TMI Blog2011 (5) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was dismissed by the Labour Court vide its order dated 11.02.1994. Aggrieved by the aforesaid order of the Labour Court, Respondent filed a writ petition before the High Court of Punjab and Haryana, which was allowed vide order dated 10.04.1996, setting aside the order of termination. The High Court further directed the reinstatement of the Respondent with effect from 18.06.1996. In the meantime, on 15.06.1992, the Corporation had introduced the Pension Scheme for its employees and also framed Regulations known as Pepsu Road Transport Corporation Employees Pension/Gratuity and General Provident Fund Regulations 1992 ('Regulations' for short) in order to regulate the said scheme. The Pension Scheme in terms of Regulation 4 of the Regulations envisages the condition of exercise of the option within a period of six months from the date of issue of the Regulations by an employee in order to avail the pensionary benefits under the scheme. This time was further extended till 15.12.1992. The Regulation 4 of the said Regulations entitles the employee re-joining after leave or suspension to exercise his option for Pension Scheme within the period of 6 months from the date of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10285 of 1998) vide its order dated 09.08.2007 has allowed the appeal following its earlier decision in RSA No. 2173 of 1994, dated 25.05.2004 titled as 'PEPSU Road Transport Corporation v. Sant Ram Fitter', wherein, the High Court has observed that the rejection of the claim of Respondent by the Corporation was illegal and arbitrary as the amount of advance can be adjusted against Death-cum- Retirement Gratuity payable to employee on his retirement as per Regulation 24 (3) of the Regulations and it can even be deducted from the C.P.F. of the Respondent. In the light of this, the High Court has further directed the Corporation to release pensionary benefits to the Respondent with interest @6% per annum from the date of accrual of pension till the date of payment thereof within two months from the date of the order. 4 . In SLP (Civil) No. 330 of 2008- PEPSU Road Transport Corporation and Anr. v. Baldev Singh and Ors. ((hereinafter referred to as Baldev's appeal): The Respondent joined the services of the Corporation as a driver on 13.10.1966 and had subscribed to C.P.F. and gratuity. In the year 1986, Respondent took loan from his C.P.F. account to the tune of ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also extended this period by three months. It is not in dispute that the Respondent had not exercised any option for availing the benefits under the pension scheme. On 30.11.2000, the Respondent took pre-mature voluntary retirement. On 08.06.2001, the Respondent received all the retrial benefits under the C.P.F Scheme and gratuity without any objection or protest. However, 01.06.2002, after nearly 10years from his retirement, the Respondent filed a suit for declaration for the entitlement to pension and other benefits in the Court of Civil Judge Senior Division, Bathinda. The learned Civil Judge had passed the judgment and decree dated 01.03.2006 in favor of the Respondent on the ground that the Respondent was never informed about the option available under the Regulations and he came to know about this Scheme only at the time of his retirement. The learned Civil Judge further directed the Corporation to release pensionary benefit to the Respondent along with interest @9% per annum till the date of realization. Being aggrieved by the judgment and decree dated 01.03.2006, the Corporation filed a Regular Second Appeal in the Court of District Judge, Bathinda, the same was allowed vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of the service of notice by the Corporation to its individual employees. 9. Learned Counsel for Respondents submits relying on Dakshin Hayana Bijli Vitran Nigam v. Bachan Singh (2009) 14 SCC 793, that in Mangal's and Jagroop's appeals, the Respondents were not given the opportunity in order to exercise the option for the Pension Scheme as no individual notice was served to them. Therefore, they were unable to exercise the option for availing the benefits under the Pension Scheme in terms of the Regulation 4 of the Regulations. 10. The learned Counsel for Respondent in Mangal's appeal further submits that the Respondent's services were terminated when the Pension Scheme was introduced. Therefore, the re-joining of duty by the Respondent after the termination of his services is not covered by Regulation 4 of the Regulations. In other words, the learned Counsel submits that Regulation 4 contemplates the exercise of option only by an employee, under suspension and leave, within further period of 6 months from the date of joining of duty after suspension. 11. Learned Counsel submits that, in Baldev's and Bachittar's appeals, the Respondents op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the employees of the PEPSU Road Transport Corporation with effect from 15.06.1992. 15. To appreciate the point in issue, it would be necessary to refer to the relevant Regulations: Regulation 3. Application: (1) These Regulations shall apply to the employees of the PEPSU Road Transport Corporation who: (i) Were/are appointed on or after the date of issue of Regulations on whole-time and regular basis; and (ii) Were working immediately before the date of issue of Regulations and opt for these Regulations. (2) These Regulations shall not apply to the employees, who: a) Opt out of these Regulations. b) Are on deputation with the Corporation. c) Are paid out of contingencies. d) Are work charged employees. e) Are employed on contract basis, except when the contract provided otherwise. f) Are re-employed after superannuation. g) Are specifically excluded wholly or partly from the operation of these Regulations; and h) Opt for the PRTC Employees Pension/Gratuity and Regulations General Provident Fund, 1992, but failed to refund the amount of advance taken out of the Employer's share of the Contributory Provident Fund along with interest the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed by the Punjab Government from time to time. (2) The date of switchover for the existing employees to General Provident Fund shall be date of issue of these Regulations. The Corporation shall maintain the General Provident Fund Account at head office level. (3) An employee may be sanctioned an advance out of his own share (General Provident Fund) for transfer to Pension and Gratuity to meet with his liability of advance taken by him out of the employer's share of the Contributory Provident Fund. Regulation 24. Adjustment and Recovery of dues: (1) The competent authority shall take steps to assess the dues outstanding against the employee two years before the date on which he is due to retire on superannuation. (2)The assessment of the outstanding dues against the employees shall be completed by the competent authority eight months prior to the date of his retirement. (3) The dues as assessed including those dues which come to the notice subsequently and which remain outstanding till the date of retirement of the employee, shall be adjusted against the amount of death-cum-retirement gratuity becoming payable to the employee on his retirement. (4) When an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the public who come within the sphere of its operations. The doctrine of ultra vires as applied to statutes, rules and orders should equally apply to the Regulations and any other subordinate legislation. The Regulations made under power conferred by the statute are subordinate legislation and have the force and effect, if validly made, as the Act passed by the competent legislature. .... 33. There is no substantial difference between a rule and a Regulation inasmuch as both are subordinate legislation under powers conferred by the statute. A Regulation framed under a statute applies uniform treatment to every one or to all members of some group or class. The Oil and Natural Gas Commission, the Life Insurance Corporation and Industrial Finance Corporation are all required by the statute to frame Regulations inter alia for the purpose of the duties and conduct and conditions of service of officers and other employees. These Regulations impose obligation on the statutory authorities. The statutory authorities cannot deviate from the conditions of service. Any deviation will be enforced by legal sanction of declaration by courts to invalidate actions in violation of rules and R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal sanction of declaration by courts to invalidate actions in violations of rules and Regulations. The existence of rules and Regulations under statute is to ensure regular conduct with a distinctive attitude to that conduct as a standard. The statutory Regulations in the cases under consideration give the employee a statutory status and impose restriction on the employer and the employee with no option to vary the conditions. 10. There is, therefore, no escape from the conclusion that Regulations have force of law. The order of the High Court must, therefore, be reversed on this point unhesitatingly. 19. Even in the case of non-statutory Regulations, specifically providing for the grant of pensionary benefits to the employee qua his employer shall be governed by the terms and conditions encapsulated in such non-statutory Regulations. In Union of India v. Brig. P.K. Dutta (Retd.) 1995 Supp (2) SCC 29, this Court: 7. It is true that the Pension Regulations are non-statutory in character. But as held by this Court in Major (Retd.) Hari Chand Pahwa v. Union of India 1995 Supp (1) SCC 221 , the pensionary benefits are provided for and are payable only under those Regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent benefit partaking of the character of regular payment to a person in consideration of the past services rendered by him. We hasten to add that although pension is not a bounty but is claimable as a matter of right, yet the right is not absolute or unconditional. The person claiming pension must establish his entitlement to such pension in law. The entitlement might be dependent upon various considerations or conditions. In a given case, the retired employee is entitled to pension or not depend on the provisions and interpretation of Rules and Regulations. The Contributory Provident Fund appears to be simple mechanism where an employee is paid the total amount which he has contributed along with the equal contribution made by the employer ordinarily at the time of retirement of an employee. In short, we quote what was repeatedly said by this Court that pension is payable periodically as long as the pensioner is alive whereas C.P.F. is paid only once on retirement . Therefore, conceptually, pension and C.P.F. are separate and distinct. 22. Now we will try to explain the essential distinction between these two retirement benefits that an employee may derive at the time of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any contribution to the fund. Taking into account the various difficulties, financial and administrative, the most appropriate course appears to be the institution compulsorily of contributory provident fund in which both the worker and the employer would contribute. Apart from other advantages, there is the obvious one of cultivating among the workers a spirit of saving something regularly. 13. This indicates that the scheme of Contributory Provident Fund, by way of retiral benefit, envisaged by the Provident Fund Act, is in the nature of a substitute for old age pension because it was felt that in the prevailing conditions in India, the institution of a pension scheme could not be visualized in the near future. It was not the intention of Parliament that Provident Fund benefit envisaged by the said Act would be in addition to pensionary benefits. 24. In Krishena Kumar v. Union of India (1990) 4 SCC 207, this Court has held: 32. The Railway Contributory Provident Fund is by definition a fund. Besides, the government's obligation towards an employee under CPF Scheme to give the matching contribution begins as soon as his account is opened and ends with his retireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as compensation to former members of the Armed Forces or their dependents for old age, disability, or death (usually from service causes), (ii) as old age retirement or disability benefits for civilian employees, and (iii) as social security payments for the aged, disabled, or deceased citizens made in accordance with the rules governing social service programmes of the country. Pensions under the first head are of great antiquity. Under the second head they have been in force in one form or another in some countries for over a century but those coming under the third head are relatively of recent origin, though they are of the greatest magnitude. There are other views about pensions such as charity, paternalism, deferred pay, rewards for service rendered, or as a means of promoting general welfare (see Encyclopaedia Britannica, Vol. 17, p. 575). But these views have become otiose. 2 8 . Pensions to civil employees of the Government and the defence personnel as administered in India appear to be a compensation for service rendered in the past. However, as held in Douge v. Board of Education 302 US 74, a pension is closely akin to wages in that it consists of payment provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar other cases of undeserved want. Relevant rules merely make effective the constitutional mandate. 30. In Krishena Kumar v. Union of India (supra) this Court has held: 32... On the other hand under the Pension Scheme the government's obligation does not begin until the employee retires when only it begins and it continues till the death of the employee. Thus, on the retirement of an employee government's legal obligation under the Provident Fund account ends while under the Pension Scheme it begins. 31. In Prabhu Narain v. State of U.P. (2004) 13 SCC 662, this Court has observed: 5. No doubt pension is not a bounty, it is a valuable right given to an employee, but, in the first place it must be shown that the employee is entitled to pension under a particular rule or the scheme, as the case may be. 3 2 . In U.P. Raghavendra Acharya v. State of Karnataka (2006) 9 SCC 630, this Court has held: 25. Pension, as is well known, is not a bounty. It is treated to be a deferred salary. It is akin to right of property. It is correlated and has a nexus with the salary payable to the employees as on the date of retirement. 33. The term pension has been defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or bounty nor is it a conditional payment solely dependent on the sweet will of the employer. It is earned for rendering a long and satisfactory service. It is in the nature of deferred payment for past services. It is a social security plan consistent with the socio-economic requirements of the Constitution when the employer is a State within the meaning of Article 12 of the Constitution rendering social justice to a superannuated government servant. It is a right attached to the office and cannot be arbitrarily denied. (see A.P. Srivastava v. Union of India (1995) 6 SCC 227, Vasant Gangaramsa Chandan v. State of Maharashtra (1996) 10 SCC 148, Subrata Sen v. Union of India (2001) 8 SCC 71, Union of India v. P.D. Yadav (2002) 1 SCC 405, Grid Corpn. of Orissa v. Rasananda Das (2003) 10 SCC 297, All India Reserve Bank Retired Officers Assn. v. Union of India (Supra)). 3 7 . Having noticed the conceptual difference between the concept of C.P.F. and pension, we will now notice the submissions made by the learned Counsel for the parties to the lis. 38. The common thread which runs through all these appeals canvassed before us is that the Respondents have failed to comply with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of option for pension Scheme and also for asking Respondent to refund the employers contribution of C.P.F. at each stage. Furthermore, when notice or knowledge of the Pension Scheme can be reasonably inferred or gathered from the conduct of the Respondents in their ordinary course of business and from surrounding circumstances, then, it will constitute a sufficient notice in the eyes of law. In Union of India v. M.K. Sarkar (2010) 2 SCC 59, this Court has: 21. The Tribunal in this case has assumed that being aware of the scheme was not sufficient notice to a retiree to exercise the option and individual written communication was mandatory. The Tribunal was of the view that as the Railways remained unrepresented and failed to prove by positive evidence, that the Respondent was informed of the availability of the option, it should be assumed that there was non-compliance with the requirements relating to notice. The High Court has impliedly accepted and affirmed this view. The assumption is not sound. 22. The Tribunal was examining the issue with reference to a case where there was a delay of 22 years. A person, who is aware of the availability of option, cannot contend that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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