Dismissed

Rfc Officers Association v. State of Rajasthan

Rajasthan HC15 Nov 2018WRW/190/2018

Case brief

AI extract

What is this about?

In a review petition, the court held that the Division Bench judgment dividing employees into three categories regarding pensionary benefits under the Regulations of 1990 remains valid. The court refused to recall directions for employees in service despite a new Notification, noting its legality is subject to a pending separate writ petition. A typographical error correcting 'GPF' to 'CPF' was cl

What did the court decide?

The review petition was dismissed; the judgment dated 7th May 2018 continuing the Regulations of 1990 for employees in service remains in force pending the outcome of a separate writ challenging the J

Rfc Officers Association Vs State of… — Pension and Retirement Benefits | Rajasthan HC (2018)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Writ Review No. 190/2018

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RFC Officers Association, Through The President Govind Singh S/o Late Shri B.r. Singh, Aged About 56 Years, R/o 119/148, Agarwal Farm, Mansarovar, Jaipur, Present President Is Vishwajeet Bhattacharya S/o Late Sh. Pundarik Bhattcharya, Aged About 57 Years, R/o D-27, A Pawan Path, Hanuman Nagar, Jaipur 202021.

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Rajasthan Vitta Nigam Karmachari Mahasangh, Through General Secretary, Gyan Prakash Sharma, S/o Sh. B.s. Sharma, Aged About 57 Years, R/o 80, Ganga Vihar Colony, Near Arjun Nagar, Jaipur Of Presently Resides At 53, Kasturba Nagar, Ajmer Road, Jaipur.

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----Petitioners

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Versus

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State Of Rajasthan, Through The Secretary, Govt. Of Rajasthan, State Enterprises Department, Secretariat, Jaipur.

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Managing Director, Rajasthan Financial Corporation, Udyog Bhawan, Tilak Marg, Jaipur.

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----Respondents

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For Petitioner(s) : Mr. Virendra Lodha, Sr. Adv. with Mr.Jai Lodha For Respondent(s) : Dr. Saugath Roy

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HON'BLE MR. JUSTICE MUNISHWAR NATH BHANDARI HON'BLE MR. JUSTICE G R MOOLCHANDANI

Judgment

15/11/2018

(2 of 11)

[WRW-190/2018]

This review petition has been filed by the Rajasthan Financial Corporation against one category of the employees governed by the order of this court dated 7^th May, 2018.

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The Rajasthan Financial Corporation Employees Pension Regulations, 1990 (for short “the Regulations of 1990” ) was introduced by the Rajasthan Financial Corporation ( “the RFC” ). It was in consultation with the Small Industries Development Bank of India (for short “the SIDBI” ) and previous sanction of the State Government as per Section 48 of the State Financial Corporations Act, 1951 (for short “the Act of 1951” ). After introduction of the Regulations of 1990, the RFC sought option from the employees under Regulation 7 of the Regulations of 1990. The employees and the officers of the RFC gave option for pensionary benefits under the Regulations of 1990. The RFC withdrew the Regulations of 1990 by an order dated 12^th August, 2004. It was with the stipulation that employees already retired would continue under the Regulations of 1990 unless they opt for CPF Scheme. It was allowed as one time arrangement only. The employees, who retired prior to 12^th August, 2004, were thus given pensionary benefits.

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A challenge to the order dated 12^th August, 2004 was made mainly in reference to Section 48 of the Act of 1951. The amendment in the Regulations or its withdrawal could have been made in consultation with the SIDBI and with previous sanction of the State Government, as envisaged under Section 48 of the Act of 1951. The court found that RFC had issued an order dated 12^th August, 2004 without compliance of Section 48 of the Act of 1951. The order dated 12^th August, 2004 was thus held to be illegal.

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(3 of 11)

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[WRW-190/2018]

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The issue was considered by this court even in reference to Regulation 3 of the Regulations of 1990, which, according to the RFC, permits an amendment and withdrawal of the Scheme by the RFC. The court found that Regulations cannot overwrite the provisions of the Act and otherwise, Regulation 3 of the Regulations of 1990 is not for the purpose of withdrawal of the Pension Scheme. Accordingly, this court while holding the order dated 12^th August, 2004 to be illegal in absence of compliance of Section 48 of the Act of 1951, issued directions dividing employees in three categories.

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The first category is of those employees, who retired prior to 12^th August, 2004. They were ordered to be governed by the Regulations of 1990 unless an individual has opted for CPF Scheme as one time arrangement. The RFC has no issue in the review petition in regard to those employees.

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The second category is of those employees, who retired subsequent to 12^th August, 2004 but before filing of the writ petition. The group of such employees was also found entitled to the pensionary benefits, provided they have not accepted benefit under the CPF Scheme. It was thus made clear that if an employee has accepted benefit under CPF Scheme then would not be governed by the GPF scheme i.e. by the Regulations of 1990. A direction for scrutiny of each case was given to the RFC. Those who had made protest to govern them by CPF instead of the pension Regulations of 1990 either by sending a protest or by returning of the amount towards CPF on their retirement, such employees were ordered to be governed by the Regulations of 1990. It is leaving those who failed to make protest either in writing or by sending amount, if encashed or withdrew the amount

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(4 of 11)

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[WRW-190/2018]

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of CPF sent by the RFC. It should have been prior to filing of the writ petition and not subsequent thereto. The review petitioners have no objection to direction given in regard to second category also.

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The third category is of those employees, who were in service. They were ordered to be governed by the Regulations of 1990 unless those Regulations are withdrawn by the mode provided under the Act of 1951.

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Learned counsel for RFC submits that a Notification to withdraw the Regulations of 1990 after complying Section 48 of the Act of 1951 was issued on 21^st July, 2017. The aforesaid Notification was issued subsequent to the judgment in the writ petitions but before disposal of the special appeals. It was submitted at the stage of appeal but could not be brought to the notice of the court while arguing the appeals. It is moreso when Notification has been given effect since 12^th August, 2004 and, accordingly, the pension scheme was withdrawn by adopting the procedure given under Section 48 of the Act of 1951. The third category would not exist and, accordingly, review of the order is sought in reference to third category of the employees.

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It is stated that a separate writ petition has been filed by the petitioners to challenge the Notification dated 21^st July, 2017 and is pending consideration before the court. The outcome of the said writ petition would govern third category thus, direction for third category needs to be recalled by accepting the review petition.

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Learned counsel for respondents has opposed the review petition. It is submitted that even Notification dated 21^st July, 2017 has not been issued after compliance of Section 48 of the Act of 1951. It was not in consultation of SIDBI and previous

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(5 of 11)

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[WRW-190/2018]

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sanction of the State Government. It is, however, admitted that issue aforesaid is pending consideration before this court in a separate writ petition. It is, however, urged that Notification dated 21^st July, 2017 was not before learned Single Judge so as to seek review of the order. It was not even brought to the notice of the Division Bench while arguing the case though it may have been submitted while appeals were pending. In view of the above, recall of the order in regard to third category may not be made as RFC had challenged the judgment before the Supreme Court and its withdrawn thereupon. It was, however, with liberty to file a review petition.

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It is also stated that presently the RFC is running in profits thus ground about financial crunches no more exists. The review petition may accordingly be dismissed.

¶35

We have considered rival submissions made by learned counsel for the parties and perused the record.

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The RFC introduced the Regulations of 1990 in consultation with the SIDBI and with previous sanction of the State Government as per Section 48 of the Act of 1951. The employees were called upon to give their option for pensionary benefits instead of continuing them under the CPF Scheme. It was with the stipulation that on receipt of the option, such an employee would subscribe towards GPF and amount lying in the credit of CPF contribution would be transferred. The employees in litigation opted for pensionary benefits.

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The Regulations of 1990 were, however, withdrawn by the RFC vide order dated 12^th August, 2004. It was challenged by maintaining writ petitions mainly on the ground that the order for withdrawal of the Regulations of 1990 is without compliance of

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(6 of 11)

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[WRW-190/2018]

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Section 48 of the Act of 1951. For ready reference, Section 48 of the Act of 1951 is quoted hereunder:

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“ 48. Power of Board to make regulations

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(1) The Board may, after consultation with the [Small Industries Bank] and with the previous sanction of the State Government, make regulations not inconsistent with this Act and the rules made thereunder to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

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(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for-

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(a) the holding and conduct of elections under this Act, including the final decision on doubts or disputes regarding the validity of elections;

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(b) the manner in which, and the conditions subject to which, the first allotment of the shares of the Financial Corporation shall be made;

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(c) the manner in which, and the conditions subject to which, the shares of the Financial Corporation may be held and transferred and generally all matters relating to the rights and duties of shareholders;

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[(ca) the maintenance of register of shareholders, particulars to be entered in such register, the safeguards to be observed in the maintenance of register of shareholders on computer floppies or diskettes, compact disk or any other electronic form the inspection and closure of the register of shareholders and all other matters connected therewith under sec.6;

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(cb) the manner of nomination of directors under clause(d) of sec.10;

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(cc) the entrusting or delegation of duties to the managing director by the Board under clause (c) of sub-sec. (1) of sec.17;

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(cd) the functions of Executive Committee under sub-sec.(2) of sec.18;

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(7 of 11)

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[WRW-190/2018]

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(ce) the guidelines and prudential norms in accordance with which investment may be made under sec.34;

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(cf) the manner in which nomination may be made under section 41B; and

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(cg) the investment (whether by way of deposits in bank or otherwise) of the amounts which are not for the time being required for transaction of business.]

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(d) the manner in which general meetings shall be convened, the procedure to be followed thereat and the manner in which voting rights may be exercised;

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(e) the calling of meetings of the Board, and of the Executive Committee, fees for attending meetings thereof and the conduct of business thereat;

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(f) the manner and the terms of issue and repayment of bonds and debentures by the Financial Corporation;

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(g) the conditions which the Financial Corporation may impose in granting loans or advances; [* * *]

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(i) the forms of returns and statements required under this Act;

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(j) the duties and conduct of officers, other employees, advisers and agents of the Financial Corporation.

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(k) the establishment and maintenance of provident or other benefit funds for employees of the Financial Corporation;

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(l) the taking over of the management of any industrial concern on a breach of its agreement with the Financial Corporation;

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(m) the appointment of² [committees] for the purposes of this Act, fee for attending meetings thereof and the conduct of business thereat;³ [xxx]

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(n) generally, the efficient conduct of the affairs of the Financial Corporation⁴ [and]

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[WRW-190/2018]

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4[(o) the form and manner in which the balancesheet and the accounts of the Financial Corporation shall be prepared;

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(p) any other matter which is to be, or may be, prescribed.]

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(3) All regulations made under this section shall be published in the Official Gazette and any such regulation shall have effect from such earlier or later date as may be specified in the regulations.”

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Section 48 of the Act of 1951 gives power to the Board to make Regulations. It has to be in consultation with the SIDBI and with the previous sanction of the State Government. The Regulations need to be published in the Official Gazette as per sub-section (3) of Section 48 of the Act of 1951. The Regulations of 1990 were brought by applying the procedure given under Section 48 of the Act of 1951. The withdrawal of Regulations of 1990 was not by the same procedure, as applied while bringing it. The Regulations of 1990 were withdrawn by the RFC vide order dated 12^th August, 2004 without publishing a Notification in the Gazette. It was not in consultation with the SIDBI and previous sanction of the State Government. This court found order dated 12^th August, 2004 to be illegal for withdrawal of the Regulations of 1990. The effect of the said finding was to nullify the order dated 12^th August, 2004.

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The court while delivering the judgment dated 7^th May, 2018 divided the employees in three categories.

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The first category was of those employees, who retired prior to issuance of order dated 12^th August, 2004. They were governed by the Regulations of 1990 and, accordingly, extended pensionary benefits after their retirement. The RFC was, accordingly, directed

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(9 of 11)

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[WRW-190/2018]

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to continue them by the Regulations of 1990, as they retired even prior to withdrawal of the Regulations thus a vested right was existing in their favour to continue with pensionary benefits unless they opt for CPF Scheme as one time arrangement. The RFC has not raised issue in regard to those employees in the present review petition and, accordingly, those employees, who retired prior to 12^th August, 2004, would continue to be governed by the pensionary benefits.

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The second category is of those employees, who retired after 12^th August, 2004. They were also ordered to be governed by the Regulations of 1990 unless accepted CPF contribution on their retirement without protest. In view of the above, even second category of employee was ordered to be governed by the Regulations of 1990 unless they had accepted CPF contribution.

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The acceptance of CPF contribution was taken where the employees had received the cheques and amount of CPF contribution without protest. It was excluding those who did not receive the CPF contribution or returned the cheques with protest. It is even by indicating that they do not want to be governed by the CPF Scheme but to continue them under GPF Scheme with pensionary benefits. It should be prior to filing of the writ petitions in those cases where employees retired prior to filing of the writ petitions. The RFC has no issue even in regard to second category of the employees. The second category to deny pensionary benefits was evolved for those employees, who had accepted the CPF contribution. It is taking into consideration that once CPF contribution is accepted without protest then there is implied

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(10 of 11) [WRW-190/2018]

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consent of those employees to govern them by the CPF Scheme instead under the Regulations of 1990.

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It cannot be that even after acceptance of the contribution towards CPF, they can, at the same time, claim for benefit under GPF i.e. pensionary benefits. The view aforesaid is supported by the judgment of the Apex Court in the case of Union of India (UOI) through the Secretary, National Council of Educational Research and Training Vs. Shyam Babu Maheshwari, reported in (2011) 6 SCC 412 .

¶82

The third category is of those employees, who were in service. Since the order dated 12^th August, 2004 was nullified by this court, the employees in service were ordered to be governed by the Regulations of 1990 unless it is withdrawn by applying the procedure given under Section 48 of the Act of 1951.

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Learned counsel for RFC submits that a Notification for withdrawal of the Regulations of 1990 was issued subsequent to disposal of the writ petitions but during pendency of the special appeals. The Notification dated 21^st July, 2017 was issued after complying Section 48 of the Act of 1951. The reference of the said Notification has not been made in the judgment sought to be reviewed with necessary finding. It is moreso when withdrawal of the Regulations of 1990 vide Notification dated 21^st July, 2017 has been made w.e.f. 12^th August, 2004.

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We have considered the issue aforesaid but find no ground for review of the order even in reference to the Notification dated 21^st July, 2017. This court, while dealing with the issue in reference to the employees falling in third category, made it clear to continue them under the Regulations of 1990 unless withdrawn

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(11 of 11)

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[WRW-190/2018]

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by applying the procedure given under Section 48 of the Act of 1951. In view of the above, we do not find any reason to review the order when it is clear in its terms. It is, otherwise, informed that the Notification dated 21^st July, 2017 has been challenged by maintaining a separate writ petition. The issue in reference to the Notification would be determined in the said writ petition.

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The review petition is disposed of with the aforesaid. It is, however, with the clarification that while dealing with the issues pertaining to employees falling in second category, the word “GPF” has been mentioned as “CPF” at some places due to typographical error. It has been corrected in a separate order passed today on the misc. application preferred by the employees. Accordingly, the order aforesaid would apply to the present order also.

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(G R MOOLCHANDANI),J (M.N. BHANDARI),J

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FRBOHRA

Rfc Officers Association v. State of Rajasthan

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Rfc Officers Association v. State of Rajasthan

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