Kerala High Court

George John vs Union Of India on 2 May, 2023

                    IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                    PRESENT
                 THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
               Tuesday, the 2nd day of May 2023/12th Vaisakha, 1945
                               WP(C)NO.14403 OF 2023
PETITIONERS:

  1. GEORGE JOHN, AGED 62 YEARS, S/O.K.J.JOHN, KOCHUPARAMBIL HOUSE,
     THODUPUZHA EAST P.O., THODUPUZHA TALUK, IDUKKI DISTRICT-685
     585.(BRANCH MANAGER (RETD.) ERSTWHILE IDCB).
  2. SURENDRAN NAIR.M.K., AGED 62 YEARS, S/O.KESAVAN NAIR, MANJALLOOR
     HOUSE, MADAKKATHANAM P.O., MOOVATTUPUZHA TALUK, ERNAKULAM
     DISTRICT-686 670.(SENIOR BRANCH MANAGER (RETD.) ERSTWHILE IDCB).
  3. AVIRACHEN P.K., AGED 63 YEARS, S/O.MATHEW KURIAKOSE, KOTTUPPALLIL
     HOUSE,MOOVATTUPUZHA P.O, PUTHUPPADY, KOTHAMANGALAM TALUK, ERNAKULAM
     DISTRICT-686 673. (DY.GENERAL MANAGER (RETD.) ERSTWHILE IDCB).
  4. BABY.A.P., AGED 62 YEARS, S/O KORA PAILY, ARACHIRACHALIL HOUSE, 200
     ACRE, MANNAMKANDAM P.O., ADIMALI, DEVIKULAM TALUK, IDUKKI
     DISTRICT-685 561. (SENIOR BRANCH MANAGER (RETD.) ERSTWHILE IDCB).
  5. K.T.MATHEW. AGED 62 YEARS, S/O.THOMAS, KURUVANTHANATHU HOUSE, KOLANI
     P.O., THODUPUZHA TALUK, IDUKKI DISTRICT-685 608. (DY.GENERAL
     MANAGER (RETD.) ERSTWHILE IDCB).
  6. JOSE SEBASTIAN, AGED 62 YEARS, S/O.SEBASTIAN, VALIPLACKKAL HOUSE,
     KANCHIYAR P.O., KANCHIYAR, IDUKKI TALUK, IDUKKI DISTRICT-685 511.
     (DY.GENERAL MANAGER (RETD.) ERSTWHILE IDCB).
  7. JOSEPH P.M., AGED 63 YEARS, S/O.MICHAEL, PALLIKUNNEL HOUSE,
     MANAKKADU VILLAGE & POST, THODUPUZHA TALUK, IDUKKI DISTRICT-685
     608. (SENIOR BRANCH MANAGER (RETD.) ERSTWHILE IDCB).

RESPONDENTS:

  1. UNION OF INDIA, REP.BY ITS SECRETARY TO MINISTRY OF LABOUR &
     DEPARTMENT OF EMPLOYMENT, CENTRAL SECRETARIAT, NEW DELHI, PIN-110
     001.
  2. THE PROVIDENT FUND COMMISSIONER-1 (PENSION) PROVIDENT FUND
     ORGANISATION (EPFO), EPFO HEAD OFFICE, MINISTRY OF LABOUR &
     EMPLOYMENT, GOVERNMENT OF INDIA, BHAVISHYA NIDHI BHAVAN, 14 -
     BHIKAJI KAMA PLACE, NEW DELHI, PIN-110 066.
  3. THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND
     ORGANISATION, BHAVISHYA NIDHI BHAVAN, PATTOM PALACE,
     THIRUVANANTHAPURAM, PIN-695 004.
  4. THE SUB REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT
     FUND ORGANISATION, SUB REGIONAL OFFICE, BHAVISHYA NIDHI, ADITHYA
     SABARI TOWER, THIRUNAKARA, KOTTAYAM-686 001.
  5. THE KERALA STATE CO-OPERATIVE BANK LTD., (KERALA BANK) REP.BY ITS
     MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER, COBANK TOWERS, PALAYAM,
     THIRUVANANTHAPURAM-695 033. (ERSTWHILE IDUKKI DISTRICT CO-OPERATIVE
     BANK LTD.).
  6. THE REGIONAL GENERAL MANAGER, THE KERALA STATE CO-OPERATIVE BANK
     LTD., (KERALA BANK), REGIONAL OFFICE, PB NO.140, CENTRAL JUNCTION,
      KOTTAYAM-686 001.


     Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to (1) pass an order directing respondents 5 and 6 to issue joint
option physically and respondents 3 and 4 to accept it under paragraph
26(6) of EPF Scheme and to grant approval forthwith, in order to enable
the petitioners to exercise their option under paragraph 11(4) of Pension
Scheme 1995, pending disposal of this Writ Petition(C) in the interest of
justice. (2) pass an order declaring that as petitioners and their
employer remitted EPF contribution on actual salary and it was accepted by
respondents 3 and 4 without any demur, they have deemed to be exercised
option under paragraph 26(6) of the EPF Scheme, 1952, in order to submit
option under paragraph 11(4) on online, pending disposal of this Writ
Petition(C) in the interest of justice.


     This petition coming on for orders upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
M/s. GEORGE MATHEW, M.D.SASIKUMARAN, SUNIL KUMAR A.G, GEORGE K.V., STEPHY
K.REGI, ADARSH KURIAN & MEDHA B.S., Advocates for the petitioners and of
SMT.NITA N.S, Advocate for R3 & R4, the Court passed the following:
              MURALI PURUSHOTHAMAN, J.
           ---------------------------------------------
                 W.P.(C) No.14403 of 2023
         -------------------------------------------------
            Dated this the 2nd day of May, 2023

                           ORDER

Admit.

2. The learned DSGI takes notice for the 1 st

respondent. Smt.Nita N.S, the learned Standing

Counsel takes notice for respondents 2 to 4. Sri.Athul

Shaji, the learned Standing Counsel takes notice for

respondents 5 and 6.

3. The learned counsel for the petitioners refers

to the order dated 12.04.2023 in W.P.(C) No.8979 of

2023 wherein, this Court has passed an interim order,

as follows:-

"In all these cases, the issue involved is pertaining to the legal entitlement of the petitioners for higher pension, as per the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. These writ petitions are already admitted.

2. As per the decision rendered by the Honourable Supreme Court in EPF Organisation v. Sunil Kumar W.P.(C) No.14403 of 2023

[2022(7) KHC 12 (SC)], certain directions were issued in this regard with respect to the options to be submitted by the employees concerned, to be eligible for the benefits of higher pension under the Employees Pension Scheme, 1995. In para 44 (iv) of the said decision, the following observations were issued by the Honourable Supreme Court.

" 44 (iv) The members of the scheme, who did not exercise option, as contemplated in the proviso to paragraph 11(3) of the pension scheme (as it was before the 2014 Amendment) would be entitled to exercise option under paragraph 11(4) of the post amendment scheme. Their right to exercise option before 1st September 2014 stands crystallized in the judgment of this Court in the case of R.C. Gupta (supra). The scheme as it stood before 1st September 2014 did not provide for any cut-off date and thus those members shall be entitled to exercise option in terms of paragraph 11(4) of the scheme, as it stands at present. Their exercise of option shall be in the nature of joint options covering pre-amended paragraph 11(3) as also the amended paragraph 11(4) of the pension scheme."

3. The Honorable Supreme Court permitted the employees who could not submit the options in the light of para 11(3) of the pre-amendment scheme, to submit fresh options within a period of four months. Though the said period expired on 3.03.2023, the same was further extended for two months i.e. up to 3.05.2023. The petitioners in these cases are employees intending to submit their options in the light of directions of the Honourable Supreme Court.

4. The EPF organization made available to the W.P.(C) No.14403 of 2023

employees the facility to submit the options through online mode by providing necessary links for the same on their website. Ext P9 in WP(C)8979/2023 is the option form the employee has to fill up while submitting the option.

5. The grievance highlighted by the petitioners is that one of the details to be furnished in the said option form is the copy of the permission under para 26(6) of the Employees Provident Fund Scheme, 1952. According to the petitioners, even though they were permitted to pay the contribution based on the salary, exceeding the ceiling limit prescribed (Rs 5,000/- and Rs 6,500/-), as contemplated under para 26(6) of the Scheme 1952, no formal option has been submitted. According to them, submission of such an option was never necessitated or insisted upon, and instead, higher contributions were being accepted all along by the EPFO. Therefore, they are unable to fill up the said column in the online option form, and the said form is formulated in such a fashion that, unless the details of the option under para 26 (6) of the Scheme, 1952 are incorporated, they cannot successfully submit the online options. If they are not submitting their options on or before the cut-off date, i.e. 3.05.2023, they will be deprived of the benefits of the Scheme to which they are legally entitled. In such circumstances, the petitioners seek an interim order permitting them to submit options without insisting on the details/copies of the options submitted by them under para 26(6) of the Scheme 1952.

6. The prayer for interim relief is stoutly opposed by the respective Standing Counsels for the EPFO. According to them, the option under para 26(6) is one of the crucial requirements for availing the benefits, and therefore, it is absolutely necessary for processing the options submitted by the employees. W.P.(C) No.14403 of 2023

7. The learned counsels for the petitioners would point out that higher contributions were being accepted by the EPFO all along, even without formal options from the employees and without any insistence for submission of options as referred to above. The petitioners relied on various circulars issued by the EPFO to substantiate the said contentions.

8. In circular bearing No: Pension/ Misc.2005/ 65836 dated 22.011.2006, it was mentioned in para 4 (4) that, if the option was not exercised at the time of salary crossing the statutory limit or on 16.3.1996 as the case may be and the contributions were deposited on salary exceeding the limit after receiving instructions from the Office before the date of issue of circular dated 22.06.2004, the department has the vicarious liability(restricted to specific cases only)of honouring such a commitment and hence the pensionable salary shall be on the actual salary, i.e. on the salary (exceeding the statutory limit) on which contribution paid. However, it is true that, in para 4 (5) of the said Circular, it was clarified that, in cases where no options were given, or no commitment was made by the concerned office, but the contribution on higher pay was deposited by the establishment/employee on their own, excess contributions will be considered as erroneous contributions, and the pensionary salary will be restricted to statutory ceiling existing from time to time. But the fact remains that the said Circular clearly indicates that certain offices of the EPFO used to give instructions for accepting the higher contributions, even without options being actually submitted, and permitting payment of higher contribution.

       9.   Besides   the  same,    in  Circular    No
       Pen1/12/33/96/Amendment/Vol.IV/16762      dated

22.01.2019 (Ext P3 in WP(C) 8979/2023), it is W.P.(C) No.14403 of 2023

mentioned as follows: "However, if an employer and employee have contributed under the EPF Scheme, 1952 on wages higher than the statutory wage limit, without joint option of employee & employer, and the EPF Account of the concerned employee has been updated by the EPFO on the basis of such contribution received, then by action of employee, employer and EPFO, it can be inferred that joint option of the employee and employee has been exercised and accepted by EPFO........."

10. Of course, the said Circular has been withdrawn as per Circular dated 7.02.2019, in the light of the observations made by a Division Bench judgment of this Court in WP(C)13120 of 2015. However, the said Circular dated 22.01.2019 clearly conveys the manner in which the EPFO treated the issue as regards the necessity of submitting options under para 26(6) of the Scheme 1952, and it indicates that the submission of options was never made mandatory.

11. In addition to the above, the petitioners have also raised a contention that, in the judgment passed by the Division Bench of this Court, in Sasikumar P. and others v. Union of India and others [ILR 2019 (1) Kerala 614], it was clarified that, 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. Therefore, even if the submission of an option is mandatory, it is still open for the employees to submit the same without any cut-off date. It was further contended that, even though the said judgment was set aside by the Honourable Supreme Court in Sunil Kumar's case (supra), it would not affect the direction of the Division Bench judgment of this court in Sasikumar's case (supra), as there is no contrary finding in the decision of the Honourable Supreme W.P.(C) No.14403 of 2023

Court, with regard to the option under para 26(6) of the Scheme 1952. In my view, this is also a matter to be considered at the time of the final hearing.

12. Thus, when all the above aspects are considered, it can be seen that, right from the inception, higher contributions were being accepted by the EPFO, even without submitting options under para 26(6) of the Scheme 1952. It is also evident that in some cases, instructions were issued from some of the offices of EPFO to accept the same, and in some cases, accounts of respective employees were also updated in tune with such higher contributions.

13. Further, the petitioners also have a contention that, going by the language used in para 26(6) of the Scheme, 1952, it could be interpreted as an enabling provision, which provides the power to the EPFO to accept higher contributions in certain circumstances and the same cannot be treated as a provision which makes the submission of option mandatory. The exercise of such options and their acceptance by the EPFO can be inferred from the conduct of the employees, employers and the EPFO, as mentioned in Circular dated 22.01.2019. After considering the provisions in this regard, I am of the view that this is also a relevant aspect to be considered in detail.

14. Thus, when considering all the above aspects, the only view that can possibly be taken is that the petitioners have succeeded in establishing a prima facie case, warranting an interim order in the matter. It is to be noted that the balance of convenience also favours the petitioners. Evidently, the Honourable Supreme Court fixed the cut-off date as 3.05.2023 for submitting the options. Now on account of the insistence from the EPFO to furnish the details of the option under para 26(6)of W.P.(C) No.14403 of 2023

the Scheme, 1952, and also in view of the peculiar nature of the online facility provided for such submissions, they are now prevented from submitting the said options. There cannot be any dispute that if they were not permitted to submit their options before the cut-off date, they would be deprived of their opportunity to claim the benefits of the judgment of the Honourable Supreme Court forever. Therefore, the petitioners deserve an interim order for that reason,i.e. the balance of convenience, as well.

15. The learned Standing Counsel for the EPFO also raised a contention that some of the writ petitions are submitted by the employees of the exempted establishments, and they cannot be granted the benefits. However, in para 38 of the judgment in Sunil Kumar's case (supra), this aspect was considered, and it was found that employees of the exempted establishments should not be deprived of the benefit of remaining in the pension scheme while drawing salary beyond the ceiling limit. Therefore the said contention of the EPFO is also not prima facie sustainable.

In the light above of the observations, I am inclined to pass an interim order; Accordingly, the Employees Provident Fund Organization and the authorities under the same are directed to make adequate provisions in their online facility to enable the employees/pensioners to furnish the options in tune with the directions of the Honourable Supreme Court, without the production of the copies of option under paragraph 26(6) of the Scheme, 1952 and the details thereof, for the time being. If appropriate modifications cannot be made in the online facility, feasible alternate arrangements, including the permission to submit hard copies of the options, shall be made/granted. The facilities mentioned above shall be made available to all the W.P.(C) No.14403 of 2023

employees/pensioners within a period of ten days from today."

4. The petitioners pray for extending the

benefit of the said interim order to the petitioners in

this writ petition.

5. Heard Smt.Nita N.S, the learned Standing

Counsel for EPFO.

6. The learned Standing Counsel submits that

they have no objection in extending the benefit of the

order dated 12.04.2023 in W.P.(C) No.8979 of 2023

to the petitioners also.

Accordingly, the Employees Provident Fund

Organization and the authorities under the same are