Employee Cannot Be Denied Pension Due To Employer's Failure To Allot General Provident Fund Number: Allahabad High Court

In a case where an employee did not make any contribution to the General Provident Fund because he was not allotted a GPF number by the employer, the Allahabad High Court has held that the employee cannot be denied pension due to the fault of the employer.

Justice Subhash Vidyarthi held: “Firstly, the deduction toward General Provident Fund is not a condition precedent for eligibility to receive pension. Secondly, the petitioner was not at fault for non-deduction of the contribution by the authorities. Thirdly, having been retired, the petitioner would be entitled to receive the amount of General Provident Fund and directing the petitioner to deposit the amount merely for the amount being refund to him immediately thereafter, would not serve any purpose.”

Factual Background

Petitioner was appointed as an Assistant teacher at M.M. Ali Memorial Higher Secondary School, Kanpur Nagar in 2004. In 2005, DIOS declined to sanction salary payment for the petitioner. Petitioner approached the High Court wherein direction was issued to the DIOS to consider his case. Subsequently, on 20.11.2009, DIOS passed an order directing payment of salary to the petitioner from the said date.

The petitioner again approached the High Court, and direction was issued to pay the petitioner his salary from 2004. Though the petitioner was being paid his salary, no deduction was made towards his contribution to the General Provident Fund.

In 2022, the petitioner was allotted a GPF number and was directed that 10% of his basic pay would be deducted towards GPF. The Principal of the institution wrote to the Finance and Accounts Officer (Secondary Education), Office of D.I.O.S. informing him that the petitioner was set to retire in less than 6 months and no deduction could be made towards GPF now as per the rules.

The petitioner retired on 31.03.2023, however, due to non-payment of pension, the petitioner approached the High Court.

High Court Verdict

The Court observed that DIOS in his personal affidavit had relied on a Government Order dated 31.03.1978 to state that since no GPF was deducted from the petitioner's salary, he was not entitled to pension.

The Court observed that the Government Order dated 31.03.1978 provides that all permanent, full-time and regular teachers at aided Higher Secondary Schools run and managed by private managements or local bodies retiring on or after 01.03.1977 are entitled to pension at the same rate at which it is payable to the teachers of similar category of government schools. The GO also provides that GPF deduction from the salary of such teachers will be made on the rates applicable to the teachers of Government Schools. It further provided that

The Court observed that the pension payable to the petitioner was governed by Rule 6 of the U.P. General Provident Fund, Insurance, Pension Scheme Rules which provides that employees of the State-aided privately managed institutions as well as the employees of the institution maintained by a Local Body shall be governed by the existing Contributory Provident Fund Rules.

It was observed that the Contributory Provident Scheme was replaced by the General Provident Fund Scheme with effect from 01.03.1977. Rule 17 provides that an employee shall be eligible for pension upon retirement.

The Court held that “deduction towards C.P.F./G.P.F. is not a condition precedent for eligibility of an employee for receiving pension. Therefore, the mere fact that no deduction was made towards G.P.F. from the salary of the petitioner would not affect his eligibility to get pension after his retirement.”

The Court observed that the petitioner was willing to pay his contribution towards the GPF even though he was not guilty for the deductions not being made from his salary. It was held that petitioner was appointed in 2004, much after the closure of the Contributory Provident Fund, therefore petitioner was not covered by the Government Order dated 31.03.1978.

“It is a rudimentary principle of law that no person can be made to suffer for a fault, for which he is not responsible. Apparently, the petitioner was in no manner responsible for non allotment of G.P.F. account number and for non deduction of contribution towards G.P.F. by the Authority is concerned. Therefore, even if deduction of G.P.F. contribution was necessary, the petitioner was not at fault for non- deduction thereof and he cannot be penalized in any manner for non deduction of General Provident Fund for which he is not responsible.”

Accordingly, the Court allowed the writ petition and directed payment of arrears of pension to the petitioner.

Case Title: Udai Narayan Sahu v. State Of Up And 5 Others 2024 LiveLaw (AB) 547 [WRIT - A No. - 8170 of 2024]

Case citation: 2024 LiveLaw (AB) 547

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