Employee absorbed from Non-Pensionable Establishment Entitled to Pension

In the case of Rajasthan State Road Transport Corporation and Others vs Goverdhan Lal Soni and Others (Civil Appeal No. 1789 of 2020),
a bench of Justice Ashok Bhushan and K.M. Joseph held that the employee is entitled to Pension even if, in the earlier establishment,
which was non-pensionable, the CPF scheme was applicable.

Background:

Goverdhan Lal Soni, the respondent No.1 was appointed as Junior Assistant on 02.04.1974 in Rajasthan State Agro Industries Corporation Limited.

The State Government closed the Rajasthan State Agro Industries Corporation Limited and declared all its employees as Surplus.

The State Government decided to absorb the services of all surplus employees in different Corporations.

The Respondent No.1 in pursuance of Circular dated 02.07.1991 was absorbed by Rajasthan State Road
Transport Corporation vide order dated 03.10.1996. The Respondent gave his option on 22.03.1997 for
Pension under Rajasthan State Road Transport Pension Regulations, 1989.

In Rajasthan State Agro Industries Corporation Limited, the respondent No.1 was governed by Contributory
Provident Fund Scheme, and the Pension Scheme was not applicable in Rajasthan State Agro Industries Corporation Limited. 

The Respondent, who had joined the Corporation on 10.10.1996, wrote a letter dated 06.07.2010 to the Finance Advisor and Chief Accounts Officer of the Corporation praying for approval of Pension.

The Respondent sent several reminders to the authorities,
but no order was passed, and ultimately the Respondent No.1 filed Writ Petition before the Rajasthan
High Court, seeking direction to consider the case of the petitioner for extending the benefits of the GPF
and Pension Scheme of 1989 in the light of the condition No.11(b) of the Circular dated 02.07.1991 by taking note of his option form for the same.

A Single Judge of Rajasthan High Court allowed the writ petition directing that writ petitioner be treated
to be entitled to get the Pension, however, the same would be subject to petitioner returning the amount
under the CPF Scheme. Feeling aggrieved by the judgment of learned Single Judge an Appeal was filed by
the Rajasthan State Road Transport Corporation, which was also dismissed.

This lead to the filing of Appeal Civil Appeal 1789/2020 in the Supreme Court.

Contention of Corporation/Appellant:

  1. Respondent was absorbed from Rajasthan State Agro Industries Corporation Limited where Pension Scheme was not applicable, and the Respondent was governed only by Contributory Provident Fund (CPF) Scheme.
     
  2. Since the earlier employer of the Respondent No. refused to transfer the capital value amount, the conditions under para 11(b) of Circular dated 02.07.1991 was not fulfilled, as such the Corporation cannot undertake the liability of payment of Pension.
  3. The Respondent who has already availed the benefit under the CPF Scheme cannot be directed to given the benefit of Pension which shall amount to extending the double benefits.

Contention of Employees/Respondent:

  1. Entire contribution of the Respondent which was credited were transferred by the Regional Provident Fund Commissioner
    with regard to which Regional Provident Fund Commissioner has also issued a certificate of account transfer; therefore there was nothing due.
  2. The Respondent has exercised the option of Pension benefit within the period prescribed, and the case of the Respondent was fully covered by the judgment of the Rajasthan High Court dated 05.07.2017 in Mahaveer Prasad Jain’s Case.
  3. Pension under CPF Scheme has been accepted since the Respondent had no option.
  4. Both the Rajasthan State Agro Industries Corporation Limited as well as Rajasthan State Road Transport Corporation are
    two arms of the Government, and it was the State responsibility to ensure that the respondent No.1 could have received the Pension in pursuance of his option exercised on 22.03.1997.

Findings of Court:

  1. Regulation 43 of the Regulations, 1989 is the provision of transfer of Pension Fund by Corporation.
    The Regulation makes it clear that except those employees who have opted for continuing to CPF,
    employer’s share shall be transferred to the Rajasthan State Road Transport Corporation Pension
    Fund and the employees share with interest shall be transferred to Rajasthan State Road Transport
    Corporation GPF Fund.
  2. Clause 11(b) makes it clear that when the Respondent was absorbed in Rajasthan State Road Transport
    Corporation, the balance in CPF Account of the surplus employees would be transferred in GPF Account
    and the Pension Fund respectively.
  3. Both employee’s contribution and employer’s contribution, which were deposited with Provident Fund
    Commissioner Office was transferred to Corporation. Thus, what was contemplated by Clause 2(vi) of
    notification dated 12.02.1997 was complied with.
  4. As such, there was no justifiable ground for the appellant for not sanctioning the claim of Pension of
    the Respondent after his retirement.

As such the Court recognized the right of the employee to receive Pension, even if the earlier establishment
was non-pensionable and governed by the CPF scheme only.

Download Law Trend App

Law Trendhttps://lawtrend.in/
Legal News Website Providing Latest Judgments of Supreme Court and High Court

Related Articles

Latest Articles