IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA
Friday the 6th day of August, 2021
Filed on 03.02.2020
Present
1. Sri.S.Santhosh kumar.Bsc.LLB(President)
2. Smt. Sholly.P.R ,LLB (Member)
In
CC/No.33/2020
Between
Complainant:- Opposite parties:-
1. Sri. N.T.Chandrababu 1. The Employees Provident
Naduvethezhauveli Fund Organisation
Ponnadu.P.O Rep by the Central Provident
Alappuzha. Commissioner
Bhavishya Nidhi Bhavan
2. S. Manoharan, Bhikaji Cama Place,
Vadakke Chirayil New Delhi-110066
Pallana.P.O, Alappuzha (Adv. Joseph Rony Jose)
2. The Regional Provident
3. Radhakrishna Panicker.C.S Fund Commissioner,
Chennattuveli, Ponnadu.P.O Employees Provident Fund
Alappuzha Organization, Sub Regional
Office, Bhavishyanidhi
4. Shajahan.S Bhavan, Kaloor, Kochi
Malakizakkethil (Adv. Joseph Rony Jose)
Arattupuzha North, Alappuzha 3. The Manager
Kerala Co-operative Milk
5. Kamalasanan.P.K Marketing Federation Ltd
Padakkathara House (MILMA), Cattle Feed Plant
Thuravoor.P.O,Cherthala Pattanakkadu.P.O,Cherthala
6. M.V.Viswanathan Pillai (Party in person)
Edavaparambil, Kozha.P.O 4. The Manager
Kottayam Kerala Co-operative Milk
Marketing Federation Ltd
7. Chidambaran.K (MILMA) Central Product
Bhagavathi Parambu Dairy, Punnapra. P.O,
S.N.Puram.P.O,Cherthala Alappuzha.
(Party in person)
8. Karthikayan.K.K,
Bhoothathan Veli,
Kuruppankulangara.P.O,Cherthala
9. G. Manoharakumar, Sree Nilayam
Thuravoor South.P.O,Cherthala
10. Sobhana, Thattam Parambil,
Arattupuzha.P.O,Alappuzha
11. G. Chandrababu, Kannittachirayil
TDMC P.O, Alappuzha
12. Rajendrababu.K.P, Ayyam Parambil
Pazhaveedu.P.O, Alappuzha
13. Xavier.V.O, Vaniyapurackal,
Veliyanadu.P.O, Alappuzha
14. C.K.Abdul Khader, Kambiyakathu
Muhamma P.O,Alappuzha
15. Manoharan.V.K. Vellapillil House
Punnapra.P.O, Alappuzha
16. Unnikrishnan Nair,C
Pokkathan parambu,
Vadakkal.P.O,Alappuzha
(Adv. C.H.Chandrabhanu for complainants)
O R D E R
SMT. SHOLLY.P.R (MEMBER)
Complaint filed u/s 12 of the Consumer Protection Act,1986
1. The averment in complaint are as follows:-
All the complainants are employees retired from the service of Kerala Co operative Milk Marketing Federation Ltd.(MILMA), which is a Co operative Sector undertaking. The complainants are retired from two units of MILMA. The employees of 3rd and 4th opposite parties are covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and the schemes made there under and they were allotted employer code by the 2nd opposite party. In 1995, the employees Provident Fund Organization implemented a pension scheme for the members covered under the Employees Provident Act which is known as Employees Pension Scheme 1995. Accordingly the complainants were also members in Employees Provident Fund Scheme and Employees Pension Scheme.
As per the Employees Provident Fund and Miscellaneous Provisions Act, it is obligatory on the part of the employer to remit 12% of the monthly salary limited to the ceiling prescribed in the Act along with the employee share of contribution. The statutory monthly salary ceiling was Rs.6,500/- till 31-8-2014 and it was enhanced to Rs.15,000/- with effect from 1/9/2014 by an amendment. However with a view of employees’ welfare, Milma is remitting employee and employer share of contribution at the rate of 12% of the full salary of the employees. In addition to that administration charges at the rate prescribed by the 1st opposite party is also remitted for the service rendered by the 1st and 2nd opposite parties.
As per the Employees Pension Scheme 1995, normally 8.33% of the employer contribution limited to the statutory salary ceiling only will be accounted in the pension fund, even if the employee and employer share of contribution is remitted for the full salary. The balance of employer contribution along with employee contribution will be accounted in the Provident Fund account. There were provisions in the Employees’ Pension Scheme 1995 for remittance of pension contribution for the full salary if a prescribed joint option is submitted by the employee and employer ie, if a joint option is submitted, 8.33% of the employer contribution for the full salary can be remitted to the pension fund and such employees on retirement will be eligible for pension worked out based on the actual salary drawn by them at the time of retirement.
The 2nd opposite party declined to accept the joint options submitted by the complainants. Hence they filed Writ Petitions before the Hon’ble High Court and obtained judgments with direction that the PF organization shall accept joint options, receive monthly pension contribution based on the actual salary and disburse monthly pension based on the actual last drawn salary, on their retirement.
In the light of the judgments of the Hon’ble High Court the complainants have submitted required documents including joint option for sanctioning monthly pension based on the actual salary. Still initially the 2nd opposite party sanctioned them pension based on the statutory salary ceiling only. On repeated requests, the 2nd opposite party has worked out the additional amounts of pension contribution to be remitted to the pension fund and instructed the complainants to remit back such additional amounts. The complainants remitted back the amount as instructed by the 2nd opposite party. Accordingly they were sanctioned revised pension and they have also received fresh pension payment order.
As per the paragraph 12 of the Employees Pension Scheme 1995, the formula prescribed to work out the quantum of monthly pension is pensionable salary /70 X no of years of pensionable service. Further as per Paragraph11 of the said scheme, the pensionable salary was the average of last 12 months salary immediately preceding the date of retirement of the employee. As per the amendments made to the Employees Pension Scheme with effect from 1/9/2014 the pensionable salary shall be computed by taking the average of last 60 months salary, preceding the date of retirement of the employee. However on challenge by the employees by a series of Writ Petitions, the Hon’ble High Courts of different states including Kerala set aside the said amendments. Though the Employees Provident Fund Organization challenged the above judgments before the Hon’ble Supreme Court, the Supreme court also upheld the decisions of the High Courts.
On verification of the P.P.O received by the complainants it is noticed that their quantum of monthly pension is computed by taking pensionable salary arrived at by taking average of last 60 months salary, instead of 12 months’ salary. It has made considerable reduction in the quantum of monthly pension sanctioned to the complainants. Bulk amount of arrears of salary received by the complainants with retrospective effect by virtue of D.A declaration, pay revision etc are ignored while taking the average salary. As per the PPO issued by the 2nd opposite party the pensionable salary of the 1st complainant is Rs.25,206/- only and as per the statement issued by the 3rd opposite party it is Rs.37,649/-.
Earlier the 2nd opposite party has not considered the arrears of salary for calculation of average salary while sanctioning pension to some other retired employees of the 3rd and 4th opposite parties. Hence they filed WP(C) No.19223/2018 before the Hon’b le High Court. In that case the 2nd opposite party has filed counter affidavit dated 2-8-2018 in which they clearly admitted and committed that such amounts will be considered and revised pensionary benefits will be sanctioned and paid to the petitioners on receipt of necessary clarifications from the employer. Thereafter they were sanctioned revised pension considering also the arrear salary paid to them. The complainant are also eligible and entitled to get revised monthly pension by taking average of last 12 months salary and by considering that portion of arrears of salary falling in those 12 months. Since the Hon’ble High Court has set aside the amendments implemented with effect from 1/9/2014, there is no legally valid reason for delaying the revised pensionary benefits payable to the complainants. Hence this complaint filed alleging deficiency in service on the part of the opposite parties 1and 2 by curtailing the eligible benefit and the undue delay in rectifying the defects.
2. Version filed by the 2nd opposite party is as follows:-
The complaint is not a ‘consumer’ as per Sec.2(1) (d) of the Consumer Protection Act, 1986. The act denies a consumer as any person availing any buys any goods for a consideration or hires or avails of any services for a consideration. Further service is described as “service of any description which is made available to potential users and includes, but not limited to ,………. but does not include the rendering of any service free of charge or under a contract of personal service.”
Employees Pension Scheme 1995 (EPS) is a statutory, compulsory and contributory Social Security Scheme formed in accordance with Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The contributions towards EPS are received at the rate of 8.33% of salary subject to statutory limits prevailing at the time. The government of India contributes to the Fund of EPS at the rate of 1.16% of salary limit to statutory maximum. Since the OP or the EPFO does not levy any charges or any other consideration towards running or providing service to the complainant as regard to EPS. The members of the EPS or the EPS Pensioners including the
complainant are not consumers as per the definitions provided under the Act.
The opposite parties have filed a review petition RP(C) No.1430-1431/2019 in Hon’ble Apex Court against the order in SLP No.8658-8659/2019 in Hon’ble Apex Court and Kerala High court on WP(C) No. 13120/2015 and connected cases. The Review Petition has been tagged along with SLP filed by the Union of India vide SLP(C) No. 016721-016722/2019 against the judgment of this Hon’ble Court in the writ petition Supra, which is still under consideration in the Hon’ble Supreme court and is to be heard in open court. It is submitted that vide order dated 12/7/219 Hon’ble Supreme Court in SLP(C) No.016721-016722/2019 has ordered to list the matter along with Review Petition (Civil) Nos. 1430-1431/2019 in open court.
Hon’ble Supreme Court by its order dated 6/2/2020 in CONMTPET. (C) No.1917-1918/2018 in CA No.10013-10014/2016 after hearing the Learned Attorney General, ordered that as the petition against the judgment of the Kerala High Court bearing SLP(Civil) Nos.16721-16722/2019 have been directed to be listed before a Three –Judge Bench in terms of order dated 12/7/2019 and even the Review Petitions have been directed to be listed in open court, it may be appropriate to list the present matters also along with those matters so that a call can be taken whether these matters have to be heard after the decision of that matter or whether the parties in the present matters will also get an opportunity to address the Court in those proceedings. Also as per the website of the Hon’ble Apex Court, the SLPs are tentatively listed to be heard on 16/10/2020.
Hon’ble High Court of Kerala by its Order dated 3/7/2020 in WP(C) 2654 of 2020 and connected cases deferred the hearing of similar cases indicating that the decision of Supreme Court in the Review Petition filed by Employees Provident Fund Organization and Special Leave Petition by Union of India is pending and the matter urged in the petition are similar to the judgment of Division Bench in WP(C) No.13120 of 2015. It is further submitted that Hon’ble High Court of Kerala by its Order dated 19/8/2020 in contempt case C.O.(C) No.1007 of 2020, held that it is appropriate to consider the contempt case after disposal of the Special Leave Petition filed by Union of India which is pending before the Apex Court. The Court also held that there is no dispute about the fact that certain matters relating to the Higher Pension issues are pending before the Apex Court. As the matter is pending for adjudication at the Hon’ble Apex Court, consideration of the same by the Hon’ble Commission would be prejudicial and exceeding in jurisdiction. Hence the complaint may be dismissed.
3. Version of 3rd and 4th opposite parties are as follows:-
Opposite parties 3 and 4 are two units of Kerala Co –operative Milk Marketing Federation Ltd,(MILMA). The complainants were employees under this organization. All of them retired from the service and they are members in Employees Provident Fund Scheme and Employees Pension Scheme,1995. As per the Employees Provident Fund and Miscellaneous Provisions Act, the employer is bound to remit employer share of PF contribution only for the statutory salary limit prescribed from time to time. However from the beginning Milma is remitting employee and employer share of contribution for the full salary of the employees. Administration charges are also remitted at the rate prescribed by the EPFO from time to time.
In the past,8.33% of the employer contribution limited to the statutory salary ceiling only was accounted in the pension fund though they were remitting employer share of contribution for the actual salary. The balance of employer contribution along with employee contribution was accounted in the Provident Fund account.
The complainants along with several other employees filed Writ Petitions before the Hon’ble High Court and obtained judgments with direction that the PF organization shall accept joint options and receive monthly pension contribution based on the actual salary. Accordingly the joint options of the complainant and other employees involved in the Writ Petitions were forwarded to the EPFO. Thereafter from August2016, onwards they are remitting pension contribution for the full salary of employees who got judgment while in service. This practice was started with the concurrence of the EPFO. After retirement the complainants submitted application and required documents for sanctioning monthly pension based on the actual salary and they have forwarded the same to the EPFO.
As per the Employees Pension Scheme 1995, the pensionable salary was the average of last 12 month’s salary immediately preceding the date of retirement of the employee. As per the amendments made to the Employees Pension Scheme with effect from 1/9/2014, the pensionable salary shall be the average of last 60 months salary, preceding the date of retirement of the employee. However the said amendment was set aside by the Hon’ble High Court and the Hon’ble Supreme Court.
The salary statement issued by opposite parties 3 and 4 includes the arrears of salary paid to the complainant by way of arrears of DA and arrears of pay revision etc as one of submission. It is also submitted that EPF and EPS contributions are remitted for such arrears paid if any, even if it is paid after the retirement. Later on the statement prepared by distributing the arrears falling in those 12 months was provided to the individual employees which is factual and correct. They also assure to provide any such statements and facts further if necessary before concerned authorities.
The Kerala Co-operative Milk Marketing Federation was the 3rd respondent in the WP(C) No.19223/2018 filed by Sri K.P.Rajan and 3 others before the Hon’ble High Court. Three petitioners therein including Sri. K.P.Rajan were employees retired from this unit. Pursuant to the filing of that Writ Petition, the EPFO sought some clarifications on the salary statement furnished by us pertaining to the petitioners therein and they have furnished the same. Thereafter they were sanctioned revised pension based on the salary including the arrears paid.
Opposite parties 3 and 4 submitted that the complainants herein are also eligible to get pension based on the actual last drawn salary by taking the average of last 12 months salary and also by including that portion of arrears of salary paid for the months falling in that 12 months.
4. On the above pleadings following points were raised for consideration:-
1. Whether the complainants come under the definition of ‘consumer’ under Consumer Protection Act?
2.Whether there is any deficiency in service on the part of opposite parties1 and 2?
3. Whether the complainants are entitled to get the reliefs sought for in the complaint?
4. Reliefs and costs?
Evidence in this case consists of documentary evidence on the part of complainants, marked as Ext.A1 to A5. No oral or documentary evidence on the part of opposite parties. Heard both sides. Counsel for complainants filed notes of arguments.
5. Point No.1:-
Admittedly all the complainants are employees retired from opposite parties 3 and 4. It is also admitted that the employees of 3rd and 4th opposite parties are covered under the Employees Provident funds and Miscellaneous Provisions Act, 1952, and schemes made there under. In 1995 the Employees Provident Fund Organisation implemented a pension scheme for the members covered under the EPF Act which is known as Employees Pension Scheme 1995. Accordingly the complainants were also members in Employees PF scheme and Employees Pension Scheme.
Learned Counsel for the opposite parties 1 and 2 stated in the version and argued that the complainants are not “consumer” as per Sec.2(1)(d) of the Consumer Protection Act, 1986, because the “service” rendering by them is service free of charge or under a contract of personal service which does not include as “Service” availed by the complainants. Opposite party 1 and 2 also submitted that they did not levy any charges or any other consideration towards running or providing service to the complainant as regards to Employees Pension Scheme.
Regarding the above point counsel for the complainants produced Judgment of our Apex Court in Civil Appeal No.6447 of 2008 arising out of various SLP(C). In Regional Provident Fund Commissioner Vs. Bhavani (Appeal (Civil) 6447/2001), submissions regarding the non -applicability of the Consumer Protection Act to the case of the respondent rejected on account of the fact that the Regional Provident Fund Commissioner, who is the person responsible for the working of the 1995 Pension Scheme, must be held to be a ‘Service giver’ within the meaning of Sec.2(1)(d) of the Consumer Protection Act. Nor is this a case of rendering of free service or rendering of service under a contract of personal service so as to bring the relationship between the appellant and respondent within the concept of ‘master and servant’. And also held, the respondent comes squarely within the definition of “Consumer” within the meaning of Sec.2(1)(d) (ii) of Consumer Protection Act.
The same proposition has been explained in Regional Provident Fund Commissioner Vs. Shivkumar Joshi(2000 (1) SCC 98) wherein in relation to the Consumer Protection Act to the Employees Provident Fund Schemes it was held “ A perusal of the scheme clearly and unambiguously indicates that it is a ‘service’ within the meaning of Sec.2(1)(o) and the member a ‘consumer’ within the meaning of Sec.2(1)(d) of the Act. As per the settled judicial pronouncement regarding the said point the complainants are come under the definition of ‘consumer’ in Consumer Protection Act. This point answered in favour of the complainant.
6. Point No.2 and 3:-
Admittedly the complainants are the members of Employees Provident Fund Scheme. They all retired from service and applied for getting pension benefit under the scheme. 10th complainant died in the meantime and his legal representative was incorporated as 17th complainant. According to the complainants they are entitled to get monthly pension considering the share of contribution of both employer and employee at the rate of 12% of the full salary of employees since from the very beginning Opposite parties 3 and 4, MILMA management were remitting the said rate with a view of employees’ welfare without considering the statutory ceiling of monthly salary @ Rs.6,500/- till 31/8/2014 and enhanced salary @Rs.15,000/- from 1/9/2014. Opposite parties 3 and 4, the employer of the complainants also agreed with the submissions furnished by the complainants in the complaint regarding the payment of Provident Fund Contribution to opposite parties 1 and 2 and its allocation. They also submitted in the version that they were forwarded joint options of the complainants 10 to 16 to the Employees Provident Fund Organisation as per the direction of Hon’ble High Court in a judgment of Writ Petition filed by the complainants along with several other employees.
The opposite parties 3 and 4 were remitting pension contribution for the full salary of employees who got judgment while in service and same was started with the concurrence of the EPFO. In the Pension Scheme, the Pensionable salary was the average of last 12 months salary immediately preceding that date of retirement of the employee, but as per the amendments made to the Scheme on 1/9/2014, the pensionable salary shall be computed by taking the average of last 60 months salary preceding the date of retirement of the employee. However on challenge by the employees by a series of Writ Petitions, the Hon’ble High Courts of different states including Kerala set aside the said amendments. Hon’ble Supreme Court also upheld the said decisions of the High Courts. Accordingly now the period of calculation of said Pension Scheme is last 12 months of retirement of the employee. But it is seen from Ext.A1 PPO of 1st complainant, that the quantum of monthly Pension is computed by taking pensionable salary arrived at by taking average of last 60 months salary instead of 12 months’ salary. Ofcourse it will be affected at the time of receiving the amounts of arrears of salary by the complainant with retrospective effect by virtue of DA declaration, Pay Revision etc, while taking the average salary. On perusal of Ext.A2 which is the statement issued by 3rd opposite party, the pensionable salary of the 1st complainant is Rs.37,649/-, while it was calculated by 2nd opposite party in PPO it is Rs.25,206/- .
Moreover on 9/7/2019 2nd opposite party issued a letter sought to be certain clarifications from employer after receiving the applications to 2nd opposite party and after attending the grievance hearing Adalath held by 2nd opposite party. The said letter is Ext.A5 in which 2nd opposite party needs only the source documents for verification to allow the pension on actual wages.
The main and sole contention of the opposite parties 1 and 2 for nonpayment of revised pension is that the consideration of this case by the Commission would be prejudicial and exeediing in jurisdiction as the matter is pending for adjudication at the Hon’ble Apex Court.
But on perusal of Ext.A3 , counter affidavit filed by 1st and 2nd opposite parties in connection with W.P(C). No. 19223 of 2018 in a similar matter they emphatically stated that the revision of pensionary in respect of the petitioners will be implemented and revised pensionary benefits alongwith arrears of pensionary benefits will be sanctioned and paid to the petitioners in that case at the earliest on receipt of necessary clarification and revised statutory return in Form 3A in respect of the petitioners in the case cited above from the 3rd respondent, employer establishment. They had not raised any contention for disallowing the said matter in dispute in the above said case.
On evaluation of the complaint, available records and arguments advanced by the complainants it is understood that the complainants are eligible to get enhanced monthly pension, hence they are entitled to get the reliefs sought for submitted before this Commission. In the above circumstances we have no hesitation in allowing the complaint.
7. Point No.4:-
In the result complaints stands allowed.
1. Opposite parties 1 and 2 are directed to rework the quantum of pension by taking the advantage of last 12 months salary of the complainants for the purpose of arriving at the pensionable salary of the complainants and also include that portion of arrears of salary paid for the months falling in that 12 months for the calculation of pensionable salary of the complainants.
2. Opposite parties 1 and 2 are directed to pay the arrears of monthly pension payable to the complainants by virtue of revision of Pension as calculated above with interest @ 9% for the period from the date of complaint.
3. Complainants are allowed to realize Rs.10,000/- as cost of this proceedings from opposite parties 1 and 2.
The order shall be complied within one month from the date of receipt of this order.
Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Commission on this the 6th day of August, 2021.
Sd/-Smt. Sholly.P.R(Member)
Sd/-Sri.S.Santhosh Kumar(President)
Appendix:-Evidence of the complainant:-
Ext.A1 - Copy of Pension Payment Orders:EPS -95
Ext.A2 - Monthly Wages Details
Ext.A3 - Copy of Counter Affidavit by Ops 1&2
Ext.A4 - Copy of Letter dated.24/6/2019
Ext.A5 - Copy of Letter from Employees Provident Fund
Organisation
Evidence of the opposite parties:-Nil
// True Copy //
To
Complainant/Oppo. party/S.F.
By Order
Senior Superintendent
Typed by:- Br/-
Compared by:-
