Dismissed

Sri v. C Byranna v Union of India

Karnataka HC13 Aug 2024WP/14136/2021

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition filed by a retired employee seeking quashing of orders denying a revised pension. Relying on Sunil Kumar, the Court held that employees retiring before 1 April 2014 without exercising an option cannot benefit from judicial interventions allowing pension revision.

What did the court decide?

Writ petition stands dismissed. Respondents directed to consider future applications filed after 11.07.2023 in accordance with law.

Sri v C Byranna Vs Union of India — Pension and Retirement Benefits | Karnataka HC (2024)

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1 - NC: 2024:KHC:32423 WP No. 14136 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13^TH DAY OF AUGUST, 2024 BEFORE

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THE HON'BLE MRS JUSTICE K.S. HEMALEKHA WRIT PETITION NO. 14136 OF 2021 (L-PF)

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BETWEEN:

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SRI. V C BYRANNA, AGED ABOUT 71 YEARS, S/O LATE CHIKKEGOWDA, R/AT BASAVA SRI KRUPA, MADHAVANAGARA, BHADRAVATHI, SHIVAMOGGA DISTRICT 577 301.

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…PETITIONER

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(BY SRI. S. S. PARIKSHIT, ADVOCATE FOR SRI. S. N. BHAT, ADVOCATE)

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AND:

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UNION OF INDIA,

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Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA

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REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR AND EMPLOYMENT, SHRAM SHAKTI BHAWAN, RAFI MARG, NEW DELHI 110 001.

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COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION, BHAVISHYA NIDHI BHAWAN, NO.14, BHIKAIJI CAMA PLACE, NEW DELHI 110 066.

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ADDITINAL CENTRAL COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION,

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2 - NC: 2024:KHC:32423 WP No. 14136 of 2021

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BENGALURU ZONE (KARNATAKA), BHAVISHYA NIDHI BHAVAN, NO.13, RAJA RAM MOHAN ROY ROAD, BANGALORE-560 025.

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THE REGIONAL PF COMMISSIONER, EPFO REGIONAL OFFICE, SREE KARTHIK PLAZA, 2ND FLOOR, DURGIGUDI MAIN ROAD, SHIVAMOGGA 577 201.

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ASSISTANT PF COMMISSIONER (PENSION) / OIC, EPFO REGIONAL OFFICE, NO.2, MARUTHI COMPLEX, 1ST A MAIN, HIG A SECTOR, YELAHANKA NEW TOWN, BENGALURU-560 064.

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…RESPONDENTS

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(BY SRI. SHANTI BHUSHAN, ASG FOR R1, SMT. NANDITHA HALDIPUR, ADVOCATE FOR R2-R5(VAKALATH FILED FOR R4 AND R5 ONLY)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER / COMMUNICATION DATED 28.02.2020 ISSUED BY R4 ANNEXURE-H AND ALSO REPLY DATED 02.07.2020 ISSUED BY R4 ANNEXURE-K, GRANT AN INTERIM ORDER TO STAY THE ORDER / COMMUNICATION DATED 28.02.2020 ISSUED BY R4 ANNEXURE-H TILL THE DISPOSAL OF THIS WRIT PETITION AND ETC.,

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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NC: 2024:KHC:32423 WP No. 14136 of 2021

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CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA

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ORAL ORDER

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The petitioner has sought for the following prayers:

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"1. Quashing the order/communication bearing No. KN/SHG/PENSION/868/2019-20, dated 28/02/2020 issued by 4^th Respondent (ANNEXURE-H) and also reply bearing no. KN/PF/SHG/PP029904 (28232)/2020-21 dated 02/07/2020 issued by 4th Respondent (ANNEXUREK)

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2. Further grant any such other relief that this Hon'ble Court deems fit to grant in the interest of justice and equity."

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Heard learned counsel for the petitioner and learned counsel appearing for the respondent.

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Petitioner was working in Karnataka State Seed Corporation Limited and retired from service on 30.06.2008 on attaining the age of superannuation and has been rendered service of 35 years, on his retirement, the respondent settled his pension and the pension payment order (PPO) was fixed at Rs.1,837/- per month and after deduction was fixed at Rs.1,653/- per month and the pension was disbursed by respondent No.4.

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4 - NC: 2024:KHC:32423 WP No. 14136 of 2021

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The Central Government in exercise of powers

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conferred in Section 6A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (‘EPF Act’ for short) has made the Employees Pension Scheme 1995 (‘Pension Scheme’ for short), as per the Scheme, the pensionable salary and the percentage of remittance by the employee, employer and the Central Government towards provident fund was determined. As per paragraph No.11 Sub-Clause (3) of the Pension Scheme, the maximum pensionable salary was limited to Rs.5,000/-, which was subsequently, enhanced to Rs.6,500/- and in the year, 1996, a proviso was added to paragraph 11 (3), granting an option to the employer and employee to contribute the amount towards the pension @ 8.33% of the actual salary drawn by the employee, where the salary exceeded Rs.6,500/-.

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Learned counsel appearing for the petitioner places reliance on the judgment of the Apex Court in the case of R. C. Gupta and Others Vs. Regional Provident

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Fund Commissioner, Employees Provident Fund

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Organization and Others (R. C. Gupta)¹ and contends that there was no cut-off date to determine the eligibility of the employer and employee to indicate their option and beneficial scheme ought not to be allowed to be defeated by reference to a cut-off date and made members / employees eligible for the revision of the pension on higher wages and as per the law declared by the Apex Court in R.C. Gupta’s case, the petitioner made a representation for grant of higher pension, the representation made by the petitioner was rejected by respondent No.4.

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Learned counsel appearing for respondent Nos.2 to 5 reiterating the statement of objections filed would contend that the judgment in R.C. Gupta’s case is applicable only in relation to the person who had exercised their option under the provision to Paragraph 11 (3) of the Pension Scheme and further, submits that the Apex Court

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1 (2018) 14 SCC 809

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in the case of Employees Provident Fund Organisation and Another Vs. Sunil Kumar B and Others (Sunil

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Kumar)² has held at paragraph No.44 (v) that the employees who have retired prior to 01.09.2014 without exercising any option under paragraph 11 (3) could not be eligible to the benefit of the judgment of Sunil Kumar and the petitioner in his application for revised pension dated 04.05.2018 has clearly mentioned that he has not exercised any option under Paragraph 11(3) of Pension Scheme.

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The Apex Court in the case of Sunil Kumar

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held that the pension scheme directs that the pension must be sustainably balanced with a rates of contribution into the fund, therefore, the rate of pension can be amended to balance it with the rate of contribution for all the incumbent members of the pension scheme before pension crystallizes as a vested right on their exit from the pension fund and further held since the rate of pension

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2 AIR 2022 SC 5634

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NC: 2024:KHC:32423 WP No. 14136 of 2021

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becomes vested right at the time of exit from the scheme,

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the members cannot seek revision in the rate of pension

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after their exit from the pension scheme.

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The Apex Court in the case of Sunil Kumar has

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held at paragraph No.44 as under:

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"44. We accordingly hold and direct:

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44(i). The provisions contained in the notification no. G.S.R. 609(E) dated 22nd August 2014 are legal and valid. So far as present members of the fund are concerned, we have read down certain provisions of the scheme as applicable in their cases and we shall give our findings and directions on these provisions in the subsequent sub-paragraphs.

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44(ii). Amendment to the pension scheme brought about by the notification No. G.S.R. 609(E) dated 22nd August 2014 shall apply to the employees of the exempted establishments in the same manner as the employees of the regular establishments. Transfer of funds from the exempted establishments shalı be in the manner as we have already directed.

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44(iii). The employees who had exercised option under the proviso to paragraph 11(3) of the 1995 scheme and continued to be in service as on 1st September 2014, will be guided by the amended provisions of paragraph 11(4) of the pension scheme.

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44(iv). The members of the scheme, who did not exercise option, as contemplated in the proviso to paragraph 11(3) of the pension scheme (as it was before the 2014 Amendment) would be entitled to exercise option under paragraph 11(4) of the post amendment scheme. Their right to exercise option

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before 1st September 2014 stands crystalised in the judgment of this Court in the case of R.C. Gupta (supra). The scheme as it stood before 1st September 2014 did not provide for any cut-off date and thus those members shall be entitled to exercise option in terms of paragraph11(4) of the scheme, as it stands at present. Their exercise of option shall be in the nature of joint options covering pre-amended paragraph 11(3) as also the amended paragraph 11(4) of the pension scheme. There was uncertainty as regards validity of the post amendment scheme, which was quashed by the aforesaid judgments of the three High Courts. Thus, all the employees who did not exercise option but were entitled to do so but could not due to the interpretation on cut-off date by the authorities, ought to be given a further chance to exercise their option. Time to exercise option under paragraph 11(4) of the scheme, under these circumstances, shall stand extended by a further period of four months. We are giving this direction in exercise of our jurisdiction under Article 142 of the Constitution of India. Rest of the requirements as per the amended provision shall be complied with.

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44(v). The employees who had retired prior to 1st September 2014 without exercising any option under paragraph 11(3) of the pre- amendment scheme have already exited from the membership thereof. They would not be entitled to the benefit of this judgment.

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44(vi). The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 scheme shall be covered by the provisions of the paragraph 11(3) of the pension scheme as it stood prior to The amendment of 2014.

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44(vii). The requirement of the members to contribute at the rate of 1.16 per cent of their salary to the extent such salary exceeds Rs.15000/- per month as an additional contribution under the amended scheme is held to be ultra vires the

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provisions of the 1952 Act. But for the reasons already explained above, we suspend operation of this part of our order for a period of six months.

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We do so to enable the authorities to make adjustments in the scheme so that the additional contribution can be generated from some other legitimate source within the scope of the Act, which could include enhancing the rate of contribution of the employers. We are not speculating on what steps the authorities will take as it would be for the legislature or the framers of the scheme to make necessary amendment. For the aforesaid period of six months or till such time any amendment is made, whichever is earlier, the employees' contribution shall be as stop gap measure. The said sum shall be adjustable on the basis of alteration to the scheme that may be made.

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44(viii). We do not find any flaw in altering the basis for computation of pensionable salary.

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44(ix). We agree with the view taken by the Division Bench in the case of R.C. Gupta (supra) so far as interpretation of the proviso to paragraph 11(3) (pre-amendment) pension scheme is concerned. The fund authorities shall implement the directives contained in the said judgment within a period of eight weeks, subject to our directions contained earlier in this paragraph.

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44(x). The Contempt Petition (C) Nos. 1917-1918 of 2018 and Contempt Petition (C) Nos. 619-620 of 2019 in Civil Appeal Nos. 10013-10014 of 2016 are disposed of in the above terms."

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(emphasis supplied)

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On careful perusal of the above referred

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paragraph indicates that the employees who have retired

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prior to 01.09.2014 without exercising any option under paragraph 11(3) of the Pre-Amendment Scheme have already exited from the membership thereof and they would not be entitled to the benefit of the judgment.

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The decision of the Apex Court in Sunil Kumar’s case is aptly applicable to the present facts and the petitioner having retired on 30.06.2008 prior to 01.09.2014 is not eligible for the benefit of pension on actual salary and perusal of the application by the petitioner for the revised pension clearly indicates that he has not exercised any option under paragraph 11(3) of the Pension Scheme, as the petitioner seized to be the member on 05.06.2008 and there is no infirmity in the order passed by respondent No.4 and this Court pass the following:

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ORDER

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