Complaints filed on: 31-08-2016

Complaint Disposed on:20-05-2017

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT CHIKMAGALUR.

COMPLAINT NO.94/2016

DATED THIS THE 20^TH DAY OF MAY 2017

PRESENT:

HON’BLE SRI RAVISHANKAR, B.A.L, LL.B.,     ………PRESIDENT

HON’BLE SMT. H. MANJULA MAHESH, B.A.L., LL.B.,  .. MEMBER

COMPLAINANT/S:

B.K.Kempegowda,

S/o Late K.Kariyappa,

Aged about 69 years,

R/o Madhu Nivas,

Ramakrishna Layout,

Near Water tank,

Channarayapatna,

Hassan District.

(By Sri/Smt.K.M.Abdul Jabbar, Advocate)

                                                V/s                                                                                                                                                                                                                                                            

OPPONENT/S:

The Regional Provident Fund

Commissioner-II,

Office of the Provident Fund

Organization, Sub-Regional Office,

Rathnagiri Road, Chikmagalur Town.

(OP By Sri/Smt.Halekote A.Thejaswi, Advocate)

By Hon’ble President Sri. Ravishankar,

:ORDER:

The complainant filed this complaint U/s 12 of the Consumer Protection Act 1986 against OP alleging a deficiency in service in not providing two years weightage and also not recalculating the pension as per the Employees Pension Scheme, 1995. Hence, prays for direction against Op to recalculate the pension by providing two years weightage along with providing past and present service benefits as assured in the scheme and also to pay arrears of the pension of the complainant and also prays for compensation for deficiency in service.

2. The brief facts of the complaint is that:

The complainant is the retired employee of Karnataka Agro Industries Corporation Ltd., and he has rendered 20 years of uninterrupted service, during his service the complainant become the member of Family Pension Scheme 1971 and after introduction of employees pension scheme 1995 the complainant continued as the member of the new pension scheme, under he is getting pension from Op after retirement.

The complainant has given representation through his advocate and requested the Op to re-fix his pension by adding two years weightage under para 12 (4) r/w para 10(2) of the Employees Pension Scheme 1995, but no any steps taken by Op till today even the Op is not replied the representation made by complainant.

The pension scheme was in force from 01.03.1971 to 15.11.1995, thereafter the pension scheme 1995 was introduced, same was given effect from 16.11.1995, admittedly the complainant become member of the new pension scheme 1995 and he has rendered 20 years service as per the new scheme, the complainant legally entitled to get two years weightage as per para 12(4) R/w 10(2) of the Employees Pension Scheme 1995 and it reads as follows:

Para 10: Determination of pensionable service

(2) In the case of the members who superannuates on attaining the age of 58 years and/or who has rendered 20 years pensionable service or more, his pensionable service shall be increased by adding a weightage of 2 years.

Para 12:Monthly Member’s Pension

(4) In the case of an existing member and in respect of whom the date of commencement of pension is between the 14^th April 2003 and the 16^th November 2005.

Thus, clause 6.2.14 of the manual of accounting in procedure, eligible service explained as under:

6.2.14: Eligible Service: The eligibility for pension is determined with reference to eligible service. This comprise of the services namely, past service and actual service. The period of past service relates to service rendered by the employees pension scheme, from 01.03.1971 to 15.11.1995 the actual service is the period of service rendered by the employees commencing from a date on or after 16.11.1995 till the date of 29 years of age, which ever is earlier. The period either under past service or under actual service or both as the case may be would constitute eligible service. The eligibility of monthly pension to the members is determined with reference to eligible service only. The period of past service and actual service should be rounded off separately to the nearest year to determine the eligibility of pension. If on account of rounding off alone the eligibility is denied such cases may be referred to Central Office.

Thus the eligible service comprise of past service and actual service the past service relates to service rendered by the employees under the Employees Pension Scheme, from 01.03.1971 to 15.11.1995. Thus, the past service of the complainant has to be considered for eligible of pension is 22 years as on 15.11.1995. That paragraphs 6.2.14 further provides that actual service is the period of service rendered by the employees commencing from the date of order dated 16.11.1995 till the date of attaining the age of 58 years, whichever is earlier. That, admittedly, the complainant has put in more than 20 years of past service and as well as subsequent period is an actual service, that is after coming into force of pension scheme 1995. Since the complainant has put in more than 20 years of service, they would be legally entitled to weightage of 2 years in terms of paragraph 10(2) of the said rules.

Hence, the complainant is entitled to get two years weightage and assured benefits with respect to past and present service from the date of retirement along with arrears of the pension. Hence, prays for direction against Op to recalculate the pension payable to the complainant along with compensation for deficiency in service.

3. After service of notice Op appeared through his counsel and filed version and contended that the complainant has misinterpreted the provisions of scheme and filed the present complaint in order to gain wrongfully. The Family Pension Scheme 1971 (old scheme) where the employer used to contribute 1.16% and Employee used to contribute 1.16% of his salary. The old scheme ceased to exist and Employees Pension Scheme 1995 (hereinafter called new scheme) has come into force with effect from 16.11.1995. All members of the old scheme were brought into the purview of new scheme by calling them existing members and all the contributions made by employer and employee in the old scheme has been compensated commensurately by providing past service benefit by arriving multiplying the slab available in Para 12(3) by factor in Table B of new scheme. The benefit as arrived above being added with Formula by applying minimum pension to the past service benefit as defined above. The pension has been written in the same para 12(3), 12(4) and 12(5) of new scheme. The sum total of both the benefits is being payable subject to minimum pension as per para 12(3), 12(4) and 12(5) of the New Scheme.

4. The intention of the legislature for providing a minimum pension was to protect the quantum of benefit of all those employees who were members of Old Pension Scheme and later joined New Pension Scheme. In the present case, the complainants has misinterpreted the rule provision.

5. The scheme provisions has been amended vide GSR No.431(E) dated 15^th June 2007 where it is clearly mentioned that this provision is deemed to have came into effect from the date from which employees pension scheme 1995 came into force i.e., 16.11.1995 where it is clearly mentioned as follows:

Para 12(4):- In the case of an existing member and in respect of whom the date of commencement of pension is between the 16^th November 2000 and 16^th November 2005.

1. Superannuation or early pension shall be equal to the aggregate of

1. Pension as determined under sub paragraph (2) for the period of service rendered from the 16^th November 1995 or Rs.438/- per month whichever is more.
2. Past service pension as provided in sub paragraph (3)

2. The aggregate of (a) and (b) calculated as above shall be subject to minimum of Rs.600/- per month, provided the eligible service is 24 years, provided further, if it is less than 24 years, the pension shall be proportionately less subject to the minimum of Rs.325/- per month.

6. Therefore, in the present case, the complainant has no locus stand for demanding the pension payable by applying minimum pension to past service benefit, and hence, the complainant is not entitled for any benefit as claimed.

7. Para 2(xv) of New Scheme is read as below:

Pensionable service means the service rendered by the member for which contributions have been received or are receivable.

8. In the above para the contribution means, contribution payable under section 6 and 6A of Employees Provident Fund and miscellaneous provisions Act,1952 and has been fixed at 8 and 1/3^rd percent of basic wage and dearness allowances and retaining allowances. Therefore, definition of contribution cannot be stretched to include the old pension scheme.

9. The definition of pensionable service is distinct from the definition of past service which read as follows:

Para 2(xii) past service means the period of service rendered by an existing member from the date of joining employees family pension fund till the 15^th November 1995.

It is amply clear that pensionable service starts from 16.11.1995 only and not prior to that since service prior to 16.11.1995 denotes past service.

10. Therefore, it is amply clear that contributions at eight and one third percent can be received or receivable only from 16.11.1995 i.e., from the date on which the new pension scheme has came into effect but not from 1971. i.e., when the old pension scheme was started. Therefore, the pensionable service means service rendered on or after 16.11.1995. This fact has also been reiterated in para 10(1) of New pension scheme which read as follows:

11. Determination of pensionable service:

1. The pensionable service of the member shall be determined with reference to the contribution (received or receivable) on behalf in the employees pension fund.
2. In the case of the member who superannuates on attaining age of 58 years, and or who rendered 20 years pensionable service or more his pensionable service shall be increased by adding weightage of 2 years.

12. Hence, the complainant is not entitled for the claim as claimed in his complaint. The opponent further contends that Head Office EPFO, vide its letter No.Pension-1/3(4)/7915 dt.25.07.2016 intimated that Ministry of Labour & Employment, Government of India vide its communication no.S.65015/1/2012-SS-II dated 06.07.2016 has accepted the proposal submitted by EPFO. As per the consent given by Ministry of Labour & Employment, Government of India benefit of two years weightage to the members under EPF, 1995, with membership of 20 years or more under EPF, 1995 combined with membership period under erstwhile Employee’s Family Pension Scheme 1971 should be taken into account.

13. As per the direction of Head office vide circular dated 26.11.2013 followed by corrigendum dated 05.12.2013 and in light of H.O. letter No.Pension -1/3(4)/7915 dt.25.07.2016 the eligibility of the member for allowing 2 years weightage is examined and weightage arrears of Rs.26,046/- disbursed in the month of September 2016.

14. It is submitted that payment of annual relief does not arise since no such relief is granted of Govt. of India.

15. There is no provision for release of interest on arrears in the scheme. As no arrears is due to be paid, payment of interest does not arise.

It is further submitted that the Employees Provident Fund Organization is a statutory body under the enactment of Parliament to extend the social security to working classes. Hence, the organization is always in the forefront in extending service without any deficiency. This organization is conducting Bhavishyanidhi Adalath (Nidhi-Apke-Nikat) on 10^th of every month to sort out the the grievances of the members and conducting of Bhavishyanidhi Adalath (Nidhi-Apke-Nikat) is being published in all local/leading Newspaper. The complainants have not utilized the opportunity and prematurely approached the Hon’ble Forum.

        It is submitted that Employee’s Pension Scheme is not a Government pension rather it is a contributory pension scheme. Any extra benefit being ordered by the Hon’ble Forum to a particular applicant is impacting the health of pension fund and thereby having the effect of reducing the entitlement of other pensioners. Hence, there is no deficiency on the part of this Op and prays for dismissal of the complaint.

16. The complainant filed affidavit and no documents marked. Op also filed affidavit and filed memo with documents.

17.   Heard the arguments:

18.   In the proceedings, the following points do arise for our consideration and decision:

1. Whether there is deficiency in service on the part of OP.
2. Whether complainant entitled for any relief & what Order?

19.   Our findings on the above points are as follows:-

1. Point No.1: Affirmative. 
2. Point No.2: As per Order below. 

: R E A S O N S :

POINT NOs. 1 & 2:

20. On going through the pleadings, affidavits produced by both complainant and OP we noticed and it is admitted by OP that the complainant is the member of the new Family Pension Scheme 1995. The dispute raised by complainant is that the Op has not provided 2 years weightage to the complainant and also failed to re-fix the pension to the complainant as per the new provisions of the scheme. Hence alleges deficiency in service. 

21. Earlier the series of cases were filed before this Forum and disposed by dismissing the complaints because of wrong interpretation by complainant’s side. The similar series of complaints was disposed on the same matter before Hon’ble National commission. In the Revision petition Nos.4221 to 4231/2014 between Regional Provident Fund Commission V/s C. Raghavendrachar & Others reported in CPJ III 2015 (3)(NC). In this Revision Petition the Hon’ble National commission has categorically and elaborately discussed the matter with respect to the fixation of the pension as per the new scheme. The Hon’ble National commission has appreciated that:

      The learned counsel for the petitioner has drawn our attention to the para 12 (3) and (4) of the scheme, which read as under:

“(3) In the case of an existing member in respect of whom the date of commencement of pension is after the 16^th November, 2005-

1. Superannuation or early pension shall be equal to the aggregate of-

1.  Pension as determined under Sub-paragraph (2) for the period of pensionable service rendered from the 16^th November, 1995 or Rs.635/- per month whichever is more;
2. Past service pension shall be as given below:

The past service pension payable on completion of 58 years of age on the 16^th November, 1995.

The amount under column (2) or column (3) above, as the case may be, shall be multiplied by the factor given in Table ‘B’ corresponding to the period between the 16^th November, 1995 and the date of exit to arrive at past service pension payable. 

2.  The aggregate of (a) and (b) calculated as above 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. 

       (4) In the case of an existing member and in respect of whom the date of commencement of pension is between the 16^th November, 2000 and the 16, November,2005,

      (i)  Superannuation or early pension shall be equal to the

            aggregate of-

1. Pension as determined under Sub-paragraph (2) for the period of service rendered from the 16^th November,1995 or Rs.438 per month whichever is more;
2. Past service pension is provided in Sub-paragraph (3).
2. The aggregate of (a) and (b) calculated as above shall be subject to a minimum of Rs.600 per month, provided the eligible service is 24 years:

Provided further, if it is less than 24 years the pension shall be proportionately less subject to the minimum of Rs.325 per month.”

22. The contention of the learned Counsel is that since they are also required to give pension for the past service, it would amount to giving double benefit to the employees in case weightage of two years in computing the pensionable service is also given to them.  We, however, find no merit in this contention.  In terms of the Sub-para (2) of para 12, the pension is to be calculated by multiplying the pensionable salary with pensionable service and dividing it by 70. Since the pensionable service would be calculated in terms of para 10, the weightage of two years would have to be given to the complainant for the purpose of calculating the pension in terms of Sub-para (2) of para 12.  The provisions of the Scheme being such, we are unable to take a contrary view of the matter.  Even otherwise if two interpretations of the provisions of the Scheme are possible, we must necessarily lean in favour of the interpretation which is favourable to a pensioner, though, in the case before us we are quite clear that para 10 of the Scheme is not capable of more than one interpretations.  

23. Sub-para (3) of para 12 which deals with the case of the employees who exit after 16.11.2005 provides for payment of superannuation or early pension which is to be calculated in terms of Clause i (a) of the said Sub-paragraph and past service pension which is to be calculated as per table given in the said Paragraph.  The aforesaid table deals only with those cases where the past service pension is payable on completion of 50 years of age on 16.11.1995.  None of the complainant before us had completed 50 years of age on 16.11.1995.

       Sub-para (4) of para 12 of the 1995 Scheme deals with the case of those employees in respect of whom the date of commencement of pension is between the 16.11.2000 and 16.11.2005.  In their case also pension has to be determined in terms of Sub-para (2) of para 12 and their past service pension has to be determined in terms of Sub-paragraph (3).  As noted earlier, the table given in Sub-para (3) of para 12 refers to those cases where past service pension became payable on completion of 50 years of age on 16.11.1995.  Therefore, reliance upon the aforesaid Sub-paragraphs is misplaced.”

       6. In view of the aforesaid decision on the subject taking a view that in such cases, the employees are entitled to benefit of two years weightage, the revision petitions are liable to be dismissed.  The said petitions are dismissed accordingly. No order as to costs.

24. Thus order passed by this forum in the earlier complaints were over ruled by the said decision given by Hon’ble National Commission. Following the principles laid down in the above said citation.  The complainant also continued as a member to the new scheme and paid contributions. As such he is entitled to get the relief as per the order passed in above case by Hon’ble National Commission.  The complainant is entitled to benefit of 2 years weightage and Op is liable to re-fix the pension to the complainant accordingly.  Further the advocate for complainant vehemently argued that the Op has not paid the earlier of the pension since from termination of the job of the complainant. But they have paid only Rs.26,046/- as arrears. Hence, further prays for payment of the arrears since from session or retirement of the employment of the complainant.

25. The prayer made by complainant with respect to the arrears is also not acceptable because after calculating the payable arrears the Op have paid Rs.26,046/- to the complainant. Hence, we found the complainant is also not entitled to get any relief towards the arrears.  As such for the above said reasons we answer point No.1 and 2 in affirmative and proceed to pass the following:   

:ORDER:

1. The Complaint filed by complainant is partly allowed.

2. OP is directed to provide 2 years weightage and re-fix the pension to the complainant and also directed to pay litigation expenses of Rs.1,000/- to complainant within one month from the date of receipt of this order. Failing which 9% interest will be charged till realization.

     3. Send the free copies of this order to both the parties.

(Dictated to the Stenographer transcribed typed by her, transcript corrected by me and then pronounced in Open Court on this the 20^th day of May, 2017).

(H. MANJULA)                                        (RAVISHANKAR)

    Member                                                   President

ANNEXURES

Documents produced on behalf of the complainant:

NIL

Documents produced on behalf of the OP:

NIL

Dated:20.05.2017                         President

                                        District Consumer Forum,

                                                  Chikmagalur.