1996 Supreme(Mad) 1233

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE D. RAJU
Ashok Leyland Employees Union and Another - Appellant
Versus
Union of India and Others - Respondents
No
Decided On : 12 December 1996

Headnote:

The impugned Employees' Provident Funds and Miscellaneous Provisions (Amendment) Ordinance, 1996 (Presidential Ordinance No. 2 of 1996), hereinafter referred to as the impugned ordinance and the Employees' Pension Scheme, 1995, hereinafter referred to as the impugned pension scheme are challenged on the grounds of being arbitrary, discriminatory and confiscatory in nature and, therefore, violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India. The petitioners contend that the impugned provisions are violative of Articles 14 and 21 of the Constitution of India as they are unreasonable, arbitrary and unfair and also violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India. The petitioners also contend that the impugned scheme is discriminatory in that no option is given to the employees already covered by Family Pension Scheme, 1971 and having regard to the fact that Provident Fund and Pension are measures essentially different in nature, an option should have been given to all the past employees upto November 16, 1995 to join or not to join in the impugned pension scheme. It is further contended that the impugned Act and the scheme is a step backward in the area of socio-economic field and that the principles laid down and adopted for the scheme are not based on relevant considerations, but merely illusory.

Fact of the Case:

The petitioners are various workers' unions pertaining to different Industrial Establishments. W.P. No. 17208 of 1995 has been filed by the Ashok Leyland Employees' Union, represented by its General Secretary and another employee who is said to be a Trustee of the Ashok Leyland Employees' Provident Fund, seeking for a writ of declaration that the impugned ordinance and the impugned pension scheme are illegal and un-constitutional. Similarly, the very petitioners have filed W.P. No. 17209 of 1995 for a writ of declaration that the petitioners and their employer Ashok Leyland Limited, Madras are entitled to be exempted under Section 17 of the main Act as early as from November 1, 1952 since they had a better provident fund scheme in the establishment than under the statute with better and greater benefits and that after negotiations with the management the petitioners have arrived at a settlement under Section 18(1) of the Industrial Disputes Act, 1947, on May 24, 1995 under which workmen who superannuated from April 1, 1994 onwards became entitled to pension from the pension fund created jointly by the workers and the management. It is also the claim of the petitioners that as on date, the petitioners-workmen have three retrial benefits viz., gratuity, provident fund and pension each supplementing the other which has been said to be the longstanding demand of the working class.

Finding of the Court:

The Court held that the impugned provisions of the Act and the Scheme is quite in accordance with law, just and reasonable and in tune with the dictates of necessity of modern times as a social security measure to ameliorate conditions of the employees and their families by granting pension. It is contended that the Central Board of Trustees of the Employees' Provident Fund Organisation have, on the recommendations made by the Board which consisted of a tripartite body comprising of representatives of the Central Government and the State Governments, the employers' Organisation and the trade unions of workers, decided to amend the Act to frame a suitable Pension Scheme for the Subscribers of the Employees' Provident Fund that the validity of the impugned provisions could not be judged with reference to any individual case of difficulty or hardship, but on the other hand, should be on the provisions themselves which is an improvement on the earlier Family Pension Scheme, 1971. It is contended that no one can claim that each and every employee must get back not only what he contributes but also the contribution of the employer and the Government towards the Provident Fund and inasmuch as the entire contribution made by the employees have been left untouched, there is no merit whatsoever in the challenge on the basis of either arbitrariness or alleged deprivation or violation of property rights as claimed by the petitioners.

Issues: 1. Whether the impugned provisions of the Act and the Scheme is unconstitutional being arbitrary, discriminatory and confiscatory in nature and, therefore, violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India? 2. Whether the impugned provisions are violative of Articles 14 and 21 of the Constitution of India as they are unreasonable, arbitrary and unfair and also violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India? 3. Whether the impugned scheme is discriminatory in that no option is given to the employees already covered by Family Pension Scheme, 1971 and having regard to the fact that Provident Fund and Pension are measures essentially different in nature, an option should have been given to all the past employees upto November 16, 1995 to join or not to join in the impugned pension scheme? 4. Whether the impugned Act and the scheme is a step backward in the area of socio-economic field and that the principles laid down and adopted for the scheme are not based on relevant considerations, but merely illusory?

Ratio Decidendi: 1. The Court held that the impugned provisions of the Act and the Scheme is quite in accordance with law, just and reasonable and in tune with the dictates of necessity of modern times as a social security measure to ameliorate conditions of the employees and their families by granting pension. 2. The Court held that the impugned provisions are not violative of Articles 14 and 21 of the Constitution of India as they are not unreasonable, arbitrary and unfair and also not violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India. 3. The Court held that the impugned scheme is not discriminatory in that no option is given to the employees already covered by Family Pension Scheme, 1971 and having regard to the fact that Provident Fund and Pension are measures essentially different in nature, an option should have been given to all the past employees upto November 16, 1995 to join or not to join in the impugned pension scheme. 4. The Court held that the impugned Act and the scheme is not a step backward in the area of socio-economic field and that the principles laid down and adopted for the scheme are based on relevant considerations, and not merely illusory.

Final Decision: The Court dismissed the writ petitions filed by the petitioners challenging the constitutional validity of the Employees' Provident Funds and Miscellaneous Provisions (Amendment) Ordinance, 1996 (Presidential Ordinance No. 2 of 1996) and the Employees' Pension Scheme, 1995. The Court held that the impugned provisions of the Act and the Scheme is quite in accordance with law, just and reasonable and in tune with the dictates of necessity of modern times as a social security measure to ameliorate conditions of the employees and their families by granting pension. The Court also held that the impugned provisions are not violative of Articles 14 and 21 of the Constitution of India as they are not unreasonable, arbitrary and unfair and also not violative of Articles 14, 21, 39(a), 39(e), 41 and 300-A of the Constitution of India. The Court further held that the impugned scheme is not discriminatory in that no option is given to the employees already covered by Family Pension Scheme, 1971 and having regard to the fact that Provident Fund and Pension are measures essentially different in nature, an option should have been given to all the past employees upto November 16, 1995 to join or not to join in the impugned pension scheme. The Court also held that the impugned Act and the scheme is not a step backward in the area of socio-economic field and that the principles laid down and adopted for the scheme are based on relevant considerations, and not merely illusory.