M. Prem Kumar, Vikraman Nair and K. Unni v. Kerala State Electronics Development Corporation (KSEDC) and Regional Provident Fund Commissioner (EPFO)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** ## **&** **THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR** **THURSDAY, THE 21[ST] DAY OF DECEMBER 2023 / 30TH AGRAHAYANA, 1945 WA NO. 610 OF 2022 AGAINST THE JUDGMENT IN WP(C) 6215/2021 OF HIGH COURT OF KERALA DATED 25.4.2022** ## **APPELLANTS/PETITIONERS:** 1 M.PREM KUMAR AGED 64 YEARS MANIMOOLA, (VIA) CHANGALA, KASARAGOD, RETIRED AS GENERAL MANAGER, KELTRON, I.T.B.G, VELLAYAMBALAM, THIRUVANANTHAPURAM - 695 010, P.P.O.NO.KR/TVM/00087894. 2 VIKRAMAN NAIR.S, THIRU ONAM, PMRA - 141, CHITTATTUMUKKU P.O, KANIYAPURAM, THIRUVANANTHAPURAM, RETIRED AS JUNIOR OFFICER (COMMERCIAL), KELTRON EQUIPMENT COMPLEX, KARAKULAM, THIRUVANANTHAPURAM-695 301, P.P.O.NO. KRTVM00086229. 3 K. UNNI, A 21, DHARMAPURI HOUSING COLONY, P.O.THOTTADA, KANNUR, RETIRED AS JUNIOR OFFICER (STORES), KELTRON I.T.B.G, VELLAYAMBALAM, THIRUVANANTHAPURAM, P.P.O.NO.KR/KKD/00064605. BY ADV P.N.MOHANAN ## **RESPONDENTS/RESPONDENTS:** 1 KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION REPRESENTED BY MANAGING DIRECTOR, VELLAYAMBALAM, KELTRON HOUSE, THIRUVANANTHAPURAM - 695 033. _**W.A.610/2022**_ 2 2 KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION, REPRESENTED BY CHAIRMAN, VELLAYAMBALAM, KELTRON THIRUVANANTHAPURAM PIN-695 033. 3 REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION (EPFO), BHAVISHANIDHI BHAVAN, PATTOM PALACE, THIRUVANANTHAPURAM. PIN - 695 004. BY ADVS. SMT.M.A.ZOHRA, SC, KELTRON SMT. NITA.N.S., SC, EPFO THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 21.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: _**W.A.610/2022**_ 3 ## J U D G M E N T Dated this the 21[st] day of December, 2023 ## Anu Sivaraman, J. Heard learned counsel for the appellants, learned Standing Counsel appearing for respondents 1 and 2 as well as learned Standing Counsel appearing for the 3[rd] respondent-Regional Provident Fund Commissioner. 2. The employees of the respondent Corporation had approached this Court seeking directions to the 1[st] and 2[nd] respondents to pay balance gratuity, Earned Leave Surrender, Half Pay Leave surrender and provident fund contribution of the employer consequent to revision of pay till their date of retirement as also for a further direction to forward the pension contribution to the 3[rd] respondent to revise pension. 3. The contention of the employees was that Exhibit P2 Government Order was passed on 28.10.2017 implementing the pay revision to all employees of the respondent Corporation including workmen as well as executive and supervisory staff w.e.f. 1.4.2012. It is contended that the entire expenditure on account of the revision was to be met from own funds of the Corporation. In case of anomaly/doubt in implementing the pay revision order, the Corporation was granted _**W.A.610/2022**_ 4 freedom to approach the Government. The interim relief paid was to be adjusted within six months from the date of issuance of the order. Further, the Government Order also provided that the arrears payable on account of implementation of pay revision proposal will be subject to a resolution of Board of Directors and also subject to the availability of own funds with the company w.e.f. 1.4.2012. 4. It was contended by the employees before the learned Single Judge that there was no provision in Exhibit P2 order to deny the benefits of the revision of pay with effect from 1.4.2012 including the enhanced retirement benefits, which would become payable consequent on the pay revision to employees. It was further contended relying on Exhibit P6 office order passed by the Corporation dated 22.6.2013 that an amount of Rs.2,100/- was granted to all regular employees of the Corporation and its subsidiaries with effect from 1.2.2013. The interim relief was directed to be treated as part of salary for the purpose of gratuity, PF/ESI, Earned Leave encashment, Medical Reimbursement and overtime wages. The interim relief was to be adjusted against the proposed salary revision pending with the Government. It is contended that having treated the interim relief as part of wages for all purposes, the Corporation was estopped from thereafter contending that the pay revision would not be _**W.A.610/2022**_ 5 taken into account for such benefits. 5. A counter affidavit was placed on record by the respondents contending that since the arrears of wage revision was left to be implemented at the discretion of the Corporation and the Corporation had taken a decision to pay 85% of the arrears of wage revision in 12 equal monthly instalments to existing as well as retired employees and since the relevant resolutions of the Board did not refer to reckoning the benefits of the wage revision for the purpose of Half Pay Leave, Earned Leave and Provident Fund Contribution as well as Gratuity, the said amounts would not be taken note of for any of such benefits. The copy of the resolutions were also placed on record as Exhibit R1(a) and R1(b). 6. A reply affidavit was also on record in the writ petition stating that the financial condition of the Corporation had improved and that the statement of pay revision itself would show that there was enhancement in the pay of the employees with effect from 1.4.2012. It was contended that since the pay revision order did not permit any restriction on the grant of pensionary and other benefits on the basis of the enhanced pay, the employer Corporation could not have restricted or denied the grant of such benefits to the employees. It is contended that the employees are entitled to all the consequences of the pay revision including the grant of _**W.A.610/2022**_ 6 Leave Surrender, Half Pay Leave and payment of enhanced gratuity taking note of the pay as revised. 7. Learned counsel appearing for the 3[rd] respondent Organisation contended that the 3[rd] respondent would be justified only in requiring the payment of statutory contribution to the EPF under the Scheme by the employer and that the prayer raised by the writ petitioners that the 3[rd] respondent should be required to direct the employer to make enhanced contribution on the basis of enhanced wages, is misconceived. 8. Reliance is placed on the judgment of a Division Bench of this Court in **N. Vijayan v. Secretary to Government Agricultural (Diary) Department [2006 (3) ILR (Ker) 42]** and a decision of the Apex Court in **Marathwada Gramin Bank Karmachari Sanghatana & Others v. Management of Marathwads Gramin Bank & Others** reported in **[2011 AIR (SC) 3567].** It is contended that once the statutory contribution as provided under the Act and the Scheme is paid by the employer, the 3[rd] respondent would not be justified in requiring payment of any further amounts as contribution and this Court also would not be justified in requiring payment of such enhanced amounts even in the light of Exhibit P2 pay revision orders. It is contended that the statutory contributions have been paid by the employer and amounts have been _**W.A.610/2022**_ 7 paid in excess of the statutory limit also voluntarily by the employer. However, even in the light of Exhibit P2 Government Order enhancing the pay, it is contended that the Judgments of the Apex Court are authority on the point and no further amount can be directed to be paid by the 3[rd] respondent on the basis of Exhibit P2 Government order. 9. The learned Single Judge considered the contentions advanced and found that Exhibit R1(a) Resolution of the Board of Directors decided to pay the arrears to the employees in 12 equal monthly instalments commencing from October, 2018 relying on the decisions reported in **V.Prakash Chandran v. Kerala Gramin Bank, Malappuram and Another [2018 (3) KLJ 475], Society of Retired Forest Officers v. State of UP [2008 (3) KLT 788] and Mahatma Gandhi Vision v. Bharatiya Kamakar Sena [2017 (1) KLT SN 68, at page 63].** 10. It was held by the learned Single Judge that there was nothing on record to show that the petitioners are entitled for the enhanced gratuity, Earned Leave Surrender, Half Pay Leave Surrender etc. However, it was held that regarding the claim of provident fund, the petitioners had requested that 1[st] and 2[nd] respondents may be directed to remit the balance PF contributions. The claim of the petitioners with _**W.A.610/2022**_ 8 regard to the enhanced retirement benefits and leave encashment etc. were rejected. However, regarding EPF claim, petitioners were left at liberty to make a representation before the 1[st] and 2[nd] respondents and appropriate decision was directed to be taken. 11. Learned counsel for the appellants contended that reading of Exhibit P2 would make it abundantly clear that the wage revision was effective with effect from 1.4.2012. There was nothing in Exhibit P2 Government Order or the conditions provided there in, which enabled the employer to withhold the payment of the benefits, which were payable to the employees on the basis of wage revision effective w.e.f. 1.4.2012. It is submitted that it was only with regard to payment of arrears that the employer was given a liberty to make the payments taking note of their financial condition as well. The employer has decided to make the payments limiting the arrears to 85%, adjusting the interim relief already granted and making the payments to all employees in instalments. It is contended that there is absolutely no restriction as contained in Exhibit P2 or in any of the decisions taken by the employer or in the long term settlement entered into between the employees and the management to restrict the payment of the benefits, which would arise as a consequence of pay from 1.4.2012, to them. _**W.A.610/2022**_ 9 12. This Court, while admitting the writ petition, had considered the matter in detail and had directed the Standing Counsel to file an affidavit as to whether there is any provision in the Government Order issued subsequent to Exhibit P2 or in the memorandum of settlement, which envisages that the issue of claims for revised retirement benefits including pension, Provident Fund and gratuity shall not be based on retrospectively revised last pay shown in Exhibit P2. Further, it was also directed to be ascertained whether the order of the Upa Lok Ayukta in case No.754 of 2018 had been implemented by the KELTRON. An additional affidavit was therefore placed on record by the employer stating as follows:- “2. It is respectfully submitted that in pursuance to the Memorandum of Settlement arrived at between the employer and workmen dated 30.11.2017, the Board of Director held a meeting on Thursday 11[th] October 2018 to arrive at the decisions to implement the wage revision arrears of the employees with effect from 1/4/2012 to 31-10-2017 and the extract of the said meetings is already produced as Exhibit R1(a) along with the counter affidavit, The true copy of the Memorandum of Settlement dated 30/11/2017 entered into between the KELTRON Management and Recognized Trade Unions in the presence of the Additional Labour Commissioner (IR) is produced herewith and marked as _**W.A.610/2022**_ 10 Annexure- Rl(a). It is respectfully submitted that the benefit of wage revision for retired employees is considered as a Special Package and as a good gesture towards service rendered. Moreover though Annexure R1(a) is not applicable to the Executive and Supervisory Category, the same benefit is decided to be made applicable to them in the meeting of the Board of Directors held in the said respect and the said decision encompassed them. The true copy of the decision of the Board of Directors making Exhibit R1(a) applicable to the Executive and Supervisory employees are submitted herewith to be marked as Annexure R1(b). In view of the special package extended to them also no liability was envisaged with regard to the statutory benefits. Payment made as a good gesture to the retired employees does not encompass any other benefits, due to the financial condition of the company which was under the B.I.F.R. upto 2016. Moreover the said package cannot be construed as enhanced wage revision for the purpose of gratuity, E.P.F., earned leave surrender etc. and whereas the E.P.F. contribution above the wage ceiling is remitted in the case of all the petitioners. True copy of E.P.F. contribution details are produced herewith to be marked as Annexure-R1(c). Apart from that, though the 1[st] petitioner was admittedly given maximum gratuity amount at the time of his retirement, he along with the 2[nd] petitioner had submitted application before the Controlling Authority in this regard in the year 2021 which is pending consideration. The true copy of the application submitted by petitioners and 2 before the Controlling Authority, Thiruvananthapuram is _**W.A.610/2022**_ 11 produced herewith and marked as Annexure R1(d), The accumulated loss of the company is so great, that the profit margin now attained is only meager and narrow to substantiate the accumulated loss and not enough to meet the demands of all the employees.” 13. With regard to the findings of the Upa Lokayukta, it is stated that the employer is not a party to the case and no order or information has been brought to the notice of the employer. 14. Having considered the contentions advanced, we notice the following facts: Exhibit P2 is an order which made pay revision applicable to all employees and staff of the respondent Corporation. The financial condition of the respondent corporation has been specifically taken note of by the Government while revising the pay scales. The pay revision has been made specifically applicable from 1.4.2012. The consequences of the pay revision apparently, is clearly admissible to all employees, who were in service as on 1.4.2012. The writ petitioners are persons, who were in service as on 1.4.2012 and had retired from service on 31.1.2016, 31.10.2015 and 31.5.2014 respectively. There is nothing in Exhibit P2, which denies the benefit of the pay revision to employees, who were in _**W.A.610/2022**_ 12 service as on 1.4.2012 and has retired before the date of Exhibit P2 order i.e., 28.10.2017. 15. Having considered the contentions advanced and in view of the admitted position that pay revision is applicable w.e.f. 1.4.2012, we are of the clear view that in the absence of any interdiction in the Government Order or the long term settlement or even in the decisions taken by the Board, the employer would not be justified in denying the benefits of pay revision to the employees, who were in service as on 1.4.2012. Once the pay revision is effective w.e.f 1.4.2012, all the benefits of the same would be the clear entitlement of the employees in service as on the date of pay revision, unless specifically denied in the Government Order or in any subsequent proceedings due to the financial situation. In the absence of any such provision, we are of the clear view that the benefits as sought for except with regard to the Employees Provident Fund contribution are to be extended to the petitioners as well. 16. In the above view of the matter, the writ appeal is disposed of directing that all other benefits including the payment of enhanced gratuity, half pay leave and earn leave surrender shall be made available to the appellants herein. However, the prayer with regard to payment of enhanced contribution to the EPF is declined. Ordered accordingly. _**W.A.610/2022**_ 13 Appropriate steps shall be taken by the respondents to make the payment as directed, within a period of three months from the date of receipt of a copy of this judgment. Sd/ANU SIVARAMAN, JUDGE Sd/C. PRATHEEP KUMAR, JUDGE sou. _**W.A.610/2022**_ 14 ## **APPENDIX OF WA 610/2022** PETITIONER ANNEXURES - ANNEXURE A1 TRUE COPY OF THE G.O (RT) NO. 800/2013/ID DATED 21.6.2013 ISSUED BY THE DEPARTMENT OF INDUSTRIES, GOVERNMENT OF KERALA - ANNEXURE A2 TRUE COPY OF THE RELEVANT MINUTE DECISION NO. 1485 DATED 27.9.2017 OF THE GOVERNMENT OF KERALA - ANNEXURE A3 TRUE COPY OF THE OFFICE NOTE NO. CHR/WR ARREAR/ 2018 DATED 26.10.2018 ISSUED BY THE CHIEF GENERAL MANAGER OF KELTRON - ANNEXURE A4 TRUE COPY OF THE REPLY UNDER RTI ACT DATED 29.7.2023 GIVEN BY THE PIO ATTACHED TO THE OFFICE OF KSEDC (KELTRON) TO SRI. PREMKUMAR - ANNEXURE A5 TRUE COPY OF THE LETTER OF APPRECIATION DATED 13.5.2022 ISSUED FROM THE MINISTER FOR INDUSTRIES, GOVERNMENT OF KERALA TO THE KELTRON - ANNEXURE A6 TRUE COPY OF THE NEWS ITEM REPORTED IN MALAYALA MANORAMA DAILY DATED 28.8.2023 SHOWCASING THE PUBLIC STATEMENT GIVEN BY THE CHAIRMAN AND MANAGING DIRECTOR (CMD), KELTRON, SRI. N NARAYANAMORTHY - ANNEXURE A7 TRUE COPY OF THE NEWS ITEM PUBLISHED ONLINE BY 'ONMANORAMA' DATED 28.4.2023 WITH THE HEADLINE 'STATE ENTITY KELTRON ADEPT AT CUTTING DEALS WITH HEFTY PROFIT ANNEXURE A8 TRUE COPY OF THE NEWS ITEM PUBLISHED ONLINE BY THE 'BUSINESS LINE' (THE HINDU) DATED 7.4.2022 WITH THE HEADLINE 'WITH A NET PROFIT OF Rs.20 CRORE, KELTRON CROSSES Rs.500 CRORE TURNOVER _**W.A.610/2022**_ 15 ## RESPONDENT ANNEXURES ANNEXUE R1(A) THE TRUE COPY OF THE MEMORANDUM OF SETTLEMENT DATED 30/11/2017 ENTERED INTO BETWEEN THE KELTRON MANAGEMENT AND RECOGNIZED TRADE UNIONS IN THE PRESENCE OF THE ADDITIONAL LABOUR COMMISSIONER (IR) ANNEXUE R1(B) THE TRUE COPY OF THE DECISION OF THE BOARD OF DIRECTORS MAKING EXHIBIT R1(A) APPLICABLE TO THE EXECUTIVE AND SUPERVISORY EMPLOYEES ANNEXUE R1(D) THE TRUE COPY OF THE APPLICATION SUBMITTED BY PETITIONERS 1 AND 2 BEFORE THE CONTROLLING AUTHORITY, THIRUVANANTHAPURAM ANNEXUE R1(C) TRUE COPY OF E.P.F. CONTRIBUTION DETAILS