EPF Pension Case: Supreme Court To
Consider If Reference To Larger Bench Is Needed In View Of 'RC Gupta' Decision
The
bench said that it was of the prima facie view that EPFO has made out a case.
The Supreme Court on Wednesday decided to consider the
issue whether to refer to a larger Bench, the appeals filed by Employees
Provident Fund Organization and others including Union of India, challenging
the judgments of various High Courts which quashed the Employee's Pension (Amendment)
Scheme, 2014.
A Bench of Justice UU Lalit and Justice Ajay
Rastogi observed that it will consider if they are of a prima facie view that
the matter needs to be heard by a three-judge Bench and accordingly pass an
order by Tuesday, August 24.
The question of referral came up in
consideration of submissions made by Senior Advocate C Aryama Sundaram on
behalf of the EPFO, with regards to the top Court's judgement in the case
of R.C. Gupta and Ors. v Regional Provident Fund Commissioner, Employees'
Provident Fund Organisation and Ors, which was
delivered by a coordinate bench of 2-judgesbench.
Sundaram made detailed submissions before the Court
regarding the RC Gupta judgement as to how it did not consider certain aspects
including the necessity of remittance, pension scheme being completely
different from the provident fund regime, etc and therefore can only
be relied upon to a limited extent in the present case.
The Bench said, "Our difficulty is that
whether there is reasoning or no reasoning, the final conclusion of RC Gupta is
that irrespective of whatever time has elapsed, there is no cut off date
and it is permissible for somebody to pay arrears for months gone by and have
right to switch over to provident fund scheme, to pension fund scheme."
The bench observed that it cannot ignore a ruling laid down by a coordinate bench.
In R.C. Gupta and Ors. v Regional Provident Fund Commissioner, Employees' Provident Fund Organisation and Ors, which was decided by a Bench led by ustice Gogoi in October 2016, the Supreme Court had struck down the six-month opt-in window from 1 September 2014, for employees to continue making uncapped pension contributions. Today, the bench observed that it cannot go into the question whether RC Gupta is correct or not.
"There is one school of thought that
whatever RC Gupta has laid down, whether it was discussed or not, their
Lordships are certainly of the view that it hardly matters and is mere
adjustment from one account or the other. Whether that sentence is correct or
not we are not going into that. This is the basic fulcrum of the
judgement. They also say, the cut off date has no significance as it is a mere
adjustment, and in any case you are entitled to the money, so if you take it
from left or right hand it is your money, that is how they have perceived.
Whether its correct is a different issue."
The bench wondered if it will be proper on its
part to consider the issue in variance with the decision in RC Gupta. If any
doubt is raised regarding the said decision, the bench said the proper
course might be to refer it to a larger bench.
"When one of the issues on which you may
hang your case is RC Gupta and if you are having doubts about that, will it be
proper on our part to continue hearing that rather than refer it to Bench of
three judges who will not be hindered by any such consideration and can then
bestow attention without being bothered by any kind of value of RC Gupta as a
precedence, as they are a larger Bench." Justice Lalit said. "Your endeavor
is to say that matter is concluded by RC Gupta but In case we feel RC Gupta has
perhaps not taken an aspect into account, like the judgement in Pawan Hans,
which has
stated that invested money lying in
pension fund has a different characteristic and if we come to that level, we
will be taking a diametrically opposite view." the bench told the
respondents.
The Bench clarified that it is not saying anything as to whether the judgement is correct, good or bad, all it is saying is that a doubt may come up.
"All we are asking is will it be worthwhile for
us to spend two-three more days and arrive at that conclusion or we should
refer to a three judge bench now." the Bench asked the Counsels.
Senior Advocate R Venkatramani, appearing for one of
the respondents, suggested that " If by any reason and in any manner RC
Gupta has to be doubted, its relevance or applicability, then it has to be
referred to three judges. And if entire fulcrum of case is on principle that
there is no difference between provident and pension fund there is a
principle of law settled in RC Gupta."
Senior Advocate Meenakshi Arora, appearing for
one of the respondents, pointed out that the Government accepted RC Gupta's
judgement and issued a letter to implement RC Gupta which is a significant
aspect and needs to be considered. However, later they tried to create an
arbitrary distinction saying that it will be extended to those who are not in
an exempted organisation, she added. "As of now, prima facie we think
Mr Sundaram has a case, what do we do now", the bench said.
Responding to the Court's statement, Senior
Counsel Gopal Sankaranarayanan opined that there are certain provisions that
have not been drawn to the court's attention or otherwise the prima facie view wouldn't
have come. Pointing to para 26 of the Pension Scheme and para 52 of the
Provident Scheme regarding how money is invested, he said that almost all
respondents before the court are people who have fully contributed on actual
salary completely, which is why RC Gupta's
last paragraph calls only for an adjustment, which is the exact thing they are
doing.
Justice Ajay Rastogi responded to Mr
Sankaranarayanan's submission saying that "One thing is very principally
clear that these two are different schemes just
because they are held by one authority that doesn't mean they are same. They
are not interchangeable. Fundamentally these are two different schemes just
because they are held by one authority that doesn't mean they are same. They
are not interchangeable. Fundamentally these are two different schemes.
Provident fund and Pension are two different schemes and structure."
Justice Rastogi further added that " If we go through the entire pension scheme with the amendments introduced what Mr Sundaram has said has sum and substance to it. We can't completely say NO".
Mr Sankaranarayanan then suggested that instead of
referring the case to a three-Judge Bench, the Court may frame a question
regarding correctness of RC Gupta's judgement and if the court finds that
RC Gupta cannot be justified by the Respondents, the matter may be referred.
"RC Gupta alone is not the plank of our
arguments. Our arguments will be in consistence with it." he said. To
this, Mr Sundaram responded saying that They
think that they will persuade the Court that RC Gupta is right. The question is
if i convince you to the contrary, will your Lordships be able to write a judgement? They will be substantiating why RC
Gupta is right and i will substantiate why it's wrong. And then again
question of reference will come up.
" Senior Advocate Roham Thawani submitted that RC
Gupta was never sought to be reviewed as neither EPFO or Union of India ever filed a
review. The arguments can be dealt with without disturbing RC Gupta
In RC Gupta's Case, the Bench had
said that the date of commencement of the Scheme or the date on which the
salary exceeds the ceiling limit under 11(3) of the Pension scheme 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 the employer-employee to indicate their option under the
proviso to Clause 11(3) of the Pension Scheme.
It observed 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 employer had deposited
12% of the actual salary and not 12% of the ceiling limit.
Previous Orders:
A three-Judge Bench comprising the then CJI Ranjan
Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna had in 2019 dismissed the Special Leave Petition filed against a Kerala High
Court Judgment setting aside Employee's Pension (Amendment) Scheme, 2014 that
capped maximum pensionable salary to Rs.15, 000 per month.
The Kerala High Court, while setting aside the 2014
amendments by its 2018 judgment, had declared that all 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. Further, the High Court had also set aside the orders issued by the
EPFO declining to grant opportunities to the employees to exercise a joint
option to remit contributions to the Employees Pension Scheme on the basis of
the actual salaries drawn by them.
In April 2019, the Supreme Court had dismissed the special leave petition filed by the EPFO against the Kerala High Court's judgment, through a summary order. Later, in January 2021, a three-judge bench recalled the dismissal order in the review petitions filed by the EPFO, and posted the matters for hearing in open court. On February 25, 2021, the division bench of Justice UU Lalit and Justice KM Joseph restrained the High Court of Kerala, Delhi and Rajasthan from initiating contempt proceedings against the Central Government and the EPFO over the non-implementation of the HC verdicts.
The bench also posted the matters for final hearing on24-08-2021.
0 comments:
Post a Comment