High Court of KeralaSingle Judge2014-03-19Writ petition allowed. No costs.

P. Karunakaran; U.K. Sarojini; P.V. Mohanan; C. Vijayan v. State of Kerala, Kerala State Co-operative Employees Pension Board, Assistant Provident Fund Commissioner, Employees Provident Fund Organisation, Payyannur Co-operative Stores Limited

Case / Petition Number:WP(C).No.27034 of 2013

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: K. Vinod Chandran
Judgment Date: 2014-03-19
Court Decision / Holding: Writ petition allowed. No costs.
Final Disposition: Writ petition allowed. No costs.

Parties to the Case

Appellants / Petitioners

P. Karunakaran
U.K. Sarojini
P.V. Mohanan
C. Vijayan

Respondents

State of Kerala
Kerala State Co-operative Employees Pension Board
Assistant Provident Fund Commissioner, Employees Provident Fund Organisation
Payyannur Co-operative Stores Limited

Legal Representation & Advocates

Counsels for Petitioners

• V. N. Ramesan Nambisan

Counsels for Respondents

• Sri. Noushad Thottaahil
• Sri. K.R. Sunil
• N. N. Sugunapalan
• T. N. Girija
• Mahesh V. Ramakrishnan

Case Synopsis & Summary

This writ petition, filed in the Kerala High Court, concerns four employees of the Payyannur Co-operative Stores Limited who were initially covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) and the Employees’ Pension Scheme, 1995. A Government notification, exemplified by Exhibit P7 (G.O.(MS) No 44/2006/LBR, 19-06-2006), exempted societies like the petitioners from the EPF Act and Pension Scheme and created a separate Kerala State Co-operative Employees’ Pension Board with a parallel State pension scheme (the Kerala State Co-operative Societies Employees Self Financing Pension Scheme, 1994) under Section 80A of the Kerala Co-operative Societies Act, 1969. The petition challenged this notification, contending the two-tier arrangement is detrimental and that the petitioners should be retained under the EPF Pension Scheme, with funds and benefits transferred to the Co-operative Pension Board refunded to the EPF Organisation with interest. Earlier litigation had framed the issue: which scheme is more beneficial, leading to a Division Bench decision in Kerala State Co-op. Employees Pension Board v. Udayakumar (2012) 3 KLT 820, and proceedings that questioned the notification. The court noted the transfer of funds to the Co-operative Board and the need for recomputation of pension, refund of EPF contributions with interest, and eventual disbursal. The writ petition was allowed with no costs, directing refunds to EPF and re-computation to augment EPF pension, while ensuring due arrears are paid on recomputation.

Provisions of Law Cited

Employees' Provident Funds and Miscellaneous Provisions Act, 1952Employees' Pension Scheme, 1995Kerala Co-operative Societies Act, 1969, Section 80AKerala State Co-operative Societies Employees Self Financing Pension Scheme, 1994

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contended that they were originally covered under the EPF Act and Pension Scheme, 1995, and that the Government notification exempted similar societies from EPF and Pension Scheme, creating the Kerala State Co-operative Employees Pension Board and a separate State pension scheme. They argued that the funds once transferred to the Co-operative Board should be refunded to the EPF Organisation with interest, and that ongoing pensions be recalculated to ensure proper disbursement. They asserted that the option to remain under EPF’s Pension Scheme should be maintained, and that the EPFC funds and arrears should be restored to augment the EPF pension. The petitioners claimed difficulty in refunding amounts already paid under EPF and sought recalibration to protect pension rights.

Contentions of Respondents

The respondents argued that the exemption notification and creation of a separate State pension mechanism must stand, as it aligns with statutory policy. They maintained that the petitioners had challenged the notification in earlier rounds and that the Division Bench had held that employees should be given the option to choose between the EPF Pension Scheme and the State pension scheme. They argued that funds were transferred to the Co-operative Pension Board and should be reconciled appropriately. The State contends a policy framework governs pension rights, and that the petition’s demand for automatic reversion to EPF Scheme is not warranted; the court should respect the statutory framework and ensure proper accounting and recomputation as mandated.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Kerala State Co-operative Employees Pension Board v. Udayakumar	2012 (3) KLT 820	Mentioned Only	Cited in the judgment as background precedent affecting the issue of option between schemes but not expressly overruled or distinguished in the decision.

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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 K.VINOD CHANDRAN WEDNESDAY, THE 19TH DAY OF MARCH 2014/28TH PHALGUNA, 1935 ## **W.P.(C).No.27034 of 2013 (D)** ----------------------------------------------- PETITIONER(S):- - -------------------------- 1. P.KARUNAKARAN - “KARUNA”, ANNUR P.O, PAYYANNUR, KANNUR DISTRICT. 2. U.K. SAROJINI, UTHAMATHIL KIZHAKKE VEEDU, MAHADEVAGRAMAM, P.P. PAYYNNUR. 3. P.V MOHANAN, - PILANKU VEEDU, PERINGOME, PAYYANNUR, KANNUR DISTIRCT. 4. C.VIJAYAN, - “LAKSHMI SADANAM”, KARUVACHERY, PAYYANNUR, KANNUR. BY ADV. SRI.V.N.RAMESAN NAMBISAN RESPONDENT(S): - ---------------------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, CO-OPERATIVE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001. 2. THE KERALA STATE CO-OPERATIVE EMPLOYEES PENSION BOARD, REPRESENTED BY ITS SECRETARY, THIRUVANANTHAPURAM, PIN - 695 001. 3. THE ASSISTANT PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, V.K. COMPLEX, FORT ROAD, KANNUR, PIN - 670 001. W.P.(C).NO.27034 OF 2013 **- 2 -** 4. THE PAYYANNUR CO-OPERAITVE STORES LIMITED, REPRESENTED BY ITS SECRETARY, PAYYANNUR, KANNUR, PIN - 670 307. R1 BY GOVERNMENT PLEADER SRI.NOUSHAD THOTTAHIL. R2 BY STANDING COUNSEL SRI.K.R.SUNIL. R3 BY SENIOR ADVOCATE SRI.N.NSUGUNAPALAN & STANDING COUNSEL SMT.T.N.GIRIJA. R4 BY ADV. SRI.MAHESH V. RAMAKRISHNAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- WP(C).No.27034 of 2013 (D) -------------------------------------- ## **APPENDIX** PETITIONER(S)' EXHIBITS:- -------------------------------------- - EXHIBIT P1 TRUE COPY OF THE PENSION ORDER DATED 23-07-2007 IN RESPECT OF THE IST PETITIONER. - EXHIBIT P2 TRUE COPY OF THE PENSION ORDER DATED 09-10-2007 IN RESPECT OF THE 2ND PETITIONER. - EXHIBIT P3 TRUE COPY OF THE PENSION ORDER DATED 10-11-2007 IN RESPECT OF THE 3RD PETITIONER. - EXHIBIT P4 TRUE COPY OF THE PENSION ORDER DATED 19-08-2008 IN RESPECT OF THE 4TH PETITIONER. - EXHIBIT P5 TRUE COPY OF THE PENSION ORDER DATED 29-09-2010 ISSUED BY THE 3RD RESPONDENT OT THE IST PETITIONER. - EXHIBIT P6 TRUE COPY OF THE LETTER DATED 30-09-2010 ISSUED BY THE 3RD RESPONDENT OT THE 3RD PETITIONER. - EXHIBIT P7 TRUE COPY OF THE NOTIFICATION NO G.O(MS) NO 44/2006/LBR DATED, THIRUVANANTHAPURAM 19-06-2006 ISSUED BY THE LABOUR AND REHABILITAITON (E) DEPARTMENT. - EXHIBIT P8 TRUE COPY OF THE LETTER NO KP/P CELL-II/ CO-OP .EXEM/08 DATED 07-11-2008 ISSUED BY THE REGIONAL PROVIDENT FUND COMMISSIONER, PENSION, EMPLOYEES PROVIDENT FUND ORFGANIZAITON, THIRUVANANTHAPURAM. - EXHIBIT P9 TRUE COPY OF THE ORDER NO KR/KNR/14094/AB3(1)CO-OP. EXENPT/2012-13/2346 DATED 07-08-2012 ISSUED BY THE ASSISTANT PROVIDENT FUND COMMISSIONER. - EXHIBIT P9(a) TRUE COPY OF THE ANNEXURE-A ATTACHED TO THE EXHIBIT P9 ORDER . EXHIBIT P10 TRUE COPY OF LETTER DATED 07.08.2013 WRITTEN BY THE PETITIONER TO THE 3RD RESPONDENT. RESPONDENT(S)' EXHIBITS:- ---------------------------------------- NIL. vku/( true copy ) ## K. Vinod Chandran, J. ---------------------------------- ## W.P.(C).No.27034 of 2013-D ----------------------------------Dated this the 19[th] day of March, 2014 ## **JUDGMENT** The petitioners in the above writ petition were employees of the 4[th] respondent-Society. Admittedly all the petitioners were covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity “EPF Act”) and under the Employees' Pension Scheme, 1995 (for brevity “Pension Scheme, 1995”). The State of Kerala, by Exhibit P7 notification, exempted societies similar to the 4[th] respondent from the purview of EPF Act and Pension Scheme, 1995. The State constituted a separate Board, termed “Kerala Co-operative Employees' Pension Board”. Under Section 80A of the Kerala Co-operative Societies Act, 1969 (for short “KCS Act”), a Scheme was also notified, “the Kerala State Co-operative Societies Employees Self Financing Pension Scheme, 1994 (for brevity “Co-operative Pension Scheme”), which was brought into force with effect from 14.03.1995. WP(C).No.27034 of 2013-D **- 2 -** 2. There was a conflict between the two schemes and the employees of the societies as also certain societies were before this Court challenging the notification. The dispute agitated before this Court was as to which of the Schemes is more beneficial. In any event, all those writ petitions were allowed by the learned Single, setting aside the notification. The Pension Board filed appeals from the judgment of the learned Single Judge, which was decided by a Division Bench in the decision reported in **Kerala State Co-op. Employees Pension Board v. Udayakumar [2012 (3) KLT 820].** The petitioners were also parties in the earlier litigation, having filed a writ petition against the notification. 2. The Division Bench though confirmed the judgment of the learned Single Judge, was of the opinion that option should be given to the employees as to whether they would continue under the Pension Scheme, 1995 of the EPF Organization or the Pension Scheme of the State. The exercise of such option is agitated now before this Court in the present writ petition. WP(C).No.27034 of 2013-D **- 3 -** 3. Admittedly when the judgment of the learned Single Judge was pronounced, the EPF Organization transferred the funds which were remaining with them to the Co-operative Pension Board, which is evidenced by Exhibit P9. The petitioners herein pray that they have to be continued in the EPF Pension Scheme operated by the EPF Organization and the pension under that Scheme may be disbursed to them. It is also to be noticed that it is only on account of the difficulty of the petitioners to refund the amounts, they already obtained under the EPF Act, as provident fund, that they sought continuance in the EPF Pension Scheme. 4. It is also to be noticed that the petitioners had been all along agitating against the transfer from the EPF Organization to the Co-operative Pension Scheme. Despite the assertion of the respondent-Bank that they had exercised option in favour of the State Pension Scheme, it is to be noticed that the petitioners had challenged the notification itself before this Court in the earlier round of litigation. In such circumstance, the Pension Board has to refund the amounts paid as contribution with respect to the petitioners WP(C).No.27034 of 2013-D **- 4 -** herein with applicable interest from the date of receipt of such payments, to the EPF Organization as reflected in Exhibit P9 statement, within a period of two months from today. 4. One another problem which arise in the writ petition is with respect to the payments shown as against each of the petitioners in Exhibit P9. It is to be noticed that when transferring such amounts which were remaining with the EPF Organization, the EPF Organization had made deductions from the contributions remaining with them. Such deductions, evidently, are with respect to the pension paid by the EPF Organization on reaching the age of 58 years by the petitioners herein, and the interest thereon. For more clarity, it has to be noticed that the petitioners retired while they were enrolled in the EPF Pension Scheme of the EPF Organization. The petitioners had also received pension as per the EPF Pension Scheme till Exhibit P9 was issued. When transfer was necessitated, what the EPF Organization did was to deduct the pension paid till then, to the petitioners, from the contributions remaining with them, with interest thereon, before such contributions were transmitted to WP(C).No.27034 of 2013-D **- 5 -** the State Pension Board. When transferring back the amounts indicated in Exhibit P9 with respect to the petitioners herein, necessarily what has been deducted by the EPF Organization as per Exhibit P9 would have to be credited back to the petitioners' account to augment the pension fund of the EPF Organization, which computation would necessarily enure to the benefit of the petitioners in sanctioning pension. It is also made clear that the arrears of pension due to the petitioners from the date on which it was discontinued as per Exhibit P9, shall be paid to them on such re-computation being made as also the regular pension for the current period. ## Writ petition allowed. No costs. Sd/K.Vinod Chandran Judge. vku/- ( true copy )