Kerala High Court
Kurien.T.K vs Regional Provident Fund Commissioner on 23 May, 2025
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WP(C) NO.7307 OF 2020
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
FRIDAY, THE 23rd DAY OF MAY 2025 / 2ND JYAISHTA, 1947
WP(C) NO. 7307 OF 2020
PETITIONER/S:
KURIEN.T.K,
AGED 59 YEARS
S/O. LATE ABRAHAM KURUVILA, THEVARADIYIL HOUSE,
1
THACHAKUNNU, PUTHUPPALLY, KOTTAYAM-686 011
(PF NO.KR/KTM/1828/1044) (PPO NO.KR/KTM/00043752)
SURENDRAN V.P.,
AGED 60 YEARS
S/O.LATE PARAMESWARAN K., VETTIKULATHIL HOSUE,
2 PEECHINGAPARAMBU ROAD, KOONAMTHAI, EDAPPALLY,
ERNAKULAM-682 024. (PF NO.KR/KTM/1828/1036) (PPO
NO.KR/KTM/00043752).
BY ADV PRAKASH M.P.
RESPONDENT/S:
REGIONAL PROVIDENT FUND COMMISSIONER,
EPF ORGANISATION, SUB REGIONAL OFFICE, ADITYA
1
SABARI TOWER, THIRUNAKKARA, KOTTAYAM-686 001.
2 ERNAKULAM REGIONAL CO-OPERATIVE MILK PRODUCERS
UNION LTD.
NO.E-150(D), REPRESENTED BY ITS MANAGING
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2
DIRECTOR, HEAD OFFICE, EDAPPALLY, COCHIN-682 024.
DIARY MANAGER,
ERNAKULAM REGIONAL CO-OPERATIVE MILK PRODUCERS
3 UNION LTD., KOTTAYAM DIARY, VADAVATHOOR,
KOTTAYAM-686010
BY ADV SRI.JOY THATTIL ITOOP, SC, EPF ORGANISA
SRI.SAJEEV KUMAR K. GOPAL, SC
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 23.05.2025, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
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3
MOHAMMED NIAS C. P. , J.
.................................................
W. P. (C) No. 7307 OF 2020
.......................................................
Dated this the 23rd day of May, 2025
JUDGMENT
The petitioners herein were the employees of the 2 nd
respondent, who retired from service on 31.07.2018 and 30.04.2017,
respectively. The petitioners were subscribers to the Employees
Provident Fund Scheme (for short, 'EPF') and Employees Pension
Scheme (for short, 'EPS'). The petitioners submit that after their
retirement, their wages were revised retrospectively. They argue that
the contribution payable to the EPF is based on the basic wages, which is
defined under Section 2(b) of Employees' Provident Funds and
Miscellaneous Provisions Act 1952 (for short, 'the Act') to include all
emoluments which are earned by an employee while on duty or on leave
or on holidays with wages in either case in accordance with the terms of
the contract of employment and which are paid or payable in cash to
him. Therefore, it is the contention that on retrospective revision of
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wages, the employer is bound to collect the difference of contribution to
the EPF from the arrears of wages and remit the same in the respective
EPF account of the employees, which has been done in the instant case.
2. It is also urged that, based on such wage revision and
contribution, the pension payable is also to be revised. The petitioner
says that in identical circumstances, through Ext.P7 judgment, the issue
has been held in favour of the petitioners therein, who are similarly
situated based on the judgment of the Supreme Court reported in
Prantiya Vidhyut Mandal Mazdoor Federation and Others vs.
Rajasthan State Electricity Board and Others (1992 (2) SCC 723),
which was followed by this Court in WPC 10162 of 2012 and connected
cases dated 15.02.2013. Accordingly, direction was given in those cases
to recompute the quantum of pension based on the revision of pay
effected retrospectively and to take a decision following the dictum laid
down in the aforesaid case.
3. The learned counsel also brings to my notice the judgment
of this Court in Mohan K.S vs. Regional Provident Fund
Commissioner (2024 KHC online 7281) which also repelled the
contention of the respondent that since the pension contributions on
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the arrears of DA and pay revision benefits are paid in bulk, the same
cannot be considered for the purpose of computation of pensionable
salary. It was found that the pension contributions of the employer and
employee are arising out of the pay revision, have been revised by
respondents 1 to 3. Such pay revision benefits, being due, are to be
added to the monthly wages retrospectively, and such enhanced
monthly wages should be the basis for the calculation of the pensionable
salary. I find substantial force in the contention of the learned counsel
for the petitioner that the issue is covered in his favour by Ext.P7
judgment and the judgment in Mohan K.S (supra). The petitioner also
relies on Exts.P9 dated 16.05.2011 and P10 dated 18.01.2025, which deal
with the contributions towards PF on the amount of arrears and levying
damages/interest under Section 14B (7Q) of the Act.
4. The prayer in the writ petition is to command the
respondents to revise the pension payable to the petitioner under the
Employees Provident Pension Scheme based on the average revised
monthly pay drawn in any manner during the contributory period of
service in the span of twelve months preceding the date of exit from the
membership of the pension fund, within a time frame.
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5. At the time when the writ petition was filed, the period of
twelve months, which was brought in through the amendment in the
year 2014 was struck down. According to the petitioners, the pension
payable to them are calculated on the basis of average salary for 60
months prior to their retirement.
6. The above stipulation brought out by the Government in a
notification dated 22.08.2014 with effect from 01.09.2014 was declared as
bad by this Court in the judgment in P.Sasi Kumar and Others Vs.
Union of India and Ors. reported in [ILR 2019 (1) Kerala 614]. The
appeal filed against the same was allowed by the Supreme Court in the
judgment in Employees Provident Fund Organisation and Another
Vs. Sunil Kuamr B and Others [2022 (7) KHC 12 SC) with the following
directions;
"(i) The provisions contained in the notification no. G.S.R.
609(E) dated 22nd August 2014 are legal and valid. So far as
present members of the fund are concerned, we have read
down certain provisions of the scheme as applicable in their
cases and we shall give our findings and directions on these
provisions in the subsequent sub-paragraphs.
(ii) Amendment to the pension scheme brought about by the
notification no. G.S.R. 609(E) dated 22nd August 2014 shall
apply to the employees of the exempted establishments in the
same manner as the employees of the regular establishments.
Transfer of funds from the exempted establishments shall be
in the manner as we have already directed.
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(iii) The employees who had exercised option under the
proviso to paragraph 11(3) of the 1995 scheme and continued
to be in service as on 1st September 2014, will be guided by
the amended provisions of paragraph 11(4) of the pension
scheme.
(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 crystalised 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 paragraph11(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.
There was uncertainty as regards validity of the post
amendment scheme, which was quashed by the aforesaid
judgments of the three High Courts. Thus, all the employees
who did not exercise option but were entitled to do so but
could not due to the interpretation on cut- off date by the
authorities, ought to be given a further chance to exercise
their option. Time to exercise option under paragraph 11(4)
of the scheme, under these circumstances, shall stand
extended by a further period of four months. We are giving
this direction in exercise of our jurisdiction under Article
142 of the Constitution of India.
Rest of the requirements as per the amended provision shall
be complied with.
(v) The employees who had retired prior to 1st September
2014 without exercising any option under paragraph 11(3) of
the pre- amendment scheme have already exited from the
membership thereof. They would not be entitled to the
benefit of this judgment.
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(vi) The employees who have retired before 1st September
2014 upon exercising option under paragraph 11(3) of the
1995 scheme shall be covered by the provisions of the
paragraph 11(3) of the pension scheme as it stood prior to the
amendment of 2014.
(vii) The requirement of the members to contribute at the
rate of 1.16 per cent of their salary to the extent such salary
exceeds Rs.15000/ per month as an additional contribution
under the amended scheme is held to be ultra vires the
provisions of the 1952 Act. But for the reasons already
explained above, we suspend operation of this part of our
order for a period of six months. We do so to enable the
authorities to make adjustments in the scheme so that the
additional contribution can be generated from some other
legitimate source within the scope of the Act, which could
include enhancing the rate of contribution of the employers.
We are not speculating on what steps the authorities will take
as it would be for the legislature or the framers of the scheme
to make necessary amendment. For the aforesaid period of six
months or till such time any amendment is made, whichever
is earlier, the employees' contribution shall be as stop gap
measure.The said sum shall be adjustable on the basis of
alteration to the scheme that may be made.
(viii) We do not find any flaw in altering the basis for
computation of pensionable salary.
(ix) We agree with the view taken by the Division Bench in
the case of R.C Gupta (supra) so far as interpretation of the
proviso to paragraph 11(3) (pre-amendment) pension scheme
is concerned. The fund authorities shall implement the
directives contained in the said judgment within a period of
eight weeks, subject to our directions contained earlier in this
paragraph.
(x) The Contempt Petition (C) Nos.1917-1918 of 2018 and
Contempt Petition (C) Nos. 619-620 of 2019 in Civil Appeal
Nos. 10013-10014 of 2016 are disposed of in the above terms."
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7. Given the above directions, the petitioners are entitled to
succeed. It is declared that the pensionable salary of the petitioner is to
be calculated based on the average monthly pay drawn by the
petitioner, inclusive of arrears of DA/pay revision benefits received by
the petitioner during the contributory period of service in the span of 60
months preceding the date of exit from the pension fund. The
impugned orders are quashed. The respondents are directed to
compute the pensionable salary of the petitioner based on the actual
pay drawn by the petitioner, including DA/pay revision benefit on the
basis of the enhanced pay revision benefits. A decision as directed
above shall be passed by the 1st respondent within two months from the
date of receipt of a copy of this judgment.
The writ petition is disposed of as above.
SD/-
MOHAMMED NIAS C.P.,
JUDGE
JJ
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APPENDIX OF WP(C) 7307/2020
PETITIONER EXHIBITS
A TRUE COPY OF THE ORDER
NO.EU/P&A/37/2018/2602A DATED 29.5.2018
EXHIBIT P1 OF THE MANAGING DIRECTOR OF THE 2ND
RESPONDENT.
A TRUE COPY OF THE LETTER DATED
EXHIBIT P2 3.1.2020 OF THE IST RESPONDENT.
A TRUE COPY OF THE REPRESENTATION DATED
EXHIBIT P3 5.2.2020 OF THE IST PETITIONER.
A TRUE COPY OF THE REPRESENTATION DATED
EXHIBIT P4 10.12.2019 OF THE 2ND PETITIONER.
A TRUE COPY OF THE LETTER DATED
EXHIBIT P5 28.2.2020 OF THE 3RD RESPONDENT.
A TRUE COPY OF THE LETTER DATED
EXHIBIT P6 29.2.2020 OF THE 3RD RESPONDENT.
A TRUE COPY OF THE JUDGMETN DATED
EXHIBIT P7 29.8.2013 IN WPC NO.20261 OF 2012 (G).
A TRUE COPY OF THE LETTER DATED
24.2.2020 OF THE IST RESPONDENT TO THE
EXHIBIT P8
2ND PETITIONER.
COPY OF LETTER No. C-III/4(85)11/HQ
Exhibit P9 DATED 16.05.2011 OF THE EPFO
Exhibit P10 TRUE COPY OF THE LETTER No.
PENSION/VI/PoHW/2024-25/efile-951977/09
DATED 18.01.2025 OF THE EPFO
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RESPONDENT EXHIBITS
TRUE COPY OF THE ORDER DATED 6.2.2020
OF THE HON'BEL SUPREME COURT IN
EXHIBIT R1(A) CONMT.PET.(C)NO 1917-1918/2018 AND
CONNECTED CASES
TRUE COPY OF THE ACTUARIAL REPORT FOR
UNEXEMPTED ESTABLISHMENTS, DATED
EXHIBIT R1(B)
27.12.2018
TRUE COPY OF THE ACTUARIAL REPORT FOR
EXEMPTED ESTABLISHEMENTS, DATED
EXHIBIT R1(C)
27.12.20118
TRUE COPY OF THE EXPLANATORY STATEMENT
EXHIBIT R1(D) DATED 20.6.2019
