IN THE HIGH COURT OF KERALA AT ERNAKULAM
DEVAN RAMACHANDRAN, J.
M. Jayasankaran Nair S/o M. Padmanabhan Nair – Petitioner
Versus
Union of India, Ministry of Labour and Employment, New Delhi – Respondent
W.P. (C) Nos. 7593, 8171, 11075 of 2023
Decided On : 30-05-2024
Circular - Pension Scheme - 11(4) - The judgment discusses the interpretation of the directions of the Hon’ble Supreme Court in paragraph 44 of Ext.P4 judgment, particularly with regard to the eligibility of employees under paragraph 11(4) of the Pension Scheme.
Fact of the Case:
The petitioners challenge a Circular issued by the Regional Provident Fund Commissioner mandating employees to exercise an option under paragraph 11(4) of the Employees Pension Scheme, 1995 for obtaining a higher rate of pension.
Finding of the Court:
The court found that the impugned Circular was not in line with the directions of the Hon’ble Supreme Court and ordered the competent Authority to reconsider the matter and issue an appropriate order within two months.
Issues: Interpretation of the directions of the Hon’ble Supreme Court in paragraph 44 of Ext.P4 judgment, specifically regarding the eligibility of employees under paragraph 11(4) of the Pension Scheme.
Ratio Decidendi: The court held that the impugned Circular was not in accordance with the directions of the Hon’ble Supreme Court and should be set aside to allow the competent Authority to reconsider the matter.
Final Decision: The Writ Petition was allowed, and the impugned Circular was set aside to the extent that it ordered that employees who did not exercise the option under paragraph 11(4) of the Pension Scheme were not entitled to the benefit of the judgment. The competent Authority was directed to reconsider the matter and take necessary action within two months.
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:
(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 s
The main legal point established in the judgment is that the interpretation of the directions of the Hon’ble Supreme Court must be in accordance with the intent of the Court, and any confusion should....
Amendments to the Employees' Pension Scheme cannot impose retrospective cut-off dates for exercising pension options, affirming beneficiaries' rights established prior to amendments.
Employees of exempted establishments are entitled to pension benefits under the EPS 1995 based on actual salary, as clarified by the Supreme Court.
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