IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 4TH NOVEMBER 2011 / 13TH KARTHIKA 1933 WP(C).No. 6643 of 2007(N) ------------------------------------- PETITIONER: ------------------- M.BABU, BADGE NO.11024, HR DEPARTMENT, FACT LIMITED, UDYOGAMANDAL. BY ADVS. SRI.D.ANILKUMAR, SRI.RAJAKRISHNAN. K. RESPONDENTS: ------------------------ 1. THE UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR, NEW DELHI. 2. THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION, SUB REGIONAL OFFICE, 36/675, BHAVISHYANIDHI BHAVAN, P.B.NO.1875, KALOOR. 3. THE FERTILISERS AND CHEMICALS LIMITED, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR, UDYOGAMANDAL. 4. THE SECRETARY, EMPLOYEES PROVIDENT FUND TRUST, FACT, UDYOGAMANDAL. R1 BY SRI.SUNNY XAVIER, C.G.S.C, SRI.PRAKASH PUTHIADAM, C.G.S.C, R2 BY SRI.N.N.SUGUNAPALAN, SENIOR ADVOCATE, ADV. SMT.T.N.GIRIJA, S.C, R3 & R4 BY ADVS. SRI.E.K.NANDAKUMAR, SRI.A.K.JAYASANKAR NAMBIAR, SRI.ANIL D. NAIR. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/11/2011, ALONG WITH W.P.(C). NO. 9929 OF 2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.6643/2007-N: APPENDIX PETITIONER'S EXHIBITS:- EXT.P.1: COPY OF THE LETTER DTD. 07/12/2004 ISSUED BY THE PETITIONER TO THE R.4. EXT.P.2: COPY OF THE LETTER NO:KP/KO/165/G/GAB(6)/2004 DTD. 27/04/2004 ISSUED BY THE R.2. TO THE PETITIONER. EXT.P.3: COPY OF THE SALARY STATEMENT FOR THE MONTH OF NOVEMBER 2004 ISSUED TO THE PETITIONER BY THE R.4. EXT.P.3.A: COPY OF THE SALARY STATEMENT FOR THE MONTH DECEMBER 2004 ISSUED TO THE PETITIONER BY THE R.4. EXT.P.4.A: COPY OF THE LETTER NO. KR/KC/165/GAB(6)/2006 ISSUED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER. EXT.P.5: COPY OF THE LETTER NO:KR/KC/GAB(6)/165/2006/1031 DTD. 04/05/2006 ISSUED BY THE R.2. TO THE SECRETARY P.F TRUST. EXT.P.6: COPY OF THE LETTER DTD. 24/07/2006 ADDRESSED TO THE PETITIONER FROM THE FACT EMPLOYEES PROVIDENT FUND TRUST. EXT.P.7: COPY OF THE LETTER DTD. 20/08/2006 SUBMITTED BY THE PETITIONER TO THE R.2. EXT.P.8: COPY OF THE LETTER NO.CM-HR 1018 DTD. 19/02/2007 RECEIVED BY THE PETITIONER FROM THE FACT H R DEPARTMENT. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.A. TO JUDGE Prv. S. SIRI JAGAN, J. ------------------------------------------- W.P.(C) Nos.6643 & 9929 of 2007 ---------------------------------------------- Dated this the 4th day of November, 2011 JUDGMENT The petitioners in these two writ petitions are employees of the Fertilisers and Chemicals Limited, the 3rd respondent in both writ petitions, which is a public sector Company registered under the Companies Act. The said Company is covered under the Employees' Provident Funds and Miscellaneous Provisions Act. Consequently, the petitioners are members of the Provident Fund maintained by the Company by virtue of Section 17 of the Act. The Central Government promulgated the Employees' Pension Scheme 1995 under Section 6A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. At the time of promulgation of the Scheme, for the purpose of payment of pension, the maximum pensionable salary was limited to Rs.6,500/- per month and contributions in respect of the Pension Scheme was payable only on that amount. The petitioners were also enrolled as members of the Employees' Pension Scheme. Contributions in respect of the petitioners were paid on W.P.(C)No.6643/07 & con.case 2 Rs.6,500/- which was the maximum pensionable salary as per the Scheme. While so, the Employees' Pension Scheme was amended to permit employees, who had paid contributions only on Rs.6,500/-, to pay contributions on the actual salary received by them without limitation, by adding a proviso to clause 11(3) of the Employees' Pension Scheme 1995 with effect from 16.3.1996. Both the petitioners sought for permission to pay contributions based on the actual salary and requested that the arrears of contributions be transferred to the Pension Fund from their Provident Fund accounts. This was accepted by the Provident Fund Organisation by Ext.P2 in both writ petitions. Consequently, the arrears of contributions based on the actual salary was transferred from their Provident Fund account to the Pension Fund account in December 2004. But, subsequently, they were informed that this cannot be permitted because for availing of the benefit an employee has to apply on or before 1.12.2004 and the petitioners had applied subsequent to the cut off date so fixed. The arrears W.P.(C)No.6643/07 & con.case 3 transferred from the petitioners' Provident Fund account to the Pension Account was directed to be re-credited to the Provident Fund account. It is under the above circumstances, the petitioners have filed this writ petition seeking the following reliefs: W.P.(C)No.6643/07 i. issue a writ of certiorari or any other appropriate writ, order or direction calling for the records leading to Exhibit P4, P6 and P8 and quash the same as far as petitioner is concerned declaring it as arbitrary and against the norms and provisions of the employees pension scheme envisaged under the Employees Provident Act. ii. issue a writ of mandamus or any other appropriate writ, order or direction directing the 2nd respondent to retain the petitioner's contribution so far made on actual salary basis and permit the petitioner to continue to contribute on actual salary basis so as to entitle him to draw monthly pension based on actual salary. iii. issue a writ of mandamus or any other appropriate writ, order or direction restraining the 3rd and 4th respondent from remitting back the contribution made on actual salary basis to the petitioner's PF account. W.P.(C) No.9929/07 “i. issue a writ of certiorari or any other appropriate writ, order or direction calling for the records leading to Exhibit P4, P5, P7 and P8 and quash the same as far as petitioner is concerned declaring it as arbitrary and against the norms and W.P.(C)No.6643/07 & con.case 4 provisions of the employees pension scheme envisaged under the Employees Provident Act. ii. issue a writ of mandamus or any other appropriate writ, order or direction directing the 2nd respondent to receive back the petitioner's contribution so far made on actual salary basis and permit the petitioner to continue to contribute on actual salary basis so as to entitle him to draw monthly pension based on actual salary. iii. issue a writ of mandamus or any other appropriate writ, order or direction, directing the 3rd and 4th respondent to remit back the contribution so far made on actual salary basis to the 2nd respondent.” iv. Declare that the retrospective cut of date as 1.12.2004 introduced by the 2nd respondent into the employees pension scheme 1995 against the petitioner is invalid and unauthorised and hence not applicable in the case of the petitioner.” The contention of the petitioners is that there is no provision anywhere in the Act or the Employees' Pension Scheme fixing a cut off date for availing of the benefit under the proviso to clause 11(3) of the Employees' Pension Scheme. The Act and the Scheme do not authorise anybody to fix such a cut off date also. In any event the 2nd respondent has no power to fix such a cut off date, is the contention raised. They also rely on the decision of the Supreme Court in D.S. Nakara v. Union of India [1983(1) SCC 305] in support of their contention W.P.(C)No.6643/07 & con.case 5 wherein the Supreme Court has declared that no cut off date can be fixed for implementing revision of pension. 2. A counter affidavit has been filed by the Provident Fund Organisation taking the stand that the cut off date is applicable to the petitioners. They would also contend that the proviso to clause 11(3) is not retrospective in nature and therefore, after having opted for paying contributions on the maximum pensionable salary, the petitioners cannot re-opt to pay contributions on the actual salary retrospectively. It is further submitted that under clause 26(6) of the Employees' Provident Funds Scheme, which is applicable to the Employees' Pension Scheme as well by virtue of clause 38 of the Employees' Pension Scheme, both the employer and the employee should together file a joint application in respect of availing of proviso to clause 11(3). On these contentions, the Provident Fund Organisation would oppose the claims of the petitioners. 3. I have considered the rival contentions in detail. W.P.(C)No.6643/07 & con.case 6 Clause 11 of the Employees' Pension Scheme reads as follows: “Determination of pensionable salary.- (1) Pensionable salary shall be the average monthly pay drawn in any manner including on piece- rate basis during the contributory period of service in the span of 12 months preceding the date of exit from the membership of the Employees' Pension Fund: Provided that if a member was not in receipt of full pay during the period of twelve months preceding the day he ceased to be the member of Pension Fund, the average of previous 12 months full pay drawn by him during the period for which contribution to the pension fund was recovered, shall be taken into account as pensionable salary for calculating pension. (2) If during the said span of 12 months there are non-contributory periods of service including cases where the member has drawn salary for a part of the month, the total wages during the 12 months' span shall be divided by the actual number of days for which salary has been drawn and the amount so derived shall be multiplied by 30 to work out the average monthly pay. (3) The maximum pensionable salary shall be limited to rupees six thousand and five hundred /Rs.6,500/ per month. Provided that if at the option of the employer and employee, contribution paid on salary exceeding rupees six thousand and five hundred/Rs.6,500 per month from the date of commencement of this Scheme or from the date salary exceeds rupees six thousand and five hundred/Rs.6,500 whichever is later, and 8.33 per cent share of the employers thereof is remitted into the Pension Fund, pensionable salary shall be based on such higher salary.” (underlining supplied) W.P.(C)No.6643/07 & con.case 7 Proviso to clause 11(3) was added by G.S.R. No.134, dated 28.2.1996 with effect from 16.3.1996. I do not find any merit in the contentions of the learned counsel for the Provident Fund Organisation that the proviso is only prospective in nature. The proviso, which was added with effect from 16.3.1996 by G.S.R. Dated 28.2.1996, speaks of contributions on salary from the date of commencement of the Scheme, which is prior to 28.2.1996. Therefore, the very language of the proviso makes it explicitly clear that the proviso is intended to be operative retrospectively from the date of commencement of the Scheme, insofar as the Scheme came into force with effect from 16.11.1995. Therefore, the proviso is certainly retrospective in nature and consequently the petitioners are entitled to avail of the benefit of the proviso retrospectively, provided they are able to make good the arrears of contributions in respect thereof which they have agreed to be transferred from their Provident Fund account, which the Provident Fund Organisation actually did. In fact, W.P.(C)No.6643/07 & con.case 8 originally the Provident Fund Organisation was also of the opinion that the proviso is retrospective in nature and that is why they permitted the petitioners to avail of the benefit of that proviso by paying off the arrears of contributions payable by transfer from their Provident Fund account. In fact even according to the Provident Fund Organisation for availing of the benefit retrospectively the cut off date has been fixed. As such, it is too late for the Provident Fund Organisation to contend otherwise. 4. The second objection is regarding the cut off date fixed. According to the Provident Fund Organisation a cut off date of 1.12.2004 has been fixed for applying for benefit of the proviso by changing over to payment of contributions on actual salary basis. But the Provident Fund Organisation has not been able to produce any document by which such a cut off date has been fixed by anybody. The Employees' Provident Funds and Miscellaneous Provisions Act, the Employees' Provident Fund Scheme and the Employees' Pension Scheme W.P.(C)No.6643/07 & con.case 9 do not contain any provision enabling the 2nd respondent or anybody else to fix a cut off date for the purpose of availing of the benefit of proviso to clause 11(3). Even assuming that anybody has any power to fix that cut off date, certainly it is not the 2nd respondent. As such I am convinced that the cut off date fixed by the 2nd respondent is clearly without jurisdiction. That being so, the benefits already granted to the petitioners under the proviso to clause 11(3) cannot now be reversed or withdrawn as done in this case. 5. The third contention is that under paragraph 26(6) of the Employees Provident Fund Scheme, the employees are required to file a joint application, which has not been done in this case. But, the interesting thing is that the 2nd respondent did not insist on the same, while permitting the petitioners to avail of the benefit of the proviso to clause 11(3). It is when these writ petitions came up that they have taken such a contention. Even assuming that it is so, nothing prevents the Provident Fund Organisation in directing the employer and W.P.(C)No.6643/07 & con.case 10 employee to file a joint application, which they have not done. Added to that, the employer is also a party to these writ petitions before me. They do not have any objection in the petitioners being the given benefit of the proviso to clause 11 (3) of the Employees' Pension Scheme. Therefore, that cannot now be held as ground for denying the benefit to the petitioners. If at all what they can do is to direct the employer and the employee to file a joint application, which is merely procedural in nature which defect can be cured at any time. In the above circumstances, I allow these writ petitions quashing the orders impugned in these two writ petitions. It is declared that the fixation of cut off date of 1.12.2004 is without jurisdiction and despite the fact that the petitioners have filed the applications for benefit under the proviso to clause 11(3), after the cut off date so fixed, the petitioners are entitled to avail of the benefit under the proviso to clause 11(3) of the Employees' Pension Scheme. As such I declare that the benefits was rightly given to the petitioners. W.P.(C)No.6643/07 & con.case 11 Consequently, the arrears of contributions payable by the petitioners for availing of the benefit of the said proviso shall again to be transferred from the Provident Fund account of the petitioners to the Employees' Pension Fund account of the petitioners. Orders in this regard shall be passed, as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment. S. SIRI JAGAN, JUDGE acd W.P.(C)No.6643/07 & con.case 12 W.P.(C)No.6643/07 & con.case 13