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2024 DIGILAW 586 (KER)

M. Jayasankaran Nair v. Union of India, Ministry of Labour and Employment, New Delhi

2024-05-30

DEVAN RAMACHANDRAN

body2024
JUDGMENT : DEVAN RAMACHANDRAN, J. 1. The petitioners in these cases impugn certain portions of a Circular issued by the Regional Provident Fund Commissioner (Pension), New Delhi, wherein, it has been mandated that, for obtaining the benefit of higher rate of pension, employees ought to have exercised an option under paragraph 11(4) of the Employees Pension Scheme, 1995 (‘Pension Scheme’ for short). 2. Sri. R. Sanjith - learned counsel for the petitioners, submitted that Ext.P1 Circular is in blatant violation and derogation of the specific directions of the Hon’ble Supreme Court in paragraph 44 of Ext.P4 judgment; and hence that it is liable to be set aside. He, however, conceded that his clients’ contentions are confined only to that portion of the Circular which mandates the afore option and no other. 3. Sri. Sajeev Kumar K. Gopal - learned Standing Counsel for the Employees Provident Fund Organization (‘EPFO’) submitted that, even a glance through the directions of the Hon’ble Supreme Court, particularly that contained in paragraph 44(iii) of Ext.P4 judgment, would render it ineluctable that only those employees who had exercised the option under the proviso to paragraph 11(3) of the ‘Pension Scheme’ and who continued in service as on 01.09.2014, would be eligible to be governed by the amended provisions of paragraph 11(4) of the ‘Pension Scheme’. He submitted that this, therefore, indubitably requires that the employees who are so eligible, also ought to have exercised an option under paragraph 11(4) of the ‘Pension Scheme’ because, that is an ingrained and essential condition thereunder. He, therefore, argued that the impugned Circular is without any error. 4. Sri. M. Gopikrishnan Nambiar - learned Standing Counsel for the Fertilisers and Chemicals Travancore Limited (FACT) and Sri. Krishna Menon - learned counsel for Hindustan Organic Chemicals, submitted that they have no comment to make in the controversy now impelled before this Court because, it is between the employees and the ‘EPFO’. They added that their clients will abide by any direction to be issued by this Court. 5. I do not propose to deal with the facts in detail, most of them being uncontested and without any real dispute. 6. The only controversy now between the parties is as to the manner in which paragraph 44 of Ext.P4 judgment of the Hon’ble Supreme Court is to be interpreted. For this, I deem it appropriate that the same be extracted: “44. 6. The only controversy now between the parties is as to the manner in which paragraph 44 of Ext.P4 judgment of the Hon’ble Supreme Court is to be interpreted. For this, I deem it appropriate that the same be extracted: “44. We accordingly hold and direct: (i) The provisions contained in the Notification N?. G.S.R. 609(E) dated 22nd August 2014 are legal and valid. So far as present members of the fund are concerned, we have read down certain provisions of the scheme as applicable in their cases and we shall give our findings and directions on these provisions in the subsequent subparagraphs. (ii) Amendment to the pension scheme brought about by the notification no. G.S.R. 609(E) dated 22nd August 2014 shall apply to the employees of the exempted establishments in the same manner as the employees of the regular establishments. Transfer of funds from the exempted establishments shall be in the manner as we have already directed. (iii) The employees who had exercised option under the proviso to paragraph 11(3) of the 1995 scheme and continued to be in service as on 1st September 2014, will be guided by the amended provisions of paragraph 11(4) of the pension scheme. (iv) The members of the scheme, who did not exercise option, as contemplated in the proviso to paragraph 11(3) of the pension scheme (as it was before the 2014 Amendment) would be entitled to exercise option under paragraph 11(4) of the post amendment scheme. Their right to exercise option before 1st September 2014 stands crystalised in the judgment of this Court in the case of R.C. Gupta (supra). The scheme as it stood before 1st September 2014 did not provide for any cut-off date and thus those members shall be entitled to exercise option in terms of paragraph 11(4) of the scheme, as it stands at present. Their exercise of option shall be in the nature of joint options covering pre-amended paragraph 11(3) as also the amended paragraph 11(4) of the pension scheme. There was uncertainty as regards validity of the post amendment scheme, which was quashed by the aforesaid judgments of the three High Courts. Thus, all the employees who did not exercise option but were entitled to do so but could not due to the interpretation on cut-off date by the authorities, ought to be given a further chance to exercise their option. Thus, all the employees who did not exercise option but were entitled to do so but could not due to the interpretation on cut-off date by the authorities, ought to be given a further chance to exercise their option. Time to exercise option under paragraph 11(4) of the scheme, under these circumstances, shall stand extended by a further period of four months. We are giving this direction in exercise of our jurisdiction under Article 142 of the Constitution of India. Rest of the requirements as per the amended provision shall be complied with. (v) The employees who had retired prior to 1st September 2014 without exercising any option under paragraph 11(3) of the pre-amendment scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment. (vi) The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 scheme shall be covered by the provisions of the paragraph 11(3) of the pension scheme as it stood prior to the amendment of 2014. (vii) The requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceeds Rs. 15,000/- per month as an additional contribution under the amended scheme is held to be ultra-vires the provisions of the 1952 Act. But for the reasons already explained above, we suspend operation of this part of our order for a period of six months. We do so to enable the authorities to make adjustments in the scheme so that the additional contribution can be generated from some other legitimate source within the scope of the Act, which could include enhancing the rate of contribution of the employers. We are not speculating on what steps the authorities will take as it would be for the legislature or the framers of the scheme to make necessary amendment. For the aforesaid period of six months or till such time any amendment is made, whichever is earlier, the employees' contribution shall be as stop gap measure. The said sum shall be adjustable on the basis of alteration to the scheme that may be made. (viii) We do not find any flaw in altering the basis for computation of pensionable salary. The said sum shall be adjustable on the basis of alteration to the scheme that may be made. (viii) We do not find any flaw in altering the basis for computation of pensionable salary. (ix) We agree with the view taken by the Division Bench in the case of R.C. Gupta (supra) so far as interpretation of the proviso to paragraph 11(3) (pre-amendment) pension scheme is concerned. The fund authorities shall implement the directives contained in the said judgment within a period of eight weeks, subject to our directions contained earlier in this paragraph. (x) The Contempt Petition (C) Nos. 1917-1918 of 2018 and Contempt Petition (C) Nos. 619-620 of 2019 in Civil Appeal Nos. 10013-10014 of 2016 are disposed of in the above terms.” 7. It is apodictic that, in paragraph 44(iii) afore, the Hon’ble Supreme Court has declared that all those employees who had exercised option under proviso to paragraph 11(3) of the ‘Pension Scheme’ and who continued to be in service as on the 01.09.2014, will be guided by the amended provisions of paragraph 11(4) of the ‘Pension Scheme’. 8. At first glance, there cannot have been any room for disagreement between the parties because, it is unambiguous and without leaving any cause for thought. 9. I say as afore because, when the Hon’ble Supreme Court declared unequivocally that all those employees who had earlier exercised option under the proviso to paragraph 11(3) of the ‘Pension Scheme’ and who continued in service as on 01.09.2014, will be guided by the amended provisions of paragraph 11(4) of the ‘Pension Scheme’ it is apodictic that there is no alternative even whisperingly suggested. 10. To add to this, when one reads the further directions of the Hon’ble Supreme Court closely, particularly those in paragraph 44(iv) afore extracted, it is evident that it has also made specific provisions for those employees who did not exercise option under the proviso to paragraph 11(3) of the ‘Pension Scheme’ saying that such an opportunity would be given to them in the nature of a ‘joint option’ covering the pre-amended paragraph 11(3), as also the amended paragraph 11(4), of the ‘Pension Scheme’. 11. 11. Thereafter, by way of abundant clarity, the Hon’ble Supreme Court then said, in paragraph 44(v) of the judgment, that the employees who retired prior to 01.09.2014 without exercising any option under paragraph 11(3) of the pre-amendment Scheme, would not be entitled to the benefit of the judgment. 12. Prima-facie, therefore, one fails to understand how the ‘EPFO’ could have taken the stand that, unless an employee had made an option under paragraph 11(4) of the ‘Pension Scheme’ they would not get the benefit of the judgment because, as I have already said above, paragraph 44(iii) of the judgment leaves no room for any alternative position to be thought of, namely with respect to those employees who are not eligible under the said paragraph. 13. To paraphrase, when the Hon’ble Supreme Court has declared, without leaving any scope for dispute, that all those employees who had exercised option under the proviso to paragraph 11(3) of the ‘Pension Scheme’ and who continued in service as on 01.09.2014, will be guided by the amended provisions of paragraph 11(4) of the ‘Pension Scheme’ a contra submission, as to what would happen to such person, who had not exercised option under paragraph 11(4), is totally untenable. 14. As I have already said above, the further directions in paragraph 44 (iv) and 44(v) of the judgment cement the position, without leaving any province for confusion. 15. In such scenario, I have no doubt that the impugned Circular issued by the ‘EPFO’ - to the extent impugned - has been done without properly appreciating the observations of the Hon’ble Supreme Court and its affirmative declarations. 16. Of course, if they had any reason to harbour any confusion regarding the manner of the declarations made by the Hon’ble Supreme Court, they ought to have approached it for clarification, rather than have hazarded an interpretation, which, prima facie, does not appear to be in consonance with its intent. 17. I am consequently without doubt that the Circular, to the extent impugned, cannot be allowed to operate; and that the competent Authority must reconsider the matter, adverting to my observations and, in particular, the directions of the Hon’ble Supreme Court. 18. 17. I am consequently without doubt that the Circular, to the extent impugned, cannot be allowed to operate; and that the competent Authority must reconsider the matter, adverting to my observations and, in particular, the directions of the Hon’ble Supreme Court. 18. In the afore circumstances, I allow this Writ Petition and set aside the impugned Circular in these cases - however, solely to the extent to which it orders that the employees who did not exercise option under paragraph 11(4) of the ‘Pension Scheme’ are not entitled to the benefit of the judgment; and direct the competent Authority to reconsider these aspects in terms of the afore, thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible, but not later than two months from the date of receipt of a copy of this judgment.