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2024 Supreme(Online)(KER) 18790
HIGH COURT OF KERALA
Dinesh Kumar Singh, J
JOSE V. THOMAS – Appellant
Versus
THE EMPLOYEES PROVIDENT FUND ORGANIZATION – Respondent
WP(C) 5291/2021
R.SANJITH, SMT.C.S.SINDHU KRISHNAH
Retrospective contributions to the pension fund beyond statutory limits are impermissible, as established by the EPF Act and interpreted by the Supreme Court.
Headnote:
[Pension] - [Retirement Benefits] - [EPF Act Sections: 6, 6A; EPF Scheme Paragraphs: 11(3), 11(4), 26(6)] - [The court upheld the decision that retrospective contributions to the pension fund beyond statutory limits are impermissible, emphasizing the need for joint options under the EPF Scheme and the implications of the Supreme Court's interpretations on pensionable salary and contributions.]
Fact of the Case:
The petitioners, retired employees, challenged the refusal of their employer to make higher retrospective contributions to their pension fund, arguing that the employer had not contributed adequately based on their actual salaries.
Issues: Whether the employer can make retrospective contributions to the pension fund beyond statutory limits after employees have retired.
Ratio Decidendi: The court held that retrospective contributions to the pension fund are not allowed, as they would create an imbalance in the fund's actuarial management and violate the provisions of the EPF Act and Scheme.
Final Decision: The writ petition is dismissed.
Heard Mr R Sanjith learned Counsel for the petitioners, and Mr Sajeev Kumar K Gopal learned Standing Counsel for the Employees Provident Fund Organization.
Facts :
2. The petitioners, 16 in number, are retired employees of Kerala State Homeopathic Co-operative Pharmacy Limited, the 5th respondent. They have approached this Court impugning Ext.P3, whereby the 5 th respondent’s request for making a higher contribution retrospectively to the pension fund in excess of the statutory limit has been declined. It has been further prayed that a mandamus be issued to respondents 1 to 4 to compute and communicate the deficiency on the part of the 5th respondent in making provident fund contribution on the respective actual salary of the petitioners including damages and interest, if any, and permit the 5th respondent to remit the deficient amount to the respective provident fund account of the petitioners.
3. The 5th respondent is a Co-operative Society registered under the Co-operative Societies Act 1969. This Society functions under the administrative control of the Ministry of Health and Family Welfare, Government of Kerala. Society’s objective is to manufacture and sell quality Homoeopathic medicines and contribute to the growth of Homoeopathy.
3.1 The employees of the 5 th respondent are covered under the Employees’ Provident Funds and Miscellaneous Provisions Act 1952 (for short, ‘EPF Act’), the Employees’ Provident Fund Scheme 1952 (for short ‘EPF Scheme’) and the Employees’ Pension Scheme 1995 (for short ‘Pension Scheme’).
The date of joining and the date of retirement of the petitioners are tabulated hereunder:
| Petitioner(s) | Date of Joining | Date of Retirement |
|---|---|---|
| 1st petitioner | 22.12.1981 | 31.05.2020 |
| 2nd petitioner | 01.01.1986 | 31.05.2019 |
| 3rd petitioner | 23.01.1984 | 31.08.2010 |
| 4th petitioner | 01.04.1987 | 31.02.2009 |
| 5th petitioner | 23.01.1984 | 28.02.2010 |
| 6th petitioner | 14.06.1982 | 30.09.2011 |
| 7th petitioner | 01.04.1987 | 30.04.2010 |
| 8th petitioner | 15.05.2000 | 31.03.2019 |
| 9th petitioner | 15.05.2000 | 31.01.2017 |
| 10th petitioner | 01.04.1987 | 30.04.2017 |
| 11th petitioner | 06.01.1987 | 28.02.2014 |
| 12th petitioner | 01.02.1981 | 31.12.2012 |
| 13th petitioner | 15.06.1982 | 30.09.2013 |
| 14th petitioner | 01.12.1977 | 31.03.2009 |
| 15th petitioner | 23.11.1981 | 30.11.2015 |
| 16th petitioner | 30.11.1981 | 31.03.2017 |
3.2 The 5 th respondent had subscribed to the EPF Scheme since 1984. The employees of the 5th respondent were remitting their share of the provident fund contributions at the rate of 12% of their actual salary. However, it is said that the 5th respondent was remitting its share at the rate of 12% of Rs.5,000/6500, i.e. the statutory minimum contribution by the employer. It is stated that in the initial years, the salary of the employees was less than Rs.6,500/-. It is further said that the 5 th respondent failed to contribute its share of employees' provident fund contributions in proportion to the actual salary of the petitioners. Furthermore, since December 2014, the 5th respondent has been remitting 12% of the actual salary of its employees as the employer’s share to the provident fund. Thus, the employees who joined the service of the 5th respondent before December 2014 are prejudicially affected by the nonpayment of the employer’s share of contribution to the provident fund at the rate of 12% of their actual salary.
4. The Government of Kerala had issued an intimation [Ext.P1] to the Managing Director of the 5th respondent permitting the 5th respondent to remit provident fund arrears strictly adhering to paragraphs 32A and 30(3) of the EPF Scheme. Pursuant to Ext.P1, the 5th respondent had issued a communication [Ext.P2 dated 08.09.2020] to the 3rd respondent requesting to allow the 5th respondent to remit the arrears of the employer’s contribution to the provident fund account of the employees equal to their contribution for the period prior to 2014. The 4 th respondent considered the request of the 5 th respondent and vide Ext.P3 order/communication dated 30.09.2020, declined the request for making a higher contribution for the
