J.B. Kapoor vs Bharat Heavy Electricals Ltd.
2006 Latest Caselaw 555 Del

JUDGMENT

S. Ravindra Bhat, J.

Page 1112

1. The petitioner has sought various directions in this writ proceedings but in the course of hearing, he made submissions regarding delay in the payment of pension amounts. In his written submissions he has also claimed directions for refund of Rs. 24,429/- with interest, towards wrongful withholding or deduction of income tax amounts.

2.The petitioner was working with the respondent (hereafter referred to as 'BHEL'). He had opted for benefit of voluntary retirement, pursuant to a Scheme (hereafter referred to as 'VRS') formulated by BHEL in the year 2000. The petitioner was relieved from duties in January, 2001. As per terms of the VRS, inter alia, the optee ' employee was entitled to, inter alia, statutory benefits and an ex gratia lump sum one time payment equivalent to 60 days salary, for each completed year of service or monthly salary multiplied by Page 1113 number of months of service before normal date of retirement whichever was less. The relevant clause, i.e. para 8 reads as follows:-

'8. Benefits Admissible:

a) In addition to other terminal benefits available like CPF, Gratuity, full encashment of leave, RECHS coverage, etc., the employees seeking voluntary retirement will also be paid a lumpsum one-time payment equivalent to 60 day's salary for each completed year of service or the monthly salary at the time of voluntary retirement multiplied by the remaining number of months of service before normal date of retirement, whichever is less, subject to a maximum of 60 months' salary.

Salary for this purpose means Pay plus Dearness Allowance, interim relief and Ad-hoc payment, if any. Lumpsum payment may be made in one Installment or in annual Installments not exceeding three, if the employee so desires.

b) An employee who avails Voluntary Retirement under this Scheme will be entitled to the benefits of wage revision due from 1.1.1997, as and when implemented.

c) Payment under this Scheme is subject to the employee vacating Company's accommodation and payment of all outstanding dues.

d) Income tax liability, if any, will be met by the employee himself/ herself.

3. So far as first claim is concerned the pleadings disclose that the petitioner was entitled to an amount of Rs. 12 Lakhs. However, the BHEL took the position that income tax was payable and had to be deducted from the lump sum payment. The averments and submissions of the Petitioner also are to the effect that he opted to receive the lumpsum payment in three equated annual Installments. The grievance on this score is that in spite of having opted not to receive the entire amount, the BHEL arbitrarily deducted tax while making the payment; it is alleged that Rupees Five Lakhs out of the amount was non-taxable.

4. It is pleaded and urged by the petitioner that the BHEL is responsible for the delayed release of pension amounts for which it has to bear interest liability. Initially, the grievance raised was that pension was payable after the petitioner opted for VRS. The stand of the BHEL was that the petitioner had opted for pension in terms of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 ('The Act') which entitled him to payment only after his attaining the age of 58 years. It was pleaded and urged that the respondents deliberately and intentionally withheld the necessary papers. Ultimately, the commuted pension amounts, etc were released on 11.3.2005. The petitioner had on 4.7.2005 submitted that the claim for interest for the delay would be for the period February 2004 to March, 2005.

5. The petitioner relied on a letter dated 8.11.2004, by the Employees Provident Fund Organization stating that the BHEL had made a wrong reference in its previous letter dated 22.8.2001. The letter goes on to state that pension details had been transferred from Delhi Office 27.8.2001. It is submitted that the petitioner had joined Delhi Office in Page 1114 1997 and the stand of BHEL that details had not been transferred from the Uttaranchal Office of the Provident Fund Organization is incorrect.

6. It was averred and was urged on behalf of the respondent that the claims cannot be adjudicated in these writ proceedings. The amounts deducted towards tax were payable as per provisions of law. Learned counsel appearing on behalf of the respondent BHEL also submitted that the Scheme never held out that taxes and amounts which are to be deducted as per law would be given to the employees; it was also submitted that even otherwise the petitioner has secured refund as per provisions of Section 89 of the Indian Income Tax Act.

7. The respondents have also urged and it was pleaded on their behalf that the petitioner became entitled to pension only on 24.2.2004; they have relied upon Form 10(d) lodged by the petitioner on 2.1.2004 It is claimed that the form itself showed that the petitioner worked in different units of BHEL at different periods of time namely, at Haridwar, Chennai and New Delhi. The form shows that the petitioner asked that his accounts be transferred. It is submitted that the intr se correspondence between the petitioner and the Employees Provident Fund Organization, existing on record, shows that the family pension account of the petitioner had not been transferred by the Regional Provident Fund office at Dehradun to the concerned office at New Delhi. A letter dated 6.5.2004, to that effect has been relied on. It was also submitted that after receiving all the information the BHEL was asked to give necessary details which it did on 7.11.2004 and eventually the sanction for commuted value of pension was given on 11.3.2005.

8. As for as the first claim for interest on the amount of Rs. 24,429/- is concerned, the VRS Scheme no where holds out that income tax which is otherwise payable, would not be deducted. It is also not the case of the parties that the BHEL agreed to bear the Income Tax liability of those opting for VRS. In such circumstances, the reliance placed on Section 10(10-C) of the Income Tax Act, in my opinion is of no consequence. The respondents acted as per their understanding and deducted the tax which was admittedly deposited with the Authorities. It is also a matter of record that the amounts in excess of Rs. 70,000/- which were refundable were paid to the Petitioner, by the Income Tax Authorities. Therefore, the balance of Rs. 24,429/- was payable and and complete exemption could not be claimed. The facts show that the petitioner had claimed refund of tax and received it. If he had any further grievance about non-taxability it was always open for him to avail the statutory remedies. There mere circumstance that Section 10(10-C) of the Income Tax Act enables exemption of amounts up to Rs. 5,00,000/- by itself would not invariably result in an inference of arbitrariness by the respondents employer in deducting tax amounts for payment of income tax.

9. On the second issue, I am of the opinion that pleadings and materials on record do not justify a conclusion or finding that the BHEL acted in a capricious or illegal manner in regard to the late commutation of the petitioner's pension amounts. As per provisions of the Pension Scheme, under the Employees Provident Fund Act, 1952 the petitioner became eligible for pension 24.2.2004. Page 1115 He filled the relevant form on 2.1.2004 The inter se correspondence between the Employees Provident Fund Organization, the petitioner and the Regional Office at Uttaranchal shows that there were some doubts as to whether relevant files/ references had been transferred. After the matter was sorted out in October, 2004, the BHEL immediately took the necessary steps on 17.11.2004 In the light of these findings, I am of the opinion that BHEL cannot be faulted or made liable for payment of interest for the delay.

10. In view of the foregoing reasons, the petitioner cannot claim any relief in these writ proceedings. The writ petition is accordingly dismissed with no orders as to costs.