Asim Kumar Pal & Ors vs Indian Institute Of Management, Calcutta & Ors

I. P. Mukerji, J

First of all, we direct the department to immediately carry out the order dated 6th January, 2017 passed in the connected application (CAN 160 of

2017) for substitution of the heirs of the second appellant. The heirs/legal representatives of the first appellant, who has died on 5th June, 2017 did not

make any application for substitution. So his name be struck off from the proceedings, by recording his death.

The appellants which shall only refer to the original appellants were all faculty members of the Indian Institute of Management, Calcutta, the

respondent No. 1 (“the Instituteâ€​). All of them were appointed prior to 1st January, 1986. Each of them enjoyed the post of Assistant Professor.

The first appellant, Asim Kumar Pal, since deceased on 5th June, 2017 joined the Institute on 31st October, 1980, the second appellant, Ashis Kumar

Chatterjee, since deceased on 4th February, 1985, the third, Leena Chatterjee on 26th December, 1984, the fourth, Sudip Chaudhuri on 15th

September, 1976, the fifth, Ambujaksha Mahanti on 27th February, 1981. Asim Kumar Pal died on 5th June, 2017. Sudip Chaudhury and Ambujaksha

Mahanti retired after 31st July, 2018 and 31st March, 2017 respectively. Leena Chatterjee is still in service and is to retire after 30th June, 2021.

The appellants filed this writ application in 2015 to avail of pension in Circular Nos. F. 5-1/90 TD.2 dated 29th May, 1990 and PER/FACULTY/90

dated 13th November, 1990 of the Ministry of Human Resource Development (Department of Education), Government of India and Indian Institute of

Management, Calcutta respectively. The appellants also wanted implementation of resolutions of the Board of Governors of the Institute in its 120th

and 167th meeting held on 24th September, 1993 and 4th September, 2004 regarding pension benefit with effect from 14th March, 1992 to the

appellants. The appellants wanted to switch over from the contributory provident fund scheme to the general provident fund scheme.

The facts are like these.

In its meeting held on 8th July, 1985 the Board of Governors accepted the application of the Central GPF-cum-Pension-cum-Gratuity Rules to the

regular employees of the Institute appointed from 1st July, 1985 with effect from that date, automatically. However, the other employees already

covered by the contributory provident fund cum gratuity scheme would have the option to remain under it, by exercising their option.

All the appellants had joined service before 1st July, 1985. Each of them exercised the option to remain outside the GPF scheme.

On 24th July, 1987 the Director of the Institute published a notification on the basis of the recommendation of the 4th Pay Commission revising the

provisions inter alia regarding pension, death gratuity, family pension and so on. The notification clarified that all the CPF beneficiaries who were in

service from 1st January, 1986 should be deemed to have migrated to the pension scheme on that date unless they specifically opted out of it and

desired to remain under the CPF scheme.

On 29th May, 1990 the department of Education, Ministry of Human Resource Development wrote to the Director of the Institute that the government

had approved a revised pay scale for teachers of the Institute to be implemented from 1st January, 1986. The Institute was requested to adopt and

implement the revised scale of pay contained in the annexure to the letter. It appears that the Board held a meeting on 21st August, 1990 where it

decided to implement the revised pay scale with effect from 1st January, 1986.

According to the writ petition, the appellants exercised the option of accepting the revised scale of pay, which included a single package, inclusive of

pension. Therefore, the appellants were deemed to be covered by the pension scheme.

By a circular dated 13th November, 1990 the Indian Institute of Management, Calcutta recorded that by the notification dated 29th May, 1990, the

revised scale of pay was applicable to the faculty members of the Institute who were in service prior to 1st January, 1986 only on exercising option to

that effect in proper form. The option should be exercised on or before 30th November, 1990, latest before 30th January, 1991. It went on to clarify

that the notification would be made applicable to a faculty member only on receipt of his option form. Each of the appellants except the appellant No.

4, 5 opted out of this scheme.

Mr. Bikas Ranjan Bhattacharya, learned senior counsel, submitted that any option exercised earlier relating to the contributory provident fund based

scheme was superseded by acceptance of the revised scale of pay.

Learned counsel submitted that even assuming that the appellants had not submitted any option form to accept the revised scale of pay or had

expressly opted out of the scheme, having been paid according to the revised scale of pay, the appellants became entitled to the new scheme. Mr.

Bhattacharya referred to a note dated 11th November, 2009 of the Institute stating that Professor Manabendranath Pal, Professor B.N. Srivastava

and Professor Leena Chatterjee had expressed their decision to deposit “their arrears in CPFâ€. It recorded that the decision for transferring these

faculty members from the CPF scheme to GPF cum pension scheme was pending with the management. Deposit of arrears in the CPF account was

subject to concurrence of the Ministry of Human Resource Development, Government of India. The decision in this behalf by the Institute was

pending subject to concurrence by the government.

Let us see what the respondent Institute has stated in its affidavit-in-opposition. In paragraph 4 they say that the Contributory Provident Fund (CPF)

and the General Provident Fund (GPF) schemes are both beneficial schemes. Regular employees appointed on and after 1st July, 1985 referred to as

the (a) category automatically came under the GPF scheme. Regular employees appointed prior to that date covered by the CPF scheme, classified as

(b) category would have the option to elect either. Those employees who did not exercise any option were issued the letter dated 24th January, 1990

requesting the exercise of the said option. On receipt of their option the change in coverage was made by the Institute.

In implementing the recommendation of the 4th Central Pay Commission dated 29th May, 1990 there was revision of pay of teachers in the IIM’s

with pension and other benefits as single package with effect from 1st January, 1986. With regard to category B employees it was stated that if they

did not exercise the options they would continue in the existing scale of pay along with connected benefits. This revised pay scale with pension and

other benefits were notified by the Institute on 13th November, 1990 inviting options for either to be governed by the revised scale or to continue in the

existing scale. According to the Institute the difference between CPF and GPF was that although both were the equally beneficial schemes, the CPF

benefits are paid immediately on retirement of the employee whereas GPF payments are structured during the life of the employee and after his death

to the dependants. The appellants availed of the CPF scheme electing to and opting to forego the pension scheme. Accepted the revised scale of pay

under the CPF scheme. According to the Institute, there has been inordinate delay on the part of the appellants to approach this court. The delay has

been of 17 years. For this reason the writ application should be dismissed.

During the course of hearing of this appeal Mr. Pranab Kumar Dutta, learned Senior Advocate appearing for the respondent Institute handed over a

table to this court relating to each of the appellants. The table has nine columns containing the following headings: Appointment Letter, Option 1985,

Option 1990, Promotion, Form of Nomination, Service Book, Pay Statement and Application Form for Non-refundable withdrawal. According to this

table Ashim Kumar Pal opted out for the GPF scheme on 30th January, 1990. He was promoted to the post of professor on 27th July, 1995. The

nomination form was under the CPF cum Gratuity Rules. In the service book the account maintained was under CPF. In his pay statement in May,

2016 there was reference to that CPF account.

Mr. Ashis Kumar Chatterjee was appointed to the post of Assistant Professor on 13th December, 1984. On 20th September, 1985 he opted out of the

GPF scheme. On 30th January, 1990 he opted out of the scheme and on 7th January, 2010 he exercised the option for deposit of arrear payment into

the contributory provident fund account. The form of nomination was filled up according to the Contributory Provident Fund cum Gratuity Rules, 1960

for the period of 20th September, 1985 to 10th June, 2014. In the service book the account was under contributory provident fund. The pay statement

also reflected the contributory provident fund account.

Ms. Leena Chatterjee was appointed to the post of Assistant Professor on 19th October, 1984. On 20th September, 1985 she opted out of GPF. On

30th January, 1990 once again she opted out of GPF. On 29th July, 1999 she was appointed as professor of Behavioural Science under the

contributory provident fund scheme. Her form of nomination was under the Contributory Provident Fund cum Gratuity Rules, 1960. Her service book

and pay statement were according to CPF account.

Mr. Sudip Chaudhuri was appointed to the post of Assistant Professor on 17th August, 1984. On 13th August, 1985 he opted out of GPF. On 4th

December, 1990 he opted for the revised scale of pay with effect from 1st January, 1986. He was promoted to the post of Professor with effect from

1st April, 1990. He withdrew sums from the contributory provident fund account. His nomination was also under the said Contributory Provident Fund

cum Gratuity Rules, 1960. His service book record was also similar under the contributory provident fund. So was his pay statement.

On 13th October, 1997 he submitted an application form for non-refundable withdrawal from the contributory provident fund account for buying a flat.

Mr. Ambujaksha Mahanti was appointed to the post of Assistant Professor (Management Information) on 28th November, 1983. On 23rd August,

1985 he opted out of GPF. From 8th January, 1990 till 7th January, 1992 he was with the University of Maryland, USA, reported back for duty on 28th

September, 1992. In this process he could not fill up the option form of 1990. On 1st April, 1990 he was promoted to the post of Professor. His

account was also under the said Contributory Provident Fund cum Gratuity Rules, 1960. On 25th July, 2001 and 5th November, 2008 he made non-

refundable withdrawals from his contributory provident fund account.

Mr. Bhattacharya argued that once the appellants had availed of the “single package scheme†which included pensionary benefits according to

the government’s circular dated 29th May, 1990 and the circular of the Institute dated 13th November, 1990, there was no question of the

appellants remaining under the contributory provident fund regime. The tenor of his argument was that any exercise of option before November, 1990

had been superseded by introduction of the revised single package scheme which included pension by the Institute and its acceptance by the

appellants.

Once the Institute started payment of salary in terms of the revised scheme, nothing further was required to be done by the appellants.

Mr. Bhattacharya cited District Inspector of Schools (SE), Kolkata vs. Abhijit Baidya reported in 2013 (3) CHN (Cal) 711. It was a full bench

judgment of our court. It related to the revision of pay and allowances with 1990 (ROPA scheme) of the State Government on the basis of a

recommendation of the Pay Commission. Prior to that in 1985, there was initiated a Death cum Retirement Benefit scheme, 1981 (DCRB scheme).

Under it either of the two benefits could be availed of : CPF cum Gratuity or Pension cum Gratuity. On opting for a revised pay an employee would be

superannuated at the age of 60 years instead of 65 years under the earlier scheme with no right of extension of service but with the right to receive

pension at par with government employees together with enhanced gratuity. The special bench held that an employee who opted for revised pay scale

under ROPA would become entitled to pension and gratuity under Paragraph 17. It was not necessary for him to exercise a fresh option which was

only applicable for employees who had not opted for ROPA 1990.

Learned counsel also cited Union of India and Anr. Vs. S.L. Verma and Ors. reported in (2006) 12 SCC 53. He placed the following part of

paragraph 7 of the report:

“7. The Central Government, in our opinion, proceeded on a basic misconception. By reason of the said office memorandum dated 1-5-1987 a legal

fiction was created. Only when an employee consciously opted for to continue with the CPF Scheme, he would not become a member of the Pension

Scheme. It is not disputed that the said respondents did not give their options by 30-9-1987. In that view of the matter Respondents 1 to 13 in view of

the legal fiction created, became the members of the Pension Scheme. Once they became the members of the Pension Scheme, Regulation 16 of the

Bureau of Indian Standards (Terms and Conditions of Service of Employees Regulations, 1988) had become ipso facto applicable in their case also. It

may be that they had made an option to continue with the CPF Scheme at a later stage but if by reason of the legal fiction created, they became

members of the Pension Scheme, the question of their reverting to the CPF would not arise.â€​

Mr. Datta reiterated that there was inordinate delay in preferring the writ application. He cited Karnataka Power Corporation Ltd. Through its

Chairman and Managing Director and Anr. Vs. K. Thangappan and Anr. reported in (2006) 4 SCC 322. He said that the appellants were trying to

cover up the gross delay by relying on the representations made by them. He contended that the said Supreme Court ruling expressly stated that the

court has to be approached in proper time. Making of representations to the authorities, which resulted in delay in filing a writ application was no

ground to explain or condone the delay. The alleged subject matter of dispute becomes stale by delay and the court should not countenance it. He

referred to State of Orissa and Ors. Vs. Shri Arun Kumar Patnaik and Ors. reported in (1976) 3 SCC 579.

Learned counsel argued that the appellants had been guilty of suppression of material facts. These material facts have been brought on record by the

Institute. One who practises suppression before the court is not entitled to its protection as laid down in Dalip Singh Vs. State of Uttar Pradesh and

Ors. reported in (2010) 2 SCC 114.

DISCUSSION AND CONCLUSIONS

On 8th July, 1985 by a resolution, which was notified on 26th July, 1985, the Institute had accepted the central government GPF-cum-Pension-cum-

Gratuity scheme for its introduction to its regular employees from 1st July, 1985. The condition was that those employees who were under the

IIM’s CPF cum Gratuity scheme should expressly exercise an option to be covered by the earlier scheme by a specified date. If this option was

not exercised the employees would automatically be brought under the GPF scheme with effect from 1st January, 1986.

All the appellants except appellant Nos. 4 and 5 filled up forms on 30th January, 1990 electing to opt out of the GPF cum Pension cum Gratuity

scheme. The appellant No. 4 opted for the revised scale of pay with effect from 1st January, 1986. The appellant No. 5 did not fill up the option form.

On 29th May, 1990 the Ministry of Human Resource Development by its letter dated 29th May, 1990 addressed to the Board stated that the

government had approved the revised scheme of pay scale of teachers of IIMs with some modifications to be implemented from 1st January, 1986.

The Institute issued a circular on 13th November, 1990 stating that the option should be exercised before 30th November, 1990. Those who could not

do it could do it by 30th January, 1991. The Board of the Institute decided to implement this scheme from 1st January, 1986. This decision was taken

at the 109th meeting of the board. The terms and conditions of the scheme were as follows:-

1) Members of the faculty who were in service prior to 1st January, 1986 should exercise fresh options in terms of the notification dated 29th May,

1990.

2) Members of the faculty who were in service prior to 1st January, 1986 who did not exercise the option would continue in the existing scale of pay

along with the connected benefits.

On a combined reading of the above administrative orders, notifications, circulars, the appellants had to expressly opt for either of the two schemes. If

they did not, they would be governed by the CPF scheme.

From the supplementary affidavit filed by the Institute it is quite clear that all the appellants except the appellant Nos. 4 & 5 had filed option forms

expressly opting out of the GPF-cum-Pension-cum-Gratuity Rules and the revised scale of pay. These were not appended to the writ petition or to

their affidavit-in-reply.

But there is a twist in the tale. It is more or less an admitted position that the revised scale of pay introduced in 1990 was described as a single

package which included pension. All the appellants availed of this scheme and were paid according to the revised scale. According to the decision of

the central government, if the revised scale of pay was availed of, then the employees would be under the GPF scheme with pension. This did not

happen. The appellants received pay and allowances in terms of the revised scale of pay but continued to be under the CPF scheme. The Institute

maintains and I agree with their submission that it was possible to continue with the contributory provident fund scheme despite availing of the revised

scale of pay. Furthermore, at no point of time any of the appellants protested for being placed under the CPF scheme. In fact, their service book, CPF

account, withdrawals from that account, loans against the deposit in that account showed their acceptance of being placed under the CPF scheme,

despite being paid revised scale of pay.

The full bench decision in District Inspector of Schools (SE), Kolkata Vs. Abhijit Baidya reported in 2013 (3) CHN (Cal) 71 1is absolutely out of

context because paragraph 17 of ROPA 1990 had specifically stated that when the revised scale of pay was availed of by an employee he became

entitled to pension and gratuity automatically. There was no need to exercise an option. In this case, exercise of option was absolutely necessary. In

fact, option was exercised by each of the appellants expressly or impliedly by maintaining CPF accounts in favour of the CPF scheme.

Way back in 2007 the Institute wrote to the Under-secretary of the government of India to clarify the position. Regrettably, the Government of India

has not been able to clarify the situation. Both Ashim Kumar Pal and Ashis Kumar Chatterjee are dead. Sudip Chaudhury and Ambujaksha Mahanti

have retired. Only Leena Chatterjee is in service and to retire on 30th June, 2021.

This state of affairs has continued for years. According to the Institute, there was no real change in the benefit received by the appellants, the only

difference between GPF and CPF being that under the CPF scheme a lump sum amount was payable on retirement while in GPF the payment was

structured according to the terms of the scheme. This submission is accepted.

In any event, whatever right the appellants may have had to avail of the pension scheme had been waived by them. All the appellants at some point of

time or the other have availed of the benefit under the CPF scheme, by maintaining accounts under it, taking loans, withdrawing amounts etc.

At this point of time, this court is not minded to invoke its discretionary powers in its appellate jurisdiction under Article 226 of the Constitution of India

to disturb the present state of affairs. This will cause unnecessary problems in the administration of this premier Institute and other IIMs. In those

circumstances, this court finds no reason to interfere with the impugned order of 27th June, 2016. The said impugned order is affirmed. This appeal

(FMA 711 of 2017) is dismissed. No order as to costs.

Certified photocopy of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.

I agree,