Regarding
The Reference Order dated 21-12-2020 of honorable Kerala High Court, in the appeals, W A No.811 & others, filed by Employees Provident Fund Organisation.
To,
The EPS-95 Pensioner's Friends.
The Reference Order dated 21-12-2020 passed by the honorable Kerala High Court, Division Bench, in the appeals filed by the Employees Provident Fund Organization, is totally wrong and erroneous and is passed in misunderstanding. EPFO has been always trying to misguide the courts by pleading with irrelevant facets and false data. During the pleadings of these appeals, EPFO seems to be successful in misguiding and confusing the honorable court, and consequently, the Division Bench made very wrong and illegal observations and passed a very wrong reference order, referring the matter to the higher bench of three judges. The facts in brief, in my opinion, are as below-
1). The honorable Division Bench observed the circular dated 31-05-2017 issued by the EPFO, in their views, to be correct one, in law. The circular dated 31-05-2017 was issued, mainly, to clarify whether the employees/pensioners of the exempted establishment (exempted from the operation of Provident Fund Scheme 1952) are covered by the circular dated 23-03-2017 or not, and by this circular dated 31-05-2017 employees/pensioners, governed by the EPS-95 pension scheme, are discriminated and classified into two irrational classes. These facts are mentioned in the first para of the said circular, however, the honorable Division Bench didn't peruse this and they made their observations on the very wrong grounds.
The Division Bench considered this circular to clarify whether the earlier circular can be extended to the employees/pensioners who had actually exercised the option to pay the provident fund contribution on actual salary. Moreover, the main mistake committed by the honorable Division Bench is that the Division Bench considered the " provident fund " that referred in R. C. Gupta case, by the honorable Supreme Court, is the provident fund maintained by the EPFO only.
The honorable Supreme Court in R. C. Gupta never said the provident fund means the provident fund maintained by the EPFO. The honorable Supreme Court in R. C. Gupta mentioned the only condition that "the employee must have contributed to his actual salary and not on the statutory limit ". The provident fund referred therein is the respective provident fund (maintained by EPFO or Trust) depending upon the employee concerned. It is the EPFO that derived the meaning and said that the provident fund referred by the honorable Supreme Court is the provident fund of EPFO only and the EPFO inculcated this imagination in the minds of the honorable Court. This is one of the reasons for the erroneous order of the Division Bench.
Moreover, the main judgment in the R. C. Gupta case is that the honorable Supreme Court interpreted the law and explained the meaning of law and held that " there is no any cut off date to exercise the option for the provision to para 11(3) of pension scheme". Then the question arises how the meaning explained by the honorable Supreme Court will be applicable to the unexempted establishments employees only and it will not be applicable to the exempted establishment employees when both are governed by the same EPS 95 pension scheme. The stand taken by EPFO through the circular dated 31-05-2017 is very strange and illegal too. However, this is not pleaded before the court.
2). The honorable Division Bench divided the respondents/petitioners in those appeals into three groups and the employees/pensioners from the exempted establishments are placed in the third category. For this group, it is considered by the honorable Division Bench that contribution made by the employees/pensioners on their actual salary is not deposited in the fund of EPFO. At this point, it was necessary to point out and bring to the notice of the Division Bench that the employees of the exempted establishment are not being the members of EPFO provident fund, their contribution could not be deposited in the said fund, however, by virtue of the exemption as per the provisions of Act, it is deposited in the respective provident fund of the Trust. As per the decision of the honorable Supreme Court in R C Gupta, the employee must have contributed to the actual salary and not on the statutory limit. An employee can deposit his contribution in the funds of which he is a member and not in others. These facts were required to be brought to the notice of the Division Bench by the respondents/petitioners, however, these are not pointed out and consequently, misunderstanding of the court could not be removed.
3). Till this period Six High Courts have decided and held the circular dated 31-05-2017 as illegal, arbitrary, and unconstitutional and passed the Judgements in the favour of pensioners and quashed the circular dated 31-05-2017. These judgments are as under-
High Court. Date of Order
Telangana High Court- 24-09-2018
Rajasthan High Court-11-12-2018
Madras High Court. -27-03-2019
Karnataka High Court-27-03-2019
Delhi High Court. -22-05-2019
Jharkhand High Court -10-02-2020
Out of these judgments, the Delhi High Court judgment is the decision of Division Bench, in the case of Bhartiya Khadya Nigam Karmachari Sangha, WP (C) 5678/2018 & CM APPL22107/2018. This judgment is in detail covering all the points and in this judgment of Delhi High Court, all the questions raised by the EPFO are answered and all questions raised by the honorable Division Bench Kerala High in the instant appeals will also have the answers in this judgment. However, this judgment of the Delhi High Court, Division Bench is not cited before the Kerala High Court by the respondents/ petitioners. The judgment of the honorable Madras High Court and that of Telangana High Court are cited, which are earlier judgments to that of the Delhi High Court. If this judgment of honorable Delhi High Court Division Bench would have been cited, all the doubts of Kerala High Court would have been cleared.
Delhi High court in BKNK case directed to refund the amount of contribution difference along with the interest @ rate of 6% and then the trust has to refund all gains and profit that earned by the trust on the contributions of the employee in the past, to the EPFO, so that no any loss will be caused to the EPFO. Thus this is a full proof judgment on the subject matter and quashing the circular dated 31-05-2017 and therefore, was required to be placed before the Kerala High Court.
4). The EPFO is pleading now that the scheme of EPS 95 is a contributory scheme, however, when this scheme was apposed by employees and trade unions and challenged, EPFO and Govt of India pleaded before the honorable Supreme Court that the EPS-95 pension scheme is the welfare scheme of the Government of India and only on this ground, the honorable Supreme Court held the scheme constitutionally valid, while deciding the transfer petition in the case of M/s Otis Elevator Employees Union, in 2003. At the beginning of the scheme, the bank's rate of interest was being high 12- 14 %, EPFO was earning profit through the scheme, and because of this, there was a growth in Corpus of the EPFO. The honorable High Court noted that the Corpus is more than sufficient to meet the demand, however, the pension is not based on Corpus but on the pensionable salary. This Corpus is belonging to the employees/pensioners and the Government of India and EPFO want to grab it. Similarly, EPFO may have afraid of exposure of the misappropriation of the fund and losses caused to the fund due to mismanagement of EPFO.
5) The judgment dated 4-10-2016 of honorable Supreme Court in R C Gupta case and that the judgment dated 12-10-2018 of honorable Kerala High Court in case of Sasikumar & others, settings asides the amendments in the pension scheme from 1-09-2014 are very distinct and separate. Neither is any of the above judgments, either the honorable Supreme Court or the honorable Kerala High Court directed EPFO to allow the benefits of higher pension to the employees/pensioners who have not contributed on their actual salary. It is the EPFO, creating confusion and misguiding the Court. Observations of the Division Bench regarding the reconsideration of the decision of the Division Bench of Kerala High Court Order dated 12-10-2018, in Sasikumar case to that extent, is only due to the misunderstanding and pleading of irrelevant facts by the EPFO.
6) The honorable Kerala High Court, Division Bench in the instant case has made exercise to examine the NPS pension scheme and pension calculated for different contributions and situations which is of no use, both schemes are being on the different base. The EPFO demonstrated a case of one of the petitioners KB Prakasan to impress the Court and the honorable Court, without going into more detail, seems to be believed the same. Real facts in this regard are already circulated / Posted on the group by respected Shri Praveen Kohali Saheb. 28- 12-202, which may please be referred by the concerned. In my opinion, respondents/ petitioners have not pleaded properly and the EPFO succeeded in misguiding the Court and erroneous order is a result.
Thus the reference Order dated 21-12-2020 by the honorable Division Bench, Kerala High Court, referring the case to the higher bench is wrong and erroneous, being based on the misunderstanding and irrelevant facets. Therefore, the respondents/ petitioners are required to be more prepared to plead before the larger bench and to take more precautions so that EPFO will not be succeeded in misguiding the Court.
With regards.
Dada Tukaram Zode
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