Gopakumar A.P. and Others v Union of India, Employees' Provident Fund Organisation, Regional Provident Fund Commissioner, and Kerala State Financial Enterprises Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **MONDAY, THE 02ND DAY OF MARCH 2020 / 12TH PHALGUNA, 1941** ## **WP(C).No.3394 OF 2020(Y)** ## **PETITIONERS:** **1 GOPAKUMAR A.P., AGED 57 YEARS, S/O.PADMANABHAN, MANAGER GRADE IV, EMPLOYEE CODE1600, KERALA STATE FINANCIAL ENTERPRISES LIMITED, AMARAKKATTU HOUSE, PULLUT P.O., KODUNGALLUR, THRISUSR-680 663. 2 RADHAKRISHNAN.O.A., AGED 54 YEARS, S/O.APPUKUTTAN, SENIOR MANAGER, EMPLOYEE CODE-1234, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ODASSERIL HOUSE, SREEKRISHNA VIHAR, CHETTIKKAD, KUNJITHAI P.O., ERNAKULAM-683 522. 3 DAVIS.A.G., AGED 54 YEARS, S/O.GEORGE.A.D., SENIOR MANAGER, EMPLOYEE CODE-2585, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ALOOR HOUSE, PATHIYARAM, KUTTANCHERY P.O., THRISSUR-680 584.** **4 ASHA.M.S., AGED 54 YEARS, D/O.M.K.SANKARANARAYANAN, SENIOR MANAGER, EMPLOYEE CODE-1598, KERALA STATE FINANCIAL ENTERPRISES LIMITED, GREESHMAM, MANNANCHERRY P.O., ALAPPUZHA-688 538.** **5 MANOJ KUMAR.M.B., AGED 56 YEARS, S/O.BALAKRISHNA PILLAI, SENIOR MANAGER, EMPLOYEE CODE-1523, KERALA STATE FINANCIAL ENTERPRISES LIMITED, SITHARA, KADAKKARAPPALLY P.O., CHERTHALA, ALAPPUZHA-688 529. 6 SOMAN.K.G., AGED 55 YEARS, S/O.GOPALA PILLAI.K.N., SENIOR MANAGER, EMPLOYEE CODE-1210, KERALA STATE FINANCIAL ENTERPRISES LIMITED, KUNNEL HOUSE, CHETTIPARAMBU, IRINJALAKKUDA P.O., THRISSUR-680 121.** WP(C).No.3394 OF 2020 2 - **7 SALMA.N.S., AGED 47 YEARS,** **D/O.N.P.SOMAN, SPECIAL GRADE ASSISTANT, EMPLOYEE CODE-4356, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ASHIANA, KALATHUNGAL, THIRUVANIKKULAM (S), KODUNGALLUR, THRISSUR-680 668.** - **8 REKHA BALAN, AGED 47 YEARS,** **D/O.BALAN.P.I., SPECIAL GRADE ASSISTANT, EMPLOYEE CODE-4786, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ACHATHUPARAMBIL HOUSE, KOTTANELLUR P.O., THRISUSR-680 662.** - **9 BABU.P.K., AGED 48 YEARS,** **S/O.KARTHIKEYAN.P.A., SPECIAL GRADE ASSISTANT, EMPLOYEE CODE-4858, KERALA STATE FINANCIAL ENTERPRISES LIMITED, PAINATT HOUSE, KODUNGALLUR P.O., SRINGAPURAM WEST, THRISSUR-680 668.** - **10 FIDA.P.I., AGED 38 YEARS,** **D/O.P.K.ISMAIL, SENIOR ASSISTANT, EMPLOYEE CODE6938, KERALA STATE FINANCIAL ENTERPRISES LIMITED, KUNNUMMAL HOUSE, PUTHIYAKAVU, MATHILAKAM P.O., KODUNGALLUR, THRISSUR-680 685.** **11 REHIM.M., AGED 57 YEARS, S/O.MUHAMMED KUNJU, DESPATCH ASSISTANT, EMPLOYEE CODE-2114, KERALA STATE FINANCIAL ENTERPRISES LIMITED, KATTUNGAL VELIYIL, THONDANKULANGARA WARD, AVALOOKUNNU P.O., ALAPPUZHA-688 066.** - **12 JAMES THOMAS, AGED 57 YEARS,** **S/O.LATE T.C.THOMAS, ASSISTANT MANAGER, EMPLOYEE CODE-3137, KERALA STATE FINANCIAL ENTERPRISES LIMITED, MADATHIL CHIRA, MONKOMPU P.O., ALAPPUZHA-688 502.** **13 ALEYAMMA.F., AGED 58 YEARS,** **D/O.FRANCIS.P.F., SPECIAL GRADE ASSISTANT, EMPLOYEE CODE-2302, KERALA STATE FINANCIAL ENTERPRISES** WP(C).No.3394 OF 2020 3 **LIMITED, NADUVILAPARAMBIL, AVALOOKUNNU P.O., SOUTH ARYAD, ALAPPUZHA-688 006.** - **14 PRASAD.K.G., AGED 55 YEARS,** **S/O.GOVINDAN, ASSISTANT MANAGER, EMPLOYEE CODE2861, KERALA STATE FINANCIAL ENTERPRISES LIMITED, KARAYIL HOUSE, KARA P.O., KODUNGALLUR, THRISSUR-680 671.** - **15 SWAPNA SUKUMAR, AGED 45 YEARS,** **D/O.P.K.SUKUMARAN, SPECIAL GRADE ASSISTANT, EMPLOYEE CODE-4765, KERALA STATE FINANCIAL ENTERPRISES LIMITED, PULLARKKATTU HOUSE, PULLUT P.O., KODUNGALLUR, THRISSUR-680 663.** - **16 CHANDRABOSE.M.S., AGED 57 YEARS,** **S/O.SIVARAJAN.K., SENIOR MANAGER, EMPLOYEE CODE1544, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ANUSREE, ARYAD NORTH P.O., ALAPPUZHA-688 538.** - **17 CHANDRA BABU.G., AGED 57 YEARS,** - **S/O.P.S.GOPINATHAN, DEPUTY MANAGER, EMPLOYEE CODE1548, KERALA STATE FINANCIAL ENTERPRISES LIMITED, GOPIKA HOUSE, THATHAMPALLY P.O., ALAPPUZHA-688 013.** - **18 VINU.K.F., AGED 38 YEARS,** - **S/O.FRANSIS.K.J., SENIOR ASSISTANT, EMPLOYEE CODE6666, KERALA STATE FINANCIAL ENTERPRISES LIMITED, KANJITHARA HOUSE, KARUMBARATHU, GOTHARATH P.O., ERNAKULAM-683 516.** - **19 RAJENDRAN.O.N., AGED 57 YEARS,** - **S/O.NARAYANANKUTTY.O.V., MANAGER GRADE III, EMPLOYEE CODE-1693, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ODASSERY HOUSE, KANNAKULANGARA, KURKANCHERI P.O., THRISSUR-680 007.** - **20 MOHANAN.O.K., AGED 57 YEARS,** **S/O.KUNJAN.O.V., ASSISTANT MANAGER, EMPLOYEE CODE4327, KERALA STATE FINANCIAL ENTERPRISES LIMITED, ORAKONAMKUZHY, ERUMPAYAM P.O., (VIA)** WP(C).No.3394 OF 2020 4 ## **THALAYOLAPARAMBU, KOTTAYAM-686 605.** **BY ADVS. SRI.S.M.PREM SRI.P.RAMACHANDRAN (PALAKKAD) SRI.H.NARAYANAN SRI.G INDUCHUDAN** ## **RESPONDENTS:** - **1 UNION OF INDIA REPRESENTED BY ITS SECRETARY, MINISTRY OF LABOUR AND EMPLOYMENT, DEPARTMENT OF EMPLOYMENT, GOVERNMENT OF INDIA, SHRAM SHAKTI BHAVAN, NEW DELHI-110 001.** - **2 EMPLOYEES' PROVIDENT FUND ORGANISATION, REPRESENTED BY CHIEF PROVIDENT FUND COMMISSIONER, BHAVISHYA NIDHI BHAWAN, 14, BHIKAJI CAMA PLACE, NEW DELHI-110 066.** - **3 REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES' PROVIDENT FUND ORGANISATION, BHAVISHYA NIDHI BHAWAN, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004.** - **4 KERALA STATE FINANCIAL ENTERPRISES LIMITED, REPRESENTED BY ITS MANAGING DIRECTOR, BHADRATHA, MUSEUM ROAD, THRISSUR-680 020.** **R4 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R4 BY ADV. SRI.K.JOHN MATHAI R4 BY ADV. SRI.JOSON MANAVALAN R4 BY ADV. SRI.KURYAN THOMAS R4 BY ADV. SRI.PAULOSE C. ABRAHAM SMT NITA N.S, SC SRI GOPIKRISHNAN NAMBIAR, SC SRI P. VIJAYAKUMAR, ASG** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C).No.3394 OF 2020 5 ## **JUDGMENT** The petitioners herein are employees of Kerala State Financial Enterprises Ltd., the 4[th] respondent herein. The said establishment is covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the schemes framed thereunder. In terms of para 26(6) of the Provident Fund Scheme, 1952, the petitioners as well as the 4[th] respondent are stated to have exercised their option and they have been remitting the contribution on their actual salary without limiting it to the ceiling of Rs.6500/-. 2. The petitioners are aggrieved by the refusal of the respondents to extend the provisions of the Employees’ Pension Scheme, 1995 in all its vigour to the petitioners and also to the changes brought about by the Employees’ Pension (Amendment) Scheme, 2014. They have approached this Court seeking a direction to the respondents 2 and 3 to collect contribution on the basis of actual salary drawn by the petitioners in terms of the proviso to paragraph 11(3) of the Employees’ Pension Scheme, 1995 from the date of joining the Pension Scheme and for incident orders. 3. Heard Sri.S.M.Prem, the learned counsel appearing for the WP(C).No.3394 OF 2020 6 petitioners, Sri.Nita N.S., the learned counsel appearing for the respondents 2 and 3 and Sri.Gopikrishnan Nambiar, the learned Standing counsel appearing for the 4[th] respondent. 4. The learned counsel appearing for the 4[th] respondent has submitted that the employer has been remitting contribution on the actual salary of the employees. 5. I have considered the submissions. 6. A learned Single Judge of this Court, by judgment dated 04.11.2011, in W.P.(C) No.6643 of 2007 and connected cases, has held that the proviso which was added with effect from 16.03.1996 was retrospective and is operative from the date of commencement of the scheme which was on 16.11.1995. It was further held that the cut off date fixed by the organization as 01.12.2004 is clearly without jurisdiction. It was also held that, if a joint application is filed by the employee as well as the employer at any time, the benefits of the proviso to Clause 11(3) of the Employees’ Pension Scheme cannot be denied to the employees. The operative part of the order is extracted below for easy reference. 'In the above circumstances, I allow these writ petitions quashing the orders impugned in these two writ petitions. It is declared that the fixation of cut off date of 1.12.2004 is WP(C).No.3394 OF 2020 7 without jurisdiction and despite the fact that the petitioners have filed the applications for benefit under the proviso to clause 11(3), after the cut off date so fixed, the petitioners are entitled to avail of the benefit under the proviso to clause 11(3) of the Employees' Pension Scheme. As such I declare that the benefits was rightly given to the petitioners. Consequently, the arrears of contributions payable by the petitioners for availing of the benefit of the said proviso shall again to be transferred from the Provident Fund account of the petitioners to the Employers' Pension Fund account of the petitioners. Orders in this regard shall be passed, as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment. ' 7. The said judgment was taken in appeal by the Union of India as well as the EPF Organisation. A Division Bench of this Court by judgment dated 5.3.2013 in W.A. No.568 of 2012 dismissed the appeals. Though the judgment of the Division Bench was challenged before the Hon'ble Supreme Court, the same was dismissed, finding that there was no valid ground for interference. 8. In **R.C. Gupta & Others. v. Regional Provident Fund Commissioner Employees Provident Fund Organization & Others[1]** [Civil Appeal Nos.10013-10014 of 2016 (arising out of SLP(C) Nos.3303233030 of 2015] the Hon'ble Supreme Court had occasion to consider the question as to whether the employees would be entitled to the benefit of 1 [2018 (14) SCC 809] WP(C).No.3394 OF 2020 8 ## deposit of 8.33% of their actual salary in the pension fund irrespective of the ceiling limit. The Hon'ble Supreme Court has held thus in the report. 10. We do not see how exercise of option under paragraph 26 of the Provident Fund Scheme can be construed to estop the employees from exercising a similar option under paragraph 11(3). If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, exercise of option under paragraph 26 of the Provident Scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under Clause 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the Pension Scheme unless the circumstances warranting such foreclosure are clearly indicated. 11. The above part in a situation where the deposit of the employer's share at 12% has been on the actual salary and not the ceiling amount, we do not see how the Provident Fund Commissioner could have been aggrieved to file the LPA before the Division Bench of the High Court. All that the Provident Fund Commissioner is required to do in the case is an adjustment of accounts which in turn would have benefited some of the employees. At best what the Provident Commissioner could do and which we permit him to do under the present order is to seek a return of all such amounts that the concerned employees may have taken or withdrawn from their Provident Fund Account before granting them the benefit of the proviso to Clause 11(3) of the Pension Scheme. Once such a return is made in whichever cases such return is due, consequential benefits in terms of this order will be granted to the said employees. WP(C).No.3394 OF 2020 9 12. Consequently and in light of the above, we allow these appeals and set aside the order of the Division Bench of the High Court. 9. Later, EPF Scheme was amended by GSR 609(E) dated 22.8.2014 w.e.f 1.9.2014 omitting proviso to Clause 11 (3) of the Scheme which provides for the exercise of the option. The maximum pensionable salary was altered to mean the average monthly pay drawn for a span of 60 months preceding the date of exit from the membership of the pension fund and the maximum pensionable salary was fixed at Rs.15,000/- per mensem. Aggrieved by the changes brought to the Act and the Scheme, the validity of the amendments were challenged before this Court by several of the employees. 10. The amendment to the EPF Scheme GSR 609(E) dated 22.8.2014 w.e.f 1.9.2014 omitting proviso to para 11 (3) of the Scheme which provides for the exercise of the option were challenged before this Court by several of the employees affected by the same. A Division Bench of this Court in **Sasikumar** (supra) held that the impugned amendments are arbitrary, ultra vires the EPF Act and are unsustainable and allowed the writ petition. 11. Though the EPF organization challenged the judgment before the Hon’ble Supreme Court, the SLP was dismissed by order dated 1.4.2019 WP(C).No.3394 OF 2020 10 in S.L.P.(Civil) No. 9610 of 2019. It is submitted across the bar that the EPF Organization has preferred a review petition which is pending. It is also submitted that the Union of India has challenged the judgment of this Court and the same is pending. 12. Having gone through the records, it is luculent that the issues raised by the petitioners are covered by the judgments referred to above. In that view of the matter, this Writ Petition is allowed in terms of the judgment dated 12.10.2018 in W.P.(C) No.13120 of 2015 and connected cases, the operative portion of which is extracted below for easy reference. For the foregoing reasons, the petitioners are entitled to succeed. The writ petitions are all allowed as follows: i) The Employee's Pension (Amendment) Scheme, 2014 brought into force by Notification No. GSR. 609(E) dated 22/08/2014 evidenced by Ext.P8 in W.P.(C) No. 13120 of 2015 is set aside; ii) All consequential orders and proceedings issued by the Provident Fund authorities / respondents on the basis of the impugned amendments shall also stand set aside. iii) The various proceedings issued by the Employees Provident Fund Organization declining to grant opportunities to the petitioners to exercise a joint option along with other employees to remit contributions to the Employees Pension Scheme on the basis of the actual salaries drawn by them are set aside. WP(C).No.3394 OF 2020 11 iv) The employees shall be entitled to exercise the option stipulated by paragraph 26 of the EPF Scheme without being restricted in doing so by the insistence on a date. v) There will be no order as to costs. The respondents 2 and 3 shall take expeditious steps to permit the petitioners to exercise their option in terms of the directions above. Appropriate orders shall be passed expeditiously, at any rate, within a period of six months from the date of receipt of a copy of this judgment. The 4[th] respondent shall cooperate and shall forward the documentations required for effectuating the aforesaid direction. Before parting, it is made clear that the above order shall be subject to the orders of the Hon’ble Supreme Court in the pending matters. **Sd/-** ## **RAJA VIJAYARAGHAVAN V** ## **JUDGE** sru WP(C).No.3394 OF 2020 12 ## **APPENDIX** ## **PETITIONERS EXHIBITS:** |**EXHIBIT P1**|**TRUE COPY OF ORDER DATED 04.10.2016**| |---|---| ||**PASSED BY THE HONOURABLE SUPREME COURT**| ||**OF INDIA IN CIVIL APPEAL NOS.10013-10014**| ||**OF 2016 (ARISING OUT OF SLP(C)**| ||**NOS.33032-33033 OF 2015).**| |**EXHIBIT P2**|**TRUE COPY OF ORDER DATED 01.04.2019**| ||**PASSED BY THE HONOURABLE SUPREME COURT**| ||**OF INDIA IN SPECIAL LEAVE**| ||**PETITION(CIVIL) DIARY NO.9610/2019 FILED**| ||**AGAINST THE JUDGMENT DATED 12.10.2018 IN**| ||**WPC NOS.602 AND 13120 OF 2015 PASSED BY**| ||**THIS HONOURABLE COURT.**| |**EXHIBIT P3**|**TRUE COPY OF THE JUDGMENT DATED**| ||**10.04.2019 IN WPC NO.11463 OF 2019.**| **RESPONDENTS EXHIBITS:NIL**