Khoob Chand Verma @ K. C. Verma v. Regional Provident Fund Commissioner thr
2019-09-06
SHEEL NAGU
body2019
DigiLaw.ai
1. Writ jurisdiction of this Court under Article 226 of the Constitution is invoked by the petitioner who is an ex-employee of a wound up company/respondent No.2 to seek following reliefs: “Annexure P/4 dated 27/04/2016 may kindly be ordered to be quashed with a further direction to get deposited the contribution from 01/03/1971 to 30/06/1992 may kindly be ordered to be deposited by the petitioner and the arrear of family pension and consequential relief may kindly be ordered to be given to the petitioner on the basis of the pay band of 04/05/1998.” 2. The challenge herein is to the order dated 27/04/2016 (Annexure P/4) passed by Assistant Provident Fund Commissioner (Accounts), Gwalior rejecting the representation of the petitioner while complying with the order dated 08/03/2016 passed in WP No.1586/2010 by holding that the petitioner is not entitled to any pension in view of information divulged by the employer vide letter dated 23/12/2014 that the petitioner was not member of Family Pension Scheme, 1971. 3. The claim of the petitioner is that he served J.C.Mills Ltd. Gwalior from 1969 to 1998 and was allotted Employees Provident Fund No.MP/07/17719 but the contributions under the EPF Scheme from March, 1971 to June, 1992 could not be deposited since the said company had become sick and the payment of wages had stopped and the petitioner was assured by the management that as and when payment of wages are resumed, the petitioner shall be made member of the pension scheme. The winding up order of the said company was passed on 04/05/1998. The petitioner claims to have moved an application before Principal Officer of the J.C. Mills Ltd, Gwalior on 01/05/1993 and also moved the Company Judge in COMP No.04/1997 and WP No.156/2010. However, it is submitted that the said representation was rejected by the impugned order Annexure P/4 on wrong premise that the petitioner never became member of the pension scheme. The attention of this Court is invited to order dated 30/04/2014 passed by Company Judge, in Company Petition No.04/1997. 4. From bare perusal of impugned order dated 27/04/2016 (Annexure P/4) passed by respondent No.1, it does not appear that the order of the Company Judge dated 30/04/2014 in Company Petition 04/1997 is taken into account while deciding the representation of the petitioner.
4. From bare perusal of impugned order dated 27/04/2016 (Annexure P/4) passed by respondent No.1, it does not appear that the order of the Company Judge dated 30/04/2014 in Company Petition 04/1997 is taken into account while deciding the representation of the petitioner. The relevant portion of the said order dated 30/04/2014 passed in WP No.04/1997 is reproduced below for ready reference and convenience: 10. In nutshell, he submits that 1032 employees were neither member of 1971 Scheme not can become member of 1995 Scheme. He also drew the attention of this Court on Paras 2,3,5,6,7,9,10,11 and 12 of 1995 Scheme. It is contended that the necessary requirement as per these Paras are not fulfilled with regard to 1032 employees and, therefore, they are not entitled for the monthly pension. 16. A bare perusal of this finding shows that this Court in no uncertain terms made it clear that the workmen shall get dues as per the report of the Commissioner. Thereafter, this Court passed the order dated 22.4.2009, whereby permitting the PF Organization to utilise Rs.6,45,40,834/- for the purpose of granting revised pension. 17. The pivotal question is whether 1032 employees are entitled to get the pension ? 18. To determine this aspect, it is apt to quote certain provisions of 1971 Scheme.
Thereafter, this Court passed the order dated 22.4.2009, whereby permitting the PF Organization to utilise Rs.6,45,40,834/- for the purpose of granting revised pension. 17. The pivotal question is whether 1032 employees are entitled to get the pension ? 18. To determine this aspect, it is apt to quote certain provisions of 1971 Scheme. Para 1(3) reads as under:- “(3) Subject to the provisions of Section 16 and subsection (1-A) of Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, this Scheme shall apply to the employees of all factories and other establishments to which the said Act applies or is applied under sub-section (3), or sub-section (4) of Section 1 or Section 3 thereof.” Para 2(f) of the Scheme reads as under:- “2(f) 'reckonable service' means service rendered by a member of the Family Pension Fund in respect of which contributions are payable under this 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 employer's shares) are payable by diversion from his Provident Fund Account as provided in sub-paragraph (2A) of Paragraph 9 of his Scheme and also includes any period of service in respect of which wages are drawn but no contributions are payable in terms of subparagraph (4) of Paragraph 9 and which shall be deemed to have been paid for purposes of Paragraphs 28, 31 and 32 of this Scheme: Provided that no 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) xx xx xx (iii) after there ceases to be any amount I 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.” Para 3 of the Scheme reads as under:- “3.
shall be treated as reckonable service.” Para 3 of the Scheme reads as under:- “3. Membership of the Family Pension Fund.--Subject to sub-paragraph (3) of Paragraph 1, this Scheme shall apply to every employee-- (a) who becomes a member of the Employees' Provident Fund or of Provident Funds of factories and other establishments exempted under Section 17 of the Act on or after the 1 s t day of March, 1971; (b) who has been a member of the Employees Provident Fund or Provident Fund of factories and other establishments exempted under Section 17 of the Act immediately before the commencement of this Scheme and opts to exercise his option under Paragraph 4 : Provided that an employee who attains the age of more than 59 years on the date on which he would, but for this proviso, have become eligible for membership or have been required to become a member of this Scheme shall not be eligible for membership under this Scheme.” Para 9 of the Scheme reads as under :- “9. Family Pension Fund.--(1) From and out of the contributions payable by the employer and the employees in each month under Section 6 of the Act a part of the contribution, representing 1-1/6 per cent of the employee's pay along with an equivalent amount of 1-1/6 per cent from and out of the employer's contribution shall be remitted by the employer to the Family Pension Fund by a separate Bank Draft or cheque on the account of Family Pension Fund contribution in such manner as may be specified in this behalf by the Commissioner. The cost of the remittance, if any, shall be borne by the employer. Relevant part of Para 10 of the Scheme reads as under:- “10. Payment of contribution.--(1) The employer shall, in the first instance, pay both the contribution payable, to the Family Pension Fund by himself and also, on behalf of the member of the Family Pension Fund employed by him directly or by or through a contractor, the contribution payable to the Family Pension Fund by such member.” 19. Section 17 (1-A) of PF Act makes it clear that there is no exemption for the purpose of pension. The exemption, if any, is only to the extent of provident fund. If the Scheme of 1971 is examined, it will be clear that it is mandatory in nature.
Section 17 (1-A) of PF Act makes it clear that there is no exemption for the purpose of pension. The exemption, if any, is only to the extent of provident fund. If the Scheme of 1971 is examined, it will be clear that it is mandatory in nature. It is apt to mention here that 1032 employees have been engaged after 1.3.1971. Thus, in the opinion of this Court, they will be covered by Para 3 (a) of 1971 Scheme. The intention of scheme-maker since beginning was to cover each and every workman of the industry. Para 26 of 1952 Scheme also makes it clear that it is applicable to every employer. 20. It is interesting to mention here that the PF Organization filed an application on the basis of inspection report and showed that it quantified PF contribution of 8037 employees. The contribution was permitted to be given by the Company Court to the PF Organization. Admittedly, the said contribution of 8037 employees was already received by the PF Organization. The employees determined by the Commissioner for payment of pension were 6036 in number. Thus, for 2001 employees (8037-6036) they have received contribution but are not paying pension. This is not in dispute that as per the inspection report, the PF contribution was demanded for the period 1.7.1992 to 4.5.1998. The said amount is already paid to the PF Organization. If PF Organization has not demanded any contribution before 1.7.1992, it can be safely concluded that the contribution amount for the employees before 1.7.1992 was not due/payable. They demanded and received the amount from 1.7.1992 to 4.5.1998 for 8037 employees. 21. Apart from this, page 193 of compilation “A” (inspection report) contains following finding :-“The squad has visited the estt. for inspection of records for calculation of dues under family pension scheme 1971, employees pension scheme 1995 and inspection charges under EPF scheme 1952 and EDLI scheme 1976.” (Emphasis Supplied) This finding shows that the records were inspected for the purpose of determining the dues of eligible employees who are entitled under 1971 Scheme and 1995 Scheme. This report further shows that employees' share as well employer's share was determined/quantified by the inspection team.
This report further shows that employees' share as well employer's share was determined/quantified by the inspection team. Page 209 of compilation “A” (Application for direction to the OL for depositing FPS / EPS contribution, filed by PF organization) shows that they have taken a specific stand that contributions towards PPF were received by the PF organization for the employees of J.C. Mills upto June, 1992. No contributions were received by them thereafter. Para 3 of this application reads as under:- “(3) That, the contribution toward E.P.F. Were received in the office of the applicant upto June, 1992 and no contribution under the scheme thereafter.” (Emphasis Supplied) In para 6 of this application it is averred by PF organization that the winding up order was passed on 4.5.1998 and as per Section 445 of the Companies Act, the employees will be deemed to be in employment from the date of closure i.e. 28.04.1992 to the date of winding up 04.05.1998. 22. Para 6 of 1995 Scheme reads as under :- “6. Membership of the Employees' Pension Scheme-Subject to sub-paragraph (3) of paragraph1, this Scheme shall apply to every employee- (a) who on or after the 16th November, 1995 becomes a member of the Employees' Provident Funds Scheme, 1952 or of the Provident Funds of the 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 or 27-A of the Employees' Provident Funds Scheme, 1952, from the date of such membership; (b) who has been a member of the ceased Employees' Family Pension Scheme, 1971 before the commencement of this Scheme from 16th November, 1995.” As per Para 6 aforesaid, it is clear that the scheme is applicable to every employee who was the member of either 1952 Scheme or of Provident Fund of factories or has been a member of Pension Scheme of 1971. The PF contribution/employee and employer share for the employees have been determined and received by PF organization after the period 1992. It is admitted by them as quoted above that prior to 92 they have received the contribution of the employees. Thus, it can be conclusively held that 1032 employees were covered under 1971 Scheme and their PF deduction was made by PF organization. Thus, they are entitled to be treated as member of 1995 Pension Scheme. 23.
It is admitted by them as quoted above that prior to 92 they have received the contribution of the employees. Thus, it can be conclusively held that 1032 employees were covered under 1971 Scheme and their PF deduction was made by PF organization. Thus, they are entitled to be treated as member of 1995 Pension Scheme. 23. In the present case, as pointed out by Shri K.N.Gupta, learned senior counsel, the record is not available which can throw light whether the statutory forms were filled up by the employer as per 1971 and 1995 Schemes and whether those forms were supplied to the PF Organization. The question is whether in absence of those forms, 1032 employees can be deprived from the benefit of the pension ? 24. As per section 13 of the PF Act, the Inspectors have wide powers to inspect the record, take photocopy and make search for the purpose of enforcement of the Act and Schemes made thereunder. Section 13 (1) (2)(b)(c) and (2-A) are reproduced for ready reference :- “13. Inspectors.--(1) The appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be Inspectors for the purposes of this Act/the Schemes/the Pension Schemes or the Insurance Scheme, and may define their jurisdiction.
Section 13 (1) (2)(b)(c) and (2-A) are reproduced for ready reference :- “13. Inspectors.--(1) The appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be Inspectors for the purposes of this Act/the Schemes/the Pension Schemes or the Insurance Scheme, and may define their jurisdiction. (2) Any Inspector appointed under sub-section (1) may, for the purpose of inquiring into the correctness of any information furnished in connection with this Act or with any Scheme or the Insurance Scheme or for the purpose of ascertaining whether any of the provisions of this Act or of any Scheme or the Insurance Scheme have been complies with in respect of an establishment to which any Scheme or the Insurance Scheme applies or for the purpose of ascertaining whether the provisions of this Act or any Scheme or the Insurance Scheme are applicable to any establishment to which the Scheme or the Insurance Scheme has not been applied or for the purpose of determining whether the conditions subject to which exemption was granted under section 17 are being complied with by the employer in relation to any exempted establishment-- (a) xxx xxx xxx (b) at any reasonable time and with such assistance, if any, as he may think fit, enter and search any establishment or any premises connected therewith and require any one found in charge thereof to produce before him for examination any documents, books, registers and other documents relating to the employment of persons or the payment of wages in the establishment; (c) examine, with respect to any matter relevant to any of the purposes aforesaid, the employer or any contractor from whom any amount is recoverable under section 8-A, his agent or servant or any other person found in charge of the establishment or any premises connected therewith or whom the Inspector has reasonable cause to believe to be or to have been, an employee in the establishment.
(2-A) Any Inspector appointed under sub-section (1) may, for the purpose of inquiring into the correctness of any information furnished in connection with the Pension Scheme or for the purpose of ascertaining whether any of the provisions of this Act or of the Pension Scheme have been complied with in respect of an establishment to which the Pension Scheme applies, exercise all or any of the powers conferred on him under clause (a), clause (b), clause (c) of clause (d) of subsection (2).” 25. In the opinion of this Court, if the Inspectors have inspected the premises of the industry and prepared the inspection report, there is no manner of doubt that such report is prepared on the basis of the relevant statutory record/Registers prepared by the employer. On the basis of this record, the inspection report has quantified the number of employees as 8037. The PF contribution of Rs.6,45,40,834/-is already received by PF Organization. At a later point of time, the Commissioner Shri Trivedi quantified the employees as 7836. It is common ground of Shri A.K.Jain and Shri Vivek Jain that names of 1032 employees are already mentioned in the list prepared by the Commissioner containing the names of 7836 employees and, therefore, this list should be treated as authenticated list for the purpose of grant of pension. 26. Para 1(3) of 1995 Scheme is reproduced as under:- “(3) Subject to the provisions of section 16 of Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), this Scheme shall apply to the employees of all factories and other establishments to which the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952) applies or is applied under sub-section (3) or subsection (4) of section 1 or section 3 thereof.” Para 2(iv) of 1995 Scheme reads as under :- “(iv) “contributory service” means the period of “actual service” rendered by a member for which the contributions to the fund have been received or are receivable.” Para 2(vi) reads as under:- ““existing member” means an existing employee who is a member of the Employees' Family Pension Scheme, 1971. ”Para 2 (xv) defines “pensionable service”, which reads as under:- “(xv) “pensionable service” means the service rendered by the member for which contributions have been received or are receivable.” Para 4 of 1995 Scheme reads as under:- “4.
”Para 2 (xv) defines “pensionable service”, which reads as under:- “(xv) “pensionable service” means the service rendered by the member for which contributions have been received or are receivable.” Para 4 of 1995 Scheme reads as under:- “4. Payment of contribution.--(1) The employer shall pay the contribution payable to the Employees' Pension Fund in respect of each member of the Employees' Pension Fund employed by him directly or by or through a contractor. (2) It shall be the responsibility of the principal employer to pay the contributions payable to the Employees' Pension Fund by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor; Provided that the Central Government shall pay the contribution payable to the Employees' Pension Fund in respect of an employee who is a person with disability under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) and under the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999) respectively, up to a maximum period of three years from the date of commencement of membership of the Fund.” Para 6 of 1995 Scheme is also relevant which is already reproduced in para 22 of this order. Para 10 talks about determination of 'pensionable service' whereas Para 11 talks about determination of 'pensionable salary'. The formula for the purpose of determining the monthly member's pension is in Para 12. The formula reads as under:- Pensionable salary x Pensionable service “Monthly member's pension =-------------------------------------------70 Paragraph 16(1) of 1995 Scheme reads as under:- “16. Benefits to the family on the death of a member.-- (1) Pension to the Family shall be admissible from the date following the date of death of the member, if the member dies-- (a) while in service, provided that at least one month's contribution has been paid into the Employees' Provident Fund, or (b) after the date of exit, but before attaining the age of 58 years, from the employment having rendered service entitling him/her to monthly member's pension but before the commencement of pension payment, or (c) after commencement of payment of the monthly member's pension.
Note.--The cases where a member has rendered less than 10 years eligible service on the date of exit but has retained the membership of the Pension Fund, and dies before attaining the age of 58 years, shall be regulated under subparagraph (8) of paragraph 12.” 27. I do not see any merit in the contention of Shri R.K. Goyal, learned counsel for the PF Organization, that since in the Court order dated 22.04.2009, there was no direction to start pension for the present 1032 employees, no direction can be issued. A simple reading of said order of Company Court makes it crystal clear that the question of claim/entitlement of these 1032 employees was not at all under consideration before the Court. The Court had no occasion to deal with this aspect. Thus, that order cannot be read in the manner suggested by Shri Goyal nor it can be as impediment for deciding entitlement of 1032 employees. 28. The matter may be examined from yet another angle. The PF Organization after having received contribution from 1.7.1992 to 4.5.1998 for all 8037 employees cannot take 'U' turn and submit that this contribution is not for present 1032 employees. 8037 employees was the total strength of employees working on the date of inspection, i.e., 11.4.2000. The factory was wound up on 4.5.1998 and since 1032 employees were on the rolls on the date of winding up of the industry, their names must be treated as included in the list of 8037 employees, for whom contribution is already received by PF Organization. In any case, the list prepared by the Commissioner Shri Trivedi must be treated as authentic list for the purpose of deciding the dues of the workmen. Thus, if names of 1032 employees are included in the list prepared by the Commissioner (Annexure 'A'), such employees shall be entitled for pension. 29. Though in the peculiar facts of this case, the documents/statutory forms filed by the employer may not be available but the fact remains that the PF Organization has treated them as employees and obtained their contribution. Thus, as per the Schemes of 1971 and 1995, 1032 employees must be treated to be eligible employees for the purpose of pension scheme provided their names find place in the list prepared by the Commissioner (Annexure 'A'). 34.
Thus, as per the Schemes of 1971 and 1995, 1032 employees must be treated to be eligible employees for the purpose of pension scheme provided their names find place in the list prepared by the Commissioner (Annexure 'A'). 34. On the basis of aforesaid analysis, these applications are allowed with following directions :- (i) Shri A.K. Jain may add a column in the list of 1032 employees by indicating their serial number in the list of Commissioner's report (Shri Trivedi's report). This may be done within a week in order to provide momentum to the entire exercise required to be done. He shall supply copy of this list to the learned counsel for PF Organization and to the OL. (ii) The OL shall scrutinize the record of 1032 employees and prepare a list by reflecting their date of birth/age. This list shall be prepared within three weeks and shall be supplied to the PF Organization. (iii) The PF Organization shall calculate/determine the pension of 1032 employees as on 04.05.1998 by treating the relevant factors available on the said date. In the event of any difficulty in determining the age of employees, the PF Organization shall take assistance of its circular dated 12.12.2006. It is made clear that 1032 employees shall be entitled for pension only if their names are included in the list Annexure-A, prepared by the Commissioner Shri Trivedi. It will be open to the PF Organization to ascertain whether any of those employees is already getting pension, in that event no pension shall be payable to them. It will be open to the OL and PF Organization to take necessary steps to identify the real person, who is entitled for pension. However, it is made clear that non-availability of prescribed form by the AFR COMP 04/1997 16 employer or any other paper formality will not be the reason to deny the pension to the persons whose names are included in Annexure 'A' aforesaid. (iv) The PF Organization after receiving list by the OL aforesaid shall undertake exercise on its part and start regular pension to the employees within sixty days. Arrears of pension from due date shall be paid within six months therefrom. 5.
(iv) The PF Organization after receiving list by the OL aforesaid shall undertake exercise on its part and start regular pension to the employees within sixty days. Arrears of pension from due date shall be paid within six months therefrom. 5. The aforesaid extracted portion of the order dated 30/04/2014 reveals that in no uncertain terms, the Company Judge decided the claims of pension of Ex-Workmen of wound up company by considering the same from different angles on the anvil of provisions of The Employees Provident Funds and Miscellaneous Provisions Act, 1952 and the schemes framed thereon. 6. The aforesaid order dated 30/04/2014 has not even been referred by respondent No.1 while passing the impugned order Annexure P/4 and therefore, there is no application of mind on the relevant consideration which renders the impugned order vitiated in law. 7. Consequently, this petition stands allowed in following terms: 1. Impugned order dated 27/04/2016 (Annexure P/4) is quashed. 2. Respondent No.1 or any other competent officer as the case may be is directed to consider the claim of the petitioner for pension as per 1971 and 1995 Pensions Schemes and take a decision after considering the order dated 30/04/2014 in company petition No.04/1997 and decide the claim of the petitioner by passing speaking order and communicating the same to petitioner within a period of 60 (Sixty) days from the date of receipt of copy this order.