A. M. Shakkaravarthy Raja v. Chairman, Neyveli Lignite Corporation Ltd.
2012-07-20
VINOD K.SHARMA
body2012
DigiLaw.ai
Judgment :- 1. This judgment shall dispose of the following writ petitions, as the common question of law and facts are involved in all these writ petitions. 2. The petitioners joined Neyveli Lignite Corporation prior to 01.03.1971 and retired before and after 16.11.1995. In the year 1996, the Government of India enacted the Employees Pension Scheme 1995 for employees who are working in the public and private sector. 3. The Pension scheme was made applicable to the following categories: (a) Who on or after 16.11.1995 become a member of Provident Fund of the Factories and other establishments exempted by the Appropriate Government as per section 17 of the Employees Provident Fund and Miscellaneous Act, 1972 or whose case exemption has been granted under paragraph 27 or 27-A of the Employees Provident Fund Scheme, 1952 from the date of such member. (b) Who has been member of the ceased Employees Family Pension Scheme, 1971 before the commencement of Scheme from 16.11.1995. (c) Who ceased to be a member of the Employees Family Pension Scheme, 1971 between 01.04.1993 and 15.11.1995 and opts to exercise the option under para 7. (d) Who has been a member Employees Provident Fund or Provident Funds of Factories and other establishments exempted by the appropriate Government under section 17 of the Act or in whose case exemption has been granted under paragraph 27 of 27-A of the Employees Provident Fund Scheme, 1972, on 15.11.1995 but not being the member of the ceased Employees Provident Fund Scheme 1971 and opts exercise his option under paragraph 7. 4. It is submitted by the petitioner that employees who were not the members of earlier Family Pension Scheme 1971 and who retired after 16.11.1995 were also eligible to avail benefit of the Employees Pension Scheme 1995 by remitting the EPS components with interest upto date. 5. It is submitted that the petitioners are entitled to the benefit of the Employees Pension Scheme 1995, as under the Scheme, the employer of the petitioner was under legal obligation to issue circular and get option from the employees for their willingness to join the Employees Pension Scheme 1995. The second respondent failed in its obligation in seeking option from the employees who are on roll as on 16.11.1995. 6. It is submitted by the petitioner that in the year 1997 M/s.Neyveli Lignite Corporation announced a Scheme viz., Employees Group contributory Superannuation Scheme 1997.
The second respondent failed in its obligation in seeking option from the employees who are on roll as on 16.11.1995. 6. It is submitted by the petitioner that in the year 1997 M/s.Neyveli Lignite Corporation announced a Scheme viz., Employees Group contributory Superannuation Scheme 1997. Under this Scheme, the amounts were collected from the employees and deposited with Life Insurance Corporation of India and the interest derived from the amount deposited was to be paid as pension to the employees. But this Scheme failed and the amount collected from the employees were returned with interest during the year 2004. The petitioner therefore, requested the second respondent to implement the Employees Pension Scheme 1995. 7. It is the case of the petitioner that inspite of number of representations, M/s.Neyveli Lignite Corporation and the Regional Provident Fund Commissioner did not implement the Scheme on the ground that the Scheme was under challenge in this Court. The writ petition challenging the Scheme was dismissed by this Court. The decision of this Court was challenged before the Hon'ble Supreme Court. 8. The Hon'ble Supreme Court vide order dated 11.11.2003 upheld the validity of the Employees Pension Scheme 1995 and issued direction to the public and private sector to implement the Scheme for all its employees. 9. After passing of the judgment by the Hon'ble Supreme Court, the petitioners and various association submitted several representations from 2003 to 2005 for implementing the Employees Pension Scheme 1995. This representation again was not considered. 10. It is the stand of the petitioner that in view of the order passed by the Hon'ble Supreme Court, the public and private sector undertaking are under legal obligation to implement the Employees Pension Scheme 1995, except the sectors which have the exemption from implementation of the Scheme. M/s.Neyveli Lignite Corporation had submitted a representation for exemption to implement the Scheme, but it was rejected. 11. The action of the respondent in not implementing the Employees Pension Scheme, 1995 is challenged on the ground of it being arbitrary, thus violative of Article 14 of the Constitution of India. 12. It is submitted that M/s.Neyveli Lignite Corporation was under legal obligation to issue circular and get option from the employees of their willingness to join Employees Pension Scheme 1995, but the respondent No.2 failed in its legal obligation. 13.
12. It is submitted that M/s.Neyveli Lignite Corporation was under legal obligation to issue circular and get option from the employees of their willingness to join Employees Pension Scheme 1995, but the respondent No.2 failed in its legal obligation. 13. The writ petition has been filed for issuance of a writ in the nature of mandamus, directing the respondents to implement the Employees Pension Scheme 1995 qua, the petitioners subject to their fulfilling the conditions under the Scheme. 14. M/s.Neyveli Lignite Corporation contested the writ petition by filing counter wherein the stand taken is that in superseding the erstwhile Employees Pension Scheme, 1971, the Government of India introduced a newly formulated Scheme called Employees Pension Scheme 1995. It was applied retrospectively with effect from 16.11.1995. The members of the erstwhile Employees Pension Scheme 1971 who had retired/resigned between 01.04.1993 and 15.11.1995 were also permitted to join newly introduced Pension Scheme by exercising option and refunding the benefits received by them with interest. 15. It is submitted that M/s.Neyveli Lignite Corporation instead of implementing the new Employees Pension Scheme, 1995, formulated a new scheme of its own viz., Employees Group Contributory Superannuation Scheme, 1997 and due to failure of the said Scheme, they collected the amount back from Life Insurance Corporation of India and returned it to the employees with interest during the year 2004. The second respondent also not implemented the Scheme as it was challenged in this Court. 16. It is admitted that the writ petition filed in this Court was dismissed and the Hon'ble Supreme Court upheld the validity of the Employees Pension Scheme, 1995. 17. The stand of the Regional Provident Fund Commissioner is that the Employees Pension Scheme 1995 has been made applicable retrospectively from the date of introduction of new Pension Scheme i.e. from 16.11.1995. But the employees who have retired on superannuation during the period between 01.04.1993 and the date of actual implementation of the Scheme i.e.16.11.1995 were also permitted to become the members of the Employees' Pension Scheme, 1995. 18. The stand of the Regional Provident Fund Commissioner is that as per the Employees' Pension Scheme 1995, a member means an employee who becomes a member of Employees Provident Fund in accordance with provisions of this Scheme.
18. The stand of the Regional Provident Fund Commissioner is that as per the Employees' Pension Scheme 1995, a member means an employee who becomes a member of Employees Provident Fund in accordance with provisions of this Scheme. The explanation to the definition of the member stipulates, that an employee shall cease to be the member of Pension Fund from the date of attaining 58 years of age or from the date of vesting admissible benefits under the Scheme whichever is earlier. Therefore, the persons who have ceased to be an employee on attaining the age of superannation, are not eligible to be members of the Scheme, in view of the explanation. 19. That provision contained in para 6, 7 and 17 of the Employees Pension Scheme 1995 are mandatory, and the members of the Employees Provident Fund Scheme, 1952, who had not attained the age of 58 years and had not got their Provident Fund accumulation finally settled were alone entitled to exercise the option to join the newly introduced Employees' Pension Scheme 1995. 20. It is however admitted in the counter, that in view of rejection of the request of the M/s.Neyveli Lignite Corporation for exemption from implementation of this Scheme, it is mandatory on its part to implement the Employees Pension Scheme, 1995. 21. In order to appreciate the controversy in this writ petition, it will be necessary to refer to certain provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the 1995 Scheme. The relevant portion of Sec.6A of the Act reads as under: "6A. (1) The Central Government may, by notification in the Official Gazette, frame a scheme to be called theEmployees' Pension Scheme for the purpose of providing for : "(b) widow or widower's pension, children pension or orphan pension payable to the beneficiaries of such employees." Relevant provisions of Schedule III reads thus: "MATTER FOR WHICH PROVISION MAY BE MADE IN THE PENSION SCHEME" "2. The time within which the employees who are not members of the Pension Scheme under Section 6A as it stood before the commencement of the Employees' Provident Funds and Miscellaneous Provisions (Amendment) Act, 1996 (hereinafter, in this Schedule, referred to as the amending Act) shall opt for the Pension Scheme." Para 2(ix) reads thus : "2(ix).
The time within which the employees who are not members of the Pension Scheme under Section 6A as it stood before the commencement of the Employees' Provident Funds and Miscellaneous Provisions (Amendment) Act, 1996 (hereinafter, in this Schedule, referred to as the amending Act) shall opt for the Pension Scheme." Para 2(ix) reads thus : "2(ix). "Member" means an employee who becomes a member of the Employees' Pension Fund in accordance with the provisions of this Scheme; (Explanation : An employee shall cease to be the member of Pension Fund from the date of attaining 58 years of age or from the date of vesting admissible benefits under the Scheme, whichever is earlier.) Para6 reads thus : "6.) Membership of the Employees' Pension Scheme. -- Subject to sub-paragraph (3) of paragraph 1, this Scheme shall apply to every employee; "(b) who has been a member of the ceased Employees' Family Pension Scheme, 1971 before the commencement of this Scheme from 16th November, 1995; (c) who ceased to be a member of the Employees' Family Pension Scheme, 1971 between 1st April, 1993 and 15th November, 1995 and opts to exercise his option under paragraph 7. Para7 reads thus : "7.) Option for joining the Scheme. -- (1) Members referred to under sub-paragraph (c) of paragraph 6 who have died between 1st April, 1993 and 15th November, 1995 shall be deemed to have exercised the option of joining the Scheme on the date of his death. (2) Members referred to in sub-paragraph (c) of paragraph 6 who are alive shall have the option to join the Scheme as per the provisions of paragraph 17 from the date of exit from the employment. Para17 reads thus : "17.) Payment on exercise of option. --(1) Beneficiaries of the deceased members of Employees' Family Pension Scheme, referred to in sub-paragraph (1) of paragraph 7, shall receive higher of the benefits available under the Employees' Family Pension Scheme, 1971 and under this Scheme.
Para17 reads thus : "17.) Payment on exercise of option. --(1) Beneficiaries of the deceased members of Employees' Family Pension Scheme, referred to in sub-paragraph (1) of paragraph 7, shall receive higher of the benefits available under the Employees' Family Pension Scheme, 1971 and under this Scheme. (2) Members referred to in sub-paragraph (2) of paragraph 7, shall have the option to join this Scheme by returning the amount of withdrawal benefit received, if any, together with interest at the rate of 8.5 per cent per annum from the date of payment of such withdrawal benefit and the date of exercise of the option, to receive monthly pension as per the provisions of this Scheme." Para18 of the said 1995 Scheme reads thus : "18.) Particulars to be supplied by the employees already employed at the time of commencement of the Employees' Pension Scheme. --Every person who is entitled to become a member of the Employee's Pension Fund shall be asked forthwith by his employer to furnish and that person shall, on such demand, furnish to him for communication to the Commissioner particulars concerning himself and his family in the form prescribed by the Central Provident Fund Commissioner." 22. The aforesaid provision shows that in view of the Paragraph 6 of 1995 Scheme, the Scheme applies to all such employees who were ceased to be the members of the Employees' Provident Fund Scheme 1971 (hereinafter referred to 1971 Scheme) on the commencement of 1995 Scheme from 16.11.1995. It also applies to the persons who ceased to be the member of 1971 Scheme between 01.04.1993 and 15.11.1995, who wants to exercise option under sub-paragraph (1) of Paragraph 7, shows that the member who died between 01.04.1993 and 15.11.1995 shall be deemed to have exercised option of joining the Scheme on the date of his death. Sub-paragraph (2) of the said paragraph shows that the members referred to in sub-paragraph (c) of paragraph 6 who are alive shall have the option to join the Scheme as per the provisions of paragraph 17 from the date of exit from the employment. 23.
Sub-paragraph (2) of the said paragraph shows that the members referred to in sub-paragraph (c) of paragraph 6 who are alive shall have the option to join the Scheme as per the provisions of paragraph 17 from the date of exit from the employment. 23. Paragraph 17 shows that members referred to in sub-paragraph (2) of Paragraph 7, shall have the option to join this Scheme by returning the amount of withdrawal benefit received, if any, together with interest at the rate of 8.5% per annum from the date of payment of such withdrawal benefit till the date of exercise of the option. 24. Paragraph 18 of the 1995 Scheme shows that every person who is entitled to become a member of the Employees' Pension Fund shall be asked forthwith by his employer to furnish and that person shall, on such demand, furnish to him for communication to the Commissioner particulars concerning himself and his family in the form prescribed by the Central Provident Fund Commissioner. 25. Clause 2 of Schedule III of the 1995 of the Act requires that cut-off date shall be prescribed within which the employees who were members of the earlier Scheme shall opt under the Pension Scheme. 26. The reading of the provisions referred to above shows that the 1995 Scheme is automatically made applicable to all such persons who were members of the 1971 Scheme, on 16th November, 1995. It is also clear from sub-paragraph (1) of paragraph 7 that 1995 Scheme would also be made applicable to all such members who were members of the 1971 Scheme and who had died between 1st April, 1993 and 15th November, 1995, due to the deeming provision of they having exercised the option of joining the 1995 Scheme on the date of the death. 27. Insofar as the persons who ceased to be the members of the 1971 Scheme between 1st April, 1993 to 15th April, 1995, the 1995 Scheme would be applicable to them if they opt to exercise option under para 7. Sub-paragraph (2) of para 7 would show that such members will have the option to join the Scheme as per the provision of paragraph 17 from the date of the exit from the employment.
Sub-paragraph (2) of para 7 would show that such members will have the option to join the Scheme as per the provision of paragraph 17 from the date of the exit from the employment. Paragraph 17 would show that if such members decide to opt for the 1995 Scheme, they will have to refund benefits received by them under the earlier Scheme along with interest @ 8.5% per annum from the date of withdrawal of benefit. 28. Para 18 required the employer to ask every person who is entitled to become a member of the 1995 Scheme to furnish and that person on such demand is required to furnish to the employer for communication to the Commissioner, the particulars concerning himself and his family in the form prescribed by the Central Provident Fund Commissioner. 29. It is not disputed that no cut-off date has been prescribed for giving option to join 1995 Scheme. Para 18 makes it clear that it is a primary responsibility of the employer to seek particulars from the person who is entitled to become a member of 1995 Scheme and to furnish such particulars to the Commissioner. It is not admitted that the respondent No.2 did not seek particulars from the petitioner nor public notice was published calling for such particulars from the persons who are entitled to benefit of Employees Pension Scheme 1995. 30. The contention of the learned counsel for the respondents that a person who has retired or has attained the age of 58 years in view of the explanation to paragraph 2(ix) and in view of the fact that the petitioner have taken the retiral benefits and therefore, they are ceased to be the member, cannot be accepted. 31. The perusal of paragraph 6(c) itself shows that all such persons who ceased to be a member of the Employees Family Pension Scheme, 1971 between 01.04.1993 to 15.11.1995 were entitled to become the members of the said Scheme. Had the employer exercises the statutory obligation under paragraph 18 of the 1995 Scheme, the petitioners could have opted for the Scheme. The provisions of the Act as well as provisions of 1995 Scheme are enacted with the object of providing social security to the retired persons and their dependants. 32.
Had the employer exercises the statutory obligation under paragraph 18 of the 1995 Scheme, the petitioners could have opted for the Scheme. The provisions of the Act as well as provisions of 1995 Scheme are enacted with the object of providing social security to the retired persons and their dependants. 32. The object of the Scheme therefore is to provide the Pensioner, a life free from want, decency, independent and self respect and to have status equivalent at preretirement level. 33. The Employees Pension Scheme 1995 is beneficial piece of legislation and therefore, interpretation to the Scheme has to be given to advance the object to be achieved by the Scheme; i.e. to provide pension to the eligible members. Paragraph 6 (d) of the Scheme leaves no manner of doubt that even persons who were not members of the Family Pension Scheme 1971, could also opt under para 7 of the Scheme. Para 7 further provides that the persons covered under para 6(d) shall have option to join the Scheme as per the provisions of paragraph 17. Paragraph 17(2) removes any doubt with regard to the eligibility of the petitioner, as it provides that the members would have option to join the Scheme by returning the amount of withdrawal benefits received if any, together with interest @ 8.5.% per annum from the date of said withdrawal of the benefit till the date of exercise of option, to receive the monthly pension as per the provisions of the Scheme. Therefore, the persons who attained the age of superannuation, and stand retired from service are also entitled to opt for the pension scheme by depositing the withdrawal benefits with interest, which is available only on retirement. The stand of the respondent No.1 therefore deserves to be rejected. 34. The petitioners had opted to be covered under the Scheme 1995, and even the learned counsel for M/s.Neyveli Lignite Corporation very fairly submitted that the respondent No.2 has no objection if the petitioners are allowed to opt under 1995 Scheme by depositing benefits withdrawn in terms of para 17(2) of the Scheme. 35. Consequently, these writ petitions are allowed. The respondents 1 and 2 are directed to comply with paragraph 18 of the 1995 Scheme, and implement the Employees' Pension Scheme, 1995, qua the petitioners. No cost.