Calcutta HC Grants Relief To IIM Employee Who Did Not Opt For New Provident Fund Scheme
|The Calcutta High Court granted relief to an employee of the Indian Institute of Management who did not expressly opt to be governed by the General Provident Fund (GPF), instead of the older provident fund scheme.
The Court said that he was still entitled to its benefits in light of a notification that required employees to specifically opt out if they wished to remain under the old scheme.
The Court was hearing a Review Petition against an Order passed by it in which it was held that the appellant had to expressly opt to stay under the existing Central Provident Fund (CPF) or choose the newly introduced GPF and that the appellant had failed to exercise either option and hence, would not get the benefits of the newer scheme.
A notification in this regard stated that all employees of the IIM were required to exercise option afresh to remain under the CPF scheme, in default of which they would be treated as having automatically migrated to the GPF.
Recalling the coordinate Bench's Judgment, a Division Bench comprising Justice Rajasekhar Mantha and Justice Ajay Kumar Gupta held, "The applicant, as per the Memorandum of Institute dated 24th July, 1987, must be deemed to have come under, migrated to and covered by the GPF-cum-Pension-cum-Gratuity Scheme of the IIM at Kolkata. The applicant shall be treated as such, with effect from 27th July, 1987"
Senior Advocate Anindya Kumar Mitra appeared for the Petitioner and Senior Advocate L.K. Gupta appeared for the Respondent.
According to the impugned notification by the Director of the Institute on the basis of the recommendation of the 4th Pay Commission, the provisions regarding pension, death gratuity, family pension and so on were revised. The notification clarified that all the CPF beneficiaries who were in service from a set date should be deemed to have migrated to the pension scheme on that unless they specifically opted out of it and desired to remain under the CPF scheme.
Pursuant to the notification, all employees of the IIM were required to exercise option afresh to remain under the CPF scheme, in default whereof they would be treated as having automatically migrated to GPF-cum-Pension-cum-Gratuity Rules that was introduced for the faculty of the IIM, Kolkata.
The review applicant, who did not exercise any fresh option to remain under CPF, was to have been automatically shifted to the GPF Scheme by legal fiction. "The said Bench erred in ignoring the same." the High Court said.
A review was sought against the Judgment of the coordinate Bench on the ground that there is error apparent on the face of the Judgment and in view of certain new facts and documents discovered by the applicant.
The Court said the Division Bench of the Court need not have gone beyond the notification insofar as the review applicant was concerned.
"It is wholly irrelevant for the review applicant that he did not formally protest when the Institute’s documents, regarding his pay and emoluments, which indicated that he was still under the CPF scheme. It is equally irrelevant that the review applicant obtained loans from his service benefits mentioning the same as a withdrawal from the CPF account." the Court said.
The Court noticed that the facts of the case were similar to that of Union of India v. S.L. Verma & Ors. (2006) where the Central Government was seeking to encourage employees directly under it and autonomous bodies under various Ministries, to opt for GPF-cum-Pension- cum-Gratuity Scheme which is more beneficial than the CPF scheme.
With regard to the present case, the Court concluded, "This Court, therefore, clearly finds error apparent on the face of the record in the Judgment dated 14th February, 2020 insofar as the review applicant is concerned. He ought to have been treated as having migrated to the GPF-cum-Pension-cum-Gratuity Scheme for not having exercised any option in terms of the Circular dated 24th July, 1987."
"The most glaring error in the order dated 14th November, 2020 in the finding of the Division Bench that the 'review applicant has not chosen to come under the GPF and hence will not get pension.' In fact, the said observation is contradictory to the Court’s own finding that the review applicant comes under the 4th Pay Commission which mandates pension." the Court said.
Allowing the review application, the Court recalled the dismissal of appeal through the coordinate Bench's Judgment.
Cause Title: Ambujaksha Mahanti v. Indian Institute of Management, Calcutta & Ors. [RVW 173 of 2021 With I.A. No. CAN 1 of 2022]
Appearance:
Petitioner: Senior Advocate Anindya Kumar Mitra; and Advocates Shamit Sanyal and Dip Jyoti Chakraborty
Respondent: Senior Advocate L.K. Gupta; Advocates D.N. Ray, Bhaskar Mukherjee and Debadrita Dutta
Click here to read/download the Judgment