Export Inspection Council vs Deepak Shekhar & Anr.

Devendra Kumar Upadhyaya, CJ

These three intra-Court appeals challenge the judgment and order dated 05.07.2021, passed by the learned Single Judge whereby W.P.(C) 6747/2014, W.P.(C) 8601/2010 & W.P.(C) 3426/2012 have been allowed and  it has  been  held  that  the  employees  of  the  Export  Inspection  Council–appellant, who had instituted the proceedings of the writ petitions would be deemed to have switched over to the pension scheme and as such are entitled to the benefits thereunder on the date of their retirement. The learned Single Judge has also directed that the employees shall refund the employer’s contribution to Contributory Provident Fund (hereinafter referred to as‘CPF’)received  by  them  with  interest  @  8%  per  annum  and  the  appellant shall compute the pension and arrears, if any, after making adjustment which shall be paid to the employees thereafter, but without any interest.

Since, all the three appeals challenge the same judgment and order passed  by the  learned  Single  Judge  and  raise  similar  questions  of  law,  they ‘have been heard together and are being decided by the common judgment which follows:

The issue in these appeals centers around a circular dated 02.07.1987 issued by the Export Inspection Council (hereinafter referred to as the‘Council’)which  has  been  established  under  Section  3  of  Export  (Quality Control and Inspection) Act, 1963 (hereinafter referred to as‘the Act’). The said  circular  dated  02.07.1987  refers  to  a  decision  of  Government  of  India while accepting the recommendations of the Fourth Central Pay Commission on Pension, whereby it was decided that employees of the Central Government who were  still  governed by  the  CPF scheme shall  be given option to continue to remain in the said scheme vide circular dated 01.05.1987. The circular further mentions that the Council, with the approval of the Ministry, has decided to extend the said benefit on the same terms and conditions as is stipulated by the Government of India to the employees  who  are  governed  by  the  CPF  Scheme  of  the  Export  Inspection Council/ Agencies.

The said circular dated 02.07.1987 embodies salient features of the scheme  and  provides  that  all  those  who  are  governed  by  the  CPF  Scheme, who  were  in  service  as  on  01.01.1986  and  who  were  still  in  service  on  the date of issue of the circular i.e. 02.07.1987, would be deemed to have come over to Export Inspection Council, Pension and General Provident Rules, 1981  as  notified  by the  Ministry on  24.10.1981. It  also  mentions  that  such employees would have an option to continue to remain under the CPF Scheme if they so desired. It further provides that the option would have to be exercised and conveyed to the concerned head of the office by 31.10.1987 in the format which formed part of the circular. The said circular also stipulates that if the employees wish to continue under CPF Scheme and if no option is received by the head of the office by 31.10.1987, the employees  would be deemed  to have come over to the pension scheme. Clauses 2(a) and 2(b) of the circular dated 02.07.1987 are quoted hereunder:

“2.With the approval of the Ministry it has been decided to extend, with immediate effect, the said benefit on same terms and conditions as stipulated by the Govt. to the employees who are governed by the CPF Scheme of the Export Inspection Council/ Agencies. The salient features of the scheme are as under:-

(a) All those who are governed by the CPF scheme who were in service as on 1.1.1986 and who are still in service on the date of issue of this circular shall be deemed to have come over to Export Inspection Council Pension and General Provident Fund Rules 1981 as notified by the Ministry vide S.O. No.2922 dated 24.10.1981.

(b) The employees of the category mentioned above will, however, have an option to continue to remain under the CPF Scheme, if they so desire. The option will have to be exercised and conveyed to the concerned head of office latest by 31 Oct. 1987 in the form enclosed to the circular, if the employees wish to continue under the CPF Scheme If no option is received by the head of office by 31.10.1987 the employees will be deemed to have come over to the Pension Scheme.

(c)……………………

x x x”

The question for consideration which had arisen before the learned Single Judge and that needs to be considered in these appeals as well, is that in case the employees of the Council, in terms of the circular dated 02.07.1987 did not exercise and convey their option to continue to be governed  by  the  CPF  Scheme  of  the  Council,  will  they  be  deemed  to  have come over to the Pension Scheme?

Such stipulations are made in Clauses 2(a) and 2(b) of the circular dated 02.07.1987, a perusal of which makes it unambiguously clear that those employees who were governed by the CPF Scheme and were in service as on 01.01.1986 and also were still in service on the date of issue of the circular i.e. 02.07.1987, shall be deemed to have come over to the Export Inspection Council, Pension and General Provident Rules, 1981.

Clause 2(b) of the said circular further stipulates that employees willing to remain to be governed by the CPF Scheme were to give their option for their continued coverage under the CPF Scheme and, in case, the employee concerned did not give his option to be covered under the CPF Scheme by 31.10.1987, such employee will be deemed to have come over to the Pension Scheme. Accordingly, in view of the clear and explicit stipulation in Clauses 2(a) and 2(b) of the circular dated 02.07.1987, the coverage of the Pension and GPF Scheme was automatic which was dependent only on the employee giving an option to continue to be covered under  the  CPF  Scheme. In  other  words,  in  a situation  where  the  employee concerned did not exercise and convey his option by 31.10.19687 to be continued to be covered under the CPF Scheme, he was not required to give any option  for  being  covered  under  the  Export  Inspection  Council,  Pension and General Provident Rules. The deeming clause contained in clauses 2(a) and 2(b) of the circular dated 02.07.1987 is unequivocal and does not leave any ambiguity.

The respondents in these appeals (employees) were in service on 01.01.1986 and were also in service of the Council on the date of issuance of the said circular i.e. 02.07.1987. However, since the appellant–Council was not treating them to be covered under the Pension and General Provident Fund Scheme, they represented their cause to the authorities of the Council.

The representation made by the respondent in LPA 392/2021, namely Rajiv  Raizada  was  rejected  by  the  Council  vide  order  dated  07.11.2013.  If we peruse  the  order  rejecting the  claim  of Rajiv  Raizada,  what we find is that the reason given by the Council for not allowing him to be covered under the GPF and Pension Scheme is that he had given his option on 24.12.1983 and again on 24.03.1986 in favour of being covered by CPF Scheme and thereafter he continued to be covered under the CPF Scheme till the date of decision i.e. 07.11.2013.

In our considered opinion, such a reason given by the Council for not allowing Shri Rajiv Raizada to be covered under the Pension and GPF Scheme is untenable for the reason that on issuance of the circular dated 02.07.1987, he would be deemed to have come over to the Pension and GPF Pension Scheme as, admittedly, by the cut of date i.e. 31.10.1987, he did not exercise and convey his option to continue to be covered under the CPF Scheme. As a matter of fact, the circular dated 02.07.1987 gave option to all the employees who were in service of the Council as on 01.01.1986 and were also continuing on the date of issue of the circular i.e. 02.07.1987. Thus,  since  Shri  Rajiv  Raizada  had  not  exercised  his  option  by  31.10.1987 to  be  governed  under  the  CPF  Scheme,  he  would  be  deemed  to  have  come over to the Pension and GPF Scheme of the Council.

Any option, given prior to the issuance of the circular dated 02.07.1987,  would  lose its significance and  meaning  for the  reason  that the circular  dated  02.07.1987  covered  all  those  employees  who  were  in  service on 01.01.1986 and were still in service on the date of issuance of the circular dated 02.07.1987. The option to remain covered under the CPF Scheme was to  be  exercised  and  conveyed  by  all  such  employees  by  31.10.1987  and  in case such employees, who were in service as on 01.01.1986 and were also in service of the Council on 02.07.1987,  did  not  opt to be  governed by  CPF Scheme, they  will be deemed to have come over to the Pension and GPF Scheme of the Council.

The circular dated  02.07.1987, in fact, does not differentiate between employees  who  had  earlier  given  option  to  be  covered  by  the CPF  Scheme and those who had not given such option, prior to 02.07.1987. The conditions for application of the circular dated 02.07.1987 were (1) the employee  was  covered  by  CPF  Scheme  prior  to  02.07.1987,  (2)  he  was  in service on 01.01.1986 and (3) he was still in service on the date of issuance of the circular i.e. 02.07.1987.

There is no dispute that Shri Rajiv Raizada and other employees who had  instituted  the  underlying  writ  petitions  were  governed  by  CPF  Scheme prior to issuance of the circular dated 02.07.1987  and  were in service as on 01.01.1986  and  were  also  in  service  of  the  Council  on  the  date  of  issue  of the circular dated 02.07.1987. Thus, merely because prior to 02.07.1987, an employee had given an option to be governed under the CPF Scheme, he will  not  be  debarred  from claiming  that  he  shall  be  covered  under  the  GPF and  Pension  Scheme  if  he  had  not  given  his  option  conveying  that  he  shall continue to be governed under the CPF Scheme, by 31.10.1987. In the aforesaid view of the matter, a bare perusal of the provisions of the circular dated  02.07.1987  and  the  facts  of  the  instant  case,  clearly  establish  that  all the employees who had instituted the underlying writ petitions were governed  by  the  circular  dated  02.07.1987  and  none  of  them  had  exercised and conveyed their option to be governed under the CPF Scheme by 31.10.1987  and,  therefore,  any  other  view  taken  in  respect  of  the  claim  of these employees, in our considered opinion, runs  in  complete derogation of the circular dated 02.07.1987.

So far as the respondent in LPA 391/2021 (the petitioner in W.P.(C.) No. 3426/2012)–Deepak Shekhar is concerned, the representation made by him  claiming  that  he  shall  be  covered  under  the  GPF  and  Pension  Scheme was  rejected  by  the  authorities  of  the  Council  vide  order  dated  30.03.2012, however, the said order does not disclose any  reason for denying him  the said benefit; rather it only conveys that decision has been taken to deny the said benefit. The facts in relation to Deepak Shekhar are also not in dispute. He was covered by the circular dated 02.07.1987 and had not given his option to be continued under the CPF Scheme by 31.10.1987 and, therefore, for all these reasons, he shall also be deemed to have come over to the GPF and Pension Scheme of the Council.

Similarly, the respondent in LPA 396/2021 (petitioner in W.P.(C.) No. 8601/2010)–Anand Kishore, is also entitled to the benefit of being included in and covered by  the GPF and Pension Scheme of the Council. His  representation  claiming  such  benefit  was  rejected  by  the  authorities  of the  Council  vide  order  dated  24.06.2010  wherein  it  has  been  stated  that  in terms of the circular dated 02.07.1987, the option to move over to GPF was to  be  exercised  by  those  employees  of  the  Council  who  had  joined  service prior  to  24.10.1981  and  since  Shri  Kishore  never  exercised  such  option,  he will  be  continued  to  remain  under  the  purview  of  the  CPF  Scheme.  Such  a reason, in our opinion, is absolutely misconceived as it is based on complete misreading of  the circular dated 02.07.1987  inasmuch as,  the said circular never  required  the  employees  to  exercise  and  convey  option  for  moving  to GPF and Pension Scheme. All that was required under the said circular dated  02.07.1987  was  that  those  employees  who  still  wanted  to  continue to be governed  under the  CPF  Scheme,  were  to  give  their options  and  convey the same to the authorities. The circular dated 02.07.1987 does not stipulate any requirement of exercising and conveying option for moving over to GPF and Pension Scheme from CPF Scheme. The option required was only to be given  in  case  the  employee  concerned  intended  to  continue  to  be  governed by the CPF Scheme. Thus, the reason given in the rejection letter dated 24.07.2010 in respect of Shri Anand Kishore is absolutely untenable.

We  may  also  note,  at  this  juncture,  that  the  appellant–Council  had issued a circular dated 08.02.1989 with the approval of the Ministry of Commerce, and conveyed therein that officers and employees of the Council,  if  they  so  desire  may  opt  for  the  pension  scheme  and  such  option should reach the Head of the Export Agency by 31.03.1989. It further stipulated  that  no  further  opportunity  will  be  extended  to  the  employees  in future for this purpose and, consequently, they shall be governed by the CPF Scheme.

So far as the aforesaid circular is concerned, the same cannot be read in isolation for the simple reason that the said circular dated 08.02.1989 does not supersede the earlier circular dated 02.07.1987. In terms of the circular dated  02.07.1987,  if  an  employee  concerned  who  was  covered  by  the  said circular and did not exercise and convey his option by 31.10.1987 to be covered under the CPF Scheme, in our opinion, shall be deemed to have switched over to the GPF and Pension Scheme of the Council. The circular dated 08.02.1989, as already noted  above, nowhere states that it was  issued in supersession of the circular dated 02.07.1987. This circular, in our opinion,  would  apply  to  those  who  had  opted  for  CPF  Scheme  pursuant  to the circular dated  02.07.1987  and, thereafter, intended to switch  over to  the GPF and Pension Scheme. No defence, thus, is available to the appellant to deny the employees of the Council of the benefit of the circular dated 02.07.1987 on the basis of the subsequent circular dated 08.02.1989.

The learned Single Judge has discussed the respective cases of the parties and has also considered the provisions of the circular dated 02.07.1987 and has held that the circular dated 02.07.1987 had deeming effect that in the eventuality an express option is not exercised by an employee for his continuance in the CPF Scheme, then he is deemed to have switched over to the Pension Scheme. The learned Single Judge has also returned a finding that nothing was placed on record to show that the employees who had filed the underlying writ petitions had ever opted to continue in CPF Scheme pursuant to the circular dated 02.07.1987. The learned Single Judge has also discussed the subsequent circular dated 08.02.1989 and has rightly come to the conclusion that the said circular was issued to enable those employees who under the circular dated 02.07.1989 had expressly given their option to continue under the CPF Scheme and thereafter intended to be governed by the GPF and Pension scheme.

The learned Single Judge has discussed the judgment of this Court in Dr. R.N. Virmani and Ors. University of Delhi and Anr. and other connected matters, W.P.(C) 1490/2006, decided on 30.04.2014 and also the judgment of the Bombay High Court in the case of Amita Ajit Desai &Ors. v. Union of India & Ors., W.P. No. 1331/2017, decided on 17.01.2019. The learned Single Judge while passing the impugned judgment has also noticed that against the judgment of the Bombay High Court in Amita Ajit Desai (supra), the SLP preferred before the Apex Court was also rejected.

In Dr. R.N. Virmani (supra), it has categorically been held that a perusal of the circular dated 01.05.1987, which was issued in respect of the employees of the Central Government, as also the format appended thereto, which was to be filled in for the purpose of exercising option under the said circular, would show that the only option which had to  be exercised  was  in respect  of  continuation  by  an  employee  under  the  CPF  Scheme  and  further that  the  employee  was  not  required  to  submit  any  form  if  he  wanted  to  be covered under the Provident Fund and Pension Scheme.

We may also note that the circular dated 02.07.1987 was issued on the lines of the Office Memorandum dated 01.05.1987 issued by the Central Government  for  the  benefit  of  its  employees.  In  Dr.  R.N.  Virmani  (supra), University of Delhi, vide notification dated 25.05.1987 had adopted the Office Memorandum issued by the Government of India, dated 01.05.1987. The learned Single Judge has recorded a finding that the said Office Memorandum  dated  01.05.1987  clearly  applies  to  all  employees  who  were beneficiaries of the CPF Scheme on 01.01.1986 and that all such employees who were CPF beneficiaries would be deemed to have come over to Pension Scheme unless the employee concerned submitted his or her option to continue with the CPF Scheme.

We are in complete agreement with the impugned judgment where the learned Single  Judge  has  placed reliance on  the judgment of this Court  in Dr. R.N. Virmani (supra).

Much emphasis was laid on behalf of the appellant on the judgment of Hon’ble Supreme Court in KVS & Ors v. Jaspal Kaur & Ors., (2007) 6 SCC 13. However, the facts of the said case are distinguishable and distinct from  the  facts  of  the  instant  case  inasmuch  as,  in  Jaspal  Kaur  (supra),  the employee concerned had given a letter dated 15.03.1997 where the employee is said to have categorically stated that she was contributing towards CPF. She also had disclosed her CPF account number. Though, this fact was disputed by the employee concerned, however, the Hon’ble Supreme Court came to the conclusion that even though the employer (Kendriya Vidyalaya Sangathan) was not able to produce the original option form which was indicative of the fact that the employee was desirous of continuing under the CPF Scheme, however, the attendant circumstances showed that she had chosen to remain under the CPF Scheme whereas in the instant  case, none of the employees  had  ever given  their option  pursuant  to the circular dated 02.07.1987 to continue to be covered under the CPF Scheme. Thus, the reliance placed by the learned counsel for the appellant in Jaspal Kaur (supra) does not improve the case of the appellant.

For  the  discussion  made  and  reasons  given  above,  we  find  ourselves in complete agreement with the judgment and order dated 05.07.2021, passed by the learned Single Judge which is under challenge herein.

Resultantly, the appeals are hereby dismissed. There shall be no order as to costs.