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Anie Philip, Principal, Food Craft Institute, Kalamassery & Others v/s State of Kerala, Represented by Secretary To Government, Tourism Department, Government Secretariat, Thiruvananthapuram & Others


Company & Directors' Information:- INDIA FOOD COMPANY PRIVATE LIMITED [Active] CIN = U15133MH2006PTC161188

Company & Directors' Information:- O. S. FOOD PRIVATE LIMITED [Active] CIN = U15119DL2006PTC152903

Company & Directors' Information:- G I S FOOD PRIVATE LIMITED [Active] CIN = U15412DL2002PTC117761

Company & Directors' Information:- T F FOOD PRIVATE LIMITED [Active] CIN = U15122MH2012PTC232222

Company & Directors' Information:- J R N INSTITUTE PRIVATE LIMITED [Active] CIN = U80302DL2004PTC127742

Company & Directors' Information:- P L FOOD PRIVATE LIMITED [Active] CIN = U74899DL1985PTC021305

Company & Directors' Information:- Z CRAFT INDIA PRIVATE LIMITED [Active] CIN = U74900CH2012PTC033654

Company & Directors' Information:- PHILIP & CO LTD [Strike Off] CIN = U36900WB1930PLC019108

Company & Directors' Information:- Z H TOURISM PRIVATE LIMITED [Strike Off] CIN = U63030MH2004PTC145328

Company & Directors' Information:- R K D FOOD PRIVATE LIMITED [Strike Off] CIN = U74999MH2014PTC253447

Company & Directors' Information:- S G L FOOD PRIVATE LIMITED [Strike Off] CIN = U74120UP2013PTC057688

Company & Directors' Information:- R L TOURISM PRIVATE LIMITED [Strike Off] CIN = U63020KA2013PTC070668

Company & Directors' Information:- M R TOURISM INDIA PRIVATE LIMITED [Active] CIN = U63000GJ2014PTC081635

    WP(C). No. 4526 of 2014 (M)

    Decided On, 21 July 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE A.M. BADAR

    For the Petitioners: K. Saneesh Kumar, V.B. Santhini, Advocates. For the Respondents: Ron Bastin, Govt. Pleader, R3, Thomas Mathew Nellimoottil, SC (Food Craft Institute), Tom K. Thomas, R5, P. Ramakrishnan, Preethi Ramakrishnan (P-212), T.C. Krishna, C. Anil Kumar, Asha K. Shenoy, Pratap Abraham Varghese, Advocates.



Judgment Text


1. By this petition, petitioners, who are employees of 3 rd respondent-Food Craft Institute, are praying for the following reliefs:

i) Issue a writ of certiorari or such other appropriate writ, order or direction calling for the records leading to Exts.P8 and P9 and quash the same.

ii) Declare that action of the 1st respondent as per Exts.P6 and P8 contrary to the decision of the 3rd respondent in Ext.P7 is illegal and unsustainable.

iii) Declare that in the light of Exts.P3 and P7, 3 rd respondent can continue payment of employer's contribution @ 12% of salary and allowances of employees under EPF Scheme in terms of Ext.P10.

iv) Issue a writ of mandamus or other appropriate writ, order or direction directing the 1st respondent not to interfere in the matter of the 3rd respondent continuing remittance of Employees Provident Fund Contribution under the EPF Scheme @ 12% of salary and allowances of employees in terms of Ext.P10 in view of Exts.P1, P3 and P7.

2. Heard the learned counsel appearing for all parties.

3. Learned counsel for the petitioners argued that on 12.01.1990, the Board of Governors of the 3rd respondent resolved for payment of employers' contribution at the rate of 10% of the pay and allowance of the employees without any ceiling limit. In 1997, the percentage was enhanced to 12% and the 3rd respondent since then is remitting contribution at the rate of 12% with an equal amount of contribution for the employees. This is based on the joint request accepted by the Employees Provident Fund Organisation. It is further contended that as per the Government Order dated 21.08.2013, pay revision benefits came to be extended to the employees of the 3rd respondent. However, in paragraph 2 clause (viii) of the said Government Order (produced as Ext.P6 in the instant petition), the Government had imposed a condition that the maximum contribution of the employer in the Employees Provident Fund shall be calculated at the rate of 12% of Rs.6500/- which is the ceiling limit unless otherwise specifically ordered by the Government. This condition imposing a ceiling of Rs.6500/-, according to the petitioners, is ignoring the fact that from the year 1990 onwards, contribution at the rate of 10% or 12% was being remitted without any ceiling limit. It is further contended that the Board of Governors of the 3rd respondent once again recommended to the Government to permit continuation of remittance of Employees Provident Fund contribution at the rate of 12% without any ceiling vide resolution dated 25.09.2013 (Ext.P7). However, the request came to be turned down by the impugned communication dated 03.02.2014 (Ext.P8). The 3rd respondent therefore proposed to implement this Government Order as per communication dated 06.02.2014 (Ext.P9).

4. Learned counsel for the petitioners submitted that from 1997, remittance of contribution to the Provident Fund was at the rate of 12% of the salary without any ceiling. The same is abruptly reduced even ignoring the stand of the 3rd respondent-employer without hearing any employees and therefore, the impugned action of the State Government is totally illegal. Similar benefit is still being extended to the employees of the Kerala Tourism Development Corporation. With this, it is submitted that apparently the impugned action is based on amendment to the Employees Pension Scheme with effect from 01.09.2014. However, those amendments are already quashed and set aside by this Court in the decisions in Sasikumar P and others vs. Union of India and others (2018 KHC 906) as well as in W.P.(C) No.29524 of 2016 and connected cases dated 12.10.2018.

5. As against this, learned Government Pleader submitted that the 1st respondent-Government has every right to raise objection in the matter of remittance of Provident Fund as 3 rd respondent is owned and controlled by the State Government. Learned Government Pleader further argued that the impugned communication has been issued by the Government as a policy matter and it is a sole prerogative of the Government to frame policy.

6. I have considered the submissions advanced and have also perused the materials placed on record. Obviously, the impugned action of the State Government is based on the amendment in the Employees Pension Scheme with effect from 01.09.2014. The petitioners are undisputedly governed by the Employees Provident Fund and Miscellaneous Provisions Act, 1952 as well as the Pension Scheme framed thereunder. As per the amendment of the year 2014, the pensionable salary has been altered to mean the average monthly pay drawn in any manner, including on piece-rate basis, during the contributory period of service comprising of a span of 60 months preceding the date of exit from the membership of the pension fund. The pensionable salary shall be determined on pro-rata basis for the pensionable service upto the first day of September 2014 subject to a maximum of Rs.6500/- per month and for the period thereafter at the maximum of Rs.15,000/- per month. The maximum pensionable salary shall be limited to Rs.15,000/- per month. It is apparent that the impugned action limiting contribution to 12% of Rs.6500/- ignoring the actual salary received by the employee is an outcome of the amendments effected in the Employees Pension (Amendment) Scheme, 2014. The provisions of this amended Scheme drastically reduced the pension payable to the employees and in many petitions the validity of amendments had been challenged.

7. Learned counsel for the petitioners rightly relied on the judgment in Sasikumar's case (supra) wherein the Hon'ble Division Bench of this Court was pleased to quash and set aside the Employees Pension (Amendment) Scheme, 2014 brought into force by notification No.GSR.609(E) dated 22.08.2014. Similarly, all consequential orders and proceedings issued by the Provident Fund authorities on the basis of the impugned amendment also came to be quashed and set aside in the same matter. The employees were permitted to exercise the option stipulated by paragraph 26 of the Employees Provident Fund Scheme without being restricted in doing so by the insistence on a date. Similar reliefs were granted in W.P.(C) No.29524 of 2016 and connected cases decided on 12.10.2018. In paragraph 33 of the decision in Sasikumar's case (supra), following are the observations of the Hon'ble Division Bench of this Court:

“33. As per the amendments, the maximum pensionable salary has been fixed at Rs.15,000/- thereby disentitling the persons who have contributed on the basis of their actual salaries to any benefits on the basis of the excess contributions made by them. The said provision is arbitrary and cannot be sustained. The employees, who have been making contributions on the basis of their actual salaries after submitting a joint option with their employers as required by the Pension Scheme, are denied the benefits of their contributions by the said amendments without any justification. Apart from the above, to cap the salary at Rs. 15,000/- for quantifying pension is absolutely unrealistic. A monthly salary of Rs.15,000/- works out only to about Rs.500/- per day. It is common knowledge that, even a manual labourer is paid more than the said amounts as daily wages. Therefore, to limit the maximum salary at Rs.15,000/- for pension would deprive most of the employees of a decent pension in their old age. Since the pension scheme is intended to provide succour to the retired employees, the said object would be defeated by capping the salary. The duty of the trustees of the Fund is to administer the same for the benefit of the employees- by wise investments and efficient management. They have no right to deny the pension legitimately due to them on the ground that the fund would get depleted. The demand of additional payment of 1.16% of their salaries exceeding Rs.15,000/- is unsustainable for the reason that, Section 6A does not require the employees to make any additional contribution to constitute the Pension Fund. Nor does it empower the authorities to demand additional contribution. In the absence of any statutory backing, the said provision in the Pension Scheme is ultra vires. The amendment in so far as it stipulates the average monthly pay drawn over a span of 60 months preceding the date of exit as the pensionable service is also arbitrary for the reason that it deprives the employees of a substantial portion of the pension to which they would have been eligible had it not been for the amendment. The provision as it originally stood stipulated computation of pensionable salary on the basis of the monthly pay drawn over a period of 12 months prior to their exit. The reason for the amendments as disclosed by the counter affidavit filed is that payment of pension on the basis of the Scheme as it stood prior to the amendment would result in depletion of the Fund. Absolutely no material or data to support the above contention has been placed before us. On the contrary, placing reliance on a news report carried by “The Hindu” newspaper on 17.8.2014, it is contended by the petitioners that, a staggering amount of Rs.32,000 Crores of unclaimed amount is lying in various inoperative accounts across the country, as unclaimed pension as disclosed by the Central Provident Fund Commissioner at an interactive session with employees at Hyderabad.

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In the absence of any material to support the contention that the fund is likely to be depleted, we reject the said contention. Apart from the above, there is no provision in the Act that stipulates the pension payments to commensurate with the amounts actually remitted by an employee and his employer. It is also a fact that the administrators of the Fund invest the amounts and generate profit from such investments”. 8. In the light of the above stated judgments of this Court, the impugned action of the State Government imposing a condition that the maximum contribution in the Employees Provident Fund shall be at the rate of 12% of Rs.6,500/- cannot be sustained. In the result, this writ petition deserves to be allowed and the same is allowed. The communications at Exts.P8 and P9 are quashed and set aside by directing that the 3rd respondent shall continue payment of employer's contribution at the rate of 12% of the salary and allowances of employees under the Employees Provident Fund Scheme in terms of Ext.P10.
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