Calcutta High Court Issues Direction On Pension Scheme Further To Supreme Court’s Guidelines In EPF Pension Case

Facts:

The Writ Petitioners (approx. 200), all employees of IOCL, had challenged Notification dated 22.08.2014 and also Advisory Circular (Pension -1/12/33/EPS Amendment/96 Vol. II) issued by Regional Provident Fund Commissioner – I (Pension). While the 2014 Notification was issued to amend an earlier Notification dated 28.02.1996 by which the maximum pensionable salary under Clause 11(3) of EPS 1995 was enhanced to Rs 15,000/- per month, the 2017 Circular allowed the benefit of actual salary in the Pension Fund exceeding wage limit of either Rs 5000/- or Rs 6500/- per month from the effective date respectively as per Civil Appeal No. (s) 10013- 10014 of 2016 arising out of SLP No. 33032-33033 of 2015. [R.C. Gupta & Ors – versus- Regional Provident Fund Commissioner Employees Provident Fund Organization& Ors].

It was argued on behalf of the retired employees that they were members of EPS 1995 who had exercised their options as provided in paragraph 26(6) of the Employees Provident Fund Scheme 1952. Further, during the pendency of the 20 writ petitions, the Supreme Court had decided on the validity of the Notification dated 22.08.2014 in the case of Employees Provident Fund Organisation and Anr (Supra) albeit reading down certain provisions of the scheme. In compliance thereto, the Employees Provident Fund Organizations Authority (‘EPFO’) had issued two departmental instructions on 29.12.2022 and 20.02.2023 by which they had opened a window for the petitioners to submit options both under proviso to paragraph 11(3) as also paragraph 11(4) of EPS 1995. Since the matters were sub-judice, unless necessary directions were passed, the petitioners were not able to submit the option forms before the EPFO.

Arguments:

Per Contra, IOCL submitted that:

• As per Section 6 of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (‘EPF Act’), 8.33% of an employees’ pay shall be remitted by the employer to the employees’ pension fund whereas 1.16% of the pay of the members was to be contributed by the Central Government. However ,the proviso limits such contributions payable by the employer and the Central Government on the pay of the member upto Rs.5,000/6,500/15,000/-.

• By introducing proviso to paragraph 11(3) and 11(4), the cap of Rs.6,500/15,000/- had been removed and the members had been granted an opportunity to seek higher pension, by requiring the employer to contribute 8.33 % only on actual pay and to remit the same to the pension fund.

• Notification dated 22.08.2014 had been finally decided by the Supreme Court and was no longer res integra.

• Therefore, only those employees of IOCL who had either exercised the option prior to 01.09.2014 and those employees, who had retired from service after 01.09.2014 were entitled to the benefit subject to satisfaction of conditions laid down in Section 11(4)

Placing reliance on R.C.Gupta & Ors. (Supra), EPFO also argued that exercise of option under paragraph 26(6) of the Employees Provident Fund Scheme, 1952 was a necessary precursor to exercising option under proviso to paragraph 11(3) of EPS 1995. In this case writ petitioners exercised option under paragraph 26(6) of the Employees Provident Fund Scheme, 1952 and the petitioners who had not retired from service on 01.09.2014 should be entitled to the benefit of Supreme Court’s judgment.

The Single Bench, placing reliance on Employees Provident Fund Organisation (Supra), observed:

• Only employees who had exercised option under proviso to paragraph 11(3) of EPS 1995 and continued to be in service as on 01.09.2014 would be guided by the amended provisions of paragraph 11(4).

• The members of the scheme who did not exercise option as contemplated in proviso to paragraph 11(3) of EPS 1995 (as it was before 2014 amendment) would be entitled to exercise option under paragraph 11(4). Such exercise of option should be in the nature of joint options covering pre amended as also amended paragraph 11(4) of EPS 1995.

• Employees who had retired prior to 01.09.2014 without exercising any option in terms of paragraph 11(3) of the pre-amendment scheme and had already exited from the membership thereof, shall not be entitled to the benefit of the judgment.

Accordingly, only those IOCL employees/writ petitioners who were in service as on 01.09.2014 and were members of EPS 1995 were held to be entitled to exercise option under paragraph 11(3) (covering pre-amendment) as also paragraph 11(4).

The Assistant Provision Fund Commissioner (pension), EPFO was directed to accept such option forms from only those employees/writ petitioners as mentioned in the judgment dated 27.02.2023. Thereafter, pensionary benefits payable to petitioners were to be re-computed by issuing revised pension payment orders upon making adjustments and by realizing additional contributions. The entire exercise was to be completed within 2 months from date of furnishing joint option forms.

Case: WPA 4645 of 2018 [Krishnapada Pal & Ors. vs. Union of India & Ors.] Along with WPA 4646 of 2018, WPA 4647 of 2018, WPA 4648 of 2018, WPA 4649 of 2018, WPA 4650 of 2018, WPA 4651 of 2018, WPA 4652 of 2018, WPA 4654 of 2018, WPA 4655 of 2018, WPA 4656 of 2018, WPA 4658 of 2018, WPA 4659 of 2018, WPA 4660 of 2018, WPA 4661 of 2018, WPA 4662 of 2018, WPA 4663 of 2018, WPA 6820 of 2018, WPA 4622 of 2018 and WPA 4830 of 2018

Citation: 2023 LiveLaw (Cal) 68

Counsel For Petitioners: Mr. Achyut Basu, Mr. Kartik Chandra Kapas, Ms. Punam Basu, Mr. Srikumar Chakraborty, Mr. Somen Bose, Mr. Anirban Saha (Advocates).

Counsel for IOCL (Respondent no. 7): Ms. Vineeta Meharia, Barrister & Advocate, Ms. Urmila Chakraborty, Mr. Amit Meharia, Ms. Paramita Banerjee, Ms. Subika Paul and Ms. Amrita Das – Meharia & Company (MCO Legals)