order, dated 15.10.2007 passed by the respondent Regional Provident Fund Commissioner-II, Vellore. By the impugned order, the petitioner was informed that her petition cannot be entertained under Para 7 of the Employees Family Pension Scheme, 1971, since the subscriber employee, i.e., the husband of the petitioner late Salam was neither alive nor in employment. The act also contemplates hearing of an employee as a legal requirement for taking decision under Para 7. 2. In the writ petition notice was ordered to the respondent. Subsequently, it was admitted on 30.10.2009. Accordingly, Ms.V.J.Latha, learned counsel appearing for the respondent. But no counter affidavit was filed. 3. The case of the petitioner was that she was a widow of late Salam, who was an employee of a Beedi Manufacturer by name S.P.Abdul Raheem Son from 1.1.1980 to 4.3.1991. He died on 4.3.1991 while he was in service. He was a member of the Employees' Provident Fund. Since the employer had refused to pay the petitioner's husband's terminal benefits, i.e., gratuity and other benefits on the ground that he was not their employee, but an employee of one Contractor Mr.K.Nishar Ahamed, 99 Mark Beedi' contractor, she filed an application before the Controlling Authority under Payment of Gratuity Act, 1972, claiming gratuity. The said gratuity case was taken on file as P.G.Case No.136/02. In that case, M/s.S.P.Abdul Raheem Son, manufacturer of 99 Mark Beedi' and the Contractor K.Nishar Ahamed were made as respondents. The employer remained absent. The Contractor did not deny the fact that her husband had worked under him. 4. Before the authority, a copy of the Employees' Provident Fund and Family Pension Scheme certificate was also filed. The Controlling Authority by an order dated 26.07.2003 has held that the petitioner's husband was an employee of the manufacturer and that as a legal heir, the petitioner was entitled to get the gratuity. As per the said direction, she had also received gratuity from the said employer. Till his death, the petitioner's husband was the member of the Employees Family Pension Scheme, 1971 and he died while in service. Therefore, the petitioner as a widow is entitled to get the benefits under the scheme. The Family Pension Scheme, 1971 applies to all employees working in the factory and the other establishments to which the Act applies. Till his death, the petitioner's husband was the member of the Employees Family Pension Scheme, 1971 and he died while in service. Therefore, the petitioner as a widow is entitled to get the benefits under the scheme. The Family Pension Scheme, 1971 applies to all employees working in the factory and the other establishments to which the Act applies. There was no dispute regarding the application of the Act and the Scheme. Once the Act applies to an employer, equally the Family Pension Scheme, 1971 will also apply. 5. The petitioner's husband died on 4.3.1991 and as per para 29 of the Scheme, she is entitled to get pension. Since the petitioner was not paid pension under the Employees' Family Pension Scheme, 1971, she made an application to the respondent to decide her eligibility under the Scheme. The respondent relying upon para 7 which provides for resolution of doubts under 1971 Scheme (which is now paragraph 8 under 1995 Scheme) had refused to decide the issue. Para 7 reads as follows: "Para 7. Resolution of doubts- If any question arises whether an employee is entitled to become a member of the Family Pension Fund, the decision thereon of the Regional Commission shall be final : Provided that no decision shall be given unless both the employer and the employee have been heard". 6. As the Scheme contemplates hearing of employee, the respondent on an erroneous impression had refused to decide the matter. If due to the reason that the proviso provides for both employer and employee to be heard before passing a final order and for that purpose the employee must be alive to decide any doubt regarding the application of the Act is accepted, then in case if an employer dies, who happens to be the sole Proprietor, then in such case no question can be decided by the Provident Fund Authorities. It is a strange logic adopted by the respondents. Wherever an hearing is contemplated before determination, it is only based upon the concept of principles of natural justice. If any determination of such a question arise, then under para 7 of the 1971 Scheme or under para 8 of the 1995 Pension Scheme, certainly the term "employer" and "employee" found therein must include the legal heirs also. Wherever an hearing is contemplated before determination, it is only based upon the concept of principles of natural justice. If any determination of such a question arise, then under para 7 of the 1971 Scheme or under para 8 of the 1995 Pension Scheme, certainly the term "employer" and "employee" found therein must include the legal heirs also. Otherwise, the benefit conferred by the scheme will stand deprived only because during the hearing the employee was not physically present. That is not the intention of the framers of the scheme. It was on a literal meaning of the proviso, the respondents had rejected the case of the petitioner. It must be noted that it is only a personal action which may die with the person and not other issues. 7. The Supreme Court has held that notwithstanding the death of a Government servant, a punishment order imposed on him can be challenged by his legal heirs and they have locus standi to pursue the case vide its judgment in Rameshwar Manjhi v. Sangramgarh Colliery reported in (1994) 1 SCC 292 . The following passages found in paragraphs 8,10,11,12,13,15 and 16 may be usefully reproduced below: "8. We are not inclined to agree with the view taken by the learned Judges of the Assam, Patna, Delhi and Orissa High Courts. 10. Patna High Court fell into patent error in relying upon clauses (c) and (d) of Section 18(3) of the Act for reaching the conclusion that the heirs of a deceased workman are not entitled to be substituted in the proceedings before the Tribunal. Section 18(3) of the Act enumerates the parties who are bound by the settlement arrived at in the manner provided therein. Clause 18(3)(c) refers to a party to the settlement who is an employer and further provides that the settlement shall be binding not only on the employer but his heirs, successors or assigns in respect of the establishment to which the dispute relates. The said provision is obviously to safeguard the interest of the workmen in the sense that after the death of the employer his heirs, successors or assigns may not say that they are not bound by the settlement. The said provision is obviously to safeguard the interest of the workmen in the sense that after the death of the employer his heirs, successors or assigns may not say that they are not bound by the settlement. It was not necessary to make similar provision in Clause 18(3)(d) because the party referred to in the said clause is composed of workmen and as such the death of an individual workman cannot have any effect on the binding nature of the settlement. The provisions of Section 18(3) of the Act have been enacted by the legislature with a view to give continuity to the binding effect of the settlements reached between the parties under the Act. Patna High Court was not justified in relying upon the provisions of the said section for the purpose of denying a right to the heirs of a deceased workman to be substituted in a pending industrial dispute. 11. We do not agree with the viewpoint of Delhi and Orissa High Courts to the effect that the claim for computation under sub-section (2) of Section 33-C of the Act dies with the death of the workman. It is difficult to understand why a claim of money which became payable to the deceased workman should not be claimable, upon satisfaction of other relevant conditions, by the heirs of the deceased workman by making a claim under sub-section (2) of Section 33-C of the Act. Having regard to the well-established principle that all causes of action - except those which are known as dying along with the death of a person - must survive to his heirs, the cause of action created in favour of workman under sub-section (2) of Section 33-C of the Act should in normal circumstances survive to the heirs. We approve the reasoning of the Bombay High Court in Sitabai case7. 12. The maxim “actio personalis moritur cum persona” though part of English Common Law has been subjected to criticism even in England. It has been dubbed as unjust maxim, obscure in its origin, inaccurate in its expression and uncertain in its application. It has often caused grave injustice. We approve the reasoning of the Bombay High Court in Sitabai case7. 12. The maxim “actio personalis moritur cum persona” though part of English Common Law has been subjected to criticism even in England. It has been dubbed as unjust maxim, obscure in its origin, inaccurate in its expression and uncertain in its application. It has often caused grave injustice. This Court in a different context, in considering the survival of a claim for rendition of accounts, after the death of the party against whom the claim was made, in Girja Nandini Devi v. Bijendra Narain Choudhury observed as under: “The maxim “actio personalis moritur cum persona” - a personal action dies with the person - has a limited application. It operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries not causing the death of the party, and in other actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory. An action for account is not an action for damages ex delicto, and does not fall within the enumerated classes. Nor is it such that the relief claimed being personal could not be enjoyed after death, or granting it would be nugatory.” 13. It is thus obvious that the applicability of the maxim “actio personalis moritur cum persona” depends upon the “relief claimed” and the facts of each case. By and large the industrial disputes under Section 2-A of the Act relate to the termination of services of the concerned workman. In the event of the death of the workman during pendency of the proceedings, the relief of reinstatement, obviously, cannot be granted. But the final determination of the issues involved in the reference may be relevant for regulating the conditions of service of the other workmen in the industry. Primary object of the Act is to bring industrial peace. The Tribunals and Labour Courts under the Act are the instruments for achieving the same objective. It is, therefore, in conformity with the scheme of the Act that the proceedings in such cases should continue at the instance of the legal heirs/representatives of the deceased workman. Even otherwise there may be a claim for back wages or for monetary relief in any other form. It is, therefore, in conformity with the scheme of the Act that the proceedings in such cases should continue at the instance of the legal heirs/representatives of the deceased workman. Even otherwise there may be a claim for back wages or for monetary relief in any other form. The death of the workman during pendency of the proceedings cannot deprive the heirs or the legal representatives of their right to continue the proceedings and claim the benefits as successors to the deceased workman. 15. In Bank of Baroda v. Workmen a Division Bench of the Gujarat High Court, followed the reasoning of Chandrasekhara Menon, J. in Gwalior Rayons case3. B.J. Divan, C.J. speaking for the Bench quoted verbatim from Gwalior Rayons case and in addition observed as under: “It may be pointed out that under Section 306 of the Indian Succession Act, “All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease, survive to and against his executors or administrators; except causes of action for defamation, assault, as defined in the Indian Penal Code, or other personal injuries not causing the death of the party; and except also cases where, after the death of the party, the relief sought could not be enjoyed or granting it would be nugatory.” In this context, it must be pointed out that, so far as the granting of relief of reinstatement is concerned, it would be nugatory on the death of the workman concerned pending the reference before the Tribunal or the Labour Court, as the case may be. However, reinstatement involves the concept of back wages also and very often the Tribunal has to pass orders providing for the back wages from the date of wrongful termination of the services till the date of reinstatement. It is only under the Industrial Disputes Act that in the field of industrial relations, the Tribunal concerned can direct reinstatement of the workman. Under the ordinary civil law, it is not open to a civil court to direct reinstatement of a workman. The only thing that a civil court can do is to provide for damages for wrongful termination of service or wrongful dismissal. Under the ordinary civil law, it is not open to a civil court to direct reinstatement of a workman. The only thing that a civil court can do is to provide for damages for wrongful termination of service or wrongful dismissal. Again, the whole concept under the Industrial Disputes Act of the Tribunal ascertaining whether the termination of services was proper, legal and just, is unknown to the civil courts. So, in the case of a deceased workman where the reference is under Section 2-A of the Industrial Disputes Act, the heirs and legal representatives can agitate the question, firstly, whether the termination of the deceased workman was just, legal and proper, and secondly, if it was wrongful and invalid, then, what compensation in terms of money could have been given to the workman from a particular date fixed by the Tribunal till the date of reinstatement and if reinstatement cannot be granted because of the death of the workman, till the date of his death. It is therefore in this context of Section 306 of the Succession Act that the right to prosecute these special proceedings before the Industrial Tribunal survives to the administrators, executors, heirs and legal representatives of the deceased workman. It is only a cause of action for personal injury or in the case of defamation or assault or battery or malicious prosecution which cannot be said to survive after the death of person concerned.” 16. We have quoted in extenso the reasoning of the Kerala High Court in Gwalior Rayons case and of the Gujarat High Court in Bank of Baroda case. We agree with and approve the reasoning and the conclusions reached therein."(Emphasis added) 8. The above said judgment came to be quoted with approval in an another judgment of the Supreme Court in V. Veeramani v. Madurai Distt. Coop. Supply and Marketing Society Ltd. reported in 1995 Supp (3) SCC 557. The following passage found in paragraph 3 may be usefully extracted below: "3. This makes it clear that although the amendment came into operation from 21.8.1984 the Legislature by the said amendment only wanted to make clear the law on the subject which according to it was prevalent from the very inception. The following passage found in paragraph 3 may be usefully extracted below: "3. This makes it clear that although the amendment came into operation from 21.8.1984 the Legislature by the said amendment only wanted to make clear the law on the subject which according to it was prevalent from the very inception. Thus it is clear that the industrial dispute would neither abate nor otherwise come to an end merely because the workman who was a party to the dispute had died pending the adjudication of the dispute. 9. The issue can also be looked in a different angle. The services rendered by the respondent PF Department is covered by the provisions of the Consumer Protection Act, 1986. It has been held that the service rendered by the PF department is a "service" within the meaning of Section 2(1)(o) of the Consumer Protection Act. The members of the Provident Fund are Consumers within the meaning of Section 2(1)(d) of that Act. In case of deficiency of service, the provisions of the Consumer Protection Act can be invoked against the Provident Fund Commissioner by the members of the Employees Provident Fund Scheme. 10. The members of the Provident Fund are Consumers within the meaning of Section 2(1)(d) of that Act. In case of deficiency of service, the provisions of the Consumer Protection Act can be invoked against the Provident Fund Commissioner by the members of the Employees Provident Fund Scheme. 10. The terms "complainant" and "consumer" are defined as follows: (b) “complainant” means- (i) to (iv )omitted [(v) in case of death of a consumer, his legal heir or representative;] (d) “consumer” means any person who, - (i)buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ii)[hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose];(Emphasis added) 11. The Supreme Court in Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi reported in (2000) 1 SCC 98 has held that the department is covered by the provisions of the PF Act. If that is so, the petitioner can be a complainant as she is the legal heir of the deceased Salam as per the definition of the Act. Therefore, she can bring an action even before a Consumer Forum. 12. The applicability of the 1971 Pension Scheme does not depend upon any oral statement of an employee and it depends upon the records. Therefore, all that the proviso to para 7 of the 1971 Scheme merely states is that the determination has to be made after hearing of employee or employer as the case may be. 12. The applicability of the 1971 Pension Scheme does not depend upon any oral statement of an employee and it depends upon the records. Therefore, all that the proviso to para 7 of the 1971 Scheme merely states is that the determination has to be made after hearing of employee or employer as the case may be. It only means either employee or his legal heir or any person authorised by the employee. If such an extended definition of the term employee is not given, then it may likely to result in prejudice being caused to employees or his legal heirs. Every labour legislation had construed the term "employee/workman" as one including a retired workman or in case of death, his legal heirs or authorised representative and had assured locus standi to them to pursue their claims against authorities concerned. 13. In view of the above, the impugned order is liable to be set aside. Accordingly, the impugned order will stand set aside. The matter is remanded to the respondents for determination of the petitioner's claim to get pension under the 1971 Pension Scheme. This exercise shall be carried out within a period of two months from the date of receipt of copy of this court. The writ petition will stand allowed. However, there will be no order as to costs.