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2015 DIGILAW 2109 (BOM)

A. K. Kumaran Nair v. Union of India

2015-09-08

A.A.SAYED, ANOOP V.MOHTA

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JUDGMENT ANOOP V. MOHTA, J. Rule. Rule made returnable forthwith. By consent, heard finally being pension matter. 2. The Petitioner, by this Petition has challenged the action of Respondent No.2, withdrawing the pensionary benefits sanctioned to the Petitioner on and from 11 November 2011 and also directing recovery of the pension already paid. This is on the basis of interpretation of Regulation No. 15 of the KVIC Employees Pension Regulations 1984 (for short, “the KVIC Regulations”) and the impugned Standing Order No. 1719 dated 5 October 2012, issued by Respondent No.2. 3. The backgrounds/events are relevant for consideration of the Petitioner's case. The same reads as under:- On 15 June 1982, the Petitioner joined the services of the U.P. Khadi and Village Industries Board. The same was taken over by Respondent No.2Khadi Village Industrial Commission (for short, KVIC) on 11 February 1984. The Petitioner continued working in the trading establishment of the KVIC from 27 February 1984 to 16 February 2005. By order dated 17 February 2005, the Petitioner was considered and was appointed to the post of Assistant Development Officer with the Directorate of Polymer and Chemical based Industries under the Commissioner for KVIC, in selection quota for general category. After being so appointed in regular establishment, the employer's contribution of provident fund amounting to Rs.1,69,687/- along with interest accruing thereupon, had been withdrawn from the Petitioner's Contributory Provident Fund Account (CPF Account) vide bill dated 9 January 2006, in pursuance to Regulation 15(1) of the KVIC Regulations. 4. In the year 2006, a proposal came to be submitted by the Administration Department of the KVIC in the context of counting of past trading services rendered by the Petitioner for the period from 27 February 1984 to 17 February 2005 exclusively for pensionary benefits. As the Petitioner had not only rendered uninterrupted services in the commission, but also refunded the employer's contribution on EPF thereby, fulfilling the major requirement essential for counting of past trading services exclusively for pensionary benefits established after 27 September 1984. The Audit Department of Respondent No.1Commission concurred with the view of the administration and Respondent No.3 and recorded his approval for considering the past services rendered by the Petitioner under trading establishment as qualifying service for pensionary benefits under Respondent No.2 Commission. The Audit Department of Respondent No.1Commission concurred with the view of the administration and Respondent No.3 and recorded his approval for considering the past services rendered by the Petitioner under trading establishment as qualifying service for pensionary benefits under Respondent No.2 Commission. By memo dated 3 August 2006, the Director of the Respondents issued the official order according approval and sanction for counting of services rendered by the Petitioner under trading establishment as Operator and Salesman II for period from 27 February 1984 to 17 February 2005, as qualifying service, for pensionary benefits only, as CPF number came to be allotted to him. The Petitioner's service book too came to be endorsed with the said decision vide an entry dated 27 July 2006. 5. On 18 February 2005, the GPF Account number 8636 came to be allotted to the Petitioner immediately after the Petitioner joining regular service of the Commission, with subscription being duly credited to the said account regularly. The Petitioner wrote to Respondent No.3, requesting the Commission to process his pension papers at the earliest as he would reach his superannuation age on 30 September 2011. The Petitioner again requested the Commission to process his pension papers at the earliest. After rendering continuous and uninterrupted service of 27 years, the Petitioner reached the age of superannuation on 30 September 2011. As his pension papers were not yet processed, the Petitioner filed a representation on the day of his superannuation, requesting to process his pension papers expeditiously. 6. On 11 November 2011, due sanction was accorded and the Petitioner started receiving pension w.e.f. October 2011. Ultimately, by memorandum dated 11 November 2011, Respondent No.4Director of the Respondent Commission, issued pension commutation vide pension payment order No. 4128/2011-2012. Respondent No.2Commission's account office forwarded the requisite direction of remittance of pension to the State Bank of India. That arrears of the Petitioner's pension from 1 October 2011 to 31 October 2011 amounting to Rs.9,988/- came to be paid by being deposited in the pension account. On 12 March 2012, the Commission has also issued standing order upon the subject matter upholding the right of the Petitioner and similarly situated employees to get Pension. The Petitioner, therefore, continued to draw his pensionary benefits duly and regularly. His pension also came to be upgraded in terms of decision taken by the Screening Committee of the Commission. On 12 March 2012, the Commission has also issued standing order upon the subject matter upholding the right of the Petitioner and similarly situated employees to get Pension. The Petitioner, therefore, continued to draw his pensionary benefits duly and regularly. His pension also came to be upgraded in terms of decision taken by the Screening Committee of the Commission. On 5 October 2012, by a subsequent standing order, the standing order dated 12 March 2012 came to be withdrawn. Under this impugned standing order, new directive that cases where pension benefit have been extended to officials who switched over to the regular establishment by virtue of absorption/selection after 1 January 2004 who were being provided pension under old pension scheme be discontinued and the pension disbursed till date be recovered, came to be issued. On 27 May 2013, by memorandum show cause notice came to be issued to the Petitioner calling upon him to show cause why the pensionery benefits sanctioned to him should not be stopped with immediate effect and the amount of pension already paid to him should not be recovered from him. 7. By reply dated 26 June 2013 and 9 July 2013 the Petitioner made submissions to the aforesaid show cause notice dated 27 May 2013. The Petitioner also issued a legal notice to the Respondents, calling upon them to withdraw the impugned memorandum. Several of identically situated employees who would suffer due to loss of pensionary benefits had represented to the Respondent Commission against the impugned standing order and decision not to extend benefits taken by the Commission. The Commission, therefore, had taken up the said issue with the concerned Ministry of Micro, Small and Medium Enterprises of Respondent No.1. By communication, Respondent No.2 wrote Respondent No.1 Ministry pointing out the fallacy in treating trading establishment employees as new recruits. The said communication further records that the aforesaid issue has been taken up by the Commission with the Ministry from 22 June 2009 onwards and that subsequent reminders have been issued over the period of 2009 to 2011 by the KVIC. A Committee to finalize the revision of Regulation 15 of the KVIC Regulations came to be formed and the draft proposal for the said revision came to be forwarded. A Committee to finalize the revision of Regulation 15 of the KVIC Regulations came to be formed and the draft proposal for the said revision came to be forwarded. Respondent No.2 Commission in its meeting dated 25 November 2013 deliberated on the issue and approved counting of past service of trading officials who switched over to regular establishment by virtue of their selections/absorption on or after 1 January 2004 and the coverage under the KVIC Regulations, till notification of revision of Regulation 15 by the Government of India. The Petitioner was never called for a personal hearing and was kept on tenterhooks for a period of more than one year. The Petitioner is now issued impugned memorandum dated 22 August 2014, informing him that the pensionary benefits as sanctioned to him vide Pension Payment Order dated 11 November 2011 stood withdrawn. The impugned order further records that the pension paid till then, shall be recovered from the Petitioner. Hence the present Petition. 8. The Petitioner has relied upon the sub-regulation (1) of Regulation 15 of the KVIC Regulations, which provides that (1) a person who is initially engaged by the commission under the trading establishment or on contract for a specific period and subsequently transferred or appointed permanently to the same or another post under the regular establishment, without interruption of duty, in the interest of commission's work, may opt either; (a) to retain the commission's contribution in the contributory provident fund with interest thereon including any other compensation or retirement benefits for that service; or (b) to agree to refund to the commission the monetary benefits referred to in clause (a) or to forego the same if they have not been paid to him and count in lieu thereof the service for which the aforesaid monetary benefits may have been payable. It is significant that the Petitioner has given his option and has in fact returned the employer's contribution of provident fund amounting to Rs.169687/- along with interest accruing thereupon way back in 2006. The Commission is therefore duty bound to count in lieu thereof Petitioner's earlier service, for which the aforesaid monetary benefits may have been payable. It is significant that the Petitioner has given his option and has in fact returned the employer's contribution of provident fund amounting to Rs.169687/- along with interest accruing thereupon way back in 2006. The Commission is therefore duty bound to count in lieu thereof Petitioner's earlier service, for which the aforesaid monetary benefits may have been payable. That an entry came to be made in the service book to the effect that the services rendered by the Petitioner under the trading establishment for the period from 27/02/1984 to 17/02/2005 was being treated as qualifying service for pensionary benefits only, vide a memo number PCB/EST/AKKN/2006-07 as per the approval of CEO/Commissioner.” 9. The record shows that the Petitioner by virtue of his selection on and after 1 January 2004, was instructed to appear for the interview before Departmental Staff Selection Committee II by Memo dated 12 January 2005. He was selected, accordingly, as Salesman II (HMPI) (Under Trading Cadre) under selection quota against General Category, as per the payscale and allowances under the Rules of the Commission. He was ordered to be posted in new head quarter at Mumbai. Therefore, we decline to accept the case/submission of the Respondents that he was a new appointee. On the contrary, his appointment needs to be considered from the date of his basic appointment. We decline to accept the case of the Respondents in treating him as a new recruit. 10. In view of the objection from the Ministry to Standing Order dated 12 March 2012, the Commission had taken up the issue with the concerned Ministry of Micro, Small and Medium Enterprises of Respondent No.1. It was agreed that there needs to be reconciliation upon the issue and therefore, directed to circulate the draft proposal for the revision of the KVIC Regulations. By the Standing Order No. 1719 dated 5 October 2012, earlier Standing Order dated 12 March 2012 was withdrawn abruptly, pending the draft proposal of revision, which was admittedly forwarded to Respondent No.1. Respondent No.2Commission deliberated on the issue of approved counting of past service of trading officials, who switched over to regular establishment, by virtue of their selections/absorption, on or after 1 January 2004 and its coverage under KVIC Regulations. The issue is pending with Respondent No.1, based upon its Regulation dated 13 December 2013, is an additional factor which cannot be overlooked while deciding the case/contention of the Petitioner. The issue is pending with Respondent No.1, based upon its Regulation dated 13 December 2013, is an additional factor which cannot be overlooked while deciding the case/contention of the Petitioner. The impugned memorandum/show cause notice dated 27 May 2013 in view of above background, in our view, therefore unsustainable. The Petitioner had replied to the notice and submitted his representation to withdraw the same. The decision so taken on 22 August 2014 of withdrawing the benefits as sanctioned to him, is illegal and unsustainable. 11. The Commission had decided in 2008 to adopt the new pension scheme. The Petitioner's services were counted as qualifying services for the purpose of pension in the year 2006 itself and entry came to be made in the service book to that effect, by treating the period from 27 February 1984 to 17 February 2005 as qualifying services for pensionary benefits. The Petitioner, as recorded, had already complied with the conditions specified in the KVIC Regulations and refunded the Commission contribution and interest thereon in the year 2006 itself. Respondent No.2 therefore, ought not to have resiled from the said decision. There was no illegality as such, while adopting such mode and such scheme, specifically when the KVIC, being the statutory body governed by its own Act, Rules and Regulations, including service conditions. Those Rules and Regulations were not extended automatically to its employees. But, having once decided to adopt the pension scheme, the pension fixed cannot be taken away in such fashion by changing the Rules retrospectively. Respondent No.2 is bound by their own Pension Rules, as adopted at the relevant time. The change, if any, needs to be made prospectively, subject to the decision. 12. There is no substance in the contention that those employees, who were absorbed in the Commission's services after 27 September 1984 only could get the benefits of regulation No.15. The similarly situated eight colleagues/employees/trading staff employees, absorbed by the Commission on 11 February 1984, and have been getting pension based upon the very same Regulations. Even otherwise, in the present case, in view of the above facts and reasons, the Respondents' submission that the post of the Petitioner not being within government budgetary grants, is not acceptable. This is also for the reason that the Commission had already taken back the contribution given to the Petitioner's CPF Account in the year 2006 itself. Even otherwise, in the present case, in view of the above facts and reasons, the Respondents' submission that the post of the Petitioner not being within government budgetary grants, is not acceptable. This is also for the reason that the Commission had already taken back the contribution given to the Petitioner's CPF Account in the year 2006 itself. It is unacceptable situation that the Petitioner is not entitled for old pension nor new pension, even after completion of his 27 years service in KVIC. The legal and constitutional entitlement of pension, therefore, cannot be taken away at this stage and/or after retirement in such fashion. This would cause great injustice and hardship, apart from breach of principle of legitimate expectations and principle of estoppel, as there was nothing illegal and contrary to law, when they had adopted the scheme and permitted the employees like the Petitioner to act on the same. 13 Therefore, taking overall view of the matter, we are inclined to pass the following order: ORDER a) Impugned order dated 22 August 2014 is quashed and set aside. b) Respondent No.2 to restore and continue pensionary benefits of the Petitioner as granted by Order dated 11 November 2011 along with arrears and interest thereon @ 8% p.a. withing eight weeks from today. c) Writ Petition is disposed of. d) Rule disposed of accordingly. e) There shall be no order as to costs.