1996 Supreme(Mad) 1236

High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI & THE HONOURABLE MR. JUSTICE D. RAJU
Ashok Leyland Employees’ Union (Reg. No.2286) rep. by its General Secretary and another
Versus
Union of India, rep. by the Secretary, Ministry of Law, New Delhi and 3 others
W.P.Nos. 17208 and 17209 of 1996 and etc.,
Decided On : 12-12-1996

Headnote:

Writ petitions challenging the constitutional validity of the 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’. Petitioners claimed that the impugned ordinance and the impugned pension scheme are illegal and unconstitutional. They contended that the impugned provisions of the Act and the impugned scheme is unconstitutional being arbitrary, discriminatory and confiscatory in nature and, therefore, the same is liable to be struck down. It was also contended that by enacting the protective safeguards in Sections 10, 12 and 17 of the main Act the legislature must be considered to have guaranteed the protection of the existing benefits and consequently none including Courts or the Legislatures by any new legislation can take away the said benefits or provide for a lesser benefits than the one available under the existing scheme of Provident Fund and that any new Scheme or provision could provide only any additional benefits that the existing one or accord improved terms of the scheme. The impugned Act and the 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 being measures essentially different in nature, an option should have been given to all the past employees upto 16-11-1995 to join or not to joint in the impugned pension scheme. It was also contended that the impugned amendment and the impugned 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 above batch of writ petitions have been filed challenging the constitutional validity of the 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’. Subsequently, the Parliament has enacted the Employees’ Provident Funds and Miscellaneous Provisions (Amendment) Act, 1996, Central Act, 25 of 1996, hereinafter referred to as ‘the impugned Act, and the Presidents’ assent was also accorded to the same on 18. 1996. Orders have been passed by this court to suitably amend the references in the nature of relief sought so as to substitute the name of the Act in places where the name of the impugned Ordinance, without driving the various petitioners to the necessity of filing formally individual petitions seeking for such amendment and thereupon the challenge stood modified as one directed against the Central Act, 25 of 1996 and the impugned pension scheme thereunder.

Finding of the Court:

The court held that the impugned provisions of the Act and the impugned scheme is unconstitutional being arbitrary, discriminatory and confiscatory in nature and, therefore, the same is liable to be struck down. It was also held that by enacting the protective safeguards in Sections 10, 12 and 17 of the main Act the legislature must be considered to have guaranteed the protection of the existing benefits and consequently none including Courts or the Legislatures by any new legislation can take away the said benefits or provide for a lesser benefits than the one available under the existing scheme of Provident Fund and that any new Scheme or provision could provide only any additional benefits that the existing one or accord improved terms of the scheme. The impugned Act and the 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 being measures essentially different in nature, an option should have been given to all the past employees upto 16-11-1995 to join or not to joint in the impugned pension scheme. It was also held that the impugned amendment and the impugned 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.

Issues: 1. Whether the impugned provisions of the Act and the impugned scheme is unconstitutional being arbitrary, discriminatory and confiscatory in nature? 2. Whether by enacting the protective safeguards in Sections 10, 12 and 17 of the main Act the legislature must be considered to have guaranteed the protection of the existing benefits and consequently none including Courts or the Legislatures by any new legislation can take away the said benefits or provide for a lesser benefits than the one available under the existing scheme of Provident Fund and that any new Scheme or provision could provide only any additional benefits that the existing one or accord improved terms of the scheme? 3. Whether the impugned Act and the 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 being measures essentially different in nature, an option should have been given to all the past employees upto 16-11-1995 to join or not to joint in the impugned pension scheme? 4. Whether the impugned amendment and the impugned 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 impugned scheme is unconstitutional being arbitrary, discriminatory and confiscatory in nature and, therefore, the same is liable to be struck down. 2. The court held that by enacting the protective safeguards in Sections 10, 12 and 17 of the main Act the legislature must be considered to have guaranteed the protection of the existing benefits and consequently none including Courts or the Legislatures by any new legislation can take away the said benefits or provide for a lesser benefits than the one available under the existing scheme of Provident Fund and that any new Scheme or provision could provide only any additional benefits that the existing one or accord improved terms of the scheme. 3. The court held that the impugned Act and the 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 being measures essentially different in nature, an option should have been given to all the past employees upto 16-11-1995 to join or not to joint in the impugned pension scheme. 4. The court held that the impugned amendment and the impugned 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.

Final Decision: The court dismissed the writ petitions but, in the circumstances of the case, there will be no order as to costs. It is made clear that the dismissal of these writ petitions shall not stand in the way of any of the managements concerned, approaching the appropriate and competent authorities for according exemption by satisfying such authorities with particulars relating to their own schemes and substantiating that such benefits are on the whole not less favourable to the employees than the benefits provided under the Act or the Family Pension Scheme in relation to employees in any other establishment of similar character. Consequently, W.M.Ps. also shall stand dismissed.