A K Kumaran Nair vs Union Of India And 3 Others
2015 Latest Caselaw 304 Bom

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               IN THE  HIGH COURT OF JUDICATURE AT BOMBAY

                     ORDINARY ORIGINAL CIVIL JURISDICTION




                                                                           
                            WRIT PETITION NO. 792 OF 2015




                                                   
    A.K. Kumaran Nair, Age-63,




                                                  
    residing at flat no. 213, D-Wing,

    Nathwani Park, Dev Prayag building, 




                                            
    Achole road, Veer Sawarkar Marg, 
                                   
    Nallasopara (East), district Thane-401209               ...Petitioner
                                  
                             Vs.


    1      Union of India,
          


           Through Secretary Ministry of 
       



           Micro, Small & Medium Enterprises,





           Udyog Bhavan, 

           New Delhi -110 011.





    2      Khadi Village Industrial Commission,

           Presently the Office of the Commissioner

           for Khadi and Village Industries

           Through its Commissioner,

                                                                                   1/14



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           3, Irla Road, Vile Parle (W),

           Mumbai-400 056.




                                                                           
                                                   
    3      Chief Executive Officer,

           Khadi Village Industrial Commission,




                                                  
           Presently the Office of the Commissioner

           for Khadi and Village Industries




                                              
           3 Irla Road, Vile Parle (W),
                                   
           Mumbai-400 056.               and
                                  
    4      Director (Administration)
          


           Khadi Village Industrial Commission
       



           presently the Office of the Commissioner

           for Khadi and Village Industries 





           3 Irla Road, Vile Parle (W),

           Mumbai-400 056.                                  ...Respondents





    Ms. Neeta Karnik for the Petitioner.
    Mr. P.S.Gujar with Mr. Vinod Joshi for Respondent No.1
    K.P. Anilkumar for Respondent Nos. 2 to 4.

                      CORAM:-  ANOOP V. MOHTA AND
                                 A.A.SAYED, JJ.

RESERVED ON:- 27 AUGUST 2015 PRONOUNCED ON:- 8 SEPTEMBER 2015.

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JUDGMENT (PER ANOOP V. MOHTA, J.) :-

Rule. Rule made returnable forthwith.

By consent, heard finally being pension matter.

2 The Petitioner, by this Petition has challenged the action of

Respondent No.2, withdrawing the pensionary benefits sanctioned to

the Petitioner on and from 11 November 2011 and also directing

recovery of the pension already paid. This is on the basis of

interpretation of Regulation No. 15 of the KVIC Employees Pension

Regulations 1984 (for short, "the KVIC Regulations") and the

impugned Standing Order No. 1719 dated 5 October 2012, issued by

Respondent No.2.

3 The backgrounds/events are relevant for consideration of

the Petitioner's case. The same reads as under:-

On 15 June 1982, the Petitioner joined the services of the

U.P. Khadi and Village Industries Board. The same was taken over by

Respondent No.2-Khadi Village Industrial Commission (for short,

KVIC) on 11 February 1984. The Petitioner continued working in the

trading establishment of the KVIC from 27 February 1984 to 16

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February 2005. By order dated 17 February 2005, the Petitioner was

considered and was appointed to the post of Assistant Development

Officer with the Directorate of Polymer and Chemical-based Industries

under the Commissioner for KVIC, in selection quota for general

category. After being so appointed in regular establishment, the

employer's contribution of provident fund amounting to Rs.1,69,687/-

along with interest accruing thereupon, had been withdrawn from the

Petitioner's Contributory Provident Fund Account (CPF Account) vide

bill dated 9 January 2006, in pursuance to Regulation 15(1) of the

KVIC Regulations.

4 In the year 2006, a proposal came to be submitted by the

Administration Department of the KVIC in the context of counting of

past trading services rendered by the Petitioner for the period from 27

February 1984 to 17 February 2005 exclusively for pensionary

benefits. As the Petitioner had not only rendered uninterrupted

services in the commission, but also refunded the employer's

contribution on EPF thereby, fulfilling the major requirement essential

for counting of past trading services exclusively for pensionary

benefits established after 27 September 1984. The Audit Department

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of Respondent No.1-Commission concurred with the view of the

administration and Respondent No.3 and recorded his approval for

considering the past services rendered by the Petitioner under trading

establishment as qualifying service for pensionary benefits under

Respondent No.2 Commission. By memo dated 3 August 2006, the

Director of the Respondents issued the official order according

approval and sanction for counting of services rendered by the

Petitioner under trading establishment as Operator and Salesman-II

for period from 27 February 1984 to 17 February 2005, as qualifying

service, for pensionary benefits only, as CPF number came to be

allotted to him. The Petitioner's service book too came to be endorsed

with the said decision vide an entry dated 27 July 2006.

5 On 18 February 2005, the GPF Account number 8636

came to be allotted to the Petitioner immediately after the Petitioner

joining regular service of the Commission, with subscription being

duly credited to the said account regularly. The Petitioner wrote to

Respondent No.3, requesting the Commission to process his pension

papers at the earliest as he would reach his superannuation age on 30

September 2011. The Petitioner again requested the Commission to

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process his pension papers at the earliest. After rendering continuous

and uninterrupted service of 27 years, the Petitioner reached the age

of superannuation on 30 September 2011. As his pension papers were

not yet processed, the Petitioner filed a representation on the day of

his superannuation, requesting to process his pension papers

expeditiously.

6 On 11 November 2011, due sanction was accorded and the

Petitioner started receiving pension w.e.f. October 2011. Ultimately,

by memorandum dated 11 November 2011, Respondent No.4-Director

of the Respondent Commission, issued pension commutation vide

pension payment order No. 4128/2011-2012. Respondent No.2-

Commission's account office forwarded the requisite direction of

remittance of pension to the State Bank of India. That arrears of the

Petitioner's pension from 1 October 2011 to 31 October 2011

amounting to Rs.9,988/- came to be paid by being deposited in the

pension account. On 12 March 2012, the Commission has also issued

standing order upon the subject matter upholding the right of the

Petitioner and similarly situated employees to get Pension. The

Petitioner, therefore, continued to draw his pensionary benefits duly

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and regularly. His pension also came to be upgraded in terms of

decision taken by the Screening Committee of the Commission. On 5

October 2012, by a subsequent standing order, the standing order

dated 12 March 2012 came to be withdrawn. Under this impugned

standing order, new directive that cases where pension benefit have

been extended to officials who switched over to the regular

establishment by virtue of absorption/selection after 1 January 2004

who were being provided pension under old pension scheme be

discontinued and the pension disbursed till date be recovered, came to

be issued. On 27 May 2013, by memorandum show cause notice

came to be issued to the Petitioner calling upon him to show cause

why the pensionery benefits sanctioned to him should not be stopped

with immediate effect and the amount of pension already paid to him

should not be recovered from him.

7 By reply dated 26 June 2013 and 9 July 2013 the

Petitioner made submissions to the aforesaid show cause notice dated

27 May 2013. The Petitioner also issued a legal notice to the

Respondents, calling upon them to withdraw the impugned

memorandum. Several of identically situated employees who would

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suffer due to loss of pensionary benefits had represented to the

Respondent Commission against the impugned standing order and

decision not to extend benefits taken by the Commission. The

Commission, therefore, had taken up the said issue with the

concerned Ministry of Micro, Small and Medium Enterprises of

Respondent No.1. By communication, Respondent No.2 wrote

Respondent No.1 Ministry pointing out the fallacy in treating trading

establishment employees as new recruits. The said communication

further records that the aforesaid issue has been taken up by the

Commission with the Ministry from 22 June 2009 onwards and that

subsequent reminders have been issued over the period of 2009 to

2011 by the KVIC. A Committee to finalize the revision of Regulation

15 of the KVIC Regulations came to be formed and the draft proposal

for the said revision came to be forwarded. Respondent No.2

Commission in its meeting dated 25 November 2013 deliberated on

the issue and approved counting of past service of trading officials

who switched over to regular establishment by virtue of their

selections/absorption on or after 1 January 2004 and the coverage

under the KVIC Regulations, till notification of revision of Regulation

15 by the Government of India. The Petitioner was never called for a

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personal hearing and was kept on tenterhooks for a period of more

than one year. The Petitioner is now issued impugned memorandum

dated 22 August 2014, informing him that the pensionary benefits as

sanctioned to him vide Pension Payment Order dated 11 November

2011 stood withdrawn. The impugned order further records that the

pension paid till then, shall be recovered from the Petitioner. Hence

the present Petition.

The Petitioner has relied upon the sub-regulation (1) of

Regulation 15 of the KVIC Regulations, which provides that-

(1) a person who is initially engaged by the commission under the trading establishment or on contract for a

specific period and subsequently transferred or appointed permanently to the same or another post

under the regular establishment, without interruption of duty, in the interest of commission's work, may opt either;

(a) to retain the commission's contribution in the contributory provident fund with interest thereon including any other compensation or retirement benefits for that service; or

(b) to agree to refund to the commission the monetary benefits referred to in clause (a) or to forego the same if they have not been paid to him and count in lieu thereof the service for which the aforesaid monetary benefits may have been payable.

It is significant that the Petitioner has given his option

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and has in fact returned the employer's contribution of provident fund amounting to Rs.169687/- along with interest accruing thereupon way back in 2006. The

Commission is therefore duty bound to count in lieu thereof Petitioner's earlier service, for which the

aforesaid monetary benefits may have been payable. That an entry came to be made in the service book to the effect that the services rendered by the Petitioner under the trading establishment for the period from

27/02/1984 to 17/02/2005 was being treated as qualifying service for pensionary benefits only, vide a memo number PCB/EST/AKKN/2006-07 as per the approval of CEO/Commissioner."

The record shows that the Petitioner by virtue of his

selection on and after 1 January 2004, was instructed to appear for

the interview before Departmental Staff Selection Committee-II by

Memo dated 12 January 2005. He was selected, accordingly, as

Salesman-II (HMPI) (Under Trading Cadre) under selection quota

against General Category, as per the pay-scale and allowances under

the Rules of the Commission. He was ordered to be posted in new

head quarter at Mumbai. Therefore, we decline to accept the

case/submission of the Respondents that he was a new appointee. On

the contrary, his appointment needs to be considered from the date of

his basic appointment. We decline to accept the case of the

Respondents in treating him as a new recruit.

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    10              In   view   of   the   objection   from   the   Ministry   to   Standing 

Order dated 12 March 2012, the Commission had taken up the issue

with the concerned Ministry of Micro, Small and Medium Enterprises

of Respondent No.1. It was agreed that there needs to be

reconciliation upon the issue and therefore, directed to circulate the

draft proposal for the revision of the KVIC Regulations. By the

Standing Order No. 1719 dated 5 October 2012, earlier Standing

Order dated 12 March 2012 was withdrawn abruptly, pending the

draft proposal of revision, which was admittedly forwarded to

Respondent No.1. Respondent No.2-Commission deliberated on the

issue of approved counting of past service of trading officials, who

switched over to regular establishment, by virtue of their

selections/absorption, on or after 1 January 2004 and its coverage

under KVIC Regulations. The issue is pending with Respondent No.1,

based upon its Regulation dated 13 December 2013, is an additional

factor which cannot be overlooked while deciding the case/contention

of the Petitioner. The impugned memorandum/show cause notice

dated 27 May 2013 in view of above background, in our view,

therefore unsustainable. The Petitioner had replied to the notice and

submitted his representation to withdraw the same. The decision so

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taken on 22 August 2014 of withdrawing the benefits as sanctioned to

him, is illegal and unsustainable.

11 The Commission had decided in 2008 to adopt the new

pension scheme. The Petitioner's services were counted as qualifying

services for the purpose of pension in the year 2006 itself and entry

came to be made in the service book to that effect, by treating the

period from 27 February 1984 to 17 February 2005 as qualifying

services for pensionary benefits. The Petitioner, as recorded, had

already complied with the conditions specified in the KVIC

Regulations and refunded the Commission contribution and interest

thereon in the year 2006 itself. Respondent No.2 therefore, ought not

to have resiled from the said decision. There was no illegality as such,

while adopting such mode and such scheme, specifically when the

KVIC, being the statutory body governed by its own Act, Rules and

Regulations, including service conditions. Those Rules and

Regulations were not extended automatically to its employees. But,

having once decided to adopt the pension scheme, the pension fixed

cannot be taken away in such fashion by changing the Rules

retrospectively. Respondent No.2 is bound by their own Pension

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Rules, as adopted at the relevant time. The change, if any, needs to be

made prospectively, subject to the decision.

12 There is no substance in the contention that those

employees, who were absorbed in the Commission's services after 27

September 1984 only could get the benefits of regulation No.15. The

similarly situated eight colleagues/employees/trading staff employees,

absorbed by the Commission on 11 February 1984, and have been

getting pension based upon the very same Regulations. Even

otherwise, in the present case, in view of the above facts and reasons,

the Respondents' submission that the post of the Petitioner not being

within government budgetary grants, is not acceptable. This is also

for the reason that the Commission had already taken back the

contribution given to the Petitioner's CPF Account in the year 2006

itself. It is unacceptable situation that the Petitioner is not entitled for

old pension nor new pension, even after completion of his 27 years

service in KVIC. The legal and constitutional entitlement of pension,

therefore, cannot be taken away at this stage and/or after retirement

in such fashion. This would cause great injustice and hardship, apart

from breach of principle of legitimate expectations and principle of

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estoppel, as there was nothing illegal and contrary to law, when they

had adopted the scheme and permitted the employees like the

Petitioner to act on the same.

13 Therefore, taking overall view of the matter, we are

inclined to pass the following order:-

ORDER

a) Impugned order dated 22 August 2014 is quashed

and set aside.

b) Respondent No.2 to restore and continue pensionary

benefits of the Petitioner as granted by Order dated

11 November 2011 along with arrears and interest

thereon @ 8% p.a. withing eight weeks from today.

          c)      Writ Petition is disposed of.





          d)      Rule disposed of accordingly. 

          e)      There shall be no order as to costs. 





             (A.A.SAYED, J.)                           (ANOOP V. MOHTA, J.)