BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BELLARY

C.C.No.138 of 2014  

   Present :  

  (1) Shri. R.Bandachar,

                                          B.Com, LL.B.  (Spl) ……    President

                                                                                         (in-charge)

  (2) Smt Mary Havila,

                                          B.A.                           ……     Member

DATED THIS THE 21^ST DAY OF MAY 2015

// ORDER //

Per Shri R.Bandachar.

The complainant filed the complaint against the respondent U/Sec-12 of the Consumer Protection Act 1986. IA filed by the complainant u/sec-24A of C.P. Act is hereby allowed and the delay in filing the complaint is condoned.  

                  2.  The brief facts of the case are that the complainant was working with N.S.L. Sugar’s Ltd., Desanur since 1976 and retired from service on 04-01-2011 on attaining the age of 58 years and had rendered past service of 19 years and 15 years of actual service. The respondent settled the monthly pension of the complainant w.e.f.          05-01-2011 under PPO No.KN/BLR/00009269 with erroneous calculations and fixed the monthly pension @ Rs.1,114/- after necessary deductions and it is being paid to the complainant as pension. It is the further case of the complainant that the respondent’s department introduced the Family Pension Scheme 1971 w.e.f. 01-03-1971 and the complainant opted for it and  his membership was accepted by the respondent and the family pension account number was allotted and his employer deducted the monthly subscription towards the said scheme from his monthly salary and remitted it to the respondent’s office.  In the year 1995, the said scheme was repealed and new scheme known as Employees’ Pension Scheme 1995 was introduced w.e.f.  16-11-1995. At that time, the respondent asked the complainant to submit his willingness to transfer the amount accumulated in the old scheme to the new scheme and the complainant gave his willingness and it is accepted by the respondent and continued the complainant in the new scheme. After retirement of the complainant, the employer sent all the service records and other details to the respondent’s office.  However, in the month of December-2013, it came to the notice of the complainant that there are errors in the calculation of his pension and the pension paid is lesser than the one the complainant is entitled to. Immediately the complainant gave notice to the respondent for revision of his monthly pension which was duly served. But his monthly pension was not revised till this day. The respondent knowing fully well that the complainant is entitled to the pension as mentioned in the Annexure- A to the complaint, deliberately refused to extend the said benefits. This amounts to deficiency in service. Hence, the complainant is constrained to file the complaint. As per the provisions of the Employees’ Pension Scheme 1995, the monthly pension is to be calculated for two different periods separately i.e. past service and actual service. The past service means the service rendered by the member in Family Pension Scheme 1971 and the actual service means the service rendered by the member under the Employees’ Pension Scheme 1995. As per para-12 of the Employees’ Pension Scheme 1995, the monthly pension means the aggregate of the past and actual service benefits. The provisions of law are very clear in respect of giving separate minimum assured pension in respect of both the past service as per para-12(3-5)(a) and actual service as per para-12(3-5)(b). But the respondent has not followed the said provisions of law and made erroneous calculation without granting assured benefits. Therefore, the complainant is entitled for minimum assured benefits both in respect of past and actual services separately. The Hon’ble High Court of Karnataka in its judgment reported in ILR 2004 KAR 2859, clarified that it is necessary to give minimum assured benefits in respect of both the past and actual services separately. After the above said judgment, the respondent amended the provision and thereby tried to curb the facility and it amounts to unfair trade practice. The said amendment is not applicable to the complainant’s case, because no such provision was there at the time of accepting the membership of the complainant. It is necessary to settle the pension, as per the terms and conditions existed at the time of accepting the membership of the complainant. Further the respondent has no authority to amend the provisions against the objects of the scheme. As per the para-10(2) of the Employees’ Pension Scheme 1995, it is necessary to give 2 years weightage to the members who superannuates on attaining the age of 58 years or/and who has rendered 20 years of pensionable service or more. If the member fulfilled either of the two conditions he is eligible for 2 years weightage. The said benefit has not been extended to the complainant. The complainant is rendered more than 20 years of pensionable service and superannuated on attaining the age of 58 years. Therefore, he is entitled for weightage of 2 years.  As per the para-32 of the scheme, it is necessary to give annual relief by making valuation of the Employees’ Pension Fund, but from 2001 no such valuations are made by the respondent and no annual relief is given to the complainant. All these facts are admitted by the respondent’s organization in its letter dated:07-05-2010. As a consumer, the complainant has paid contributions to the pension scheme since the date of his memberships till the date of his retirement. But the respondent failed to pay the annual relief to him, as per the provisions of the scheme. Therefore, the complaint seeking reliefs as prayed for.   

                    3.  The respondent filed the written version, which in brief is as follows;  

                  It is true that the Employee’s Family Pension Scheme 1971 was replaced and new Scheme i.e. Employee’s Pension Scheme 1995 was introduced w.e.f. 16/11/1995.   After receipt of Form-10D and other details, the respondent rightly fixed the pension of the complainant.   The PPO number mentioned in the complaint was already cancelled and new PPO was issued vide No.GB/BLR/9715 which was issued to the complainant on 07/09/2011 and he continuously accepted the pension for more than 03 years.  The member has not attained superannuation on attaining the age of 58 years prior to 24-07-2009 and he attained superannuation on                    04-01-2011 and the pension commenced w.e.f. 05/01/2011 and therefore, he is not eligible for 2 years bonus.   There was no error in calculation of the pension.  The aggregate of pension for past service and pensionable service is Rs.445/- plus Rs.1114/- totally Rs.1559/-, as per para-12(3)(ii). A separate calculation sheet is produced before this Forum.  As per para-12(3)(ii), the aggregate of (a) and (b) calculated shall be subject to a minimum of Rs.800/- per month, provided the eligible service is 24 years, provided further, if it is less than 24 years, the pension as computed above shall be reduced proportionately subject to a minimum of Rs.450/- per month.  In this case the aggregate of (a) and (b) is above the minimum of Rs.800/- per month i.e. Rs.445 + 1114/- = Rs.1559/-. Therefore, the past service amount should be taken as Rs.445/- only.  Para-10 of Employees’ Pension Scheme 1995 is related to the service rendered by a member and the contributions thereon are received or receivable for the period after 16.11.1995 and not for the earlier period.  Para-10(2) of the scheme is for the purpose of giving weightage of 2 years to the members who have rendered the required number of years of service after 16.11.1995 and not by clubbing both the past service prior to 16.11.1995 and the service rendered after 16.11.1995.  Therefore, there is no deficiency in service on the part of the respondent’s organization.   

           4.  The complainant to prove his case, as his evidence, filed his affidavit, which is marked as P.W.1 and got marked 03 documents as Ex.P.1 to Ex.P.3. The respondent as his evidence, filed his affidavit, which is marked as R.W.1 and no documents are marked.

          5.  The written argument is filed by the complainant and heard the oral arguments on both sides.

1. The points that arise for our consideration are;

    

         7.  The findings on the above points are as under.  

//REASONS//

Point No.1:-

               8.  It is the grievance of the complainant that in the month of December-2013, it came to his knowledge that there are errors in the calculation of pension fixed in his favour and the pension now paid to him is much lesser than the one for which he is entitled to, which is as shown in annexure-A annexed to the complaint.   It is the contention of the complainant that as per the provisions of the Employees’ Pension Scheme 1995, the monthly pension has to be calculated separately for the period of past service and actual service rendered by the complainant and the provision prescribes minimum assured pension separately for past service and actual service and the respondent has not followed the said provisions and made erroneous calculation. It is the further contention of the complainant that the respondent has also failed to give benefit of 2 years weightage to his pensionable service, as per para-10(2) of the scheme, though he has fulfilled the criteria or condition of 20 years of pensionable service or retiring on attaining the age of 58 years.  It is also the grievance of the complainant that as per para-32 of the scheme, it is necessary to give annual relief to the pensioners after valuation of the pension fund, but no such annual relief is granted to him and he is entitled for interest @ 12% p.a. on the arrears due to him.     

            9. The respondent in his statement of objections contended that there is no error in the pension sanctioned to the complainant and he has filed the calculation sheet Annexure-I (which is in the case file) explaining as to how the pension was fixed. 

            10.  There is no dispute with regard to the contention of the complainant that in the Employees’ Pension Scheme 1995 two different formulae are prescribed to calculate the pension to be granted to the employees who have retired from service and one is for calculating the pension for the “past service” rendered by the employees and another is for calculating the pension for the “actual service” rendered by the employees.  The para-2(ii) of the Employees’ Pension Scheme 1995 defines the “actual service” thus;

The para-2(xii) of the scheme defines the “past service” thus; 

                 11.  Therefore, when two methodologies are prescribed for calculating the pension to be awarded to the employees and when minimum pension payable has also been prescribed under the said two heads to be adopted for the purpose of fixing the pension, the respondent should have strictly adhered to the said methodologies prescribed and calculations of pension should have been shown for past service and actual service separately and then total pension should have been fixed.  But on perusal of the pension pay orders, the copy of which is marked as Ex.P.1, it is found that the pension for past service and actual service are not shown separately by the order issuing authority.  Only the total pension payable is shown in Ex.P.1. The complainant contended in his complaint that as per para-12(3-5)(a) and 12(3-5)(b) of the scheme, he is entitled for minimum assured benefits in respect of past and actual services rendered by him separately and pension paid now is lesser than the one for which he actually deservea. The complainant in support of his contention filed Annexure-A with the complaint in which memo of calculations is shown showing separately the pension he is entitled under “past service” and “actual service”. As per the said annexure, the complainant is entitled for pension which is more than the pension actually granted by the respondent. In the said annexure, the calculation of pension for “past service” and “actual service” are shown separately and then the total pension he deserves to be.    But the respondent has not shown the pensions granted to the complainant separately under “past service” and “actual service”.  Therefore, it is not possible to arrive at conclusion that minimum assured pension under the scheme was granted to the complainant or not.  Therefore, the respondent is bound to recalculate the pension payable to the complainant separately for “past service” and “actual service” and shall arrive at total pension payable and accordingly issue revised pension order to the complainant.   

               12.  As regards granting of 2 years weightage to the service rendered by the complainant, as per para-10(2) of the scheme, the contention of the respondent is that when a member/employee superannuates on attaining the age of 58 years and who has rendered 20 years of pensionable service and more his pensionable service shall be increased by adding weightage of 2 years and pensionable service includes only the service rendered under the Employees’ Pension Scheme and if the intention of the legislation is to calculate whole service as pensionable service there would be no need to define actual service and past service separately. But this contention of the respondent is found unacceptable when relevant provision is looked into. The relevant provision of the scheme applicable for the complainants for giving weightage of 2 years is para-10(2) of the Employees’ Pension Scheme 1995 which reads thus; 

                13. However, amendment is brought to the above provision making retirement age at 58 years and 20 years of pensionable service as mandatory for giving weightage of 2 years with effect from 24-07-2009.  The said amended provision reads thus;  

                 14.  However, the said amended provision being effective from 24-07-2009 and here in the case at hand, though the complainant retired on 04/01/2011, but having rendered 34 years of pensionable service (past service and actual service), he is also entitled for weightage of 2 years to his pensionable service. 

               15. An employee’s eligibility for pension is also determined as per para-9(a) & (b) of the Employees’ Pension Scheme 1995 and the said provision is as follows; 

                16.  So it is very clear as per para-9(b) of the scheme that the aggregate of “actual service” and “past service” shall be treated as eligible service which shall be the pensionable service. This reasoning and conclusion arrived at is supported by the decision of the Hon’ble National Consumer Disputes Redressal Commission reported in 2010 (3) CPR 45 wherein at para-5 it considered the phenomena of eligible service on the basis of the clause-6.2.14 of the Manual of Accounting Procedure, which reads thus; 

               17. In the above referred decision, the Hon’ble National Commission made observation regarding facts of the said case which is as reproduced below;  

18. As per the above decision of the Hon’ble National Commission and para 9(a) & (b) of the Employees’ Pension Scheme 1995, the aggregate of past service and actual service is eligible service and if it is more than 20 years the employee is entitled for two years weightage to be given to his pensionable service under the unamended para-10(2) of the scheme who retired before amendment which is applicable from 24-07-2009. 

                19. The contention of the respondent is that the pensionable service includes only the service rendered after 16-11-1995 i.e. period of service rendered under “actual service” and does not include service rendered prior to it i.e. period of “past service”, is also not acceptable, in the light of the provisions of 2(viii) and 2(xv) of the Employees’ Pension Scheme 1995.  The para-2(viii) of the scheme reads thus; 

               20.   When the pension includes pension payable under the Employees’ Family Pension Scheme of 1971, how then the service rendered under the said scheme be excluded for determining pensionable service is unknown to common logic. Therefore, the service rendered under the Employees’ Family Pension Scheme 1971 has to be included for determining the pensionable service. 

                21.  Besides, the para-2(xv) of the scheme reads thus; 

                 22.  As per the above provision, the period of service for which contributions are received becomes pensionable service.  As per the complainants, when the Employees’ Family Pension Scheme 1971 was introduced they opted for the same and became its members and made contributions for the said scheme and when the Employees’ Pension Scheme was enacted in 1995 they opted for the same and gave their consent to transfer the contributions made under the Employees’ Family Pension Scheme 1971 to the fund of the new scheme as sought for by the respondent and accordingly, it was transferred.  This aspect is not in dispute. So when the contributions made under the Employees’ Family Pension Scheme 1971 was transferred to the fund of the Employees’ Pension Scheme, it became the contributions made to the Employees’ Pension Scheme 1995 and thus service rendered under the Employees’ Family Pension Scheme 1971 became part of the pensionable service. So service rendered by the complainant under the Employees Family Pension Scheme 1971 merged with the service rendered under the Employees’ Pension Scheme 1995 and aggregate of both services became the pensionable service for which the complainant is entitled for pension and wieghtage of 2 years, if one of the conditions of unamended para-10(2) of the scheme is fulfilled by them. 

23.  Further the para-6(b) of the scheme contemplates about the conditions for membership of the Employees’ Pension Scheme which reads thus;

                24.  As per the above provision, as the complainant was member of the erstwhile Employees’ Family Pension Scheme 1971 and when the Employees’ Pension Scheme 1995 was introduced as he became the member of the same, he is entitled for pension for the period to which contributions were made by him under Employees’ Family Pension Scheme 1971 as well as Employees’ Pension Scheme 1995 put together.

                 25.  The above discussed aspects are repeatedly reiterated by the Hon’ble National Consumer Disputes Redressal Commission and in the decision reported in III (2013) CPJ 244 (NC), the Hon’ble National Commission critically made observation regarding the attitude of the concerned authority which is as follows;  

               26.  The above aspects are reiterated by the Hon’ble National Commission in the decision reported in IV (2014) CPJ 470 (NC)  and it is observed thus;    

          27.  Regarding the complainant’s grievance that on the basis of the para-32 of the Employees’ Pension Scheme 1995 it is necessary to give annual relief to him by making valuation of employees’ pension fund, but from 2001 no such valuation is made and no annual relief is given to him and therefore, the complainant is entitled for the said reliefs for which direction be given to the respondent, what we would like to opine is that this Forum does not have powers to give such direction to the concerned authority.  The para-32 of the scheme reads thus;  

                28.  As per the above provision of the scheme, the Central Government is the authority to appoint a valuer for the purpose of valuation of the pension fund and it is mandatory on the part of the Central Government to do so. However, this Forum has no jurisdiction to direct the Central Government to proceed in the matter and get the valuation done. For that purpose the complainant has to approach the proper forum.   As per provision 2 of para-32 of the scheme , the Central Government at any time when the pension fund so permits may alter the rate of contributions payable under the scheme or the scale of any benefit admissible under the scheme or the period for which such benefit may be given.  But this is not mandatory and only discretionary.  The Government may do so or may not.  However, in this regard also this Forum lacks jurisdiction to direct the Central Government to comply with provision under para-32(2) of the scheme.  Besides this, the Central Government is not a party in this proceedings to give such direction. Therefore, such relief cannot be granted by this Forum in favour of the complainant. 

             29.  Another relief sought for by the complainant is grant of interest @ 12% p.a. on the arrears amount for which he relied on para-17A of the scheme.  The said provision reads thus; 

                  30. As per the above para-17A of the scheme, the employees are entitled for interest @ 12% p.a. on benefit amount payable to them, if the commissioner/authority who is empowered to settle the pension of the employees fails to settle the same within 30 days of submission of the claim.  However, it is not at all the case of the complainant that his pension was not settled within 30 days of submission of his claim to the commissioner. That being the case, he is not entitled for interest @ 12% p.a. from the respondent as claimed by him.    

                   31.  The Employees’ Family Pension Scheme 1971 as well as the Employees’ Pension Scheme, 1995 are introduced under the Employees’ Provident Funds and Misc. Provisions Act 1952 and therefore, these two cannot be detrimental to the interest of the employees, but must be complimentary to each other as the said scheme being under the social welfare legislation which is meant for well being of the common workmen who toil in the establishments like factories etc till their retirement. So the interpretation and implementation of the provisions of the scheme must be beneficial to such workmen and not detrimental to their interest.  However, what we observed here in the case at hand is that the respondent calculated the pension payable to the complainant without properly implementing the scheme according to the provisions laid down in the scheme. 

    32.   For the reasons discussed above, the complainant is entitled for re-fixation of his pension for the service rendered by him under “past service” and “actual service” separately by adding 2 years weightage to his pensionable service and the respondent shall settle the pension accordingly. Improper application of the provisions while fixing the pension of the complainant amounts to deficiency in service on the part of the respondent. With these observations, we answer this point is in the affirmative. 

Point No.2 :- 

     33.  As the complainant has proved deficiency in service on the part of the respondent he is entitled for reliefs as observed in Point No.1 with interest as well as cost of the proceedings. Accordingly, this point is answered partly in the affirmative.  

Point No.3 : -

   34.   In view of the discussions made under Point No.1 and 2, we pass the following; 

//ORDER//

              The complaint filed by the complainant is partly allowed.   

              The respondent is ordered to re-fix the pension of the complainant for the service rendered by him under “past service” and “actual service” in accordance with the Employees’ Pension Scheme 1995, by giving weightage of two years and issue revised Pension Payment Order and pay the pension accordingly from the date as applicable and arrears of pension amount due shall be paid to him with interest @ 6% p.a. from the date of the complaint till its realization,  within two months from the date of this order. 

  The respondent shall also pay Rs.2,000/- towards cost of the proceedings to the complainant. 

   Inform the parties accordingly.

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