STATE CONSUMER DISPUTES REDRESSAL COMMISSION

OF TELANGANA : AT HYDERABAD

                      FA NO. 114 OF 2015 AGAINST CD NO.538 OF 2013

     ON THE FILE OF DISTRICT FORUM-III, HYDERABAD

Between :

The Regional Provident Fund Commissioner,

Employee Provident Fund Organization,

Regional Office, Bhavishya Nidhi Bhavan,

# 3-4-763, Barkatpura, Hyderabad – 500027

Rep. by its Asst. P.F. Commissioner – Legal,

Mr. K.Sivalingam.                                                     …..Appellant / Opposite party

And

          M.Valsalakumar, S/o. Madhavan Pillai,

# 32, Type II, Self Finance Colony,

Vanasthalipuram, Rangareddy Dist.,

Hyderabad – 500070.                                          ….Respondent / Complainant

Counsel for the Appellant           : Sri K.Raghuram Reddy

Counsel for the Respondent       : Sri M.Valsalakumar (PIP)

Coram                   :

Hon’ble Sri Justice B.N.Rao Nalla, President

&

Sri Patil Vithal Rao, Member

Monday, the Twenty First day of November

Two thousand Sixteen

Oral Order : (per Hon’ble Sri Patil Vithal Rao, Member)

***

          The complainant in C.D. No.538/2013, on the file of the District Consumer Forum-III, Hyderabad is the Respondent and the opposite party is the Appellant in the present appeal, which has been filed aggrieved by the order dated 24.04.2015 passed by the said Forum in the case.

2.      The respondent herein has set up his claim under section 12 of the Consumer Protection Act, 1986 before the District Forum, in a nutshell, that he had joined in the service of the Food Corporation of India on 15.05.1968 as Assistant Grade-III and retired as Assistant Manager [Accounts] on 31.07.2005 on superannuation at the age of 60 years and that during his employment, he was a member of the Employee’s Family Pension Scheme, 1971 and subsequently became a member automatically in the Employee’s’ Pension Scheme, 1995 which was introduced with effect from 16.11.1995.  His further case is that though contributions were promptly deducted from his salary towards both the schemes till July, 2003 no weightage of two years was given to him as provided under Rule-12(4) R/w Rule-10 (2) of the Employee’s Pension Scheme, 1995 at the time of fixing his pension by the Department without interpreting properly the relevant provisions of the scheme.  The respondent, though brought it to the notice of the Provident Fund Commissioner, Hyderabad, there was no response resulting in mental agony and financial loss to him.  Therefore, he had prayed before the District Forum in the case to direct the appellant / opposite party to re-fix his pension by granting weightage of 2 years and pay the arrears with interest thereon and also cost of Rs.1,000/-. 
3.           The appellant has resisted the claim before the District Forum by way of written version on the grounds, interalia, that the Family Pension Scheme, 1971 (old Scheme), and the Employee’s Pension Scheme, 1995 (new Scheme) are totally different and that the old scheme is applicable only when a member dies while in service as the widow/widower and in the absence of one of the family members of below 25 years can get pension and that as such the member cannot get pension.  Whereas, under the new scheme even a member who renders 10 years of service under pension scheme (including the service rendered under the old scheme) and attains 50 years of age can get pension.  Further, the rate of contribution to the old scheme is only 1.16% of wages whereas the new scheme provides contribution at 8.33% of wages.  Infact, the weightage of 2 years has been provided for 20 years membership exclusively under the new scheme and a member is entitled for the same if he has completed service till 2015 only to claim the weightage.  In the present case the respondent did not interpret the schemes properly in claiming the relief.  As per para-10(2) of the EPS, 1995 a person who superannuates on attaining the age of 58 years and who has rendered 20 years “pensionable service,” his pensionable service will be increased by adding a weightage of 2 years.     The pensionable service and past service which together are termed as pensionable service.   The pensionable service is a service for which contributions are received or receivable under the new scheme [Para 2(xv)], whereas, past service means service rendered by existing member from the date of joining in old service and till 15.11.1995 [Para-2(xii)].  These two definitions clearly show that both services are different.  Therefore, when a member renders 20 years pensionable service, i.e., 20 years under new Pension Scheme with effect from 16.11.1995 for that service only such weightage of 2 years can be given.  In the present case the service rendered by the respondent under the new scheme is very much less than 20 years and that as such he is not entitled for weightage of 2 years for calculation of the pension.  Infact, he had completed 10 years of service after the advent of the scheme and that as such he is not entitled for the benefit of weightage of 2 years as per Para-10(2) of the new scheme. Further defence of the appellant before the District Forum was that the respondent herein never contributed any amount towards his pension but the same was paid from employee’s contribution.  Though the respondent has been receiving pension as per his entitlement, he has filed the case with vexatious claim to make wrongful gains and that there is no deficiency in service on the part of the department.  For these reasons the appellant had prayed, before the District Forum, to dismiss the claim.
4. Basing on the material evidence placed on record in the light of the evidence affidavit of the respondent and his documents under Exs.A1 to Ex.A8 and also the affidavit evidence of Assistant Provident Fund Commissioner- Legal and Exs. B1 to Ex.B5 on behalf of the appellant herein, the forum below passed the order dated 24.04.2015 allowing the complaint directing the opposite party to re-fix the pension of the complainant by giving 2 years weightage to his services by adopting relevant formula and also compensation of Rs.20,000/- with costs of Rs.2,000/-, which is impugned now.      
5. The appellant has contended in the present appeal, in brief, that the District Forum failed to interpret the legal provisions, properly and erroneously found that the past service benefit was not added to the formula pension.  Infact, during pendency of the complaint the appellant has re-fixed pension of the respondent as per the latest amendment of the new scheme by considering 2 years weightage and issued a fresh PPO and that the same is being received by him regularly without any protest.  The District Forum also failed to infer that the interpretation taken by the National Commission in the case relied on by the respondent is not a settled question of law and that as such the same is not applicable to his case.  The order under appeal was passed mechanically without appreciating the statutory provision properly and that as such the same is liable to be set aside by allowing the appeal.
6. Perused the written arguments submitted by the respondent and heard both the parties.

7.  Now the point for consideration is that :

Whether the impugned order is erroneous and illegal and that as such liable to be set aside?

8. Point :- It is not in dispute that the respondent was retired from service of the Food Corporation of India, on 31.07.2005 on attaining age of superannuation.  He served the department for a period of about 38 years and retired at the age of 60 years.  During his employment the statutory deductions were made from his salary and credited to the Employee’s’ Provident Fund as he was a member of the erstwhile Employee’s Family Pension Scheme,1971.  By virtue of the Employee’s Family Pension Scheme, 1995 all his contributions vested / transferred to this scheme from the Family Pension Scheme (FPS),1971.  Thus, automatically he became member of the EPS, 1995. 
9. On retirement, the respondent’s pension was fixed at Rs.1,090/- with effect from 01.08.2003 without granting weightage of 2 years by the department.  The respondent challenged the same on the ground that as per Rule-12(4)(a) R/w Rule-10(2) of the Employee’s Pension Scheme, 1995 he is entitled to the said weightage as he was paying contribution even earlier under the Employee’s Pension Scheme, 1971 and that he rendered Past Service of more than 20 years as required by the said scheme.  This was disputed by the appellant on the premise that his eligible service which includes pensionable service and past service is less than 20 years and that as such he is not entitled to claim weightage of 2 years in terms of Rule-12(3)(b) R/w Rule-10 (2) of the Employee’s Pension Scheme, 1995.  To appreciate this aspect and resolve the controversy, let us refer to the relevant provisions of the Employee’s Pension Scheme, 1995   which are as under:-

“Rule 2(ii) “actual service” means the aggregate of periods of service rendered from the 16^th November, 1995 or from the date of joining any establishment whichever is later to the date of exit from the employment of the establishment covered under the Act;

(vi) “Existing Member” means an existing employee who is a member of the Employee’s’ Family Pension Scheme, 1971”,

(xii) “Past service” means the period of service rendered by an existing member from the date of joining Employee’s’ Family Pension fund till the 15^th November, 1995;

(xv) “pensionable service” means the service rendered by the member for which contributions have been [received or are receivable].

6. Membership of the Employee’s’ Pension Scheme.  Subject to sub-paragraph (3) of paragraph 1, the Scheme shall apply to every employee,-

(b). Who has been a member of the ceased Employee’s’ Family Pension Scheme, 1971 before the commencement of this Scheme from 16^th November, 1995.

10. Determination of Pension Service-

(1) The pensionable service of the member shall be determined with reference to the contributions [received or receivable] on his behalf in the Employee’s’ Pension Fund.

(2) In case of the member who superannuates on attaining the age of 58 years, 3[and] who has rendered 20 years pensionable service or more, his pensionable service shall be increased by adding a weightage of 2 years. 

12.Monthly Members Pension:

(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-

(b) 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.

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

(i) superannuation or early pension shall be equal to the aggregate of-

(a) 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;

(b) past service pension as provided in sub-paragraph(3)

(ii) 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.

10. The respondent was joined service on 15.05.1968 and was retired on 31.07.2005 from the department.  Thus, his total service is more than 20 years.  During the said period the required contribution from his salary were deducted and credited to the Employee’s’ Provident Fund by the department. The Employee’s Pension Scheme,1995 came into force with effect from 16.11.1995.  As the respondent was existing employee during the Employee’s Family Pension Scheme, 1971, he became Existing Member (EM) and his “past service” was from the date of his joining the earlier scheme of 1971 till 15.11.1995.  The said service automatically merged with his subsequent service under the new scheme of 1995 as per Rule-2(ii) of the Employee’s Pension Scheme,1995.  Therefore, his “pensionable service” will be from the date of his becoming member of the earlier pension scheme of 1971 till the date of his retirement.  By virtue of his contributions to the Employee’s’ Pension Fund, his pensionable service has to be determined as per Rule-10 of the Employee’s Pension Scheme,1995 and the same has to be computed in terms of Rule-12 of the said scheme.  In the instant case Rule-12(3) is not applicable since the respondent had attained superannuation on 31.07.2005 i.e., prior to 16.11.2005.  As per clause-12(4) the date of commencement of pension is between 16.11.2000 and 16.11.2005 in the case of an existing member.  Further the Rule-10(2) provides that in case of a member to superannuate at the age of 58 years and who has rendered 20 years pensionable service or more, his pensionable service shall be increased by adding the weightage of 2 years.  Therefore, in the present case Rule-12 (4) R/w Rule-10(ii) applies squarely to determine the pensionable service of the complainant.  This aspect was dealt with by the Hon’ble National Commission in R.P.No.3970/2009 between, “Regional Provident Fund Commissioner, Hubli, Karnataka”, and “Sri Mallikarjuna Devendrappa, Veerapur”.  By the order dated 29.06.2010 in the said case the Hon’ble National Commission held as under:

Paragraph 6:2.13 of the Manual of Accounting Procedure which provides that the weightage is due to be given only in the year November, 2015 does not get any support from any provision in the Employee’s’ Pension Scheme, 1995 and the said paragraphs of 6:2.13 in the Manual of Accounting Procedure is not in accordance with the provisions in the Employee’s Pension Scheme,1995. In the said case the complainant had 24 years past service and 8 years of actual service after coming into force of the Employee’s Pension Scheme,1995 .  Thus, his service was more than 20 years and that as such it was held that, he was entitled to weightage of 2 years in terms of Rule-10(2) of the Employee’s Pension Scheme,1995.  No doubt, the said order was challenged before the Hon’ble Supreme Court in Special Leave to Appeal (civil) No.(S) 30844/2010 but the same was dismissed by the order dated 15.11.2010.  The said order reads as under:-

“The Special Leave petition is dismissed leaving the question of law open to be decided in an appropriate case.”

         From the above order it is clear that the view taken by the Hon’ble National Commission holds the field even as on today.

11.    The learned counsel for the Appellant has contended that the Employee’s Pension Scheme,1995  is with retrospective effect and that as such the respondent cannot challenge the calculation made by the department in fixing his pension.  Per contra, the respondent has vehemently propounded that by virtue of any amendment to a statute by a Rule or executive order of the State his rights cannot be impaired which were already accrued to him.  In support of his contention, he has relied on the decisions of the Hon’ble Supreme Court in:

1.  Mohd. Rashid Ahmad etc., Appellants Vs. The State of U.P. and another, AIR 1979 SC 592.
2. Deokinandan Prasad, Vs. The State of Bihar and others, AIR 1971 SC 1409(1).
3. Chairman, Railway Board and others, Vs. C.R. Rangadhamaiah and others, AIR 1997 SC 3828.
4. State of Assam Vs.Barak Upatyaka D.U. Karmachari Sanstha, AIR 2009 SC 2249.

12.     The judicial decision of the Hon’ble Supreme Court in the above cited cases are ratio decidendi and squarely applicable to the present case and that as such this Commission is bound to follow the same.
13. Even otherwise, during the pendency of the proceedings, before the District Consumer Forum, the appellant has re-fixed the pension of the respondent by considering 2 years weightage and issued a fresh PPO.  The respondent has challenged even the re-fixation made therein in his written arguments by giving his own mode of calculation.  But, we are unable to deal with the said aspect and give any finding thereon for the simple reason that he did not challenge it by way of a cross appeal or counter claim.  Moreover, it is outside the purview of the provisions of the Consumer Protection Act, 1986. The respondent is at liberty to challenge the same before appropriate forum under the Pension Laws and Rules there under, if he is so advised.
14. We have carefully gone through the impugned order passed by the District Forum.  All the contentions raised by the rival parties were duly considered by the forum and appreciated the same properly and came to a just conclusion which, in our considered opinion, needs no interference.
15.    In view of the aforesaid discussion, we hold that the appeal is devoid of any merits and that as such must fail. 
16.   The point is answered accordingly against the appellant.
17.       In the result, the appeal is dismissed by confirming the impugned order in toto with costs of Rs.5,000/-, payable to the respondent within 4 weeks from the date of receipt of a copy of this order.  

PRESIDENT                         MEMBER                   

21.11.2016