Madras High Court

P.Djeassilane @ Jayaseelan vs The Regional Provident Fund on 27 July, 2023

                                                                                     W.P.No.14255 of 2022 &
                                                                           W.M.P.No.13498 and 13500 of 2022

                                     IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                         DATED: 27.07.2023

                                                             CORAM:

                                   THE HON'BLE Mrs.JUSTICE V.BHAVANI SUBBAROYAN

                                                   W.P.No.14255 of 2022 &
                                               W.M.P.No.13498 and 13500 of 2022

                     P.Djeassilane @ Jayaseelan                                      ...   Petitioner

                                                                Vs.

                     The Regional Provident Fund
                       Commissioner – II,
                     Regional Office, Puducherry,
                     101, 100 Feet road, Cholan Nagar,
                     Mudaliarpet, Puducherry – 605 004                               ... Respondent

                                  Writ Petition filed under Article 226 of the Constitution of India for

                     issuance of Writ of Certiorarified Mandamus calling for the records of the

                     order dated 18.01.2021 bearing no.TN/RO-RDY/Pension/Revision/2020-21

                     passed by the respondent and quash the same and consequently, directing

                     the respondent to pay monthly pension of Rs.9,050/- as per PPO

                     No.TB/PDY/00064304 dated 28.07.2018 and pass further orders.



                                        For Petitioner      : Mr. Anil Relwani

                                        For Respondent      : Mr.R.Vishnu
                                                              Standing counsel




https://www.mhc.tn.gov.in/judis


                     1/11
                                                                                       W.P.No.14255 of 2022 &
                                                                             W.M.P.No.13498 and 13500 of 2022



                                                              ORDER

Seeking for an issuance of Writ of Certiorarified Mandamus by

calling for the records of the order dated 18.01.2021 bearing no.TN/RO-

RDY/Pension/Revision/2020-21 passed by the respondent and to quash

the same and consequently to direct the respondent to pay monthly

pension of Rs.9,050/- as per PPO No.TB/PDY/00064304 dated

28.07.2018, the petitioner has come up with the present Writ Petition.

2. The brief facts of the case are as follows:-

(i) The Petitioner was an employee of M/s. Swadeshee-Bharathee

Textile Mills Limited and the petitioner retired on 31/07/2011. The Petitioner

had opted the scheme of Employees Pension Scheme, 1995 (EPS,

1995),[for brevity, herein after referred to EPS]. Under the said scheme, the

employees' contribution and the employer's contribution were being

deducted by the employer and remitted into EPFO Account. Accordingly

PPO No.TB/PDY/00058098 dated 11/10/2011 was issued by the

respondent in favour of the Petitioner. The monthly pension was Rs.1,985/-

on wage ceiling limit of Rs.6,500/- under the provisions of EPS, 1995.

Pursuant to the orders passed by the Hon’ble Supreme Court of India in

RC Gupta & Ors Vs Regional Provident Fund Commissioner Employees

Provident Fund Organisation & Ors, the Additional Central PF https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

Commissioner, HQ (Pension), Employees Provident Fund Organisation

issued Circular dated 23/03/2017 to all the Regional PF Commissioners,

Regional Office/Sub-Regional Office directing the officers in charge to take

necessary action in accordance with the order of the Hon’ble Supreme

Court.

(ii) The circular stated that in a situation where the deposit of the

employer’s share at 12% has been on the actual salary and not the ceiling

amount, the Provident Fund Commissioner could seek a return of all such

amounts that the concerned employees may have taken or withdrawn from

their Provident Fund Account before granting them benefits of the proviso

to Clause 11(3) of the Pension Scheme. Once such a return is made in

whichever cases such return is due, consequential benefits in terms of this

order will be granted to the said employees. As per the circular, the

Petitioner returned an amount of Rs. 6,04,663/- to the Respondent and the

Respondent also paid a sum of Rs.5,89,928/ to the Petitioner towards the

difference. The Respondent issued a new PPO vide PPO No.

TB/PDY/00064304 dated 28/07/2018 fixing the revised monthly pension at

Rs.9,050/-.

(iii) Subsequently, the Additional Central PF Commissioner (HQ),

Pension issued a additional circular dated 22/01/2019 under Reference No.

Pen1/12/33/96/Amendment/Vol.IV/16762 to all Regional PF

Commissioners directing “However, if an employer and employee have https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

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 EPFO on

the basis of such contribution received, then by action of employee

employer and EPFO, it can be inferred that joint option of employee and

employer has been exercised and accepted by EPFO Therefore, in such

cases, for implementing the issue vide Head Office Circular Penson

1/12/33/EPS Amendment/96/Vol.11/34007 dated 23/03/2017 formal joint

option of employee and employer should not be insisted.”

(iv) While that being so, the Respondent, by way of the impugned

order dated 18/01/2021 bearing No. TN/RO-PDY/Pension/Revision/2020-

21 held that the Petitioner’s Application for revision of Pension has been

reviewed in line of Head Office Legal Wing circular No. LC-E-file No.

15795/2/782 dated 16/09/2020 and observed that the Petitioner has not

exercised option under proviso to para 11(3) of the EPS 1995 with the

employer during the service and hence the Petitioner not eligible to claim

for revision of pension on higher wages and consequently, the Respondent

stopped the pension on high wages and released the original pension of

Rs.1,985/- The Respondent stopped paying the enhanced pension from

February, 2021 onwards. Hence this petition.

https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

3. The learned counsel for the petitioner submits that the petitioner is

a senior citizen and relies on the pension amount for day to day expenses.

The respondent has passed the impugned order without following the due

process of law. Therefore, unless and until the impugned order is set aside

or stayed, grave prejudice will be caused to the petitioner. Further, various

High Courts have come down heavily on the EPFO for unilaterally

cancelling the revised PPO, thereby cancelling the revised enhanced

pension without following the principles of natural justice.

4. The learned counsel for the petitioner submits that the application

for revision of pension based on the circular dated 23.03.2017 was issued

and the office verified the application on the basis of the documents.

Admittedly, the petitioner has also submitted a joint declaration with the

employer stating that his employer had deposited 12% of actual salary

above the statutory wage ceiling limit as the employer's share of

contribution on the basis of option exercised jointly by the petititioner and

employer under the proviso of paragraph 26(6) of Employees Provident

Funds scheme, 1952, thereby pleaded to pay the enhanced pension.

4. Per contra, the learned standing counsel for the respondent

submits that after 2014 amendment came into effect, the option of the

members to further opt to remain in the scheme beyond the ceiling limit has https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

been taken away. But the existing option members who had chosen to

contribute beyond the salary limit has been permitted to exercise fresh

option to continue beyond the salary limit has been permitted to exercise

fresh option to continue with such contribution upon payment of an

additional 1.16 per cent of their salary beyond the said ceiling, thereby

pleaded that to dismiss the present petition. In support of his contention,

the learned counsel relied on the Judgment of the Hon'ble Supreme

Court reported in 2022 SCC Online S 1521 [Employees Provident

Fund Organisation and Another Vs. Sunil Kumar.B & Others]

5. Heard the learned counsel on either side and perused the

documents placed on record.

6. The Point now arises for consideration before this Court is

'Whether the petitioner is eligible for higher pension?'

7. It is well settled that the Employees Provident Funds and

Miscellaneous Provisions Act, 1952 (in short referred to as EPF Act) was

enacted to provide provident funds, pension fund and deposit-linked

insurance fund for employees in factories and other establishments,

however, the said act did not contain any provision for pension, hence the

Employees' Pension Scheme, 1995 (EPS) brought into effect through an https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

amendment to Section 6A of the EPF Act, for governing the terms of

employees' pension. The employees and employers contribute 12% of their

basic salary and dearness allowance to the EPF of the employer’s 12%

contribution, 8.33% goes to the Employees’ Pension Scheme (EPS)and the

remaining 3.67% to the EPF. The pensionable salary was altered vide

various amendments to the EPS.

8. At this juncture, it is pertinent to point out that prior to the year

2014 Amendment, the maximum pensionable salary was INR 5,000/- per

month, which was later increased to Rs 6,500/-. However, the EPFO

granted six months for the employees to file a joint option form for higher

pension contributions to the EPS. Thereafter, through an amendment to

the EPS which was effective from September 1, 2014, the EPS contribution

of 8.33% was given at the maximum pensionable salary of INR 15,000 per

month, even when the employee draws a higher salary. The same was

challenged before the Hon’ble Supreme Court of India in RC Gupta &

Ors Vs.Regional Provident Fund Commissioner Employees Provident

Fund Organisation & Ors, and the Hon'ble Apex Court has held that the

reference to the date of commencement of the Scheme or the date on

which the salary exceeds the ceiling limit in the proviso are dates from

which the option exercised are to be reckoned with for calculation of

pensionable salary and are not cut-off dates to determine the eligibility of https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

the employer-employee to indicate their option under the proviso. Further,

the Hon'ble Apex Court had taken a view that a beneficial Scheme ought

not to be allowed to be defeated by reference to a cut-off date, particularly,

in a situation where the employers had deposited 12% of the actual salary

and not 12% of the ceiling limit of Rs.5,000/- or Rs.6,500/-per month.

9. Pursuant to the aforesaid order of the Hon’ble Supreme Court of

India, the Additional Central PF Commissioner, HQ (Pension), Employees

Provident Fund Organisation issued Circular dated 23/03/2017, the

Petitioner submitted his Application for revision of his pension based on the

circular dated 23/03/2017 issued by the Head Office, EPF department. As

a sequal, the Respondent also paid a sum of Rs.5,89,928/ to the Petitioner

towards the difference. The Respondent issued a new PPO vide PPO No.

TB/PDY/00064304 dated 28/07/2018 fixing the revised monthly pension at

Rs.9,050/- Subsequently, by way of the impugned order dated 18/01/2021

bearing No. TN/RO-PDY/Pension/Revision/2020-21 it was held that the

Petitioner’s Application for revision of Pension has been reviewed in line of

Head Office Legal Wing circular No. LC-E-file No.15795/2/782 dated

16/09/2020 and observed that the Petitioner has not exercised option

under proviso to para 11(3) of the EPS 1995 with the employer during the

service and hence the petitioner not eligible to claim for revision of pension

on higher wages and consequently, the respondent is constrained to stop

pension on high wages and release the original pension of Rs.1,985/-. https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

10. In fact, in a recent ruling of the Hon’ble Supreme Court of India

in the matter of Employees’ Provident Fund Organisation & Another

V. Sunil Kumar B. and Others, the Apex Court examined the legality of

certain amendments made to the pension scheme by the Central

Government in 2014, while hearing appeals from different judgments of

High Courts of Kerala, Rajasthan and Delhi, which quashed most of the

said amendments by order dated 04.11.2022. The Hon'ble Apex Court had

upheld the provisions of the Employees' Pension (Amendment) Scheme,

2014 as legal and valid and also held that the Employees who had retired

before 1st September 2014 without exercising the option under the pre-

amendment scheme would not be entitled to the benefit of this judgement,

as they have already exited the scheme. The employees who retired before

September 1, 2014 and who exercised the option shall be covered by 11(3)

of Pension scheme, as it stood prior to the 2014 Amendment and the

relevant portion is as follows:

“44. We accordingly hold and direct:- …..

(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.

(vi) The employees who have retired before 1st September 2014 upon exercising option under paragraph 11(3) of the 1995 https://www.mhc.tn.gov.in/judis

W.P.No.14255 of 2022 & W.M.P.No.13498 and 13500 of 2022

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.”

11. In the present case on hand, it is clear that the petitioner has not

excersied his option during his period of service i.e prior to 01.09.2014. The

petitioner has submitted his joint option only in the year 2017 and claims for

a higher pension. Applying the ruling of the Hon'ble Apex court mentioned

supra to the present case on hand it is crystal clear that the petitioner will

not be entitled for higher pension, as claimed.

In view of the above, the present Writ Petition is dismissed.

Consequently, connected miscellaneous petitions are closed. No costs.

27.07.2023

Index:Yes/No Internet:Yes/No Speaking / Nonspeaking order