High Court of KeralaDivision Bench2023-11-02Contempt Case disposed of/closed with direction...

Cont.Case (C) No. 1850 of 2020

Case / Petition Number:Cont.Case (C) No. 1850 of 2020 (Arising out of W.P.(C) No. 40695/2016)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Anil K. Narendran
G. Girish
Judgment Date: 2023-11-02
Court Decision / Holding: Contempt case disposed/closed. The court held that, in light of the Supreme Court’s 2022 judgment, the petitioners’ entitlement to higher pension requires reconsideration by EPFO in accordance with law. The case is closed, with EPFO directed to undertake the reconsideration of entitlements consistent with the 2022 decision, preserving the petitioners’ rights.
Final Disposition: Contempt Case disposed of/closed with directions to EPFO to reconsider entitlement in light of the 2022 Supreme Court judgment.

Parties to the Case

Appellants / Petitioners

Sumavathy V.V
K. Valsamma
Sisobhini M
S. Indira

Respondents

B. Andrew Prabhu

Legal Representation & Advocates

Counsels for Petitioners

• Adv P.N. Mohanan

Counsels for Respondents

• Adv Nita N.S

Case Synopsis & Summary

This Contempt of Court case arises from directions contained in Annexure A1 to the Kerala High Court’s judgment dated 12 October 2018 in W.P.(C) No. 40695 of 2016 (and connected matters). The petitioners, being petitioners 10, 11, 13 and 14 in the 2016 writ petition, filed this contempt petition under Section 12 of the Contempt of Courts Act, 1971, alleging willful disobedience by the Employees Provident Fund Organisation (EPFO) in implementing the directions and the amended pension scheme. The respondent, B. Andrew Prabhu, an EPFO officer, is opposed by the learned counsel for the EPFO, who contends that the directive should be implemented in accordance with law and that the matter requires reconsideration in light of subsequent Supreme Court jurisprudence. The apex judgment dated 04.11.2022 in Civil Appeal Nos.8143-44 of 2022, namely Employees Provident Fund Organisation v. Sunil Kumar B., held that the notification No.G.S.R.609(E) dated 22 August 2014 is legal and valid and directed read-down of the pension scheme for current employees, including in exempted establishments, with applicable extensions of option periods. The Kerala High Court concludes that the petitioners’ entitlement to higher pension requires reconsideration by EPFO in light of the 2022 apex ruling. Consequently, the contempt petition is closed, with a direction that EPFO undertake the reconsideration in accordance with law, preserving the petitioners’ rights. The matter is disposed in terms of the Supreme Court’s 2022 judgment.

Provisions of Law Cited

Section 12 of the Contempt of Courts Act, 1971Employees' Provident Funds and Miscellaneous Provisions Act, 1952G.S.R. 609(E) (Notification) dated 22 August 2014Paragraph 11(3) (pre-amendment) of the 1995 pension schemeParagraph 11(4) of the post-amendment pension schemeArticle 142 of the Constitution of India

Legal Doctrines & Maxims

Read down
Ultra vires
Article 142 (Constitutional power)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners submit that the EPFO has willfully disobeyed the directions in Annexure A1 of the 2018 order by not implementing the pension reforms and by denying higher pension in contravention of the amended pension scheme. They rely on the Supreme Court’s 2022 decision (Sunil Kumar B.) upholding the legality of G.S.R. 609(E) and directing read-down of the scheme, asserting that their entitlement to higher pension is crystallised and should be granted following the post‑amendment framework. They contend that continued delay causes prejudice and violates the mandate of the 2018 judgment, justifying invocation of Section 12 to secure obedience and prompt recalculation of entitlements.

Contentions of Respondents

The respondent contends that the directive must be implemented in compliance with law, incorporating the Supreme Court’s 2022 guidance. The EPFO asserts it will undertake a lawful reconsideration of entitlements per the amended scheme, with a view to align with the apex court’s directions. The learned Standing Counsel submits that the exercise should be undertaken by EPFO in accordance with law and that the contempt petition should be closed in view of the 2022 judgment, while reserving the right to reconsider entitlement as per the new directions.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Employees Provident Fund Organisation v. Sunil Kumar B.	AIR 2022 SC 5634	Positive	The Supreme Court held the G.S.R. 609(E) notification legal and valid and directed read-down of the pension scheme; the Kerala High Court relies on this judgment to justify reconsideration of entitlements.
R.C. Gupta and others v. Regional Provident Fund Commissioner, Employees Provident Fund Organisation and others	(2018) 14 SCC 809	Positive	The High Court agrees with the view in RC Gupta on interpretation of the proviso to paragraph 11(3) (pre-amendment) pension scheme.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE ANIL K. NARENDRAN`** ``` & ``` ``` THE HONOURABLE MR. JUSTICE G. GIRISH ``` ``` THURSDAY, THE 2[ND] DAY OF NOVEMBER 2023 / 11TH KARTHIKA, 1945 CON.CASE(C) NO. 1850 OF 2020 ``` ``` ARISING OUT OF THE JUDGMENT DATED 12.10.2018 IN WP(C) ``` ``` 40695/2016 OF HIGH COURT OF KERALA ``` ``` PETITIONERS/PETITIONERS 10, 11, 13 & 14: ``` ``` 1 SUMAVATHY V.V AGED 61 YEARS W/O. R. ASOKAN,CHITHIRA, MARUTHACHIKKAL, KUTHIRAPPANTHY, THIRUMARADY P.O, ALAPPUZHA 688 002 P.P.O NO. KR/KCH/00108486 P.F A/C NO. KR/KNR/1813255 ``` - **`2 K. VALSAMMA, AGED 61 YEARS`** ``` W/O. LATE K.C GEORGE, AMBALKANDATHIL, KALAVOOR P.O, ALAPPUZHA 688 522 P.P.O NO. KR/KCH/00107384 P.F A/C NO. KR/KNR/1813/439 ``` ``` 3 SISOBHINI M, AGED 62 YEARS W/O. K.V RAVEENDRAN, MINI NIVAS, NORTH ARYAD P.O, ALAPPUZHA 688 538 P.P.O NO. KR/KCH/00094072 P.F A/C NO. KR/KNR/1813/266 ``` - **`4 S. INDIRA, AGED 63 YEARS`** ``` W/O. P.G VASUDEVA POANICKAR, GOPASARAS, AVALOOKUNNU P.O, ALAPPUZHA 688 006 P.P.O NO. KR/KCH/00090299 P.F A/C NO. KR/KNR/1813265 ``` ``` BY ADV P.N.MOHANAN ``` ## **`RESPONDENT/3[RD] RESPONDENT:`** ``` B.ANDREW PRABHU AGED 51 YEARS ``` 2 Cont.Case (C)No.1850 of 2020 ``` S/O. S. BHAKTHAVALASALAM (LATE) ASSISTANT PROVIDENT FUND COMMISSIONER, SUB REGIONAL OFFICE, EMPLOYEES PROVIDENT FUND ORGANISATION (EPFO) BHAVISHYANITHI BHAVAN, KALOOR, KOCHI 682 017 RESIDING AT KADAVANTHARA, KOCHI ``` ``` BY ADV NITA N.S ``` ``` THIS CONTEMPT OF COURT CASE (CIVIL) HAVING COME UP FOR ADMISSION ON 02.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 3 Cont.Case (C)No.1850 of 2020 ## **JUDGMENT** Anil K. Narendran, J. The petitioners, who are petitioners 10, 11, 13 and 14 in W.P.(C)No.40695 of 2016, have filed this Contempt Case, invoking the provisions under Section 12 of the Contempt of Courts Act, 1971 alleging willful disobedience of the directions contained in Annexure A1 judgment dated 12.10.2018 in that writ petition along with W.P.(C)No.13120 of 2015 and connected matters. 2. The SLP filed by the Employees Provident Fund Organisation against the judgment dated 12.10.2018 in W.P.(C) No.13120 of 2015 and connected cases were dismissed by the Apex Court vide Annexure A2 order dated 01.04.2019 in SLP (C) - Diary No.9610 of 2019. That order was recalled and the Apex Court rendered a detailed judgment dated 04.11.2022 in Civil Appeal Nos.8143 of 2022 and 8144 of 2022 and connected matters- **Employees Provident Fund Organisation v. Sunil Kumar B. [2022 (7) KHC 12 : AIR 2022 SC 5634]** . In that judgment, the Apex Court held that the provisions contained in Notification No.GSR 609(E) dated 22.08.2014 is legal and valid. The directions contained in paragraph 44 of the said judgment of the Apex Court dated 04.11.2022 read as follows: 4 Cont.Case (C)No.1850 of 2020 ## “44. We accordingly hold and direct:- (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 subparagraphs. (ii) Amendment to the pension scheme brought about by the notification No. G.S.R. 609(E) dated 22[nd] 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 shall be in the manner as we have already directed. (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 1[st] September 2014, will be guided by the amended provisions of paragraph 11(4) of the pension scheme. (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 before 1[st] September 2014 stands crystalised in the judgment of this Court in the case of **R.C. Gupta and others v. Regional Provident Fund Commissioner, Employees Provident Fund Organisation and others [(2018) 14 SCC 809]** . The scheme as it stood before 1[st] September 2014 did not 5 Cont.Case (C)No.1850 of 2020 provide for any cut-off date and thus those members shall be entitled to exercise option in terms of paragraph 11(4) of the scheme, as it stands at present. Their exercise of option shall be in the nature of joint options covering preamended 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. (v) The employees who had retired prior to 1[st] 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. (vi) The employees who have retired before 1[st] 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. (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.15,000/- per month as an additional 6 Cont.Case (C)No.1850 of 2020 contribution under the amended scheme is held to be ultra vires the 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. 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. (viii) We do not find any flaw in altering the basis for computation of pensionable salary. (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. (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.” 3. Heard the learned counsel for the petitioners and also the learned Standing Counsel for the Employees Provident Fund 7 Cont.Case (C)No.1850 of 2020 ## Organisation, for the respondent. 4. In view of the judgment of the Apex Court dated 04.11.2022 in Civil Appeal Nos.8143-44 of 2022 and connected matters **[2022 (7) KHC 12 : AIR 2022 SC 5634]** , the entitlement of the petitioners for disbursement of higher pension requires reconsideration at the hands of the Employees Provident Fund Organisation. 5. The learned Standing Counsel for the respondent would submit that the aforesaid exercise shall be undertaken by the Employees Provident Fund Organisation in accordance with law. In the said circumstances, this Contempt Case is closed, without prejudice to the right of the Employees Provident Fund Organisation to reconsider the entitlement of the petitioners for disbursement of higher pension, in view of the judgment of the Apex Court dated 04.11.2022 in Civil Appeal Nos.8143-44 of 2022 and connected matters **[2022 (7) KHC 12 : AIR 2022 SC 5634]** . **Sd/ANIL K. NARENDRAN, JUDGE** **Sd/-** **G. GIRISH, JUDGE** AV/20/11 8 Cont.Case (C)No.1850 of 2020 ## **`APPENDIX OF CON.CASE(C) 1850/2020`** ``` PETITIONER ANNEXURES ``` |**`ANNEXURE A1`**|**`CERTIFIED COPY OF THE JUDGMENT DATED 12-`**| |---|---| ||**`10-2018 IN W.P(C) NO. 40695/2016`**| |**`ANNEXURE A2`**|**`A TRUE COPY OF THE ORDER DATED 01-04-2019`**| ||**`IN SLP NO. 9610/2019`**| |**`ANNEXURE A3`**|**`A TRUE COPY OF THE PENSION PAYMENT ORDER`**| ||**`ISSUED IN RESPECT OF 2ND PETITIONER.`**| |**`ANNEXURE A4`**|**`A TRUE COPY OF THE LETTER DATED 29-01-2020`**| ||**`OF THE EMPLOYEER ADDRESSED TO THE`**| ||**`RESPONDENT.`**|