ROWS/CBFC/CBT/10 17 TH November 2017

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1 Retired Officers Welfare Society (Registered with Govt. of NCT Delhi under Societies Registration Act XXI of 1860) (Registration No. District East/1607/2016) Regd. office: 18-C, OCS Apartments, Mayur Vihar, Phase-I Ext. New Delhi Website: myrows.org.in Tel: Mob: , , , ROWS/CBFC/CBT/10 17 TH November 2017 To The Member Board Central Board of Trustees (CBT) Employees Provident Fund Organization Bhavishya Nidhi Bhawan New Delhi Sub: An appeal on behalf of 10 lakh EPS 95 pensioners from EXEMPTED establishments for implementation of verdicts of Hon ble Supreme Court for their pension revision at par with the similarly placed pensioners of Un-exempted establishments and also with thousands of similarly placed pensioners from various Exempted establishments whose pension has been revised by EPFO by virtue of their having won the cases from various Courts of law. Respected Sir, We, around 10 lakh old aged pensioners, belonging to different establishments exempted for Provident Fund by EPFO itself but not exempted for Employees Pension Scheme 95, would like to draw your personal attention to the artificial discrimination first time created by EPFO amongst the pensioners of exempted establishments and non exempted establishments and submit following facts for sympathetic consideration in the interest of justice: Background a) The Employees Pension Scheme, 1995 (EPS 95) is an Employees Welfare Scheme introduced by Govt. of India under Employees Provident Fund & Misc. Provisions Act, 1952 which is managed and monitored exclusively by the Employees Provident Fund Organization (EPFO) under your direct & total control/supervision. b) When the EPS 95 was introduced all the funds of earlier Family Pension Scheme, 1971 were transferred to EPS 95 Fund. c) In accordance with the provisions contained in the Act, Provident Fund of Unexempted establishments is being managed by the EPFO Trust whereas that of Exempted establishments, it is being managed by the Exempted Trusts of respective establishments under the total supervision & guidelines of the EPFO Trust. d) But, so far as EPS 95 is concerned; an out of employer s contribution was being transferred to EPFO by all the Exempted as well as Un-exempted establishments but on the wage ceiling of Rs.5000/Rs.6500 as applicable from time to time. e) The exemption granted under section 17 of the EPF&MP Act, 1952 to the Exempted establishments by EPFO is from Provident Fund and not from Employees Pension Scheme, 1995 which falls under clause 39 of the Scheme and NO SUCH EXEMPTION

2 HAS BEEN ACCORDED BY EPFO TO ANY SUCH ESTABLISHMENT. So, there is no differentiation between the Exempted and Un-Exempted establishments so far as EPS 95 Scheme is concerned and as such all the pensioners of EPS 95 are on equal footing for all purposes. f) All the Pensioners of EPS 95 are getting a meager pension from EPFO ranging between Rs.1000/- and Rs.2500/- only per month for his/her entire life without any link to any cost of living index. g) The formulae for Pensionable salary, Pensionable service and Pension calculation is the same for all EPS 95 Pensioners but while implementing the orders of the Apex Court, both the categories have been differentiated on the basis of their Provident Fund management which is discriminatory & erroneous h) Recently the pension of all EPS pensioners had also been revised marginally & equally by EPFO by granting the benefit of 2 yrs weightage in pensionable service as per orders of National CDR Commission dt While doing so, EPFO had correctly not differentiated the pensioners between the two (PF exempted & PF unexempted establishments) as all of them were on same footing by all yard sticks so far as the EPS 95 is concerned. So, the differentiation done by EPFO while implementing the orders of the Apex Court is unlawful and wrong being inequitable & discriminatory. Present Developments i) On the basis of orders of Supreme Court of India and various High Courts, the employees of both Provident Fund - Exempted and Provident Fund Un - exempted categories have been demanding equitable implementation of revised pension on the basis of actual/higher salary instead of on ceiling amount of Rs.5000/- & Rs.6500/- by paying/ depositing/ returning the entire differential amount between the ceiling amount and actual salary along with interest from onwards till their attaining the age of 58 years in accordance with the various decisions of the Apex Court/High Courts. This has been implemented by EPFO in respect of: Pensioners from PF un-exempted establishments Pensioners from PF Exempted establishments but only for those who were the petitioners in various cases as decided by the Apex Court and also by various High Courts in their favors. j) As a matter of fact, various High Courts and the Supreme Court of India have held against the restriction of pension on the basis of wage ceiling for pension purpose (Rs. 5000/6500) and EPFO has lost all the 10 SLPs filed by them in the Supreme Court on the issue wherein seven (7) SLPs were decided together in a single order dated i.e. RPFC Vs A. Mazeed Kunju & others (SLP No. 7074/2014). It is pertinent to mention, here, that out of these seven SLPs; in the two (2) SPLs (7076/2014 RPFC vs M.Babu & ors and 7107/2014 RPFC vs AK Jayappan & ors) the petitioners were belonging to the PF Exempted establishments Fertilizers & Chemicals Travancore Ltd. (FACT) whereas one (1) SLP was decided on titled RPFC Vs Austin Joseph and ors. and two (2) SLPs were decided together on in R.C. Gupta & ors. vs Union of India & EPFO wherein the Apex Court has held that: 10. We do not see how exercise of option under paragraph 26 of the Provident Fund Scheme can be construed to estop the employees from exercising a similar option under paragraph 11(3). If both the employer and the employee opt for deposit against the actual salary and not the ceiling amount, exercise of option under paragraph 26 of the Provident Scheme is inevitable. Exercise of the option under paragraph 26(6) is a necessary precursor to the exercise of option under

3 Clause 11(3). Exercise of such option, therefore, would not foreclose the exercise of a further option under Clause 11(3) of the Pension Scheme unless the circumstances warranting such foreclosure are clearly indicated. 11. The above apart in a situation where the deposit of the employer's share at 12% has been on the actual salary and not the ceiling amount, we do not see how the Provident Fund Commissioner could have been aggrieved to file the L.P.A. before the Division Bench of the High Court. All that the Provident Fund Commissioner is required to do in the case is an adjustment of accounts which in turn would have benefitted some of the employees. At best what the Provident Commissioner could do and which we permit him to do under the present order is to seek a return of all such amounts that the concerned employees may have taken or withdrawn from their Provident Fund Account before granting them the benefit of the proviso to Clause 11(3) of the Pension Scheme. Once such a return is made in whichever cases such return is due, consequential benefits in terms of this order will be granted to the said employees. 12. Consequently and in light of the above, we allow these appeals and set aside the order of the Division Bench of the High Court. k) Central Board of Trustees (EPF) in its 215 th meeting held on , approved the following recommendations of the Pension & EDLI Implementation Committee (PEIC) for all the EPS 95 pensioners as under: Recommendations of the PEIC of EPFO held under the Chairmanship of Dr. V.P.Joy, IAS CPFC, EPFO in its 38 th meeting held on : Item No. 3: The agenda item was deliberated at length and the Committee unanimously decided to comply with the orders of the Hon ble Supreme Court in SLP No of 2015 in the matter of Shri R.C.Gupta & others Vs RPFC (Shimla) & Others, in respect of all similar cases to avoid further litigation in this regard. However, it was agreed that compliance may be made immediately in respect of the Provident Fund & Pension Members including superannuated cases whose accounts are maintained by EPFO as their details are already available with EPFO and contribution on higher wages has been received by EPFO. Their pension settlement may be regulated in accordance with the order of the Hon ble Supreme Court by taking joint option from the employee and the employer and transfer/payment to Pension Fund as per details of payable contributions with interest. In respect of those members of Exempted Provident Fund Trusts whose contribution on higher wages has not been received by EPFO, it was decided that their cases may be examined on verification of books of record of the exempted establishment and the trust regarding compliance to Provident Fund and Pension Fund as per the provisions of the EPF Scheme 1952 and Employees Pension Scheme 1995 and the information may be submitted to the committee. l) The then MOL&E had also announced the decision to the public by releasing a press note on through Press Information Bureau (PIB) wherein it was clarified as under:

4 The Supreme Court in SLP no in the matter of R. C. Gupta & others has passed certain orders of credit of amounts in the EPF accounts to the previous accounts of employees in respect of wages more than the statutory wage limit. The orders are to the effect that if amounts exceeding statutory wage ceiling have been credited to EPFO, the classification thereon shall be at the joint option of employers and employees. In accordance, the Central Board approved a proposal for facilitating compliance. The 8.33% of the employer s contribution proportionate to the salary of employees in excess of Rs.6500/- shall now be credited to the pension scheme along with the interest accrued in the provident fund account The employees however shall be required submit joint application along with their employer wherever the same has not been done. This will be applicable only in those cases where the members/pensioners have contributed on higher wages than the statutory wage ceiling of Rs.6500/- with or without exercise of option prior to the issue of notification for increase of wage ceiling to Rs.15000/- effective from m) After the approval by CBT (EPF); the proposal of EPFO dated for extending these benefits to all the EPS 95 pensioners was approved by MOL&E and conveyed to EPFO on n) In compliance of approval accorded by MOL&E, GOI; the EPFO HQ vide its letter no. Pension-I/12/33/EPS-Amendment/96/Vol.II/34007 dated issued administrative instructions/ directive to all RPFCs/ROs/SROs to implement the same i.e. revision of pension after accepting the differential amount w.e.f till the date of retirement along with interest from pensioners for re-fixing their revised pension. Its extracts are being reproduced hereunder: Para 2: EPFO s Interpretation of the Apex court order: Thus a member contributing to the Provident Fund on the wages exceeding the statutory ceiling or who had contributed to the Provident Fund on the wages exceeding the statutory ceiling cannot be debarred from exercising the option to contribute on such higher wages to the pension fund. Para 3: Regarding proposal sent by EPFO to MOL&E: Accordingly a proposal was sent to MOL&E to allow members of the Employees Pension Scheme, 1995 who had contributed on higher wages exceeding the statutory wage ceiling of Rs in the Provident Fund to divert 8.33% of the salary exceeding Rs to the Pension Fund with up to date interest as declared under EPF Scheme, 1952 from time to time to get the benefit of Pension on higher salary on receipt of joint option of the Employer and Employee. Para 4: Regarding approval accorded by MOL&E: The MOL&E vide letter dated has conveyed its approval to the EPFO to issue administrative instructions to allow members of the Employees Pension Scheme 1995 who had contributed on higher wages exceeding the statutory wage ceiling of Rs in the Provident Fund to divert 8.33% of the salary exceeding Rs to the Pension Fund with up-to-date interest as declared under EPF Scheme, 1952 from time to time to get the benefit of pension on higher salary on receipt of joint option of the Employer and Employee. Para 5: Direction issued by EPFO to field offices: The officers in charge of all filed offices were directed to take necessary action accordingly in accordance with the order of the Hon ble Supreme Court in SLP No

5 33033 of 2015 as approved by the Government and as per the provisions of the EPF & MP Act, 1952 and Schemes framed there under. o) It is also a matter of record that the decision as contained in the directive dated had also been announced on the floor of the House of Parliament by Mr. Bandaru Dattatreya, the then Union Minister for Labour & Employment, GOI on the same day i.e and it was also assured by him on the floor of Parliament that the said benefit will be applicable to all the EPS pensioners whether they were petitioner or not. p) But unfortunately, on , Shri Mukesh Kumar, RPFC-1 (Pension), without any competency/ approval to undone/alter the approval granted by Competent authority i.e. CBT & decision of MOL&E, issued an erroneous, inequitable & discriminatory interim advisory to all filed offices by misinterpreting & distorted the judgment of the Apex Court to restrict the benefit to the pensioners of only Un- Exempted establishments and to deny the same to the pensioners of Exempted establishments just on the wrong plea that in the SLP titled R.C.Gupta & ors, the petitioners happened to be from Un-Exempted establishments. He, however, ignored & suppressed the facts that in the Apex Court s orders dt , in two of the SLP s, the petitioners were from an Exempted establishment and also same benefits have also been allowed by the EPFO to the pensioners of atleast nine (9) exempted establishments as under: Instrumentation Ltd Fertilizers & Chemicals Travancore (FACT) ITI Ltd Airports Authority of India (AAI) Kerala State Co-operative Agricultural Dev. Bank Ltd. (KSCADB) Kerala Minerals & Metals Ltd., Kollam (KM&M) Kerala State Inland Navigation Corp (KNCO) Kerala Agro Machinery Corp. (KAMCO) Malabar Cements Many other similarly placed petitioners of various Exempted establishments q) The recommendations of the 40th meeting of PEIC dt , Legal Adviser s advice dt and Interim advisory dt are all based on the Apex Court s judgment dt (although wrongly interpreted by EPFO) but the facts of the other judgment of Apex Court dt in similar matter SLP 7076/2014 and 7107/2014 concerning pensioners/employees of other Exempted Establishment i.e. M/S Fertilizers & Chemicals Travancore Ltd FACT have been ignored/suppressed/concealed intentionally by EPFO everywhere. r) It has also been suppressed/concealed from the PEIC in its 40th meeting held on as well as from the Legal Adviser that in view of various judgments of Supreme Court ( ) & High Courts, this benefit has already been extended to the pensioners who were the petitioners in various cases irrespective of any distinction regarding their belonging to exempted or Un-exempted establishments. Names of NINE (9) such exempted establishments the pensioners of which have already been granted the benefit of pension revision on actual salary have been indicated above. Had

6 these facts been brought on record & to their notice through the papers accessed by them, they would not have recommended as such erroneously. s) So, the aforesaid interim advisory is against the provisions of the Article 14 & 16 of the Indian Constitution and in violation of landmark five judge full constitution bench judgments of Apex Court in famous D.S. Nakara Vs Union of India decided on (1983 AIR 130, 1983 SCR (2) 165) and Deokinandan Prasad vs State of Bihar & ors decided on (1971 AIR 1409, 1971 SCR 634). Similar orders have been passed by the Apex Court in Civil Appeal no of 2015 (arising out of SLP no. 321 of 2015) decided on in State of Rajasthan & ors vs Union of India. Further, the Article 141 of the Constitution prescribes that the law declared by Supreme Court to be binding on all courts. t) Apex Court, in a catena of judgments has also held that only because one person has approached the Court that would not mean that persons similarly situated should be treated differently and that it is the duty of the Government to avoid unwarranted litigation and not to encourage litigation for the sake of litigation. u) In the interim advisory dated , EPFO has also wrongly pleaded that adjustment of contribution from Provident Fund Account to Pension Account as contemplated in the judgment is not possible on the ground that PF of employees of exempted estts. is managed by Exempted Trusts and Pension Fund is managed by EPFO. Whereas, factually, in case of pensioners, such adjustment is not required at all because the retirees have already withdrawn their corpus from PF and they have now to return the differential amount with interest w.e.f as being done by the pensioners of un-exempted estts. So where is any need/requirement of so called impossible adjustment as pleaded by EPFO? v) As revealed from the copies of the relevant file (obtained under RTI Act), it was surprising to note that there was no approval of Competent authority for this action & not even of the CPFC before issue of that controversial & unlawful interim advisory dt issued by the RPFC-1 Pension, EPFO HQ. w) MOL&E in reply to various RTI applications has also confirmed that neither any proposal had been received from EPFO regarding issue of said interim advisory dated nor any such approval has been granted to EPFO. x) MOL&E has further stated that only approval dated has been granted to EPFO to allow members of the Employees Pension Scheme 1995 who had contributed on higher wages exceeding the statutory wage ceiling of Rs in the Provident Fund to divert 8.33% of the salary exceeding Rs to the Pension Fund with up-to-date interest as declared under EPF Scheme, 1952 from time to time to get the benefit of pension on higher salary on receipt of joint option of the Employer and Employee (in compliance of which EPFO had issued the directive dated ). y) It is pertinent to mention that neither there is any mention of differentiation regarding EPS 95 pensioners of Exempted & Un-exempted establishments in any of the judgments of High Courts and Supreme Court nor such issue had ever been raised by EPFO in any court during the last 10 years i.e. since 2007 onwards prior to issue of interim advisory dated which is discriminatory, illegal, erroneous and inequitable and violates of article 14 & 16 of the Constitution of India. z) It is also a matter of record of Parliament that Hon ble the then Union Minister of Labor & Employment - cum - Chairman of CBT had also stated/ assured on the floor of

7 Parliament while replying to a question of Mr. NK Premachandran, MP, Kollam on that As far as Supreme Court Judgment is concerned, we are implementing that. Last time in the parliament itself, I have indicated that to you. I will examine the circulars which may not be in line with Supreme Court judgment. aa) The matter of determination of pensionable salary exceeding the statutory wage ceiling limit and exercise of option under deleted proviso to Para 11(3) of EPS 95 has been agitated before many High Courts. bb) Hon ble High Court of Kerala, in particular, in its very recent judgment dated in Writ Appeal No.2298 of 2015 filed by EPFO, after considering the detailed Affidavit no. 881/2017 filed by EPFO in the aforesaid WA rejecting contents of the erroneous interim advisory dt as mentioned therein, had dismissed the Writ Appeal of EPFO on similar lines directing the EPFO that the 8.33% of the employer s contribution proportionate to the salary of employees in excess of Rs.6500/- shall now be credited to the pension scheme and orders passed in accordance with law. Needless to say the interest accrued in the provident fund account to that extent also will stand transferred to the pension account. The employees shall also submit application along with their employer wherever the same has not been done. This covers the retired employees also. cc) Comparison between PF Exempted establishments & PF Un-exempted establishments so far as EPS 95 is concerned. EMPLOYEES PENSION SCHEME 1995 Particulars Exempted Establishments Un-Exempted Establishments Applicability of Employees Pension Scheme 1995 Yes Yes Nature of Scheme Social Security Social Security Contribution towards Pension on Ceiling amount i.e. Rs. 5000/6500 out of Employer s contribution amount of on Ceiling amount i.e. Rs. 5000/6500 out of Employer s contribution amount of 12% Whether EXEMPTED or NOT Custodian of Contribution amount (Pension Fund) NOT for EPS EPFO s Trust NOT for EPS EPFO s Trust Pension Fixed by EPFO EPFO Pension Formula (Pensionable Salary x Pensionable Service)/70 (Pensionable Salary x Pensionable Service)/70 Pension paid to Members On attaining 58 yrs of age On attaining 58 yrs of age

8 EMPLOYEES PENSION SCHEME 1995 Particulars Exempted Establishments Un-Exempted Establishments Pensionable salary treated for all members while fixing pension 2 years weightage allowed & pension revised recently Any Dispute Rs p.m. max ceiling YES YES Unnecessarily & illegally discrimination with the pensioners of un-exempted estts. created by EPFO Rs p.m. max ceiling YES NO Extracts from the Agenda/Minutes of the 40 th meeting of PEIC held on under the chairmanship of CPFC Some extracts from the Agenda of 40 th meeting of PEIC In case of exempted establishments, where PF contributions on full wages have been made in the exempted trust, incomes from such remittance have been received in the past by the Trust which will continue to receive it in future if invested in long term instruments. All assets and liabilities arising out of such receipts have to be bourn/discharged by the concerned Trusts for which EPFO cannot take responsibility. Adjustment of Accounts will not be possible in such cases as EPFO will not be able nor liable to bear the opportunity cost of the long term investments made by the Trust Extracts from proposal in Agenda: It is not financially possible to grant pension benefits without receipt of timely contribution by EPFO as contributions received in the past yield long term returns in future also. Some extracts from the Minutes of 40th meeting of PEIC Mr. Bhagirathi Dhal (representing an employer member) disagreed with the CPFC and requested to record his views as under: 1. There cannot be two classes of beneficiaries of the pension scheme, one under EPFO & another under exempted trusts. 2. The exemption to the establishments is given on the tacit understanding that the benefits could be either same or better to the employees covered under the exempted trusts 3. The Supreme Court while delivering its judgment has not made any difference between the two categories of subscribers that is subscribers of exempted trusts and EPFO

9 4. The differential amount due to non-receipt of funds from the exempted trusts in the pension fund over the ceiling limit may be computed through the financial processes for extending these benefits to the employees of exempted trusts. The members also suggested that specific legal opinion may be sought in the matter. Extracts from the statement of Shri Vinod Kumar, Director, MOL&E on the issues raised by Mr. Bhagirathi Dhal (representing an employer member) as recorded in the Minutes of 40th meeting of PEIC: 1. There are no two classes of beneficiaries in the pension scheme, one under EPFO and another under exempted trusts as the pension under EPS 1995 is administered and managed by EPFO only and there is only one class of beneficiaries 2. As the exemption is from EPF scheme 1952, the benefits should be same or better under exempted trust in respect of the Provident Fund only and not in respect of any other scheme. 3. In the SLP under reference where Hon ble Supreme Court delivered its judgment, all the employees who went to court were from un-exempted establishment. CBT has decided to extend the same only to similarly placed persons. [Refer point no. (j) above. The above statement is factually incorrect as petitioners on two SLPs were from the exempted category of estts. and as such the benefit cannot be denied to similarly placed persons of other exempted estts.] dd) Not only a large number of different EPFO Regional offices have confirmed in writing in response to various RTI applications that there are no official documents available depicting any differentiation between the Exempted and Un-exempted establishments so far as the EPS 95 is concerned but also this fact has further been confirmed by none other than Mr. Mukesh Kumar, RPFC-1 Pension himself vide his letter no. Pension-III/7(41/3)17/RTI/Parveen Kohli/HR/55389/3939 dated written to me wherein in response to my asking Copy of official documents differentiating the exempted and un-exempted establishments for EPS95; he has replied that Information is not available. Humble Prayer We all the pensioners belonging to various establishments Exempted for Provident Fund but Un-Exempted for Employees Pension Scheme 95 numbering about 10 lakhs earnestly request your good self to kindly direct EPFO to immediately withdraw its erroneous and unapproved Interim Advisory dated and to restore the well-considered & lawful decision of the Competent Authority i.e. CBT(EPF) and Ministry of Labor & Employment, Govt. of India by implementing the valid & equitable directive dated issued by EPFO for granting the benefit of pension revision on actual/higher salary instead of on ceiling amount to the similarly situated retired pensioners of Exempted establishments at par with those of Un-Exempted establishments under EPS 95 and also at par with those pensioners of Exempted establishments who were petitioners in various court cases won by them and in whose favor, this benefit has also been allowed after getting deposited the retrospective contribution/differential amount with interest w.e.f in accordance with the decision dated of the Supreme Court.

10 Sir, your act of kindness shall give a new lease of life to the old aged poor pensioners and they will always bless you and remember you ever for this gracious act of kindness and justice which shall save them from running around for litigation at the fag end of their lives to get justice. With warm regards Your Truly (Yogesh Chandra) President Mob :