IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No. 16480 of 1993 Date of Decision: August 31, 2010 Smt. Saroj Garg …Petitioner Versus State of Punjab and another …Respondents CORAM : HON'BLE Mr. JUSTICE M.M. KUMAR HON'BLE MS. JUSTICE RITU BAHRI Present: Mr. Rajesh Garg, Advocate, for the petitioner. Mr. Suvir Sehgal, Addl. Advocate General, Punjab, for the respondents. 1. To be referred to the Reporters or not? Yes 2. Whether the judgment should be reported in the Digest? Yes M.M. KUMAR & RITU BAHRI, JJ. 1. The sole issue involved in the instant petition is ‘whether an employee who had not subscribed to the Punjab Government Employees Insurance Scheme, 1982 (for brevity, ‘the Scheme’) and not contributed towards the Scheme, would still be entitled to get the benefit of the Scheme in view of deeming provision contained in sub-para (2) of Para 4 of the Schedule appended with the Punjab Civil Services (Group Insurance) Rules, 1982 (for brevity, ‘the Rules’)’. Also in question are two judgments rendered by learned Single Judges in the cases of Ajai Kumar v. State of Punjab, 1989 (5) SLR 313 and Santosh Sharma (Smt.) v. State of Punjab, 1996 (4) SLR 134. This reference has, therefore, been made to the Division Bench by the learned C.W.P. No. 16480 of 1993 Single Judge by doubting the aforesaid view. 2. Facts may first be noticed. The petitioner herein is a widow of Dr. Ramesh Kumar. On 3.1.1976, he joined service as a Medical Officer (Dental) in the Health Department, Punjab. The said post has been considered as Class II Service in the State of Punjab. Later on, he was promoted as a Senior Medical Officer (Dental), which was a Class I post. Unfortunately, he expired on 24.6.1993. The petitioner made an application claiming payment of Rs. 1,20,000/- being the premium amount under the Scheme (P-3). On 28.10.1993, the petitioner was informed that since her husband was not a member of the Scheme during his service, therefore, she is not entitled to the benefits of the Scheme. The petitioner challenged this order by way of filling the instant petition. 3. In the written statement filed on behalf of the respondents the stand taken is that the deceased Officer had not made any contribution under the Scheme since its inception on 2.10.1982 till his death in June 1993. It has also been asserted that the pay bills indicate that no deduction had been made on account of any contribution under the Scheme. The respondents have also placed on record the income tax statements signed by the officer showing that no deduction had ever been made from his salary on account of Group Insurance Scheme. The respondents have further pointed out that on 29.6.1984, the State Government had issued a circular (R-7) to all Heads of the Departments by which a final opportunity was provided to the employees who have not opted for the membership of the Scheme so that they could also avail of its benefits. Another defence taken by the respondents is that the benefit is admissible only to the nominee. Since the deceased had not filed his nomination in Form No. 9, the petitioner was not entitled to the benefit 2 C.W.P. No. 16480 of 1993 thereunder. 4. The matter came up for hearing before the learned Single Judge. Vide order dated 20.5.1997, the learned Single Judge after noticing the aforestated factual position as well as provisions of Rule 2(f) of the Rules and Paras 4, 5, 17, 18 and 19 of the Scheme, culled out the following provisions: “(1) Under Rule 2(f), it is postulated that only ‘a member of the Service’ who had been “enrolled” can be a member of the Punjab Government Group Insurance Scheme. (2) Under Rule 3, only that member of the Service who subscribed to the Scheme was “eligible to the benefits”. (3) The officer was never informed by his appointing authority about the date of his enrolment and the subscription to be deducted from his salary in Form I as required under para 4.4 of the Scheme. (4) No deduction was actually made from the salary of the officer from October 1982 till his death in June 1993. He knew it. He had never objected. (5) Under para 5.2, the subscription of the officer had to be raised after he had been promoted. The petitioner’s husband was promoted. However, no action as contemplated under para 5.2 was taken and no information in Form No. 2 was given to him. (6) The officer’s salary bills, income tax forms from the year 1982-83 to 1990-91 have been produced with the written statement. These are duly signed by him. Various deductions as admissible under the Income Tax Act have 3 C.W.P. No. 16480 of 1993 been clearly mentioned. He did not at any stage claim that deduction under the Group Insurance Scheme should have been made. He was accepting the deductions which were being made without any objection. (7) Vide letter dated June 29, 1984, the Government had given another opportunity to the officer “to apply in writing to be enrolled as a member of the Scheme by the 30th September, 1984.” He did not. It was also stipulated that on receipt of the written request, the person may be enrolled as a member with effect from October 2, 1984, subject to the condition that no insurance cover would be provided nor any premium would be recovered until the commencement of the membership. It was stipulated that no benefit would accrue under the Scheme nor shall any subscription be recovered “until the commencement of membership”. Yet, the officer had not applied.” 5. It is also apposite to mention here that the learned Single Judge in his order dated 20.5.1997, has also noticed the Single Bench judgment of this Court rendered in the case of Ajai Kumar (supra), wherein it was held that a person who did not specifically opt out of the Scheme shall be deemed to have become a member. The aforesaid view was subsequently endorsed in another Single Bench judgment of this Court in the case of Santosh Sharma (Smt.) (supra). However, the learned Single Judge while dealing with the instant petition was not in agreement with the said view, as is discernible from the following observations made by the learned Single Judge:- “ It is, thus, obvious that the petitioner’s husband was not 4 C.W.P. No. 16480 of 1993 ‘enrolled’ as a member. He had not subscribed to the Scheme. He had made no contribution. In spite of being given an opportunity, he had not submitted an application for his enrolment even from October 2, 1984. He was aware of the fact that no deduction was being made from his salary for contribution to the Scheme. Yet, he had never objected. Can it be still said that he shall be deemed to be a member, his widow, the petitioner is to be deemed to be a nominee and that she is entitled to the benefits under the Scheme? The two decisions cited at the Bar undoubtedly support her claim. However, if the view as expressed in these decisions is taken to be correct, the Scheme shall not remain “self financing and self supporting”. It cannot be viable. The Government shall be burdened with liability without any contribution from the employees. It would defeat the very basis on which the Scheme was promulgated. It may be desirable to help the employees. But one cannot ignore the ground realities. To illustrate: the petitioner’s husband in the present case had not contributed a penny towards the scheme during the period of more than 10 years from October, 1982 to June 1993. Yet, the petitioner is making a claim for payment of Rs. 1,20,000/-. If permitted, in case of a large number of employees who have not paid a penny, the heirs would claim substantial amounts of money. The provision in para 4.2 of the Scheme has to be read in the context of the Rules under which it has been promulgated. The member is required to get himself ‘enrolled’. If he does not do that, he cannot be ‘deemed to 5 C.W.P. No. 16480 of 1993 have become a member of the Scheme’. He must contribute. If he does not, he should be deemed to have ‘opted out’. Otherwise, the Scheme cannot be “self-supporting” or “self-financing”. In the circumstances, I consider it appropriate that this matter is considered by a Division Bench. Let the papers be placed before Hon’ble the Chief Justice.” (Italic by us) 6. It is in view of the above observations made by the learned Single Judge that the matter has been referred to the Division Bench. 7. Mr. Rajesh Garg, learned counsel for the petitioner has drawn our attention to the provisions of the Rules and the Scheme. Mr. Garg has argued that the language of the Rules and that of the Scheme makes it abundantly clear that it is obligatory for all employees irrespective of the fact whether they have entered the Punjab Government Service prior to implementation of the Scheme or thereafter. The only exception is provided for those employees who were already Member of the Service and were not interested to opt for the Scheme. Only such employees were required to give their option. Further substantiating his arguments, learned counsel has stated that those employees who did not opt out of the Scheme by the stipulated date, were deemed to be members under the Scheme in view of the deeming provision contained in Para 4(2) of the Scheme. According to him, from the combined reading of the Rules and the Scheme it is clear that being a welfare Scheme, the intention of the framers of the Scheme was that all the employees should be covered and only those employees who opt out of the Scheme consciously, were not to get the benefit. Learned counsel then submitted that a duty was also cast upon the employer to inform the employees about the Scheme and deduct the 6 C.W.P. No. 16480 of 1993 subscription from their salary. According to the learned counsel, nothing has been placed on record by the respondents to show that they have ever made any effort to inform the husband of the petitioner or to deduct from his salary the subscription in Form 1. Learned counsel states that the employee cannot be blamed for the fault of the employer. In that regard, learned counsel has placed reliance on a judgment of this Court rendered in the case of Madhav Sarup Behl v. State of Punjab, 2002 (3) RSJ 118. Mr. Garg also referred to the Single Bench judgments of this Court rendered in the cases of Ajai Kumar (supra) and Santosh Sharma (supra) and submitted that the present petition is squarely covered by the said judgments which have been noticed by the learned Single Judge in the reference order dated 20.5.1997 with a dissenting opinion. 8. Reiterating the stand taken in the written statement, Mr. Survir Sehgal, learned State counsel has submitted that the Scheme was notified on 16.8.1982 and it was enforced from the month of October 1982. However, the husband of the petitioner did not opt to be covered by the Scheme. Since no premium was deducted from his emoluments, therefore, the petitioner is not entitled to any amount under the Employees’ Group Insurance Scheme payable on the death of her husband. Learned counsel then submitted that husband of the petitioner was not enrolled as a member of the Scheme and, thus, no deduction of premium was made out of his emoluments. According to him, it was obligatory for the deceased to make necessary contribution from his pay and, therefore, the petitioner cannot claim any benefit as a matter of right. Referring to instructions dated 29.6.1984 (R/7), learned counsel states that a final opportunity was provided to the employees to apply in writing to be enrolled as member of the Scheme by 30.9.1984. Despite this, the petitioner’s 7 C.W.P. No. 16480 of 1993 husband did not opt to become the member of the Scheme. Thus, the petitioner cannot lay any claim for payment of Rs. 1,20,000/- under the Scheme. 9. We have heard learned counsel for the parties and gone through the entire record with their able assistance. Though the provisions of the Rules and the Scheme have already been subjected to judicial scrutiny in a similar controversy raised before this Court in the cases of Ajai Kumar (supra) and Santosh Sharma (supra) and answered in favour of the employees, yet, keeping in view the observations made by the learned Single Judge in his reference order dated 20.5.1997, it is imperative for us to first read and then adopt the appropriate rule of construction to interpret various provisions of the Rules and the Scheme. Accordingly, the relevant provisions of the Rules and the Scheme are extracted below in extenso: Provisions contained in the Rules “2(f) ‘Member of the Scheme’ means a member of the Service enrolled as a member of the Punjab Government Group Insurance Scheme.” “3. Application of Punjab Government Employees Group Insurance Scheme. – A member of the service shall subscribe to the Punjab Government Group Insurance Scheme set out in the Schedule and shall be eligible to the benefits of the Scheme: Provided that a member of the service who was appointed to the service before the commencement of these Rules may exercise option not to be governed by the Punjab Government 8 C.W.P. No. 16480 of 1993 Group Insurance Scheme.” 0 Provisions contained in the Schedule appended to Rule 3 i.e. clauses of the Scheme “2. Objective: The ‘Scheme’ is intended to provide for the Punjab Government employees at a low cost and on a wholly contributory and self-financing basis, the twin benefits of an insurance cover to help their families in the event of death in service and a lump sum payment to augment their resources on retirement.” “3. Application: The ‘Scheme’ will apply to the members of Service viz. all Punjab Government employees excluding persons on deputation from other State Governments/Organisations, Public Sector Undertakings or other Autonomous Organisations locally recruited staff, casual labourers, part-time and ad hoc employees etc., etc. The ‘Scheme’ will also not apply to persons recruited under the Punjab Government after attaining the age of 50 years.” “4. Membership: 4.(1) The ‘Scheme will be compulsory for all those employees who enter Punjab Government service after the 9 C.W.P. No. 16480 of 1993 ‘Scheme’ is notified, i.e. all those ‘employees’ entering Punjab Government Service after the 15th August, 1982 will be compulsorily covered under the ‘Scheme’ from the date it comes into force. 4.(2) Those ‘employees’ who are already in Punjab Government service on the date the ‘Scheme’ is notified will have an option to opt out of the ‘Scheme’. This option should be exercised in Form No. 3 by 30th September, 1982. Those employees who do not opt out of the Scheme by that date will be deemed to have become members of the ‘Scheme’ from the date the ‘Scheme’ comes into force. The option, once exercised (or not exercised) will be treated as final and no further choice will be available. 4.(3) After the ‘Scheme’ has come into force, a member of the Service appointed to the Service in a month other than October, shall be enrolled as member of the Scheme on the next anniversary of the Scheme. 4.(4) Every member of the Service enrolled as a member of the ‘Scheme’ shall be informed by his appointing authority the date of his enrolment and the subscription to be deducted from his salary in Form 1 under intimation to Government of Punjab, Department of Finance.” “15. Mode of Notification of the ‘Scheme’ for inviting option. The ‘Scheme’ shall also be notified to every Government employee by placing a copy thereof on his Service Book or other 10 C.W.P. No. 16480 of 1993 service documents with his signatures appended thereon. The signatures shall be obtained by the Head of Office.” “17. Action on the Scheme coming into force. 17(1). By the 10th of October, 1982 the Head of Office shall supply to the Drawing and Disbursing Officer a statement indicating the name, the Group and the date of birth of every member of the ‘Scheme’ who has been in the Punjab Government service on the date of the ‘Scheme’ is notified but has not opted out of the Scheme. 17(2). Every member of the ‘Scheme’ shall be informed in Form 1 the date of his enrolment, the amount of subscription to be deducted and the benefits to which he would be eligible. On his regular promotion from one Group to another, he will be similarly informed in Form 2. 17(3). The option exercised by the employees who are already in Punjab Government service on the date of the ‘Scheme’ is notified shall be in Form 3 and will be pasted in the service book of the individuals concerned.” (Italics by us) 10. A bare perusal of the above provisions would show that the Scheme has been formulated by the State of Punjab being a welfare measure for the Government employees and their families. Section 2(f) of the Rules defines the expression ‘Member of the Scheme’ to mean a member of the Service enrolled as a member of the Punjab Government Group Insurance Scheme. However, in none of the provisions of either the Rules or various clauses of the Scheme the manner of enrolment has been prescribed. Rule 3 only says that a member of the service shall subscribe to the Scheme and 11 C.W.P. No. 16480 of 1993 would be eligible to its benefits. Again no specific provision has been made with regard to subscription by a member of the service. On the other hand proviso to Rule 3 specifically lays down that a member of the service who was appointed to the service before commencement of the Rules and who does not want to be governed by the Scheme, could opt of the Scheme by exercising his option. Clause 3 of the Scheme under the heading of ‘Application’ specifies that the ‘Scheme’ was to apply to the ‘members of Service’ viz. all Punjab Government employees excluding persons on deputation from other State Governments/Organisations, Public Sector Undertakings or other Autonomous Organisations locally recruited staff, casual labourers, part-time and ad hoc employees etc., etc. It further stipulates that the Scheme was not to apply to those persons who were recruited under the Punjab Government after attaining the age of 50 years. 11. Sub-clause (1) of Clause 4 of the Scheme in clear words stipulates that the ‘Scheme’ would be compulsory for all those employees who enter Punjab Government Service after it is notified. Meaning thereby those employees who entered the Punjab Government Service after 2.10.1982 were compulsorily covered under the Scheme and automatically enrolled the moment they are appointed to the service. Sub-clause (2) of Clause 4 of the Scheme, which is in-tandem with Rule 3 of the Rules, again emphasis that those employees who are already in Punjab Government service on the date the Scheme is notified would have an option to ‘opt out’ of the Scheme in Form No. 3 by 30.9.1982. It further stipulates that those employees who do not ‘opt out’ of the Scheme by the said date would be ‘deemed to have become members of the ‘Scheme’ from the date the ‘Scheme’ comes into force’. In other words, this option to ‘opt out’ of Scheme has to be specifically exercised 12 C.W.P. No. 16480 of 1993 in writing and those employees who did not ‘opt out’ of Scheme by 30.9.1982, were deemed to have become members of the Scheme from the date of Scheme comes into force. Therefore, when, there was nothing in writing given by an employee ‘opting out’ of the Scheme, such an employee would be deemed to be covered by the Scheme. Sub-clause (4) of Clause 4 of the Scheme casts a duty on the appointing authority to inform every member of the Service about the date of his enrolment and the subscription to be deducted from his salary in Form-I under intimation to Government of Punjab, Department of Finance. 12. Clause 15 of the Scheme prescribes the mode of notification of the Scheme for inviting option. As per this clause the Scheme was to be notified to every Government employee by placing a copy thereof on his Service Book or other service documents with his signatures appended thereon. The signatures were to be obtained by the Head of Office. In other words, again it was the duty of the Head of the Office to notify the Scheme to every individual employee and to obtain their signatures in token thereof. 13. Clauses 16 and 17 of the Scheme further talks about the action to be taken by the departmental authorities upon ‘notification of the Scheme’ and ‘the Scheme coming into force’. As per Clause 16, the Head of Office was required to supply to the Drawing and Disbursing Officer the names, groups, dates of birth and dates of appointments of persons who may have been appointed to any service or post under the Punjab government during the preceding month and who would be eligible to be the members of the Scheme in terms of para 3 of the Scheme, by the 10th of every month following the month in which the Scheme is notified. Under sub-clause (1) of Clause 17, the Head of Office was required to supply information to the Drawing and Disbursing Officer by 10.10.1982 of such members of the service who have 13 C.W.P. No. 16480 of 1993 not ‘opted out’ of the Scheme. Under sub-clause (2) of Clause 17 every member of the Scheme was to be informed in Form 1 the date of his enrolment, the amount of subscription to be deducted and the benefits to which he would be eligible. Similarly, on his regular promotion from one Group to another, such information was to be provided in Form 2. As per sub-clause (3) of Clause 17 of the Scheme the option exercised by the employees, who were already in Punjab Government service on the date of notification of the Scheme, was required to be pasted in the service book of the individuals concerned in Form 3. 14. After a conjoint reading of the above provisions we are of the view that it would be erroneous to say that the husband of the petitioner was not ‘enrolled’ as a member and he had not subscribed to the Scheme. Once he had not chosen to ‘opt out’ of the Scheme, he is deemed to be member of the Scheme in view of the specific provision of sub-clause (2) of Clause 4 of the Scheme. Merely because in the definition of expression ‘member of the Scheme’ under Rule 2(f) of the Rules, the word ‘enrolled’ and in Rule 3 the words ‘member of the service shall subscribe’ are occurring, would not entail that the employee was required to give anything in writing because no procedure for getting himself ‘enrolled’ or to ‘subscribe’ to the Scheme has been mentioned either in the Rules or in the Scheme, whereas for the purpose of opting out of the scheme, a specific Form No. 3 with reference to Clause 4 (2) and 17(3) has been provided in the Schedule appended to the Rules. For a ready reference, the language and contents of Form No. 3 are reproduced as under:- “ FORM NO. 3 [Referred to in clause No. 4(2) and 17(3)] 14 C.W.P. No. 16480 of 1993 To (Head of Office) Sir, I have read and understood/I have been explained the details of the new Punjab Government Employees Group Insurance Scheme, 1982. I opt to remain out of this ‘Scheme’. Place: Yours faithfully, Date: ( ) Name and Designation of the employee.” (Italics supplied) 15. As discussed above, the Scheme has cast various duties to the Head of the Office or the Appointing