This is a complaint filed under Section 12 of Consumer Protection Act for an order directing the opposite party   to cancel the rejection of options of members having Nos. KR. 14082, 1,2,3,38, 16, 21,52, 64,20,10,14,38,44,37,24,26,59,27,74 and 100 and to give a further direction to consider that they have given options  in time and to give `10,000 as compensation.

          The brief facts of the case is that the complainant is a Secretary of a society registered under societies registration Act and is opted a scheme inclusive of provident Fund and Pension to its employees and is paying EPF share for its employees from 1995 onwards. As per this scheme the employees who are drawing salary more than  `6500 are entitle to get pension at new rate, if they  have paid contribution  at the rate of 8.33% of their salary. Accordingly the persons mentioned above are paying contributions from the respective date of increase of their salary above `6500.They has completed all the formalities as demanded by opposite partiers. Meanwhile the officer of opposite party informed the above stated persons that the applications of employees who were paying contribution from 1995 were not in the file and the opposite party will regularize the proceedings if they had given option along with a delay condonation application and the employees  were acted accordingly. But the opposite party had issued a reply stating that they had rejected the above stated options saying that they cannot accepted the option given after the expiry of statutory period. But this statement of opposite party is not correct. The employees had paid contribution and opposite party had also accepted the same. More over the opposite parties persons used to visit the complainant’s firm and issued report to more than once. But they have not made any complaint with respect to this. One of the retired employees is receiving pension as per this. So the act of opposite party is not in accordance with the statute. Even though the complainant has made a complaint before opposite party’s adalath, it was not considered by opposite party. The act of opposite party is against the spirit of the statute itself.

          It is incorrect to say that the pension contributions made by the complainant are only arrears of contributions. Actually the complainant had given the options of above persons and again it was given as per the directions of opposite party. One retied employee Mr.Gangadharan K.K is in receipt of pension and other emoluments. It is incorrect to say that the opposite party had received option only on 22.7.09. The annual statements with respect to all employees used to given in time and the opposite party had never said anything about the excess amount paid by the employees and had never included the amount as erroneous payment. So there is deficiency of service on the part of opposite party. Hence the complaint.

          In pursuance to the notice issue by the forum opposite party appeared and filed their version admitting that  the complainant  society was brought under the purview of EPF Act 1952 and a member of Family pension fund, 1971 with effect from 1994. The employee’s pension scheme 1995 was introduced with effect from 16.11.95 and shall apply to the existing member’s also. The statement that if contribution has been made at 8.33% on the entire wages exceeding `6500 will be eligible for higher   pension is not correct. Mere contribution towards employees pension Fund will not make a member eligible for higher rate of pension. The complainant’s society had made contribution towards employees Pension Fund over and above `5000 up to 31.5.2001, but opposite party has restricted the contributions to pension fund by taking wage ceiling as `5000 to `6500. The excess contribution remitted towards pension fund over and above `5000 to `6500 as the case may be treated as erroneous contribution and was diverted to individual employee’s provident fund. It is incorrect to say that opposite party had directed to file option with delay condonation. When there was a clear provision that retrospective option is not admissible, the stand taken by provident fund Commissioner is not arbitrary and legally justifiable.

          Para II (3) of 1995 scheme says that “The maximum pension able salary shall be limited to `6500 /month. Provided that if at the option of the employer and employee, contribution paid on salary exceeding `6500 per month from the date of commencement of the scheme or from the date of salary exceeds `6500 whichever is later and 8.33% share of employee themselves is remitted into pension fund, pensionable salary shall be base in such higher salary. On a plain reading of the above it  becomes crystal clear that if both employer as well as employees submitted in writing, their willingness to contribute towards pension fund on salary exceeding `6500 and only on accepting their willingness by the opposite party, contribution towards pension fund can be made on salary exceeding `6500. If the offer of proposal put forward by the complainant satisfy the condition that the offer of proposal has been made during the month itself in which salary exceed `6500 and on accepting the said offer or proposal by opposite party, then only opposite party is bound to credit contribution towards pension fund on salary exceeding `6500 and to calculate pensionable salary accordingly. The option filed by the employees is later date and hence the action of the opposite party is rejecting the options of the society is legally valid and sustainable. It is incorrect to say that opposite party had accepted the contribution towards pension fund on exceeding `6500.The opposite party had treated the excess amount remitted in pension fund on salary exceeds `6500 as erroneous remittance and credited the excess amount in Provident fund account of the individual employees. The opposite party had rightly decided to reject the option submitted by the employees during the month itself. The central government is also contributing towards employees. Pension fund at 1.16% of salary and is limited the amount payable on his pay `6500 only. If the complainant is allowed to contribute on wages exceeding `6500 at their discretion and pensionary benefits are disbursed to the employees on higher salary in the absence of corresponding contribution from the central government future of employee Pension fund will be in danger. So there is no merit in the above case and the complaint is liable to be dismissed.

                    Upon the above contentions the following issues have been raised for consideration.

1.        Whether there is any deficiency of service on the part of opposite party.

2.        Whether the complainant is entitled to any relief as prayed?

3.        Relief and cost.

The evidence in this case consists of the oral testimony of PW1, DW1,Ext.A1 to A8 and B1 to B9.

Issue Nos.1 to 3

The complainant’s case is that the complainant had paid contribution for his employees who are drawing a salary exceeding `6500 during each month from the respective months of their salary  exceeds  `6500 and hence they are entitled to get pension on higher salary, but the option was rejected by opposite party by saying that the complainant has not filed the option in time and  hence the opposite party was not getting central governments share and hence they are not in a position to give pension on higher salaries. In order to prove their contentions complainant had examined PW1 and produced documents such as letter dated 2.7.10, letter dt.21.10.10, Annual reports dt.2.3.11, statement of accounts, Annual statements in favour of Karunakakran from 2003-04 to 2009-10, Annual account statement in favour of Rajavally, Prabhakran and Pension payment orders. In order to disprove the case opposite party also produced documents such as letters, Form III (G) Form II (G) letter by opposite party pension payment order, pension work sheet and monthly pension application etc.

In order to answer issue No.1 first of all it is to be decided that whether option in writing is necessary for getting pension based on higher salary and whether the central government is contributing 1.16% towards the pension fund. It is the admitted case of opposite party that the employees mentioned in the complaint are drawing salary of more than `6500 and is also paying contribution based on such salary. But the dispute is with respect to option. As far as the complainant is concerned option is not mandatory as per the statute. But according to the opposite party, the employees of the complainant submitted option after a long delay and hence they are not able to sanction pension based on `6500. Because of the non filing of option in time, the contribution from central government will not be received and hence the future of provident fund will be in peril. So the opposite parties cannot provide pension based on higher salary. Both the parties relied upon section 26(6) of the employees provident fund scheme 1952. This section says that “ Notwithstanding anything  contained in the paragraph  an officer not below the rank of an  Assistant Provident Fund Commissioner may on the joint request in writing of any employee of a factory or  other establishment to  which the scheme applies  and his employer enroll such employee as a member or allow him to contribute on  more than (rupees six thousand and five hundred) of his pay per month if he is already a member of the  Fund and there upon such employee shall be entitled to the benefits and shall be subject to the conditions of  fund provided that the employer gives an undertaking in writing that he shall pay the administrative charges payable and shall comply with all statutory provisions in respect of such employee. As per this the provident fund commissioner has to allow the employee to contribute a more than six thousand five hundred of his pay per month, if he is already a member, when his salary exceeds rupees six thousand  five hundred similarly as per section 11(3) of employees pension scheme 1995.

“The maximum pensionable salary shall be limited to five thousand rupees per month, provided that if the option of the employer and employee contribution paid on salary exceeding `6500 per month from the date of commencement of this scheme or from the date salary exceeds, whichever is later and 8.33 per cent share of the employers thereof is remitted into the pension fund pensionable salary shall be based on such higher salary. So these shows that the condition for considering higher salary for pension is the intention of the employer and employee to pay contribution of higher salary and payment of 8.33% share to the pension fund. So in the above stated provisions nothing is stated to the effect that the employees have to give option in writing on the same month of exceeding salary than `6,500. If the option in writing is required for considering higher salary as a base for pension it should be in the statute. So nothing in the above provisions mandates on the part of the employee to give option in writing for payment of contribution for higher salary. More over the opposite party has accepted this amount from the complainant as contribution. So we are of the opinion that option in writing is not a mandatory requirement for considering higher salary for pension.

More over as per section 3(2) of the employees pension scheme 1995 it is stated that “the central government shall also contribute at the rate of 1.16% of the pay of the members of the employees pension scheme and credit the contribution to the employees pension fund provided them where the pay of the member exceeds rupees six thousand five hundred per month the contribution payable by the employer and the central government be limited to the amount payable on his pay of `6500. So the contribution payable by the central government is limited up to `6500 and hence the central government has no liability to pay 1.16% contribution, if the salary exceeds `6500.So it is very clear that there is no question of receiving or accepting the contribution from central government on higher salary and hence the contentions put forwarded by the opposite party that due to non-filing of option in time the provided fund will loose the 1.6% contribution is not based on any merit. So from the above discussion we are of opinion that in order to contribute on higher salary option in writing is not required. So there is deficiency of service on the part of opposite party in rejecting the contribution and considering the payment as erroneous payment. So the opposite party is liable to consider the higher salary for payment of pension, by receiving contribution on higher salary. Considering the peculiarity and circumstances of the case we are avoiding cost and compensation and order passed accordingly.

In the result the complaint is allowed by cancelling the order of PF authorities denying pension on higher wages and also directing the opposite party to consider the contribution made by the employees having no. KR.14082/1, 2, 3, 38, 16,21, 52, 64, 20, 10, 14, 38, 44, 37, 24, 26, 59, 27, 74 and 100 on higher wages and to issue pension payment order accordingly.

                Sd/-                          Sd/-                         

              President                    Member                        

APPENDIX

Exhibits for the Complainant

A1 & A2. Letter dt.2.76.10  & 21.10.10o issued by OP

A3.          Copy of annual report for the year 2002-03

A4.          Statement of account

A5 to A7. Annual statement in favor of Karunakaran, Rajavally and

               Prabhakaran

A8.          Copy of the pension sanction order of Gangadharan.K.K

Exhibits for the opposite party

B1. Copies of the letter sent by the complainant

B2. Copy of the letter dt.22.11.06 sent by Addl. Central PF

     Commissioner to OP

B3 and B4. Form 12 – A and Form 3 A

B5.Copy of the letter issued by the OP to complainant

B6. Copy of Pension payment order

B7.Copy of pension work sheet

B8.Copy of form 10-D(EPS)

B9. Option of K.K.Gangadharan

 Witness examined for the complainant

PW1. Bhaskaran

Witness examined for the opposite party:

DW1. M.Valsala

                                                                  /forwarded by order/

                                                           Senior Superintendent