Complaint filed on:07-02-2020

                                                      Disposed on: 07-03-2022

BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, TUMAKURU

CC.No.12/2020

DATED THIS THE 7^th DAY OF MARCH, 2022

PRESENT

SRI.KUMARA.N, B.Sc. (Agri), MBA, L.L.B, PRESIDENT (I/c)

SMT.NIVEDITA RAVISH, B.A., L.L.B, LADY MEMBER

Complainant: -

V.P.Rangaiah

S/o late Puttaiah,

Aged about 66 years,

R/o Sree Ranga Nilaya,

6^th Cross, Vidyanagar,

Tumakuru-572 103

(By Sri.R.N.Venkatachala, Advocate)

V/s

Opposite parties:-    

1. The Assistant Provident Fund Commissioner,

Sub Regional office,

Bilwashree Arcade,

15^th Cross, SIT Main Road,

Tumakuru -572 102

2. The Assistant Provident Fund Commissioner,

Sub-Regional office,

Peenya, Bengaluru-560 058

      (OP No.1&2-by Sri.M.Pradeep)

ORDER

SMT.NIVEDITA RAVISH, LADY MEMBER

This complaint was filed under Section 12 of Consumer Protection Act, 1986 to direct the opposite parties (hereinafter called as OPs) to revise the monthly pension by extending the minimum assured benefits both in respect of past and present service separately with  effect from the date of the retirement of complainant and to pay arrears along with interest @ 12%  p.a. and grant such others relief as deemed fit and proper under the circumstances of  the case and order to stop deducting ROC (return of capital) and  to return the amount which was deducted from the complainant pension account.

2. The 1^st OP is the Assistant Provident Fund Commissioner, Sub-regional office and the 2^nd OP is the Assistant Provident Fund Commissioner, Sub-Regional Office, Bangalore.

3. It is the case of the complainant that, the complainant was working in the HMT watch factory-IV at Tumakuru and he was retired from the service on 31-03-2001. The complainant joined the service on 7-01-1980. The OPs were the pension fixing and paying authority to the retired employees, who had joined the Employees’ Pension Scheme, 1995. The complainant was member of Employees Family Pension Scheme, 1971. Since the date of joining the duty and subsequently the Employees’ Pension Scheme, 1995 was introduced and earlier employees, family pension scheme was closed, as such the complainant become member of Employees’ Pension Scheme, 1995. Since 15-11-1995, the complainant paid his contribution as per stipulations laid down in both schemes till he retired, as such complainant is entitled to pension from the date of retirement. After retirement of the complainant the HMT WF-IV has sent all the service records and other details to the office of 1^st OP and accordingly pension paid monthly to the complainant w.e.f. 8-4-2003 under PPO No.KN/PNY/3148. The original monthly pension of the complainant was fixed at Rs. 634-00 per month. At the time of calculation of pension, the 1^st OP has deducted 10% towards ROC i.e. return of capital wrongly. The 1^st OP has issued a circular to stop deducting ROC during 2006, but so far OPs deducted the same which is illegal and against the law. When complainant has got knowledge through one of his colleagues in the month of January 2019, that there were mistakes in the calculation of pension fixed to him by the 1^st OP and it is lesser amount than the entitled pension amount. As per the paragraph no.12 of the Employees’ Pension Scheme, 1995 the monthly pension means aggregate of the present service and past service pension benefits. Even though the provision of the law is very clear in respect of both the post service [as defined in 12 (3) (a)] andpresent service[as defined in 12 (3)(b)], the 1^st OP has not followed the provision of law and made erroneous calculations withoutgiving minimum assured benefits. The complainant is entitled for minimum assured benefits both in respect of past and present service separately. The complainant has brought to the notice of 1^st OP and requested to rectify the mistakes in pension fixation. The 1^st OP neither revised the pension nor rectified the mistake in calculation of pension. The 1^st OP knowing fully well deliberately refused to extend the said benefits. Hence, this complaint

4. After the service of notice, the OP Nos.1 and 2 have appeared through their counsel and filed written version admitting that the complainant was enrolled as members under the Employee’s Family Pension Scheme, 1971 and thereafter, he become members of the Employees’ Pension scheme, 1995 till he retired.Further, the OPs have contended that, the complainant was retired employee of M/s. HMT Watch Factory, Tumkur and left the service with effect from 31-3-2001, but the pension has opted on 08-04-2003. The OPs has been paying pension regularly a sum of Rs.718-00 [minimum pension after subsequently amendment w.e.f.1-9-2004 GSR No.593 [E] dated 19-08-2014) per month being monthly member pension as per the Employees’ Pension Scheme, 1995. Thepension proceeds have been credited to the S.B. accountNo.10175530647 maintained with State Bank of India, Batawadi ,Tumkur The pension has been deducted under 13 (1) of EPS 1995,return of capital was processed as per request submitted by the complainant, the amount of Rs.75,200-00 credited to complainant’s wife account after death of the complainant. However, the complainant being not satisfied with the quantum of pension paid to him filed the instant complainant before this Hon’ble Commission claiming revision of pension withreference to Para 12 (3) and para 10(2) of the Employee’s Pension Scheme, 1995. The complainant disputed the quantum of the pension. Further the OPs submitted that, they were already paying pension to the complainant and pension sanctioned to the compliment was calculated on the basis of para 12(4), 12 (7) and 13(1) as per amended provision.Past services benefit of the complainant calculated as per amended provision. The complainant attempted to misinterpret the Para 12 (3-5) of the Employees’ Pension Scheme, 1995 by construing minimum pension of Rs.635-00 [formula pension] and Rs.800-00 [aggregate of past service benefit and formula pension]. The claim of the complainant for grant of minimum pension with reference to Para 12(3) of the Employees’ Pension Scheme, 1995 invokes interpretation of question of law and resolution of said aspect falls outside the jurisdiction of this Hon’ble Commission. The OPs further submits that, there is no deficiency in service on the part of the OPs and hence they prayed to dismiss the complaint.

5. In order to prove the case, the complainant has filed his affidavit evidence and produced documents which were marked as Exs.P1 to Ex.P8. On behalf of OPs, one Sri.J.Hari, Assistant P.F.Commissioner (legal) E.P.F.O, Regional office, Tumkur has filed affidavit evidence and produced Annexure-1 and 2 documents.

6. We have heard the oral arguments of both parties. Apart from that the complainant and OPs have filed written arguments and points that would arise for determination are as under:

7. Based on the above materials, the following points arise for our consideration;  

1.      Whether the complainant is entitled                  to minimum assured benefit with respect to past and present service with effect from the date of retirement of complainant?

2.      Whether the complainant proves that the OPs have made erroneous calculation in ROC?

3.      What order?

8. Our findings on the above points are as under:

Point No.1:          In the affirmative  

Point No.2:          In the negative   

Point No.3:          As per the final order for below

REASONS

        9. Point Nos.1 to 3: The complainant has contended that he came to know from his colleagues with regard to erroneous calculations of pension fixed and paid to the complainant by the 1^st OP office is lesser one, than their colleagues. The complainant came to know of the same in January, 2019 and immediately after aware of the error in the calculation of the monthly pension, payment of lesser pension and wrong deduction of 10% towards ROC. The complainant submitted representation to the 1^st OP for revision of monthly pension. Further the counsel for complainant at the time of arguments contended that the pension was wrongly fixed and being paid.  The complainant retired from service on 31-3-2001 after completing pensionable service of 20 years. Ex.P1 pension payment order reveals the eligible service of complainant. Further, the complainant counsel argued that, there is an error in the calculation of pension in fact complainant is entitled for the separate minimum assured pension for the past and present service according to the paragraph 12 of the Employees’ Pension Scheme, 1995.

10. The 1^st OP submitted that, the OPs have been paying pension regularly a sum of Rs.718-00 minimum pension after subsequently amendment w.e.f.19-8-2014, GSR No 593(E) dated 19-8-2014.

11. The complainant and 1^st OP submitted different memo of calculation in their complaint and version disclosing the particulars required for decision of this case they were inclusive of provident fund number, name of the members, date of birth, date of joining to EPF, date of exit, age at exit, age as on 16-11-1995, pay as on 15-11-1995, past service period, present service period and pensionable salary, weightage benefits.There is difference on the memo of calculation of complainant and 1^st OP is that the complainant has calculated under the category of para 12(3) of Pre-amended EPS, 1995 and the 1^st OP has calculated under the Para 12 (4), 12 (7), and 13 (1) as per amended provision of EPS, 1995. The 1^st OP admitted that, he has calculated the pension of the complainant as per the amended provision of Employee’s Pension Scheme, 1995. The 1^st OP stated as the amended and pre-amended provision of Employees’ Pension Scheme, 1995, in their written version and written arguments. The complainant counsel relied on the judgment of Hon’ble Supreme Court-AIR 1984 Supreme Court 1905 (2) in Salabuddin Mohamed Yunus v/s State of Andhra Pradesh, in this case the Hon’ble Supreme Court has stated that, “pension being thus a fundamental right could only be taken away or curtailed in the manners provided in the constitution.”

“The fundamental right to receive pension according to the rules in force on the date of his retirement accrued to the appellant when he retired from service. By making a retrospective amendment to the said rule 299(1) (b) more than fifteen years after that right had accrued to him, what was done was to take away the appellant right to receive pension according to the rules in force at the date of amendment or in any event to curtail and abbrage that right to the extent, the said amendment was void”

12. The Provision of Law defines under the Employees Pension Scheme 1995 herein under:

“Para 10(2) is as under:- 

In the case of the member 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 of the Employee’s Pension Scheme, 1995:

Para 2: Monthly Member's Pension-(i) a member shall be entitled to;

1. superannuation pension if he has rendered eligible service of 20 years or more and retires on attaining the age of 58 years;
2.  Retirement pension, if he has rendered eligible service of 20 years or more and retires or otherwise ceases to be in the employment before attaining the age of 58 years.
3. Short service pension, if he has rendered eligible service of 10 years or more but less than 20 years.

Para 12 (2) is as under:

In the case of a new entrant, the amount of monthly superannuation pension or early pension, as the case may be, shall be computed in accordance with the following factors, namely: -

Monthly member's pension = Pensionable salary X Pensionable service

                                                       70

Para 12 (3) (a) and (b) reads as under:

(3) In the case of an employee [who was a member of the ceased family pension scheme, 1971] has who has not attained the age of 48 years on the 16^th November 1995:

Superannuation/retirement/short service pension shall be equal to the aggregate of:-

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

The past service benefits payable on completion of 58 years of age on16.1195.

Subject to a minimum of Rs. 800/- per month provided the past service is 24 years. If the aggregate service of the member is less than 24 years, the pension and the benefits computed as above shall be reduced proportionally subject to a minimum of Rs.450/- per month.

(c) On completion of the age of 58 years after 16.11.1995 the benefit 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 16.11.1995 and date of attainment of age 58 to arrive at past service pension payable.

Para 12(4) is as under:-

In the case of an employee [ who was a member of the ceased Family pension scheme, 1971] and has attained the age of 48 years but less than 53 years on the 16^th November, 1995, the superannuation/ retirement pension shall be equal to the aggregate of:-

Para 12 (4) (a) & (b) is as under:-

(a) Pension as determined under sub-paragraph (2) for the period of service rendered from 16^th November, 1995 or Rs.438/- per month whichever is more:

3. Past service benefit as provided in sub-paragraph (3) subject to a minimum of Rs.600/- per month provided the past service is 24 years. Provided further that if it is less than 24 years the pension payable and the past service benefits taken together shall be proportionately less subject to the minimum of Rs.325/- per month.

Para 12 (5) is as under:-

In the case of an employee [who was a member of the ceased Family Pension Scheme 1971 and who has attained the age of 53 years or more on the 16^th November 1995, the superannuation/retirement pension shall be equal to the aggregate of:

Para 12 (5) (a) (b) is as under:-

(a) Pension as determined under sub-paragraph (2) for the period of service rendered from the 16^th November, 1995 per month or Rs.335/- per month whichever is more.

(b) Past service benefits provided in sub-paragraph (3) subject to the minimum of Rs.500/- per month provided the past service is 24 years. Provided further that if it is less than 24 years the pension payable and the past service benefits shall be proportionately lesser but subject to the minimum of Rs.265/-per month.

13. In the above citied paragraphs i.e., 12(3) to 12(5) of Employees Provident Fund Scheme, 1995 made us very clear that minimum pension fixed for the past service is separate and minimum pension fixed for the present service is separate. But the OP No.1 contended that aggregate of A & B shall be subject to the minimum if past service is 24 years.There is no separate minimum pension fixed for past and present serviceunder section 12 of the Employees Pension Scheme, 1995.

14. The Employees’ Pension Scheme, 1995 amended retrospectively with effect from 16/11/1995 vide Government notification No.GSR 593 (E) dated 19/08/2014. The above arguments, is not justifiable. Because at the time of entering into the scheme by the complainant, no such provision were existing and the 1^st OP has produced annexure -1 copy of circular with gazette notification of government but, we considered the contention of the Hon’ble Supreme Court in the case AIR 1984 Supreme Court 1905 (2) in Salabuddin Mohamed Yunus v/s State of Andhra Pradesh. Hence, annexure-1 is not applicable.

15. Further, Section 12(3) to 12(5) of the Family Pension Scheme, 1995 made very clear that separate minimum assured pension for the past service and the present services considered separately and as per Sec.10 (2) it is very clear that the complainant is entitled two years of weight age periods who superannuates on attaining the age of 58 years and or/ who has rendered 20 years of pensionable service or more.

16. The complainant argued that the 1^st OP has wrongly deducted 10% towards ROC i.e. return on capital. Even though issuing circular to stop deducting ROC during 2008, the 1^st OP has continuously deducting the same is illegal and against the law. For this the 1^st OP has submitted the annexure-2 copy of Form 10D of the complainant and argued that the pension of the complainant was deducted under para 13 (1) of EPS, 1995 return of capital was processed as per the request submitted by the complainant. On perusal of annexure-2 produced by the 1^st OP, the complainant has chosen the option for return of capital. The complainant has chosen the option 1 in para 13.

Options for return of capital.  

13 (1) A member eligible to pension may, in lieu of pension normally admissible under paragraph 12, [subject to commutation of pension, if any, under paragraph 12 A] opt to draw for reduced pension and avail of return of capital under any one of the three alternatives given below:

Explanation 1.

In alternative 2, if the [spouse] dies or remarries before the death of member, capital equal to times the original monthly pension shall be paid to the nominee on the member’s death.

Explanation 2.

In alternative 3, if the member dies before the end of 20 year period, the pension shall be to his nominee for the balance period.

Explanation 3.

In case of a member who is eligible for permanent total disablement pension, and where the payment of such pension is to commence before his attaining the age of 50 years the options shall also be admissible bur in such cases the actual pension payable shall be reduced by 1% and the return of capital shall be further reduced by Rs.1,000/- for every year by which the age at the commencement of pension falls short of 50 years.

[Explanation 4.

In case of exercise of option for commutation under paragraph 12A, balance monthly pension payable after commutation shall be deemed to be original monthly pension for the purpose of this paragraph]

According to annexure-2 produced by the 1^st OP, the complainant has already chosen the option hence, discussion para 13, explanation 4, the 1^st OP has sanctioned the pension of complainant. The Hon’ble National Consumer Commission, New Delhi in R.K.Verma v/s Asst. Provident Fund Commissioner, Karnal, Haryana and two others dated 18-11-2014, it was held that;

“In view of Rule 13 (2) of the scheme, the petitioner after having exercised his option cannot claim the restoration of the commuted portion of Pension. The respondent department while denying to restore the commuted pension has acted in accordance with Rule 13 of Employees’ Pension Scheme, 1995. Therefore, it cannot be said to be deficient in service”.

Accordingly, the OPs have not committed any deficiency regarding ROC.

17. According to memo of calculation of the OPs have already given two years weightage to the complainant. As per our findings the OPs were not done any deficiency in service on the part of giving two years weightage. The OPs wrongly calculated the past and present service benefits of the complainant.

18. The above discussion on the provision of law reveals that minimum pension fixed for the past service and subsequent service from 16/11/1995 is separate. Hence, we are of the opinion that the monthly pension of the complainant should be fixed with reference to his age group and number of years of service and if his pension more than the minimum fixed under the scheme, the pension is so calculated should be taken into consideration.

19. Further, according to 10(2) of the E.P.S 1995, the complainant has put more than 20 years of service, hence he is entitled for two years weightage.Further, the above complainant entitled to minimum assured benefit both in respect of past and present service as per Rule 12 (3) of the Employees Provident Fund Scheme, 1995 since the complainant is not attained the age of 48 years as on 16/11/1995 of E.P.S Scheme, 1995.

20. With respect to weightage past and present service, there was a decision of Hon’ble High Court of Karnataka in the case ofK.Channakeshavalu v/s  Employees Provident Fund Organization reported in ILR 2004 KAR 2859, and in a decision rendered by the Karnataka State Commission in the case of Assistant Provident Fund Commissioner, Hubli, v/s Allurappa Hirelal and others in Appeal No. 3449-3458/2009 and Appeal No.1134-1140/2010 dated 16.12.2011 and in the Hon’ble Karnataka State Consumer Disputes Redressal Commission Bangalore in Consumer Appeals No.613-650/2012 dated 03/06/2013 and the Hon’ble National Consumer Redressal Commission, New Delhi, in the case of the Regional Provident Fund Commissioner, Hubli, v/s Mallikarjun Devendrappa Veerapur reported in 2010 (3) CPR 45 date 29.6.2010.

21. Further, the complainant submits that the complainant is entitled for the interest on arrears at the rate of 12% P.A under paragraph 17(A) of EPS, 1995. The complainant relied on judgment of the Provident Fund Commissioner v/s Sulekha reported in 2008 CPJ 306 (NC) as per 17 (A) of the EPS, 1995 it is mandatory to impose interest at the rate of 12% p.a.

Section 17 (A) of the EPS 1995 reads as under:-

The claims, complete in all respects submitted along with the requisite document shall be settled and benefit amount paid to beneficiaries within days from the date of its receipt by the Commissioner.If there is any deficiency in the claim, the same shall be recorded in writing and communicated to the applicant within thirty days from the date of receipt of such application.In case the commissioner fails without sufficient cause to settle a claim complete in all respects within thirty, days the commissioner shall be liable for the delay beyond the said period and penal interest at the rate of 12 per center annum may be charged on the benefit amount and the same may be deducted from the salary of the commissioner.

22. Hence, the complainants are entitled for the benefit of interest on arrears at the rate of 12% P.A as per Para No. 17(A) of the EPS, 1995 and as per above referred decision.

23. In view of the above discussions we hold that the Scheme 1995 reveals that the law laid down by the Hon’ble National Consumer Redressal commission, the Hon’ble State Commission, and the Hon’ble Supreme Court of India, considered the similar issue in favour of the Complainant.

24. In view of the fact and materials placed before us and discussion held above, the OP no.1 and 2 are directed to recalculate the pension as per para 12 (3) of the Employees Pension Scheme 1995 by extending separate minimum assured benefit in respect of the past and present service with effects from the date of retirement along with arrears of pension with interest @12% p.a. The OP No.1 and 2 are also directed to pay Rs.2000/- to the Complainant as litigation expenses and the payment shall be made within 45 days from the date of receipt of this order.

          The complaint is partly allowed.

The OP No.1 and 2 are jointly and severally directed to recalculate and revise the monthly pension payable to the complainant as per Para 12 (3) of Employees Provident Fund Scheme, 1995 by extending the minimum assured benefits both in respect of past and present service separately with effect from the date of retirement of complainant along with arrears of pension with interest @ 12% PA till the date of payment.

Further the OP No.1 and 2 are jointly and severally directed to pay Rs.2000-00 to the complainant towards the litigation expense.

The above order shall be complied by the OP No.1 and 2 within 45 days from the date of this order.

 Furnish the copy of order to the complainant and opposite parties at free of cost.

          (Dictated to the Stenographer, got it transcribed, corrected and then pronounced in the Open Commission on this the 7^th day of March, 2022).

LADY MEMBER                                   PRESIDENT (I/c)