W.P.(C)--5678/2018. Case: BHARTIYA KHADYA NIGAM KARAMCHARI SANGH AND ANR. Vs. UNION OF INDIA AND ORS.. High Court of Delhi (India)
| Case Number | W.P.(C)--5678/2018 |
| Citation | NA |
| Judgement Date | May 22, 2019 |
| Court | High Court of Delhi (India) |
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on : 30.0 % Judgment Pronounced on: 22nd
+ W.P.(C) 5678/2018 & CM APPL. 22108/2018
BHARTIYA KHADYA NIGAM
KARAMCHARI SANGH AND ANR. ..... Petitioners
Through: Mr.Bahar U. Barqi, Advocate versus
UNION OF INDIA AND ORS. ..... Respondents
Through: Mr.Arun Bhardwaj & Mr.
Bhardwaj, Advocates for UOI
Mr. Keshav Mohan & Mr. Rishi Awasthi, Advocates for EPF.
Mr. B.P. Singh, Mr. Anubhav Mr. Amit Singh & Ms. Advocates for R-4 & 5.
CORAM:
HON'BLE MR. JUSTICE G.S. SISTANI HON'BLE MS. JUSTICE JYOTI SINGH JYOTI SINGH, J.
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The present writ petition has been filed seeking, quashing letter/circular dated 31.05.2017 issued by respondent No. Provident Fund Organization as well as Notification dated 22.08.2014. further direction is sought to the respondents to comply with the passed by the Hon‟ble Apex Court in Civil Appeal Nos. 10013 titled R.C. Gupta & Ors. vs. Regional Provident Fund Commissioner Ors. dated 04.10.2016 as also a direction to the respondents to treat
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members of the petitioners‟ Association at par with the employees unexempted establishments in getting benefits of higher pension on salary.
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Before embarking on adjudication of the present case, we would to give a brief background and genesis of the Pension Scheme with we are concerned in this case. Due to the establishment of large number industrial units, thousands of workmen of various categories who came from rural areas started making demands for better salaries and also for financial security for their old age, on retirement. The Government under the Directive Principles, thought of devising ways to provide financial security to the industrial workers during their old age. Thus, a method devised to constitute a Fund, and this gave birth to the Employees Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter referre Act‟). The Provident Fund was to be constituted by contributions both the employer and the employee. This, however, had no contribution from the State Exchequer. Thus, the EPF Act was primarily enacted for some terminal benefits to the employees of various establishments, retirements. A certain prescribed percentage of the monthly wages employee was to be deducted and credited to the employee‟s Fund, with an equal amount of contribution from the employer. This statutorily envisaged under Sections 5 & 6 of the EPF Act.
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Under Section 6 of the EPF Act, 10% [subsequently 12%]
wages including the dearness allowance is required to be deposited Provident Fund account of an employee as the employee‟s share and employer has to contribute an equal amount. This constitutes the
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Fund Account. Initially, the EPF Act did not provide for creation Pension Fund or for payment of Pension. Later on, Section 6A was inserted in the EPF Act, authorizing creation of a Pension Fund and framing Pension Scheme. Accordingly, in 1995, the Employees Pension was framed. As per the said Scheme, the maximum pensionable salary Rs. 5000/-. The corpus of the Pension Fund was to be constituted transferring 8.33% out of the employer‟s contribution under Section 6 of the EPF Act. Subsequently, by an amendment, the ceiling limit was from Rs. 5000/- to Rs. 6500/- w.e.f. 08.10.2001.
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In the meantime, a proviso was added to para 11(3) of the Scheme w.e.f. 16.03.1996 granting an option to the employer and employee, on joint request, to contribute amounts towards the Fund over and above the ceiling limits and on the actual salary.
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The ceiling limit of Rs. 6500/- was subsequently enhanced Rs.15,000/- vide Notification No. G.S.R. 609(E) dated 22.08.2014 from 01.09.2014. The Notification amended Para 11(1) and stipulated the pensionable salary would be the average monthly pay drawn in manner during the contributory period of service in the span of 60 preceding the date of exit from the membership of the Pension Fund pensionable salary was to be determined on pro-rata basis for service upto 01.09.2014, subject to a ceiling of Rs.6500/- per month the period thereafter upto a ceiling of Rs. 15000/- per month. Further, para 4 was added to provide that the employees contributing on exceeding Rs. 6500/- could give a fresh option to be exercised jointly by the employer and employee and continue to contribute on a salary exceeding Rs.
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15000/- per month. The proviso provided that the fresh option was exercised within a period of six months from 01.09.2014 extendable another six months at the discretion of the RPFC. A further proviso added, that if the option was not exercised by the member within stipulated period or extended period, it would be deemed that the had not opted for contribution over the wage ceiling and the contributions to the Pension Fund would be diverted to the Provident Account of the member, along with interest.
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Some of the employees of an establishment covered under the Act, on the eve of their retirement, sometimes in the year 2005, filed petition in the Himachal Pradesh High Court. These employees were sanctioned monthly pension on the basis of their contributions made actual salary, on the ground that they had not exercised their option the cut-off dates as per the proviso to Para 11(3) inserted by the amendment to the Pension Scheme in 1996. The main grievance in that writ petition was that the proviso was not within their knowledge and therefore, the date should not come in their way of getting the benefit of the pension on the contribution, made above the wage ceiling, more particularly, when a matter of fact, had been contributing on the actual salary and not basis of the ceiling limit of either Rs. 5000/- or Rs. 6500/- per month.
plea raised by the Provident Fund authorities was that the proviso visualizes a cut-off date, for exercise of the option and the request of the therein being subsequent to the cut-off date could not be acceded to.
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The learned Single Judge decided the writ petition in favour employees but the Division Bench reversed the said decision upholding
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stand of the Provident Fund authority, that under proviso to clause the Pension Scheme, there was a cut-off date. The judgment of the Division Bench was then challenged before the Hon‟ble Supreme Court and Appeal No.10013-14/2016 was allowed in favour of the employees judgment dated 04.10.2016 titled R.C. Gupta (supra). By the said the Hon‟ble Supreme Court held that reading of the proviso showed that the reference to the date of commencement of the scheme or the date on the salary exceeds the ceiling limit are dates from which the exercised are to be reckoned, for calculation of pensionable salary said dates were not cut-off dates to determine the eligibility of the employeremployee to indicate their option under proviso to Para 11(3). It was further observed that a beneficial scheme ought not to be allowed to be defeated reference to a cut-off date, particularly, in a situation where the and the employee had actually deposited contributions on the actual In fact, the Hon‟ble Apex Court expressed its surprise as to how Provident Fund Commissioner was aggrieved, once the employer employee were willing to contribute on the actual salary and at best, Provident Fund Commissioner could seek a return of all amounts that concerned employee may have withdrawn from their Provident Account before granting them the benefit of proviso to Para 11(3).
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A similar issue had also arisen for consideration before a Bench of the Kerala High Court in a writ petition bearing No.13120/2015 in the case of P. Sasikumar & Ors. vs. Union of Ors . The said petition was decided on 12.10.2018 along with several connected writ petitions. In those writ petitions, one of the issues was similar to the present one, namely, validity of the cut-off
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exercise the option for contributing over the wage ceiling limit. In addition, there was also a challenge to the Employee‟s Pension (Amendment) Scheme, 2014. The Kerala High Court after tracing out the background the enactment of the EPF Act as well as noticing the creation of the Pension Fund and its various amendments, came to a conclusion that the amendment to the Pension Scheme brought about by the Notification dated was bad in law and quashed and set aside the said Notification. The Court has directed the EPF organization to permit the employees to exercise options stipulated under para 26 of the Employees‟ Provident Fund without adhering to or restricting the same to any cut-off date. The Court observed that as per the provisions of the Act, every employee who is a member of the Provident Fund is entitled and required to become member of the Pension Fund and has no other option. The only option is to make contribution to the Provident Fund on the basis of the actual drawn by him. It also observed that there was no provision in the EPF contemplating payment of any amount by either the employer or employee in addition to what is stipulated by Section 6 of the EPF Act therefore it was not possible to require any further payment to be from the contributories and perhaps this was the reason why both employer and the employee are given an option to express their to make contribution in excess of the salary limit mentioned therein.
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The High Court has observed that the object of the EPF Act provide succor to the large section of the working class of our country,
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